Revenue and net profit on a scale declined slightly, and are at a good level among major banks. The first quarter of 2024 achieved revenue of 186 billion yuan (YoY, -1.76%) and net profit to mother of 70.4 billion yuan (YoY, -1.63%). The annual weighted average ROE was 11.39%, down 1.21 percentage points year over year.
Net interest income fell slightly through volume compensation, and other non-interest income grew rapidly. Net income from interest decreased by 0.7% year on year in the first quarter, net income from handling fees and commissions decreased by 10.8% year on year, and other net income without interest increased 11% year on year. The net interest spread disclosed by the company in the first quarter was 1.44%, down 26 bps year on year, and 16 bps narrower than the full year of 2023. It was mainly impacted by the downward repricing of LPR, lower interest rates on stock mortgages, and lower interest rates on newly issued loans. At the end of the period, total assets were 42.2 trillion yuan, total loans were 23.9 trillion yuan, and total deposits were 31.1 trillion yuan, up 5.7%, 5.5% and 7.5% respectively from the beginning of the year, and the scale continued to expand rapidly.
The financial development trend in the county is relatively good, and credit investment focuses on fields such as manufacturing, green credit, and inclusive finance. At the end of the period, the county's loan balance was 9.4 trillion yuan, up 7.1% from the beginning of the year, accounting for 39.5% of the total loan amount. Manufacturing loan balances, green credit business balances, and loan balances in the inclusive finance sector were 3.3 trillion yuan, 4.8 trillion yuan, and 4.4 trillion yuan respectively, up 12.7%, 18.9%, and 22.6% respectively from the beginning of the year.
Asset quality is stable, and provision coverage is stable at a high level. The end-of-term non-performing loan ratio was 1.32%, down 1 bps from the beginning of the year. Accrued credit impairment losses for the current period decreased by 1.6% year on year, and the end-of-period provision coverage rate was 303.2%, down 0.65 percentage points from the beginning of the year, leading the industry.
The capital is reasonable and sufficient, and the board of directors decides on the mid-term dividend arrangement. At the end of the period, the company's core Tier 1 capital adequacy ratio was 11.37%, up 0.65pct from the beginning of the year, and is at a reasonable level of sufficiency. The board of directors decided on arrangements relating to the distribution of mid-term profits for 2024. According to the reviewed financial report for the first half of 2024, the 2024 interim dividend will be implemented under the condition that profits can be distributed for the 2024 half year will be implemented. The total mid-year dividend accounts for no more than 30% of the net profit attributable to shareholders of the parent company achieved by the Group in the 2024 half year. The amount of interim profit distribution already distributed will be taken into account when formulating the 2024 profit distribution plan in the future.
Investment advice: The company has unique advantages in county finance, and its performance is at a good level among major listed banks.
Maintaining the 2024-2026 net profit forecast of 2952/3065/324.3 billion yuan, the corresponding year-on-year growth rate was 9.6%/3.8%/5.8%; diluted EPS was 0.84/0.88/0.93 yuan. The board of directors decided on the mid-term dividend arrangement. The company's dividend had an advantage and maintained a “buy” rating.
Risk warning: Macroeconomic recovery falls short of expectations and will drag down the company's net interest spreads and asset quality.