浦发银行(600000):净息差企稳回升 风险压降成效显现

Pudong Development Bank (600000): the net interest margin rebounded steadily and the effect of risk pressure drop showed.

天風證券 ·  Sep 1, 2022 00:00  · Researches

Scale expansion contributes to revenue, and loan impairment is a drag on profits.

The company released its annual report for 22 years, and its performance was in line with expectations. Operating income and return net profit increased by 1.31% and 1.13% respectively over the same period last year, while the annualized weighted average ROE slightly decreased to 10.26% compared with the same period last year. The revenue growth rate of 22H1 is higher than that of 22Q1, mainly due to the positive contribution of net interest income brought about by scale expansion, but the net profit of 22H1 is 2.57% lower than that of 22Q1. The main reason is that the company strictly classifies non-performing loans, and the loan impairment loss increases by 10.40% compared with the same period last year, which is a drag on profits.

Net interest margin stabilizes and picks up, scale expansion drives income growth

22H1's interest income rose 0.61% year-on-year, interest expenses fell 0.12% year-on-year, and both sides pushed the company's net interest income up 1.51% year-on-year, accounting for a 14bp increase in revenue over the same period last year. 22H1's net interest margin was 1.84%, up 1bp from 21% for the whole year, showing a trend of stabilizing and rebounding, and maintained the same level as the same period last year in a generally downward market environment. Among them, the average rate of return on interest-bearing assets was 4.03%, down 3bp from the end of last year; the average cost rate of interest-bearing liabilities decreased by 2.24% compared with 21, which offset the decline in the rate of return on interest-bearing assets. As the epidemic slows down and the company's balance sheet structure is optimized, we expect the company's net interest margin to continue to rebound to contribute to revenue growth.

The increase in net interest income is mainly driven by scale expansion. 22H1 achieved relatively rapid growth in asset investment, and total loans increased by 1.93% compared with the end of 21 years, of which corporate loans increased by 5.49%, which is the main engine of loan growth. In terms of the loan sector, medium-and long-term loans to the public loan end of the manufacturing industry increased in the first half of the year, and inclusive and consumer loans became the first growth pole of individual loans. At the same time, corporate deposits increased by 6.39% in the first half of the year, faster than the overall growth rate of liabilities, and the 50bp of 22Q2 increased by 3.36% compared with 22Q1 in a single quarter. The optimization of debt structure will help reduce the pressure on corporate debt costs and improve profitability.

The effect of risk pressure drop is remarkable, and the risk offset is gradually consolidated.

The company insists on "controlling the new and reducing the old" at the same time, continues to increase the disposal of stock non-performing assets, and has achieved remarkable results in risk pressure reduction. At the end of 22H1, the non-performing loan ratio decreased by 1.56% compared with 22Q1, and the non-performing indicators achieved a double decline in balance and ratio for ten consecutive quarters; the loan rate decreased by 2.15% month-on-month, 2bp reached 2.15%, and asset quality continued to improve. In terms of provision coverage, the company coverage at the end of 22H1 increased by 158.49% compared with that at the end of 22Q1, and the 15bp increased by 2.47% compared with the previous month.

Investment suggestion: to create the location advantage of the Yangtze River Delta, the improvement of asset quality can be expected that the company will take the Yangtze River Delta as the main position for business development, forming a sound network layout, business features and service advantages in the Yangtze River Delta region. Regional memory and loan balance rank first in the stock bank. The scale of assets and liabilities is expected to expand steadily, asset quality can be improved continuously, and we are optimistic about the company's ability to develop steadily in the long run. Considering that the company was affected by the epidemic and other factors in the first half of the year, the revenue growth rate was slower than expected, and we adjusted the year-on-year growth rate of homed net profit from 2022 to 2024 to 4.30% (8.33%), 7.90% and 9.38%. At present, corresponding to the company's PB (MRQ) 0.37 times, the company's current fundamentals and asset quality are expected to be good, giving the 2022 target PB 0.5 times, corresponding to the target price of 10.25 yuan, maintaining the "overweight" rating.

Risk tips: weak credit, higher-than-expected economic downturn, and credit risk fluctuations

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