Bank of Xiamen's performance maintained a relatively rapid growth rate. Scale growth was restored in the third quarter. Deposit pressure eased slightly, asset quality continued to stabilize, and capital advantage continued to strengthen. The company's location is scarce, business is stable, and asset quality is stable. In recent years, outlets in the province have expanded rapidly, and growth can be expected. Focus on interest spreads and deposit changes. Currently, 2023N Company PB0.59X maintains its rating of increased ownership of the company.
Key points to support ratings
Profits are growing rapidly, and high capital levels are being strengthened
In the first three quarters, the net profit of the Bank of Xiamen increased 14.6% year on year, and performance continued to grow rapidly. Revenue fell 3.5% year on year, interest income fell 4.1% year on year, non-interest income fell 1.6% year on year, and profit before provision fell 10.3% year on year. Provision for backfeeding was still the main contributor to performance. Bank of Xiamen's core capital adequacy ratio for the 3rd quarter was 9.87%, up 15 bps year on year, tier 1 capital adequacy ratio was 12.42%, up 156 bps year on year, and capital adequacy ratio was 15.53%, up 142 bps year on year. 5 billion yuan of convertible bonds has been announced, and capital strength may be further enhanced in the future.
Scale growth recovered in the 3rd quarter, and deposit pressure eased slightly
The total assets of Bank of Xiamen in the first three quarters increased 7.3% month-on-month, and the month-on-month growth rate improved markedly. The scale recovered positively from the beginning of the year, loans increased 0.8% from the previous quarter, and deposits increased 6.3% month-on-month. The loan-to-deposit ratio declined, and the pressure on high-interest deposits and margin deposits eased.
Interest income increased negatively year on year, and the pressure on interest spreads is still high
The Bank of Xiamen's interest income for the first three quarters fell 4.1% year on year, an increase over the first half of the year. This year's scale growth rate has slowed, contribution has weakened, interest spreads are low, and the year-on-year decline is not significant. It is estimated that the quarterly net interest spread for the 3rd quarter was 1.23%, down 7 bps from the previous quarter, the month-on-month decline was 6 bps larger than the previous quarter, the yield on interest-bearing assets was estimated to be 3.61%, down 4 bps from the previous quarter, and the estimated interest-bearing debt cost ratio was 2.51%, up 4 bps from month to month. The share of asset-side loans and debt-side deposits both declined, and structural factors may have an impact.
Asset quality is stable, and provisions have declined slightly
The company's non-performing rate in the 3rd quarter was 0.79%, down 1 bps from the 2nd quarter, and the bad balance fell 0.3% month-on-month, completing the double decline of bad losses. Focus on loans accounted for 1.22%, up 5 bps from month to month, mainly due to changes in the measurement caliber of risk management methods, and continued excellent asset quality.
The company's asset impairment losses in the first three quarters fell 75.4% year on year, contributing to profit. The provision coverage rate was 393.02%, a slight decrease of 1.83 percentage points from the end of the second quarter; the loan ratio was 3.11%, a slight decrease of 0.05 percentage points from the second quarter. The absolute cost of asset impairment this year is low. Next year, like, there is a similar contribution, which needs to be directly compensated.
valuations
According to the quarterly report adjusted the company's profit forecast, the company's EPS in 2023 remained unchanged at 1.07 yuan, the 2024/2025 EPS was adjusted to 1.15/1.20 yuan, and the 2023/2024 PB was 0.59x/0.52x, maintaining an increase in holdings rating.
The main risks faced by ratings
Economic downturn and overseas risks exceed expectations.