Financial report summary: 1. 1Q23 revenue was -1.8% year on year, net profit +7.8% year on year. Interest income and non-interest were both dragged down. Net interest income was +1.74% year on year, and the growth rate was marginal decline; net non-interest income was -7.1% year on year, and the decline was marginal.
2. Net interest income was -1.2% month-on-month, and the average daily net interest spread for a single quarter fell 8 bps to 2.29% month-on-month. The return on interest-bearing assets fell 2 bps month-on-month, loan interest rates and bond investment interest rates changed 5-bps and +4bp, respectively; the interest rate on interest-bearing debt rose 6 bps month-on-month, and the cost of deposits and interbank debt rose 4 bps and 24 bps, respectively. 3. Growth rate and structure of assets and liabilities: Savings and loans increased year-on-year in a single quarter, and deposit growth was higher than loan growth. Assets: Interest-bearing assets increased 11.3% year on year; total loans increased 8.8% year on year, and bond investment increased 29.3% year on year; among them, credit growth picked up markedly. 23Q1 increased 178.6 billion yuan in a single quarter, an increase of 102.2 billion yuan over the 22Q4 quarter, an increase of 45.2 billion yuan over the same quarter last year. Liabilities: Total debt increased 12% year on year; total deposits increased 17.3% year on year; of these, 1Q23 added 442.5 billion dollars in a single quarter, an increase of 231.5 billion yuan over the 22Q4 quarter, and an increase of 55.8 billion yuan over the same period last year. 4. Disaggregation of deposits and loans: Mainly public investment, retail sales improved significantly compared to the same period last year; deposit regularization continued. New to the public sector: Retail: Notes = 66:30:4. The share of new retail loans increased significantly compared to 1Q22. In terms of deposits, the trend of regularization of corporate residents' accounts continued, with the share of personal deposits rising slightly by 0.1pcts to 41.3% month-on-month. 5. Net non-interest income was -7.1% year on year (vs. 4Q22 -1.7% year on year), mainly dragged down by negative growth in fee revenue, while net other non-interest income growth rate rebounded significantly year-on-year to +13.9% year on year (Vs4Q22 -6.7% year on year). 6. Wealth management: Retail AUM was 12.5 trillion yuan, up 3.4% from the end of the previous year. The number of Golden Sunflower and private bank customers both maintained double-digit growth, and the corresponding AUM exceeded 10 trillion dollars. 7. Asset quality is generally stable, the public sector remains stable, and retail sales have improved slightly. The non-performing rate fell 1 bps to 0.95% month-on-month, the non-performing ratio remained 1.25%, the retail non-performing rate fell 1 bps to 0.89% month-on-month. The mortgage, microfinance, credit card, and consumer loan overdue rates all improved to varying degrees from month to month; provision coverage rate of 448.3% remained high. 8. Other: The acceleration of asset investment in 1Q23 led to faster risk-weighted asset growth, and capital adequacy ratios at all levels declined slightly from month to month.
Investment advice: The company's current stock price corresponds to 2023E and 2024E PB 0.92X/0.81X; PE5.66X/5.19X.
In the retail and wealth management circuit, CMB has gradually built up a “moat of business models”; the internal marketization and external customer-oriented “corporate culture” formed over a long period of time (scarce in the banking industry); and the “team members” formed by a large number of pragmatic, hardworking, professional, and enterprising senior management and business cadres. These underlying values have not changed; they are still scarce and excellent banks in the industry, and are worth holding for a long time.
Risk warning: The economic downturn has exceeded expectations, and the company's operations have fallen short of expectations.