Performance of the banking sector: the banking index rose 4.3% this week, outperforming the Shanghai and Shenzhen 300 index by 3.2pct, ranking third in all sectors; Ningbo (+ 9.2%), Hangzhou (+ 8.4%), China Merchants Bank (+ 7.9%), Ping An (+ 6.2%) and Chengdu (+ 6.2%) were among the top gainers. Since the beginning of the year, the bank index has risen 6.2%, outperforming the Shanghai and Shenzhen 300 index by 9.4pct, ranking No. 1 in all sectors. High quality regional banks such as Jiangsu, Hangzhou and Changshu, which we mainly recommend, have increased well since the beginning of the year, outperforming the bank index of 10.7, 7.8 and 7.0pct respectively. In recent years, we have concentrated on the situation of some listed banks operating in the recent year.
Volume: the credit supply is relatively stable, and the project reserve is expected to be more abundant. The increment of RMB loans in 2022 is expected to be roughly the same as that in 2021, with a slight increase of about 21 trillion yuan, with a growth rate of 10.8%; Structurally, most banks said that while maintaining the general stability of various accounts, they should appropriately increase retail preference in incremental credit. Most of the surveyed banks said that since the beginning of 2022, the credit supply has been relatively stable and can achieve a "good start". However, they are also concerned about the difficulties in starting effective demand, the regional differentiation of credit supply and the increase of inter-bank differences under the background of increasing downward pressure on the economy. They believe that the intensity of "good start" still needs to be observed. We expect that with the increase of stimulus monetary policy and the cooperation of various relevant policies, the credit supply will show signs of accelerating recovery. At the same time, the credit demand of high-quality regions such as Jiangsu and Zhejiang will be more stable. Overall, it is inferred that the credit supply may show the characteristics of "not strong in January and not weak in 1q".
Price: optimize asset structure + debt cost control to help stabilize interest margin. The surveyed banks generally said that under the circumstances of policy guidance and weak market demand, there will be downward pressure on asset side pricing in 2022, and the net interest margin may narrow. However, it will hedge through the following means: (1) continuously optimize the loan structure and increase the proportion of loans in interest bearing assets, especially the proportion of high priced products such as retail loans; (2) Strengthen the internal debt cost management, stabilize the core debt, and choose the opportunity to absorb low-cost market-oriented debt; (3) Since the implementation of the reform of deposit quotation mechanism in mid-2021, the downward dividend of medium and long-term deposit pricing is still in the release period. In the future, it is not ruled out that supervision will continue to strengthen the cost management of other debt varieties. On the whole, some banks believe that the net interest margin will show a steady and slight decline in 2022, but the decline is narrower than that of the previous year; Some regional small and medium-sized banks also said that the net interest margin of 22q1 will remain stable, and the subsequent changes need to be further observed.
Insurance: asset quality is expected to remain at the current level. At present, the burden of non-performing stock in the banking industry is relatively stable. The performance express in 2021 shows that the asset quality of listed banks is stable and good. For 2022, most banks said that considering the downward pressure of the economy, the quality of bank assets is expected to remain generally stable. The areas with great potential pressure mainly lie in: (1) the risks in the real estate market have not been fully cleared, and the risks of individual large real estate enterprises are still in the release period; (2) The downward pressure on the economy superimposes the impact of the epidemic, and some small, medium-sized and micro enterprises are under great pressure to survive; (3) The risks of weak qualified local financing platforms still need to be vigilant; (4) In the process of "double carbon" transformation, the credit risk of some traditional industries has increased; (5) Large non-performing risks are still exposed, which may increase the non-performing pressure of non credit assets. But on the whole, the pressure of relevant credit risk is controllable.
Investment logic and suggestions for bank stocks: in 2022, the revenue and profit growth of listed banks is expected to maintain the level of 2021. Since the beginning of the year, the banking sector has had an absolute return of 6.2% and a relative return of 9.4% relative to the Shanghai and Shenzhen 300 index, and the stock price has continued to perform strongly. We expect that the actual performance of "wide credit" in the next stage will be a continuous variable in transit, which will help the market form continuous expectations and have expectations for the continuous overweight of policies. In the transmission process from "wide money" to "wide credit", it helps the banking system to mitigate risks and stabilize expectations. The relatively strong characteristics of bank stocks are sustainable. It is suggested to "hold shares for the new year". Continue to suggest to grasp three main lines: 1) in the short term, the rebound main line brought by phased mitigation of real estate risk, such as Societe Generale, Ping An and China Merchants Bank; 2) In the medium term, local banks in high-quality regions such as Jiangsu and Zhejiang will operate steadily, such as Nanjing, Hangzhou, Jiangsu, Changshu and Chengdu; 3) The main line of large banks with stable credit supply, such as postal savings and China Construction Bank.
Risk warning: the economic growth rate is lower than expected; Repeated disturbance of real estate risk situation
