epilogue

The economic situation in Tianjin, where Bohai Bank is located, is below the middle of the country's provincial regions, and financial resources are average.

Compared with national joint-stock banks, Bohai Bank is at the bottom in terms of total asset size and revenue. The non-performing loan ratio is lower than the average value of joint stock banks, but its deposit to loan ratio is high, provision coverage is far lower than the average of joint stock banks, and the capital adequacy ratio is clearly insufficient.

In terms of shareholder background, Bohai Bank has a high proportion of state-owned shares, but there is also a risk shareholder situation, and the scale involved is not small. Follow up on the progress of related cases.

In terms of asset quality, in the case of a slight decline in loan size, the non-performing rate of major industries is worth paying attention to, especially in the real estate and construction industry. At the same time, the non-performing loan ratio in the leasing and business services industry and the mining industry also increased, and personal non-performing loan ratios continued to rise even as the scale declined markedly. On the other hand, the scale and share of trust and asset management plans in investment assets is relatively large, and the potential credit risk of these non-standard assets may not be low. In terms of risk mitigation, although Bohai Bank's provision coverage rate increased in 2023, it is still far from the industry average. Considering its asset structure and current economic pressure, Bohai Bank's asset quality will still be under downward pressure. Provisions will be further impacted at that time, and the difficulty of credit risk management may increase further.

In terms of debt, the size of Bohai Bank's time deposits has increased markedly, and deposit stability is relatively good, but this can lead to cost rigidity, thus causing pressure on profits. In terms of bonds, recently issued secondary capital bonds can effectively mitigate the impact of future perpetual bond redemptions on capital.

In terms of profit, Bohai Bank's operating income is under pressure. Under conditions where debt costs are relatively rigid, return on assets has declined, net interest spreads and net interest spreads have continued to narrow. In addition, credit impairment remains at a high scale. Profit pressure is obvious, and there has been a continuous double-digit decline. Judging from the asset situation, the future pressure is still not light.

In terms of capital, recently issued bonds can ease pressure during the year, but considering the specific performance of capital adequacy ratios, self-accumulation due to profit pressure will still take a long time, and other channels for capital replenishment need to be expanded urgently.

Overall, under a lot of pressure, the future of Bohai Bank can be described as “an obstacle and a long one,” and it is even more necessary to forge ahead.