招商银行(600036)2023年一季报点评:资产质量向好 信贷投放提速

China Merchants Bank (600036) 2023 Quarterly Report Review: Asset Quality Is Improving, Credit Investment Is Accelerating

民生證券 ·  04/26  · Researches

Incident: On April 26, China Merchants Bank released its 23Q1 financial report. 23Q1 achieved revenue of 90.64 billion yuan, YoY -1.5%; net profit of the mother was 388.4 billion yuan, YoY +7.8%; the non-performing rate was 0.95%, and the provision coverage rate was 448%.

Revenue is under phased pressure, and Guimu's net profit is relatively stable. 23Q1 revenue declined slightly year-on-year, mainly dragged down by narrowing interest spreads and poor revenue from wealth; asset quality improved, supporting a moderate release of provisions to feed back profits. 23Q1 credit impairment losses were -23.7% year-on-year.

Looking at the revenue segment, the decline in interest spreads had a big impact on net interest income. Net interest income in 23Q1 was +1.7% compared to the same period last year, and the growth rate was 5.3pct compared to 22-5.3 pct. Revenue in 23Q1 was -12.6% year-on-year. Fluctuations in the 22Q4 bond market still had an impact on residents' willingness to invest. Revenue in the wealth management and custodial categories all grew negatively year over year. Other non-interest income has recovered well compared to 22Q4. Other non-interest income in 23Q1 was +14.9% year-on-year and +90.7% compared to 22Q4 in a single quarter.

Take the lead in the public sector, and credit investment is speeding up. In terms of scale, on the asset side, total assets and total loans in 23Q1 were +11.6% and +10.0% compared to the same period last year. The growth rates were +2.0pct and +1.4pct respectively compared to the end of '22. Seizing the opportunity for recovery, credit investment got off to a good start. In 23Q1, 284.5 billion yuan was added in credit, an increase of 96.4 billion yuan over the same period last year. Structurally, public credit came first, and the share of incremental credit to the public sector (excluding discounts) reached 62%.

On the debt side, 23Q1 deposits were +16.3% year on year. From a structural point of view, deposit regularization continued. The average daily balance of 23Q1 current accounts accounted for 60.1%, compared to -1.5pct in '22.

In terms of pricing, the net interest spread for 23Q1 was 2.29%, compared to 22-11BP. The debt-side cost ratio has increased to a certain extent by the regularization of deposits. The asset side, on the asset side, was mainly affected by repricing in the first quarter and the decline in the pricing of newly issued loans. The average yield of 23Q1 loans was 4.41% compared to 22-13BP, but it is expected that the share of subsequent retail credit investment will gradually increase, and the impact of repricing will subside, and pricing pressure is expected to gradually decrease.

Wealth management construction is progressing in an orderly manner. 23Q1 retail AUM increased 10.5% year-on-year to 12.5 trillion yuan.

The number of retail customers was +6.25% compared to the same period last year. Among them, the number of Golden Sunflower and above and private bank customers was +11.2% and +10.7%, respectively, reflecting the increase in customer account concentration.

Asset quality has improved, and risk compensation ability is excellent. The 23Q1 non-performing rate and attention rate were better than 1BP and -9BP at the end of '22, and overall asset quality improved. The provision coverage rate for 23Q1 was 448%, stable at a high level, and a high margin of safety was established. The overall risk exposure of the housing business was stable, but affected by the risk release of some high-debt real estate customers, the bad credit rate for public real estate in 23Q1 was 4.55%, compared to +56BP at the end of '22.

Investment advice: flexible credit investment, improved asset quality

Although first-quarter revenue came under phased pressure, efforts on public credit came forward, supporting the rise in good credit and establishing a basic market for interest income throughout the year; pricing pressure is expected to gradually ease, and the decline in interest spreads is also expected to narrow; housing risks are expected to be manageable overall, and asset quality indicators are improving; wealth management and construction continues to advance, with potential upward momentum for economic recovery. EPS for 23-25 is expected to be 5.85, 6.38, and 6.96 yuan respectively. The closing price on April 26, 2023 corresponds to 0.9 times 23 PB, maintaining the “recommended” rating.

Risk warning: Macroeconomic growth declines; asset quality deteriorates; the decline in industry net interest spreads exceeds expectations.

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