Focus:
1) on May 20, the LPR quotation in May was announced: the LPR of one-year period was 3.7%, unchanged from the previous month, and that of more than five-year period was 4.45%, a decrease of 15bp compared with the previous month. This is the first time since the LPR reform that the LPR over 5-year period has been reduced separately, and it is also the largest reduction. 2) On May 18, the China Banking and Insurance Regulatory Commission issued the measures for the administration of the implementation of the expected credit loss law of commercial banks, which made provisions on standardizing the internal control management and risk management of commercial banks and promoted commercial banks to improve the implementation quality of the expected credit loss law.
Industry and company dynamics
1) on May 19, the China Banking and Insurance Regulatory Commission issued the measures for the administration of statistics of bank insurance supervision (Draft for comments); 2) On May 19, the CBRC issued the administrative measures for the protection of consumers’ rights and interests of banking and insurance institutions (Draft for comments); 3) On May 20, the central bank announced that there were 49 primary dealers in open market business in 2022. 4) This week, the China Everbright Bank Company Limited Co.Ltd(601818) board of directors deliberated and approved the appointment of Mr. Wang Jiang as chairman China Merchants Bank Co.Ltd(600036) the board of directors deliberated and approved the appointment of Mr. Wang Liang as president Bank Of Nanjing Co.Ltd(601009) the total shareholding of BNP Paribas and QFII, the largest shareholder, increased from 14.04% to 16.37% Bank Of Chongqing Co.Ltd(601963) announce the profit distribution plan for 2021, and propose to pay out 3.9 yuan for every 10 shares; The price of Suyin convertible bonds and shares was adjusted from 6.37 yuan / share to 5.97 yuan / share.
Data tracking
This week, the A-share banking index rose 0.81%, underperforming the CSI 300 index by 1.42 percentage points, and the rise and fall of the sector ranked 27 / 30, among which China Merchants Bank Co.Ltd(600036) (+ 7.56%), Ping An Bank Co.Ltd(000001) (+ 2.81%) and Jiangsu Jiangyin Rural Commercial Bank Co.Ltd(002807) (+ 2.73%) were the top gainers.
Open market operation: this week, the central bank conducted a total of 50 billion yuan of reverse repurchase and 100 billion yuan of MLF in the open market. The winning interest rate of MLF was 2.85%, and a total of 60 billion yuan of reverse repurchase and 100 billion yuan of MLF expired. Therefore, the central bank’s total net return in the open market this week was 10 billion yuan. A reverse repurchase of 50 billion yuan will expire next week.
Shibor: this week, the Bank Of Shanghai Co.Ltd(601229) inter-bank lending rate was basically stable and remained low. The overnight Shibor interest rate rose 1bp to 1.32%, and the seven-day Shibor fell 1bp to 1.67%.
Investment suggestions:
After the differentiated housing credit policy lowered the lower limit of the first home mortgage interest rate last week, the policy combination continued to stabilize the economy this week, the five-year LPR fell unilaterally than expected, and the degree of credit easing increased. In the follow-up, we will continue to pay attention to the strength of policies and the recovery rhythm of the economy and the epidemic. At present, the banking sector benefits from the expectation of economic recovery, has high cost performance, maintains the “recommended” rating of the industry, and continues to be recommended at the individual stock level: China Merchants, Ningbo, Chengdu, Hangzhou, Ping An, Societe Generale, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) etc.
Risk tips:
1) the downward pressure on the economy continues to increase, and the credit cost has increased significantly;
2) major operational risks of individual banks, etc.
