常熟银行营收增速边际下降，主要受息差业务拖累。24Q1 常熟银行利息净收入同比+5.62%，整体增速水平慢于营收增速，主要系息差承压。常熟银行归母净利润增速边际提升，主要系成本费用管控较好，24Q1 常熟银行成本收入比为35.27%，较23 年末-1.60PCT。从业绩归因来看，24Q1 常熟银行生息资产规模、净息差、中收、其他非息收入、拨备计提对净利润的贡献度分别为+15.55%、-9.93%、+0.47%、+5.92%、-0.14%，较23 年分别-1.02PCT、-5.05PCT、+2.75PCT、+3.29PCT、-4.82PCT。非息收入表现亮眼，24Q1 常熟银行中收、其他非息收入分别同比+635.41%、+67.00%。中收明显改善，主要系代理业务手续费增加。其他非息收入明显改善，主要系交易性金融资产等投资收益增加。24Q1 常熟银行投资收益同比+276.76%。Incidents:
Changshu Bank announced its quarterly report for 2014. In 24Q1, it achieved revenue of 2.70 billion yuan, +12.01% year over year, growth rate of -0.04 PCT in 23; net profit to mother was 952 million yuan, +19.80% year over year, and +0.20 PCT compared to 23 years.
Excellent overall performance and significant improvement in non-interest income
Changshu Bank's revenue growth rate declined marginally, mainly hampered by interest spread business. 24Q1 Changshu Bank's net interest income was +5.62% year-on-year. The overall growth rate was slower than the revenue growth rate, mainly due to pressure on interest spreads. Changshu Bank's net profit growth rate increased marginally, mainly due to better cost and expense control. In 24Q1, Changshu Bank's cost-revenue ratio was 35.27%, compared to -1.60 PCT at the end of '23. In terms of performance attribution, 24Q1 Changshu Bank contributed +15.55%, -9.93%, +0.47%, +5.92%, and -0.14% to net profit, respectively, compared with -1.02PCT, -5.05PCT, +2.75PCT, +3.29PCT, and -4.82PCT, respectively, compared to 2008. Non-interest income was impressive. Changshu Bank's revenue and other non-interest income were +635.41% and +67.00%, respectively, year-on-year in 24Q1. Revenue has improved markedly, mainly due to an increase in handling fees for agency services. Other non-interest income improved markedly, mainly due to an increase in investment income such as transactional financial assets. Changshu Bank's investment income was +276.76% YoY in 24Q1.
Interest spreads show strong resilience
24Q1 Changshu Bank achieved net interest income of 2,296 billion yuan, +5.62% year-on-year, with a growth rate of 23-6.07PCT, continuing the overall logic of volume compensation. In terms of credit investment, as of the end of 24Q1, Changshu Bank's loan balance was 235.243 billion yuan, +15.01% year-on-year, and the growth rate was +0.02PCT compared to 23. The loan growth rate increased slightly, mainly due to good performance on the public side. In 24Q1, Changshu Bank added 12.804 billion yuan in loans, including 7.903 billion yuan in public loans, accounting for 61.72% of the new loans. In terms of net interest spreads, Changshu Bank's 24Q1 net interest spread was 2.83%, ranking first among listed banks and showing strong resilience compared to 23-3BP. The net interest margin narrowed slightly, mainly due to a drag on the debt side. The average cost ratio of Changshu Bank's interest-bearing debt in 24Q1 was 2.34%, +4BP compared to '23. The marginal increase in debt costs is expected to be mainly due to a decline in the share of sell-back financial assets with lower interest rates. As of the end of 24Q1, Changshu Bank sold and repurchased financial assets as a share of 1.39% of liabilities, compared to 2.60 PCT at the end of 23. Changshu Bank's asset-side yield is resilient. The average yield on 24Q1 interest-bearing assets was 5.03%, +3BP compared to 23.
Overall asset quality is stable
As of the end of 24Q1, Changshu Bank's non-performing rate and attention rate were 0.76% and 1.24%, respectively, compared to +1BP and +6BP at the end of 23, respectively. Asset quality fluctuates slightly. It is expected that it is mainly due to the expiration of the debt deferment policy in the early period, and the marginal risk exposure impact of some small and micro customer groups. In terms of provisions, as of the end of 24Q1, Changshu Bank's loan ratio and provision coverage rate were 4.11% and 539.18% respectively. Compared with the end of 23, +7BP and +1.30PCT, respectively, the increase in provision plans remained high. Solid provisions are expected to maintain the basic market of excellent asset quality.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2024-2026 to be 109.54, 121.47, and 13.597 billion yuan, respectively, with year-on-year growth rates of +10.98%, +10.89%, and +11.95%, respectively, and a 3-year CAGR of 11.27%.
Net profit attributable to mother was 38.20, 45.15, and 5.241 billion yuan respectively. The year-on-year growth rates were +16.42%, +18.19%, and +16.08%, respectively, and the 3-year CAGR was 16.89%. In view of the company's strong operational resilience and real asset quality, we gave the company 1x PB in 2024, with a target price of 10.14 yuan, maintaining a “buy” rating.
Risk warning: Steady growth falls short of expectations, and asset quality deteriorates.
