The first quarter achieved a positive year-on-year increase in revenue. The company achieved revenue of $57.751 billion (YoY, +4.22%) and net profit of 24.336 billion yuan (YoY, -4.17%) in the first quarter of 2024. Among them, revenue achieved a positive year-on-year increase, mainly due to the narrowing of interest spreads, growth in interest-bearing assets, and increased investment returns. The company's weighted average ROE for the first quarter was 3.37%, down 0.36 percentage points year over year.
The size of assets remains stable. Total assets at the end of the first quarter were 10.26 trillion yuan, up 4.38% year on year, up 0.97% from the beginning of the year. Among them, the loan balance was 5.42 trillion yuan, up 7.82% year on year, up 1.58% from the beginning of the year; deposit balance was 5.19 trillion yuan, up 4.80% year on year, down 0.52% from the beginning of the year. On the asset side, public loans (excluding notes) increased by 217.145 billion yuan compared to the beginning of the year, and the balance increased 6.86% from the beginning of the year.
The decline in net interest spreads narrowed, and net interest income grew steadily. The net interest spread for the first quarter was 1.87%, down 2 bps from month to month, down 10 bps year on year, and the decline narrowed somewhat. Net interest income was $37.242 billion, up 5.09% year on year, and growth was relatively steady. On the asset side, the average interest rate for new loans invested in public loans (excluding notes) is 4.10%, and the price is at a better level in stock banks. On the debt side, interest rates on deposits fell 0.12 percentage points year on year to 2.12%, and cost control achieved results.
Net non-interest income increased year over year, and other non-interest income performed well. Non-interest net income increased 2.69% year over year in the first quarter. Among them, net income from handling fees was 6.198 billion yuan, a year-on-year decrease of 18.99%, mainly due to the decline in bank card and wealth management income; other non-interest net income of 14.311 billion yuan, an increase of 16.16% over the previous year, mainly due to an increase in investment income from bond assets.
Asset quality remained stable, and interest rates increased slightly. The company's non-performing loan ratio at the end of the first quarter was 1.07%, the same as at the beginning of the year; the provision coverage rate was 245.51%, up 0.30 percentage points from the beginning of the year. The attention rate at the end of the first quarter was 1.70%, up 0.15 percentage points from the beginning of the year, a slight increase. Overall, the quality of the company's assets has remained stable.
Investment advice: The company's overall fundamental performance is relatively stable. We keep the company's profit forecast unchanged. We expect the company's net profit to be 773/785/80.9 billion yuan for 2024-2026, corresponding to a year-on-year growth rate of 0.3%/1.5%/3.1%; diluted EPS is 3.72/3.78/3.90 yuan; PE corresponding to the current stock price is 4.4/4.3/4.2x and PB is 0.44/0.41/0.38x, maintaining an “increase in holdings” rating.
Risk warning: Macroeconomic recovery falls short of expectations and will drag down the company's net interest spreads and asset quality.