浦发银行(600000):其他非息高增 资产质量改善

Shanghai Pudong Development Bank (600000): Other asset quality improvements due to high interest rates

廣發證券 ·  Apr 19, 2023 14:27  · Researches

Core views:

SPD Bank released its 2022 annual report. Annual revenue, PPOP, and Guimu's net profit fell 1.2%, 3.9%, and 3.5% year-on-year respectively; growth rates fell 1.4pct, 1.1pct, and 0.9pct respectively from 22Q1-3. 22Q4 single-quarter revenue, PPOP, and Guimo's net profit fell 5.4%, 7.5%, and 6.6% year-on-year respectively. Single-quarter revenue continued to decline, but the decline in net profit of PPOP and Guimu has slowed. Q4's single-quarter revenue was mainly dragged down by narrowing interest spreads. Unlike the industry, other non-interest income showed impressive performance. Q4 increased 4.1% in a single quarter, mainly revenue from transactional financial assets was mainly included in investment profit and loss (out of H2:112 billion investment profit and loss, 8.1 billion came from transactional financial assets, and only 1.4 billion transactional financial asset losses were recorded in changes in fair value); the improvement in cost to revenue ratio was the main reason for PPOP and the narrowing of the decline in performance, and the narrowing contribution of impairment losses also contributed to performance.

Interest spreads have narrowed, and capital burden adjustments have hedged the negative impact of deposit and loan pricing. 22A net interest spread was 1.77%, which was 7 bps narrower than at the end of June and 6 bps for the whole year. The decline in interest spreads was mainly the deterioration in H2 deposit and loan pricing. The return on interest-bearing assets on the H2 asset side fell 7 bps to 3.96%. The decline was higher than H1, and the loan yield accelerated the decline by 11 bps (vs.22h1: -3 bps). The cost of debt-side interest-bearing debt is stable. H2 remains flat (VS.22h1: -5 bps), and the cost of H2 deposits is affected by the rise in corporate deposit pricing and the increase in the regularization rate (vs.22h1: +5 bps); however, benefiting from debt restructuring adjustments, the share of interbank debt has increased, and debt costs have remained stable.

The non-performing balance and non-performing rate “double declined” quarter by quarter for three consecutive years. The non-performing loan ratio at the end of '22 was 1.52%, down 1 bp from the end of the 3rd quarter, with non-performing loans falling 620,000 yuan from the end of the 3rd quarter; focusing on loans and overdue loans were 2.19% and 2.20% respectively, up 4 bps and 5 bps from the end of the 2nd quarter; the net non-performing loan generation rate was 1.33%, down 44 bps from the previous year; the non-performing deviation decreased by 87.4%, down 3.7 pct from the end of the 2nd quarter; provision coverage rate was 155%, down 0.2pct from the end of the 3rd quarter. From a structural point of view, the H2 negative improvement mainly benefited from the decline in the non-performing rate of operating loans and credit cards, which led to a decline in the personal non-performing rate; the corporate non-performing rate was the same as H2, and the non-performing rate in the manufacturing industry declined sharply, hedging the rise in bad performance in the construction, renter services, infrastructure, and real estate industries.

Capital constraints were tight, and the dividend distribution ratio declined: loans increased 2.4% year on year in '22, but risk-weighted assets increased 5.9% year on year, and the core Tier 1 capital adequacy ratio at the end of the year was 9.2% (company caliber was 8.8%), down 0.2 pct year on year, slightly higher than the 8.0% requirement for the second tier of regulation; therefore, the dividend per share in '22 was 0.35 yuan/share, accounting for about 20.5% of EPS (VS.21a: 25.3%).

Profit forecasting and investment advice: Consolidate risk management and continue to clear stock risks. The company's net profit growth rate for 23/24 is expected to be 0.1%/3.0%, EPS is 1.56/1.61 yuan/share respectively, BVPS is 21.35/22.82 yuan/share respectively, the closing price of A shares corresponding to 23/24 PB is 0.4X/0.3X respectively, and the corresponding PE for 23/24 is 4.8X/4.7X respectively. The company was given 0.4 times PB for 23 years, a reasonable value of 8.54 yuan/share, and gave it a “buy” rating.

Risk warning: (1) Macroeconomics declined more than expected, and asset quality deteriorated sharply. (2) Consumption recovery fell short of expectations, and deposit regularization was serious. (3) Market interest rates are rising, and transaction books are at a loss.

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