Finance Network News on September 4th (Reporter Guo Zishuo): Today, Minsheng Bank held a mid-year performance release conference for 2024. Several executives responded to market concerns one by one on topics such as deposit scale, mortgage business, and the scale of non-performing asset disposal.

Regarding Mortgage Loans: The scale of mortgage loans has stabilized and shown positive signs.

In the first half of 2024, Minsheng Bank achieved operating income of 67.127 billion yuan, a 6.17% year-on-year decrease; achieved a net profit attributable to the bank's shareholders of 22.474 billion yuan, a 5.48% year-on-year decrease. As of the end of June, Minsheng Bank's total loans and advances amounted to 4423.227 billion yuan, an increase of 0.87% over the previous year-end, accounting for 58.58% of the total assets.

Among them, the balance of Minsheng Bank's mortgage loans in the first half of the year reached 537.71 billion yuan, a decrease of 6.135 billion yuan from the end of the previous year. Zhang Junxiong, Vice President of Minsheng Bank, stated that in the first half of the year, the amount of mortgage loans issued by Minsheng Bank decreased by 9.22% year-on-year. Although the amount of early repayments also decreased significantly at the same time, the total amount of early repayments still remained at a relatively high level.

However, Zhang Junxiong added that in the first half of the year, although overall mortgage loans have decreased, the year-on-year growth rate of second-hand house mortgage loans reached 32.5%. At the same time, in June, the monthly mortgage business has already experienced a situation where the amount disbursed exceeds the amount repaid, the scale has begun to stabilize and rise, and positive signs have been maintained thereafter. Against the backdrop of a stable overall real estate market and a relatively stable willingness of residents to make early repayments, Minsheng Bank's mortgage loan performance in the second half of the year is expected to achieve positive growth in scale.

"Next, Minsheng Bank will strengthen cooperation with key primary real estate developers and top secondary housing agency institutions, continuously optimize processes, promote digital transformation, strengthen the construction of the mortgage team, enhance the comprehensive development of mortgage loan customers, and constantly improve service quality and efficiency." Zhang Junxiong added.

Regarding the real estate business: The non-performing loan ratio is rising, and the risk of projects with poor regional formats may still be exposed.

In the first half of the year, Minsheng Bank's non-performing loans in the corporate sector were mainly concentrated in the real estate, manufacturing, leasing, and business service industries, with a total percentage of 78.68% in the company's non-performing loans. Due to factors such as the real estate industry and deteriorating individual client operations, the total amount of non-performing loans in the real estate, water conservancy, environmental and public facility management industries increased by 0.969 billion yuan and 329 million yuan respectively compared to the end of the previous year.

Regarding the non-performing loan ratio of the real estate industry, Minsheng Bank's executives responded that in the first half of this year, the real estate market was still at a bottoming stage, and the non-performing loan ratio of Minsheng Bank's real estate loans increased, putting certain pressure on asset quality. On one hand, the risk situation of some projects worsened, and Minsheng Bank promptly adjusted the risk classification, accelerating the resolution of risks, leading to a slight increase in the balance of non-performing loans compared to the end of the previous year. On the other hand, in the first half of the year, Minsheng Bank made progress in the continuous risk resolution of troubled real estate enterprises, resulting in a slight decrease in the scale of real estate loans compared to the end of the previous year.

Regarding the future risks in the real estate sector, the aforementioned executives believe that overall, with the implementation of real estate policies, although the transaction volume of second-hand housing in key cities has rebounded in recent months, the overall market's recovery in terms of both quantity and price will still take some time. Until the transaction volume stabilizes, the funding chain of real estate companies will continue to be under pressure, and it is expected that there may still be risks exposed in real estate projects with poor performance in certain regions.

Regarding corporate deposits, the monthly growth of corporate deposits in July and August has continued to improve, and the cost of liabilities has been decreasing.

As of the end of June, Minsheng Bank's total deposits amounted to 4.06 trillion yuan, a decrease of 218.271 billion yuan or 5.10% from the end of the previous year. The size of individual deposits has steadily increased, while the balance of corporate deposits amounted to 2.76 trillion yuan, a decrease of 296.477 billion yuan or 9.71% from the end of the previous year.

Regarding the decrease in corporate deposits, Deputy President Shi Jie admitted that Minsheng Bank faced significant pressure in corporate deposits in the first half of the year, mainly due to: first, Minsheng Bank took the initiative to reduce costs and adjust the structure of corporate deposits; second, from April to June, Minsheng Bank actively responded to the self-discipline requirements for deposits, comprehensively requiring the resolution of all excessive self-discipline business within two months; third, in the new market environment, customer demands have also changed, with a clear trend of deposits moving towards wealth management and interbank deposits.

Shi Jie stated that the strict implementation of the deposit self-discipline mechanism has caused a certain degree of "birth pains" for the deposit scale. However, this also provides a great opportunity for structural adjustment. The monthly growth of corporate deposits in July and August has continued to improve, with better month-on-month improvement and a more obvious decline in the cost of corporate liabilities.

In the future, Minsheng Bank will strengthen the classification and servicing of deposit customers, truly understanding their needs and enhancing the level of comprehensive customer service. At the same time, it will focus on settlement and current accounts, accelerate the development of supply chain business, and improve the foundation of settlement work. Additionally, it will appropriately extend its target customers while enhancing coverage of small and medium-sized client groups.

Regarding the disposal of non-performing assets: the historical non-performing assets have been basically cleared, and it is expected that the scale of clean-up will continue to decrease year-on-year throughout the year.

Minsheng Bank accumulated a clean-up and disposal of non-performing assets of 28.15 billion yuan in the first half of the year, a decrease of 20% year-on-year. Among them, the disposal of non-performing loans was 27.625 billion yuan, a decrease of 10% year-on-year. According to the disposal methods, cash clean-up amounted to 3.743 billion yuan, securitization of non-performing assets 3.958 billion yuan, transfer 1.855 billion yuan, write-off 17.73 billion yuan, debt offset and other methods for a total of 0.339 billion yuan; clean-up and disposal of non-credit non-performing assets was 0.525 billion yuan.

In response to the decrease in the scale of non-performing asset disposal in the first half of the year, Wang Xiaoyong, Vice Director and President of Minsheng Bank, stated that on one hand, with the completion of the three-year plan for clean-up and disposal by Minsheng Bank in 2023, historical non-performing assets have been basically cleared, and the overall scale of non-performing assets continues to decrease; on the other hand, the continuous decrease in the generation rate of non-performing assets in the current period leads to a continuous decrease in the scale of non-performing assets that meet the disposal conditions, and it is expected that the scale of clean-up will continue to decrease year-on-year throughout the year.

Wang Xiaoyong further stated that the difficulty of cash clean-up of non-performing assets in the first half of this year has been continuously increasing. At the same time, the trading activity in the non-performing asset market was relatively low in the first half of the year, intensifying price negotiations between the supply and demand sides, leading to a decrease in the scale of transfers in the first half of the year. In terms of disposal methods, the size of loan write-off disposal in the first half of the year grew rapidly year-on-year.

Minsheng Bank is also accelerating the recovery work of already written-off assets to actively supplement operating profits. In the first half of the year, Minsheng Bank recovered 5.113 billion yuan of already written-off assets, an increase of 20.31% year-on-year. Next, Minsheng Bank will continue to advance the clean-up and disposal of non-performing assets. Proactively responding to the new situation faced in clean-up and disposal, adapting disposal strategies, selecting the best methods comprehensively; optimizing management mechanisms, improving preservation-related management policies, continuously enhancing disposal efficiency; deepening the concept of operating non-performing assets, adhering to valuation leadership, fully leveraging assets for preservation, loss prevention, and mitigation purposes; tapping into the potential value of written-off assets, advancing cash recovery of written-off assets in layers, with a 20.31% year-on-year increase in cash recovery scale in the first half of the year.