Key points of investment
Postbank 24Q1 revenue increased 1.4% year over year, leading the market in growth rate.
Overview of the data
The net profit of the Postbank in 24Q1 decreased 1.3% year over year; revenue increased 1.4% year over year. Postbank's non-performing rate at the end of 24q1 increased slightly by 1bp to 0.84% month-on-month; provision coverage decreased by 21pc to 327% compared to the end of 23Q4.
Leading the way in revenue
The net profit of the Postbank in 24Q1 fell 1.3% year on year, and revenue increased 1.4% year on year. Revenue led the market and exceeded market expectations. In terms of driving factors, interest spreads are more resilient, non-interest rate increases are supported, and depreciation support is weakened. (1) Interest spread: 24Q1 estimates that the single-quarter interest spread (early and end of the period, same below) decreased by 2 bps to 1.89% month-on-month compared to 23Q4. (2) Other non-interest: 24Q1 other non-interest rate increased 16.7% year on year, and the growth rate rebounded 18.2pc month-on-month, mainly due to the floating profit support of Q1 bond market-related investments. (3) Impairment: The 24Q1 impairment decreased by 18.9% year on year, and the decline narrowed by 7.1pc from month to month.
Looking ahead to the whole year, the Postbank's profit growth rate is expected to return above 0%. The main considerations are: (1) The 2023 interest spread base was high and low, and the base effect is expected to support the improvement of interest spreads. (2) Savings agent rates once again triggered passive adjustments, focusing on the potential improvement of cost pressure due to the implementation of the plan.
Interest spreads fell slightly month-on-month
The 24Q1 interest spread (at the beginning and end of the period, same below) was 1.89%, a slight decrease of 2 bps compared to 23Q4, and the interest spread was very resilient.
(1) Asset side: The yield on the asset side in 24Q1 was 3.37% in a single quarter, down 8 bps from month to month, mainly due to the downward impact of interest rates on loans and financial markets.
(2) Debt side: The debt-side cost ratio for the 24Q1 quarter was 1.49%, down 6 bps from month to month, mainly due to the release of deposit interest rate reduction dividends and deposit cost improvements.
Looking ahead, it is expected that the Postbank's subsequent interest spreads will still be under downward pressure.
Bad generation fluctuation
In terms of stock indicators, Postbank's non-performing rate, attention rate, and overdue rate were +1bp, +4bp, and +7bp month-on-month to 0.84%, 0.71%, and 0.99% at the end of 24Q1, and the bad stock index fluctuated.
In terms of dynamic indicators, the 24Q1 Postbank's bad generation rate was 0.81%, up 5 bps year on year. The pressure of bad generation is rising, and the judgment is related to the upward trend in retail loan risk in the industry.
Profit forecasting and valuation
The net profit of the Postbank in 2024-2026 is expected to increase by 0.42%/6.08%/8.55% year-on-year, corresponding to BPS of 8.45/9.06/9.73 yuan. The current price corresponds to 0.57/0.53/0.49 times PB. Maintain the target price of 5.47 yuan, corresponding to the target valuation of 2024 PB 0.65x, current price space 14%, and maintain the “buy” rating.
Risk warning: The macroeconomic economy has stalled, and the bad situation has been greatly exposed.