Financial Services Association, April 12 (Reporter Zou Juntao) According to Oriental Wealth Choice statistics, as of April 10, the capital adequacy ratios of 9 of the 22 listed banks that have disclosed their annual reports declined to varying degrees last year. Among them, Ruifeng Bank had the highest decline.

From an industry perspective, how to deal with the decline in capital adequacy ratios is a common challenge facing the banking industry at present, but the countermeasures taken by various companies are also receiving a lot of attention from the market.

On April 12, at the 2023 performance briefing of Ruifeng Bank, some investors once again put how to deal with the declining capital adequacy ratio in front of the management level of Ruifeng Bank, and the relevant management also proposed their own “solutions.” Furthermore, market concerns such as how to view the trend of interest spreads and whether the large-scale lifting of the ban will have an impact on stock prices were also answered by Ruifeng Bank's management.

Develop non-interest income business and enhance endogenous capital replenishment capabilities

According to the annual report, by the end of 2023, Ruifeng Bank's capital adequacy ratio decreased by 1.7 percentage points compared to the end of the previous year, and the core Tier 1 capital adequacy ratio decreased by 1.74 percentage points from the end of the previous year.

Regarding how to deal with the decline in capital adequacy ratio, Ruifeng Bank Governor Chen Gangliang responded that in 2024, Ruifeng Bank will continue to promote the comprehensive development of various businesses, optimize the business structure and asset structure, strengthen interest spread management, continue to increase the share of non-interest income, effectively control the growth of costs and expenses, enhance profitability, and continuously improve endogenous capital replenishment capabilities.

According to the 2023 report of Ruifeng Bank, during the reporting period, Rui Fung Bank achieved net non-interest income of 750 million yuan, an increase of 122.80% over the previous year, mainly due to increased income from changes in fair value and other income. In terms of share, during the reporting period, Rui Fung Bank's non-interest income accounted for 19.71% of total revenue.

Chen Gangliang believes that the amount of the bank's non-interest income still has plenty of room for development. In the future, while adhering to the continuous steady development of traditional businesses, non-interest income will be used as a new revenue growth point to steadily cultivate and develop businesses related to non-interest income.

Interest spread control has been strengthened, and the net interest spread is expected to continue to decline during the year and is expected to ease

According to the annual report, by the end of 2023, Rui Fung Bank's net interest spread fell to 1.73%, down 0.48 percentage points from the end of the previous year, and declined for three consecutive years.

Wu Zhihui, chairman of Ruifeng Bank, analyzed the reasons for the decline in the company's net interest spread from the asset side and debt side. He said that from the asset side, on the one hand, due to factors such as market competition and declining LPR, the stock loan turnover repricing interest rate declined markedly compared to the previous year. Combined with the reason that the Bank made full use of inclusive small and micro loan support tools to increase loan investment, book interest rates were relatively low, and the corresponding subsidies were not included in interest income, causing general loan yields to decline.

On the other hand, the bank's deposit growth rate last year was significantly higher than the loan growth rate. While ensuring that investment income covered capital costs and increased revenue, the bank also increased the share of financial assets in total assets and diluted the Bank's net interest income.

From the debt side, Rui Fung Bank maintained a high increase in deposits in 2023, implemented debt cost control measures, and lowered listed interest rates several times. However, digestion of past high-cost deposits required a certain process, so overall debt costs remained rigid.

How to deal with the continued narrowing of interest spreads? Wu Zhihui responded that in the future, Rui Fung Bank will further increase interest spread control and improve its ability to control interest spreads by adjusting the term structure at both ends of assets and liabilities, optimizing the fine management of pricing, strengthening active debt management, coordinating liquidity management, improving the operating efficiency of capital business assets, and supporting related special assessments.

Wu Zhihui said that with debt-side and asset-side structural optimization and pricing adjustments, it is expected that the problem of net interest spreads continuing to decline in 2024 will be mitigated.

Large-scale ban lifting is imminent, and the chairman responds to investors' concerns

According to information, on June 25 of this year, Ruifeng Bank will lift the ban on some restricted shares. About 42% of the total share capital of Ruifeng Bank held by the top 14 shareholders of Ruifeng Bank before the initial public offering and about 1.5% of the shares held by Ruifeng Bank employees will be lifted from sales restrictions and can be listed for circulation.

Some investors feared that the lifting of the ban would put pressure on Ruifeng Bank's stock price. Wu Zhihui responded at the meeting, “Most of the Bank's top 14 shareholders became shareholders of the Bank when the Bank was established, and are leading local companies that have coexisted and grown with the Bank. They all expressed optimism about the Bank's long-term development prospects and are willing to maintain a long-term stable investment relationship with the Bank.”