Key elements of the report:
Ping an Bank released its third-quarter results report for 2023.
Main points of investment:
Net profit from home increased 8.1% year on year in the first three quarters of 2023, revenue fell 7.7% from the same period last year, down 4 percentage points from the first half of the year, mainly due to the further narrowing of the net interest margin caused by the adjustment of the business structure and changes in fair value. Homed net profit increased by 8.1% over the same period last year, down 6.8 percentage points from the first half of the year.
Private business and bancassurance business maintained rapid growth: at the end of September 2023, retail customer assets (AUM) were managed at 3.998848 trillion yuan, an increase of 11.5% over the end of last year, of which the balance of AUM for private customers was 1.900316 trillion yuan, an increase of 17.2% over the end of last year; there were 1.3693 million wealth customers, an increase of 8.2% over the end of last year, of which 89300 were private customers, an increase of 10.9% over the end of last year.
From January to September 2023, the income from wealth management fees reached 5.636 billion yuan, an increase of 10.4 percent over the same period last year.
In addition, since 2021, the company has launched a new bancassurance strategy reform, in-depth cooperation with Ping an Life Insurance and other professional companies in Ping an Group. In 2023, the bancassurance business continued to upgrade in terms of team building, customer service and product system, and its production capacity maintained rapid growth. by the end of September 2023, the new team had more than 2500 employees, and the agent personal insurance income from January to September was 2.855 billion yuan, an increase of 98.3% over the same period last year. It has gradually become an important growth engine for the landing of the big wealth management strategy.
Asset quality-related indicators fluctuated slightly month-on-month: by the end of September 2023, the defect rate was 1.04%, the month-on-month uplink 1BP, the attention rate 1.77%, the month-on-month upstream 3BP, the provision coverage rate 282.62%, and the month-on-month decline 8.9 percentage points. Among them, the bad rate of corporate loans is slightly higher than the previous month, while the overall bad rate of personal loans is lower than the previous month.
Profit forecast and investment advice: the company continues to promote the transformation of public and retail business, reshape the balance sheet structure, and achieve a good volume-price balance. In the future, with the gradual recovery of the macro-economy and the further embodiment of the group's advantages, the company will still maintain its competitive advantage. Based on the latest data from the third quarter report, we have lowered our 2023 Universe earnings forecast for 2024 Universe 2025. According to Ping an Bank's A-share closing price of 10.38 yuan on October 25, corresponding to the 2023-2024 PB valuation of 0.5 times and 0.44 times, respectively, 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.