从单季度来看，江阴银行23Q2 实现营收、归母净利润分别为10.25、3.46亿元，同比-1.42%，+15.57%。从收入结构来看，23Q2 营收主要由其他非息收入支撑，利息净收入、中收、其他非息净收入分别同比-6.68%，-12.80%、+19.55%。从业绩归因来看，上半年净利润增长主要受益于拨备反哺、生息资产规模扩张以及营业外净收入。其中营业外收入23H1 为1.49 亿元，同比+4928.17%，主要系当期预计负债转回。Incidents:
Jiangyin Bank announced its semi-annual results for 2023. In the first half of the year, it achieved operating income of 2,061 billion yuan, +1.25% year-on-year, and net profit of 656 million yuan, or +14.23% year-on-year. The annualized ROE was 9.09%, +0.50 PCT compared to the first quarter.
Provision for backfeeding and expansion of interest-bearing assets to support performance
Looking at a single quarter, Jiangyin Bank achieved revenue in 23Q2 and net profit of 1,025 million yuan and 346 million yuan respectively, or -1.42% and +15.57% year-on-year. Judging from the revenue structure, 23Q2 revenue was mainly supported by other non-interest income. Net interest income, median income, and other non-interest net income were -6.68%, -12.80%, and +19.55%, respectively. Judging from the attribution of performance, the increase in net profit in the first half of the year mainly benefited from backward provision, expansion in the scale of interest-bearing assets, and net non-operating income. Among them, non-operating income of 23H1 was 149 million yuan, +4928.17% year-on-year, mainly due to anticipated debt turnover for the current period.
Improved debt-side costs supported interest spreads bucking the trend
By the end of 23H1, Jiangyin Bank's total assets and loan balance reached 1759.70 billion yuan and 111,921 billion yuan respectively, +4.28% and +8.53%, respectively, from the beginning of the period. The growth rate was -0.14 PCT and +3.53 PCT compared to the first quarter. Judging from the credit structure, 23Q2 added 3,644 billion yuan in credit, an increase of 619 million yuan over the previous year. The new credit was mainly concentrated in the public sector. Public, retail, and discounting accounted for 76.63%, 2.35%, and 21.02% of the new loans in 23Q2, respectively. Public credit has maintained strong growth, demonstrating the strong resilience of the private economy and manufacturing industry in Jiangsu Province and Jiangyin. The debt-side deposit balance was +8.42% compared to the beginning of the period, and the growth rate was +3.29PCT compared to the first quarter. Deposits accounted for 87.06% of debt, compared to +2.83PCT at the end of 23Q1. In terms of net interest spreads, 23H1 Jiangyin Bank's net interest margin level was 2.20%, compared to +15BP in the first quarter. The increase in net interest spreads bucked the trend mainly due to a marked improvement in the company's debt-side costs. The 23H1 interest-bearing debt cost ratio was 2.08%, compared to 22-10 BP. Mainly, weak links in cost reduction and efficiency and key indicators such as “interest rate on deposit and loan payments” and “share of loans under 1 million” were included in the assessment of business goals. The results in cost reduction and efficiency were remarkable. 1) Benefiting from lower interest rates on listed deposits, Jiangyin Bank deposit costs have improved markedly. The average cost ratio of 23H1 Jiangyin Bank deposits was 2.02%, compared to 22-11BP; 2) The deposit structure was optimized. 23H1 current deposits accounted for 30.92%, compared to +1.56PCT in the first quarter; 3) Jiangyin Bank deposits accounted for 87.06% of debt at the end of 23H1, compared to +2.94 PCT in '22. Asset-side earnings are under pressure, in line with industry trends. 23H1 Jiangyin Bank's interest-bearing asset yield and loan yield were 4.06% and 4.68%, compared to -6BP and -30BP respectively in '22.
Other non-interest net income improved markedly
23H1 Jiangyin Bank's net handling fees and commission income and other non-interest net income were -41.79% and +22.94%, respectively. The growth rates were +18.86PCT and -4.37PCT, respectively, compared to the first quarter. The increase in revenue and loss was mainly due to a decrease in settlement business revenue and an increase in expenses. Settlement transaction fee revenue and expenses were -66.85% and +20.89%, respectively. It was mainly due to a decrease in handling fee revenue in the current period and an increase in billing transaction fee expenses due to an increase in business scale. Other non-interest net income grew rapidly, mainly due to an increase in current transactional financial asset holdings and bond investment income.
Intensify planning and write-off efforts, and focus on consolidating asset quality
From a static perspective, as of the end of 23H1, Jiangyin Bank's non-performing rate and attention rate were 0.98% and 1.24% respectively, compared to +1 and +38BP at the end of 23Q1. Dynamically, the 23H1 bad generation rate was 0.99%, compared to +0.56PCT in '22. The marginal weakening of asset quality-related indicators is mainly due to the gradual withdrawal of policies related to the epidemic in the early stages, and the gradual introduction of corresponding loans into concern and poor performance. Jiangyin Bank's provision coverage rate was 500.21%, compared with +19.14PCT at the end of 23Q1. The main factors are: 1) the company increased its provision planning efforts, and the 23H1 loan ratio was 4.92%, compared to +32BP in '22; 2) the company increased its write-off efforts and continued to consolidate asset quality. The write-off ratio of 23H1 non-performing loans was 83.22%, compared with +34.28PCT in '22. The company has sufficient capital. As of the end of 23H1, the core Tier 1 capital adequacy ratio was 12.59%, compared to -0.36PCT at the end of 23Q1.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2023-2025 to be 41.67, 46.08 and 5.027 billion yuan respectively, with year-on-year growth rates of 10.24%, 10.57%, and 9.10%, respectively, and a 3-year CAGR of 9.97%. Net profit for the return mother was RMB 18.12, 20.82 and RMB 2,360 million respectively, with year-on-year growth rates of 12.15%, 14.89%, and 13.35%, respectively, and a 3-year CAGR of 13.46%. Given the company's significant location advantage and strong business resilience, with reference to comparable company valuations, we gave the company 0.78 times PB in 2023, with a target price of 5.66 yuan, and maintained a “buy” rating.
Risk warning: economic recovery falls short of expectations, asset quality deteriorates, minor policy changes