Introduction to this report:
The Bank of Beijing's 2024 quarterly report performance exceeded expectations. Deposits and loans grew rapidly, the balance and liability structure was further optimized, asset quality was stable, and the holding increase rating was maintained.
Key points of investment:
Investment advice: Maintain the Bank of Beijing's 2024-2026 net profit growth forecast of 1.96%/3.55%/4.92%, corresponding EPS of 1.08/1.12/1.19 yuan. Maintain the target price of 6.50 yuan, corresponding to 0.52 times PB in 2024, and maintain an increase in holdings rating.
The performance exceeded expectations. 2024Q1 revenue increased 7.8% year over year, mainly due to: ① the low base for the same period in 2023; ② the sharp increase in investment income led to a year-on-year increase of more than 50% in other non-interest income. Interest spreads are still under downward pressure, and quantitative price compensation has maintained positive growth in net interest income. The decline in net revenue from handling fees and commissions has narrowed markedly, and the drag on revenue has weakened. Accrual of impairment losses increased, and final net profit increased 5% year over year.
Deposits and loans are growing rapidly, and the balance and liability structure has been optimized. Q1 Total assets increased 11.2% year on year, and the rate of table expansion remained at a relatively fast level; loans increased 11.6% year over year, mainly due to public loans. The loan growth rate was faster than the total asset growth rate, driving the share of loans in total assets to 54.4%. Q1 deposits increased 9.3% year-on-year, and the share of deposits in total debt increased by 61.3%. Average interest rates on RMB retail and public deposits decreased by 7 bps and 8 bps, respectively, from the beginning of the year, showing the effect of controlling deposit costs.
Asset quality is stable. At the end of Q1, the non-performing rate decreased by 1 bps to 1.31% compared to the end of 2023, the provision coverage rate decreased by 3.7 pc to 213.1%, the loan ratio decreased by 7 bps to 2.79%, and the asset quality index was basically stable.
Risk Warning: Demand recovery fell short of expectations; retail loan risk exposure exceeded expectations.