Detailed analysis of the income statement: the growth rate of revenue and profit maintained double digits, and the growth of non-interest income was obvious. Xiamen Bank's revenue in the first half of 2022 increased by 18.17% compared with the same period last year, of which net interest income increased by 7.72% year-on-year, non-interest income increased by 90.76% year-on-year, and home net profit increased by 15.11%. The net interest margin was 1.49%, down 14bp from the same period last year. On the asset side, the average loan interest rate in the first half of the year was 4.82%, down 28bp from the same period last year, due to the fact that Xiamen Bank fully offered benefits to the real economy, and the intensification of banking competition led to a decline in overall loan interest rates; on the debt side, the average interest rate on deposits absorbed in the first half of 2022 was 2.62%, slightly higher than that of the same period last year, and the company continued to optimize the deposit structure and reduce interest payment costs. The net income of handling fees and commissions increased by 28.07% compared with the same period last year, mainly due to the increase in revenue from financial management, bank card business and other business fees.
Detailed analysis of assets and liabilities: the scale of operation is growing steadily and the growth rate of deposits is high. (1) Asset profile: by the end of the first half of 2022, the total assets of Xiamen Bank were 351.712 billion yuan, an increase of 6.74 percent over the beginning of the year.
Total loans totaled 184.72 billion yuan, up 5.53 percent and 14.44 percent over the beginning of the year, of which corporate loans increased by 7.44 percent and personal loans increased by 4.04 percent over the beginning of the year. (2) Overview of the debt side: by the end of the first half of 2022, the total debt of Xiamen Bank was 327.999 billion yuan, an increase of 7.11% over the beginning of the year. Total deposits totaled 212.026 billion yuan, up 15.36 percent over the beginning of the year and 21.9 percent over the same period last year. Of this total, corporate deposits increased by 20.14 percent and personal deposits increased by 6.02 percent over the beginning of the year.
Detailed analysis of asset quality: asset quality is stable and good, and the risk of housing-related loans can be controlled. By the end of the first half of 2022, the non-performing loan ratio of Xiamen Bank was 0.90%, the same as at the end of the first quarter, and the asset quality was improving.
By the end of the first half of 2022, the overdue rate of Xiamen Bank was 1.17%, an increase of 26bp over the beginning of the year. The increase in overdue loans was mainly caused by the increase in overdue loans of some real estate enterprises. The provision coverage rate is 364.18%, down 7.45% from the end of the first quarter, and the risk offset is relatively adequate.
Investment advice: Xiamen Bank maintains double-digit revenue and profit growth, while non-interest income growth increases significantly; under the influence of the current credit environment, loan growth has slowed down, but the deposit side has achieved relatively rapid growth; the overall asset quality has improved steadily, the overdue rate has increased, but the overall risk can be controlled. The current share price values PB at 0.61X/0.50X/0.42X in 2024, respectively, and maintains a "buy" rating.
Risk hint: asset quality is affected by a higher-than-expected economic decline, and credit risk is concentrated exposed.