Event: Qilu Bank achieved operating income of 6.076 billion in the first half of the year (10.88% of the same period last year), net profit of 2.007 billion (15.49% of the same period last year), defect rate of 1.27% at the end of June, a month-on-month decline in 1bp.
Performance: the growth of revenue and profit has accelerated, and the spread is relatively stable.
2023Q2's single-quarter revenue growth rate was 12.88% year-on-year, up 4.16pc from Q1, mainly due to a much higher growth rate of non-interest income. The net profit of home ownership increased by 18.91% compared with the same period last year, and increased by 6.58pc compared with Q1. Specifically:
1) net interest income: increased by 11.57% in the first half of the year, slightly decreased in Q1 and exceeded 1pc, but the growth rate still maintained a good level, mainly due to the reported net interest margin of 1.86%, a month-on-month decrease of only 2bps, but due to the improvement of the base, year-on-year 8bps.
A, asset side: the rate of return on interest-bearing assets in the first half of the year fell by 13bps to 3.98% compared with the beginning of the year, of which the lending rate fell by 27bps to 4.77%, and the interest rate for public and retail loans fell by 22bps and 38bps to 4.65% and 5.08% respectively. However, a slight increase in the average daily balance of loans and a rise in 44bps in interbank asset returns partly offset the negative pressure.
B, debt side: the interest-paying debt cost ratio has dropped from 4bps to 2.20% compared with the beginning of the year, of which the deposit interest rate has dropped by 3bps to 2.14%, the public deposit by 3bps, and the personal deposit by 9bps (the personal time deposit interest rate has dropped by 17bps, and the personal demand deposit interest rate has dropped by 15bps).
2) non-interest income: in the first half of the year, the net income of handling fees decreased by 26.82% compared with the same period last year, mainly due to the decline in commission and agency business fees, while other non-interest income increased by 64.36%, an increase of 366 million yuan over the same period last year, mainly due to the good performance of the bond market. fair value change profit and loss increased by 276 million year-on-year, investment income increased by 59 million yuan Other income increased by 77 million yuan compared with the same period last year, mainly due to an increase in small and micro subsidies.
Asset quality: the asset quality has improved steadily, and the ability to resist risks has been continuously enhanced.
1) at the end of June, the defect rate was 1.27%, the month-on-month decline in 1bp, the attention rate also decreased to 1.60%, and the overdue rate was 1.06%, which was slightly higher than that at the end of 2022. 7bps.
2) in terms of classification, the rate of public malpractice has decreased from 5bps to 1.46% compared with that at the end of 2022, mainly due to the decrease of 1.67pc to 4.88% in the manufacturing industry, and the increase of 4.26pc in real estate compared with that at the end of 2022. On the one hand, the molecular end exposure has increased, on the other hand, the mother-end exposure is gradually reduced, but the proportion is very small (1.89%), and the risk is controllable. The bad rate of personal loans slightly increased by 1bp to 0.97% compared with the end of 2022, basically maintaining a stable and controllable level.
3) from a dynamic point of view, the annualized bad generation rate in the first half of the year is 0.85%, which is lower than that in 2022, and the improvement is more obvious.
4) at the end of June, the provision coverage rate was 302.06%, the month-on-month increase of 17.22pc, the increase of 20bps to 3.84%, and the continued enhancement of risk resistance.
Assets and liabilities: both deposits and loans maintain steady growth.
1) Asset side: at the end of June, total assets reached 550.4 billion (year-on-year + 16.54%), loans reached 283.3 billion (year-on-year + 17.13%), Q2 net increase of 9 billion, a total increase of 26 billion yuan in the first half of the year.
From a split point of view, public loans increased by 19.6 billion in the first half of the year (+ 3.82% compared with the previous year, + 18.41% compared with the same period last year), which was the main contribution to loan growth, with the industry mainly investing in wholesale and retail and leasing and business services. The scale of low-yielding bills fell by 400 million yuan. Retail loans increased by 6.8 billion yuan, mainly mortgage growth of 4.5 billion.
2) debt side: at the end of June, the amount of deposits reached 387.8 billion (+ 2.90% compared with the previous year, + 18.19% compared with the same period last year). In the first half of the year, deposits increased by 38.2 billion yuan, public deposits slightly increased by 18.1 billion over the beginning of the year, public period increased by 10 billion, and public life also increased by 8.1 billion yuan. Personal savings increased by 20.1 billion, of which personal current decreased by 5.9 billion, and personal regular growth by 26 billion. The fixed amount of savings is still obvious, in line with the trend of the industry.
Investment suggestion: Qilu Bank is in a period of asset quality improvement + rapid growth in performance in recent years, and its performance remains in the forefront of the industry in the first half of 2023. Looking to the future, Qilu Bank's asset quality is expected to continue to maintain an improvement trend, rapid scale expansion + rapid income development, provision is expected to release profits, regardless of external refinancing disturbance, drive ROE to improve. It is estimated that the net profit of homing in 2023-2025 will be 41.7 billion, 49.1 and 5.82 billion, respectively. It is recommended to pay attention to the opportunity for ROE to drive valuation repair and maintain its "buy" rating.
Risk tips: macroeconomic downturn; consumption recovery is not as good as expected; wealth management recovery is not as good as expected.