Key elements of the report:
The Bank of Beijing released its interim results report for 2023.
Main points of investment:
The net profit of homing in the first half of 2023 increased by 4.89%: the operating income of Bank of Beijing in the first half of 2023 was 33.414 billion yuan, down 1.56% from the same period last year; and the net profit was 14.238 billion yuan, up 4.89% from the same period last year. The growth rate of performance in a single quarter rebounded significantly in the second quarter. Among them, the asset quality continues to improve and the credit cost goes down to release profits.
The scale expansion has accelerated significantly, and the asset quality has continued to improve: by the end of June 2023, the total assets of the Bank of Beijing increased by 13.5%, the total loans increased by 11.3%, and the total deposits increased by 11.5%. From the perspective of the regional structure of new credit, there is a significant increase in new credit in Beijing, Zhejiang, Jiangsu and Shandong. From the data of the new scale of public loans in different sectors, there are relatively more new increases in manufacturing, leasing and business services. By the end of June 2023, the defective rate, concern rate and overdue rate of the Bank of Beijing were 1.34%, 1.5% and 1.67% respectively, down from the beginning of the year to 9BP, 11BP and 59BP, respectively, and asset quality continued to improve. In terms of provisions, the provision coverage rate reached 217.65% at the end of the second quarter, which continued to increase compared with the previous quarter. Taking into account the gradual resolution of poor stocks and the new focus on high-quality areas, we expect that the overall asset quality is expected to maintain a continuous improvement trend.
The net interest margin narrowed and the cost of retail deposits fell: in the first half of 2023, the net interest margin was 1.54%, narrowing 23BP compared with the same period last year, of which the downward rate of return on assets was the main factor, and the rate of return on interest-bearing assets fell 20BP. On the debt side, the interest payment rate of interest-paying debt is lower than that of the same period last year (4BP), and the interest payment rate of deposits is lower than that of the same period last year (5BP), among which the cost of retail deposits is more obvious. Taking into account the downward LPR and stock mortgage adjustment and other factors, the net interest margin is still expected to have downward pressure.
Profit forecast and investment advice: the expansion of the assets of the Bank of Beijing accelerated in the first half of 2023, the new credit focused on high-quality areas, and asset quality is expected to continue to improve. The net interest margin narrowed and the cost of retail deposits fell significantly. According to the latest company business data, adjust the 2023 / 24 EPS forecast 1.11 yuan / 1.20 yuan, according to the Bank of Beijing A shares closing price of 4.47 yuan on August 31, corresponding to 0.38 times PB in 2023, maintaining the overweight rating.
Risk factors: the banking industry as a whole is greatly influenced by macroeconomic, monetary and regulatory policies. changes in economy and related policies will have an important impact on the operation of banks. Including changes in net interest margin, asset quality expectations, and so on.