① The overall interest rate from January to February of this year was only 2.05%, down 13 BP from last year. The effect of controlling deposit costs is still very obvious. ② Chen Xinjian said he is confident that it can maintain stable operations, give investors more steady returns, and ensure that the dividend rate remains at a relatively high level.
Financial Services Association, March 29 (Reporter Liang Kezhi) Industrial Bank held a performance conference in Shanghai today. Senior management answered investors' hot questions on the spot.
Facing the agency's balanced relationship between revenue and profit and dividend ratio, Governor Chen Xinjian said that he is confident that it can maintain stable operations, give investors more steady returns, and ensure that the dividend rate remains at a relatively high level.
On the evening of the 28th, Industrial Bank released its 2023 annual report, showing that Industrial Bank's assets surpassed the 10 trillion mark last year, up 9.62% year on year; operating income was 210.831 billion yuan, and net profit to mother was 77.116 billion yuan, both of which had negative year-on-year growth. However, last year, we achieved a total of 14.222 billion yuan in account cancellation cases, an increase of 27% over the previous year, a record high in recent years.
Meanwhile, in 2023, Industrial Bank decided on a dividend amount of 1.04 yuan per share, with a dividend ratio of 29.64% and a dividend rate of 6.4%.
This year's financial situation is expected to be better than last year
According to the annual report, Industrial Bank achieved settlement of 14.222 billion yuan in account cancellation cases last year, an increase of 27% over the previous year, reaching a record high in recent years. A number of institutions at the scene asked about Societe Generale's risk exposure and disposal issues.
In response, Chairman Lu Jiajin said that due to the combination of domestic cyclical and structural contradictions, economic recovery is also facing some problems. Some industries have excess production capacity, insufficient effective demand, weak social expectations, and many hidden risks. In particular, real estate, government financing platforms, and business problems of micro, small and medium-sized enterprises are prominent.
Lai Furong, general manager of the risk management department of Societe Generale Bank, explained that on the issue of government financing platforms, the stock business was crushed by 20.9 billion dollars in 2023 through special refinancing bonds, making provision for 3.7 billion yuan; new bad effects on financing platforms fell 55% from the previous year, and overall risk exposure has subsided; interest income reduced by interest rate cuts on chemical bonds was about 1.1 billion yuan, accounting for only 0.32% of the year's interest income.
In the credit card sector, Deputy Governor Zhang Min said that credit card risk exposure is declining. The credit card failure rate last year was 3.93%, down 0.08 percentage points from the previous year. Early risk indicators for newly issued customers fell 52% from their high point.
The efficiency of clearing non-performing assets has improved markedly. Through the establishment of a three-in-one settlement system with independent collection by branches and collection through outsourced agencies and judicial channels, the amount of non-performing assets cleared increased 46% year-on-year over the same period last year.
According to Lu Jiajin, as of the end of last year, the balance of non-performing loans was basically the same as at the beginning of the year. The non-performing ratio declined, from 1.09% to 1.07%, which is equivalent to 2/3 of the level of the Chinese banking industry; the increase in provisions is 245%, which is equivalent to 1.2 times the industry average.
Lu Jiajin said that according to the current situation, it is expected that 2024 will experience a certain decline in both new bad cases and risk costs compared to last year. Under the current policy environment, Industrial Bank's financial situation this year is expected to be better than 2023.
Focus on protecting interest spreads this year and maintaining dividend rates
Chen Xinjian said that Industrial Bank's dividend rate has been increasing. From 22.24% in 2018 to 29.64% this year, it is close to 30%. It should be said that this dividend rate is relatively high.
Since our listing in 2007, we have accumulated dividends of 193.6 billion yuan, which is far higher than common stock financing of 83.5 billion yuan, giving investors a very good return.
The data shows that in 2023, Industrial Bank's interest spread was 1.93%.
Lin Shu, general manager of the Planning and Finance Department of Societe Generale Bank, said that the reduction in LPR this year and the repricing of stock mortgages affected 13 BP for the whole year. The decline in income from Societe Generale Bank's overall interest spreads in January-February of this year was shrinking; only 1 BP was reduced. According to estimates, we expect interest spreads to remain above 1.8% by the end of the year.
The next step is to adjust the balance sheet to stabilize interest spreads. On the asset side, we will increase asset investment and aim to complete 40% of the 500 billion loan target this year in the first quarter. To make a good asset allocation for the public sector and the industry, the retail business should increase the amount of consumer credit and operating loans.
Lin Shu believes that on the debt side, Industrial Bank's interest rate in 2023 is 2.18%, down 11 BP from the previous year. The overall interest rate from January to February this year was only 2.05%, down 13 BP from last year. The effect of controlling deposit costs is still very obvious.