浦发银行(600000):扭转颓势 关注转型进度

SPD Bank (600000): Reverse the decline and focus on the progress of transformation

中金公司 ·  Apr 30

2023 results met our expectations and 1Q24 results exceeded expectations

SPD Bank released its 2023 annual report and 1Q24 quarterly report. The company's 2023 revenue/net profit decreased by 8.1% and 28.3% year on year, respectively, and 4Q23 single quarter revenue/net profit decreased by 9.6% and 18.6% year on year, respectively. The results were in line with our expectations. 1Q24's single-quarter revenue decreased 5.7% year over year, and net profit to mother increased 10.0% year over year. After excluding the one-time impact of the sale of shares invested in Morgan during the same period of the year, 1Q24 revenue increased 3.4% year over year, and net profit after deducting non-return to mother increased 30.6% year on year. The performance exceeded our expectations. We believe it was mainly driven by declining credit costs.

Development trends

The asset structure improved, and the net interest spread was stable in 1Q24. 2H23's net interest spread was 1.48%, down 8 bps from the first half of the month, and the company's net interest spread for the full year of 2023 decreased by 25 bps to 1.52% year on year (all average daily balance); we estimate that the average NIM at the beginning of the 1Q24 period remained the same as 4Q23 year over year. Among them, the company's debt capacity gradually increased in the past two quarters, and the 1Q24 interest-paying debt cost ratio decreased by 4 bps to 2.22% compared to 3Q23. In terms of scale growth, the expansion schedule remained steady. Total assets in 4Q23/1Q24 increased 2.3%/0.5%, respectively, and loans increased 2.0%/3.4% month-on-month, respectively. The ratio of loans to total assets increased by 1.4 pct to 57.3% compared to 3Q23. The company's 2023/1Q24 net interest income decreased by 11.4% and 6.4% year-on-year, respectively, and the decline narrowed somewhat.

Non-interest revenue for 2023 and 1Q24 increased 0.1% year-on-year and decreased 4.6%, respectively. The company's net handling fee revenue for 2023, 4Q23, and 1Q24 decreased by 14.8%/25.8%/10.9%, respectively. We believe it was mainly affected by factors such as weak capital markets, integrated insurance reporting and restructuring, and consumer spending falling short of expectations. Other non-interest income increased 16.3% and 24.3% year-on-year in 2023 and 4Q23, respectively. The good performance of the bond market drove an increase in investment income and fair value changes; in 1Q24, other non-interest income fell slightly by 0.1%, mainly due to the disposition of shares invested in Morgan in the same period last year.

Defect rate and bad net generation rate both decreased. As of the end of 1Q24, the company's loan non-performing ratio was 1.45%, a cumulative decrease of 7 bps compared to the end of 3Q23; the share of concerned loans remained flat at 2.35%. As of the end of 2023, the loan overdue rate and the proportion of loans overdue for 90 days or more was 2.02% and 1.25%, down 5bp and 11bp respectively from the end of 1h23. In terms of new non-performing loans, the company's net generation rate of non-performing loans decreased by 17 bps to 1.15% year-on-year in 2023. We estimate that the net bad generation rate for 1Q24 was 0.76% in a single quarter. In terms of risk offsetting capacity, the company's provision coverage rate at the end of 1Q24 was 172.8%, which is 4.2pct lower than 3Q23 consumption.

The dividend rate was increased to 30%. The company plans to pay a dividend of 3.21 yuan for every 10 shares in 2023, increasing the dividend rate from 20.50% to 30.05%. Based on the latest closing price estimates, the company's dynamic dividend ratio increased to 4.2%.

Profit forecasting and valuation

Maintain profit forecasts and outperform industry ratings. The current stock price corresponds to 0.4x/0.3x 2024E/ 2025E P/B. Considering that the company's credit cost pressure may be mitigated and dividend rate increases to increase dividend returns, we raised the target price by 20% to 9.2 yuan, which corresponds to 0.4x/0.4x 2024E/2025E P/B, with 19.5% upward space.


The macroeconomic recovery fell short of expectations, and risk management pressure exceeded market expectations.

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