Recently, the Postal Savings Bank of China released its annual report, and it can be seen from this report card that the bank has successfully resisted market risks and achieved steady growth in 2023.
According to the annual report, as of the end of 2023, the total assets of PSBC increased by 11.80% from the end of the previous year to 15.73 trillion yuan, the operating income increased by 2.25% year-on-year to 342.507 billion yuan, and the net profit increased by 1.25% year-on-year to 86.424 billion yuan. What is even more commendable is that the asset structure of PSBC has been further optimized, the deposit-loan ratio has continued to increase, the net interest margin of 2.01% has continued to maintain the leading position in the industry, the non-performing loan ratio has been controlled at 0.83%, the provision coverage ratio has been stable at 347.57%, and various risk indicators have maintained an excellent level in the industry.
The Board of Directors of the Company also proposed to distribute a cash dividend of RMB2.610 (tax included) per 10 shares to all ordinary shareholders, totaling RMB 25.881 billion (tax included). Based on the stock price of 4.76 yuan on the day of the release of the annual report on March 28, the dividend yield of the Postal Savings Bank reached 5.5%, and the price-to-earnings ratio (TTM) was only 5.47 times.
Optimized asset-liability structure: net interest margin of 2.01% was industry-leading
Interest margins in China's banking sector will continue to narrow in 2023, with the net interest margin of the entire banking sector falling to 1.69%, according to the latest data released by the State Administration of Financial Supervision and Administration. One of the highlights in the annual report of the Postal Savings Bank is that it has controlled the net interest margin at 2.01%, which is at the leading level in the industry, and the net interest income in 2023 will increase by 3% year-on-year, an increase of 1.44 percentage points over the growth rate in 2022.
At the 2023 annual results conference on April 2, Liu Jianjun, President of the Postal Savings Bank, explained the two main reasons why the Postal Savings Bank achieved a high net interest margin. First of all, on the asset side, we will focus on serving the real economy, achieve a reasonable growth of total credit, basically complete more than 70% of the annual credit scale growth arrangement in the first half of 2023, and allocate more of the remaining credit scale to the five differentiated growth poles in the second half of the year.
On the one hand, the annual growth of loans excluding bills was close to one trillion yuan, an increase of 263.9 billion yuan year-on-year, a record high. On the other hand, loans with differentiated credit growth poles increased by 554.3 billion yuan, an increase of 171.5 billion yuan year-on-year. In particular, the overall demand for retail credit last year was insufficient, but the growth rate of retail loans of the Postal Savings Bank was 4% higher than the industry average, and the proportion of new retail loans was 23% higher than the industry average. Under the balanced development of various key products, the balance of credit differentiated growth poles exceeded 5 trillion yuan, accounting for more than 6% of the balance of various loans, reaching 62%, which not only fully supported the real economy, but also consolidated the interest margin advantage on the asset side.
On the liability side, PSBC has made great efforts to focus on the high-quality development of deposits, and controlled the deposit interest payment rate at 1.53% in 2023, which is at the best level among listed banks, and has decreased by 8 basis points year-on-year. In this way, relying on the "two-pronged approach" of optimizing the quality of assets and controlling the cost of interest payment on the liability side, PSBC has achieved an industry-leading advantage in net interest margin and laid a solid foundation for achieving a net profit of 86.424 billion yuan for the whole year.
Yao Hong, vice president and chief risk officer of the Postal Savings Bank, pointed out that due to the comprehensive and serious implementation of the new regulatory standards on asset classification, the asset quality in 2023 will be more solid, with the non-performing rate controlled at 0.83%, a year-on-year decrease of 1 basis point, the non-performing generation rate is flat year-on-year, and the overdue loan rate is 0.91%, a year-on-year decrease of 4 basis points. "We now have a focus rate + defect rate of 1.51%, which is half of the industry average. ”
In 2023, PSBC will also strengthen the risk control of real estate and local financing platforms in corporate loans, and include large corporate customers and potentially risky projects that are individually insured. Yao Hong, vice president and chief risk officer of the Postal Savings Bank, said that although the non-performing rate of real estate has risen to 2.45%, it is still at a low level in the industry. "Local financing platforms, we include non-performing customers, and it is normal to repay principal and interest at present, and there is no overdue. "In 2023, PSBC will also increase the collection and disposal of non-performing loans, and the non-performing rates of retail and corporate loans will both decline year-on-year.
The structural optimization of the asset side and the liability side is the confidence for the Postal Savings Bank to achieve steady growth in net profit in 2023 and propose a generous dividend of 25.881 billion yuan (including tax). Since 2018, its dividend ratio has always remained at the level of 30%, and since its listing in September 2016, the cumulative dividend amount from 2016 to 2022 has reached 119.563 billion yuan.
However, friends who are familiar with the field of financial investment understand that profits and dividends represent past achievements, and the basic model of the valuation of listed companies is discounted future cash flow - to put it bluntly, it depends on the company's future business growth prospects. Therefore, compared with the huge dividend plan of 25.8 billion yuan, the six high-growth data of more than 20% disclosed in the 2023 annual report of the Postal Savings Bank may be more important. This is also the embodiment of the company's strategic layout of focusing on the five differentiated growth poles, emphasized by Liu Jianjun, President of the Postal Savings Bank, at the 2023 annual results conference on April 2.
The secret behind the six 20%+ high-growth data: the five new engines of differentiated growth are beginning to appear
At the results conference, when answering questions, the management of the Postal Savings Bank repeatedly mentioned a key word - five differentiated growth poles.
These five differentiated growth poles refer to the five major areas of "three rural" finance, small and micro finance, active credit, wealth management, and financial market, and it is expected to drive new breakthroughs in various sectors with characteristic businesses and create a "new engine" for value creation.
A careful combing of the 2023 annual report will show that the strategic layout of PSBC focusing on "differentiated growth poles" has brought at least six high-speed business data growth achievements of 20%+.
First of all, in 2023, PSBC will respond to national policies to inject more financial "living water" into the real economy, and the proportion of new physical loans will exceed 100%. Secondly, to support the construction of a modern industrial system, the medium and long-term loans of the manufacturing industry increased by 37.52% compared with the end of the previous year. Third, to promote the "dual carbon" work, the balance of green loans was 637.878 billion yuan, an increase of 28.46% over the end of the previous year. Fourth, we continued to deepen the "three rural", small and micro enterprises, private economy and other fields, and the new agriculture-related loans reached a new high, with the annual net increase of inclusive small and micro loans accounting for nearly 30%, and the number of private enterprise loan customers increased by more than 90,000. Fifth, personal small loans were 1.39 trillion yuan, an increase of 22.64 percent, an increase of 37.193 billion yuan year-on-year, a record high in history, and the growth rate of personal small loans exceeded 20 percent for four consecutive years. Sixth, it provided full life cycle services for technology-based enterprises, and the number of customers served increased by 28.38% from the end of the previous year to 69,400. The market coverage rate exceeded 10%, and the balance of loans to technology-based enterprises was 326.8 billion yuan, an increase of 38%.
At the results conference, PSBC also explained in detail how these high growth were achieved.
Under the guidance of the concept of "green makes life better", the Postal Savings Bank organically combines green finance with the strategy of rural and inclusive finance to promote financial products with green and inclusive characteristics for the "three rural" customers, small and medium-sized enterprises and urban and rural residents, forming a diversified green and inclusive financial product system, and carrying out carbon accounting and providing special services for more than 4,000 small and medium-sized enterprises.
In terms of innovation, in 2023, PSBC will implement the country's first "carbon emission reduction support tool + sustainable development linked + digital yuan" scenario business, issue the first green asset-backed note in the market with three innovative logos of carbon neutrality, rural revitalization and old revolutionary areas at the same time, and issue the country's first just transition loan.
In terms of effectiveness, PSBC issued a total of 47.4 billion yuan of carbon emission reduction loans to 452 projects in 2023, driving the annual carbon emission reduction of 10.12 million tons of carbon dioxide equivalent.
According to Xu Xueming, vice president of the Postal Savings Bank, the Postal Savings Bank has built a huge network covering urban and rural areas by relying on the special operation and management model of "self-operated + agency", with nearly 40,000 outlets and 660 million retail customers, 70% of which are distributed in county areas.
In his opinion, the model of "self-operated + agency" is both a feature and an advantage. The agency outlets in the county area can provide the Postal Savings Bank with a long-term and stable source of funds and a deep sinking customer base, provide strong support for its services to the "three rural", urban and rural residents and small and medium-sized enterprises, and build a differentiated competitive advantage of the Postal Savings Bank.
Du Chunye, vice president and secretary of the board of directors of the Postal Savings Bank, said that since the "14th Five-Year Plan", the Postal Savings Bank has issued a total of 3.86 trillion yuan of inclusive small and micro loans, with an average annual compound growth rate of 22%, and the balance reached 1.46 trillion yuan last year, an increase of nearly 275 billion yuan, with a growth rate of 23%. Since the 14th Five-Year Plan, the cumulative number of inclusive small and micro customers has reached 4.63 million, and there are currently 2.17 million customers with loan balances, an increase of 230,000 in 2023, with an average loan balance of 670,000 yuan.
On the one hand, PSBC has achieved continuous improvement in the asset quality of small and micro loans, with a non-performing rate of 1.5% at the end of 2023, a decrease of 1.64% from the end of 2018, and on the other hand, it has also met the needs of small and medium-sized enterprises to reduce financing costs, and the average new interest rate of inclusive small and micro loans in 2023 will be controlled at 4.61%.
PSBC's ability to achieve a balance between asset quality and financing costs in the field of small and micro loans is inseparable from continuous innovation in the field of digital finance. Du Chunye believes that the key to the sustainable business of inclusive finance is to achieve precise risk prevention and control. In recent years, PSBC has continued to improve the level of intelligent risk control, and has realized the closed-loop management of the whole process before, during and after the loan.
According to Niu Xinzhuang, vice president and chief information officer of the Postal Savings Bank, the Postal Savings Bank has insisted on investing 3% of its annual revenue in the field of financial technology in the past few years. Since 2023, it has focused on "strategic brain, science and technology strengthening, and data hematopoiesis" to further drive the upgrading of digital financial services.
Through the digital staff, intelligent image and multimedia intelligent analysis platform based on the "Postal Savings Brain", PSBC helps customers obtain information and services more conveniently and quickly. Robotic process automation (RPA) replaces manual work to complete high-volume, repetitive tasks, and has been performed more than 2 million times by the end of 2023, saving a total of 280,000 man-hours. More than 50 million intelligent outbound calls were made to credit cards, rural areas and consumer loans, achieving an organic balance between risk prevention and control and business development. In December 2023, the "Digital Employee Family" debuted to provide financial services to customers through various online and offline channels.
At the results conference, Liu Jianjun, President of the Postal Savings Bank, said: In 2024, we will insist on positioning the "three rural" finance as the first pole of our five differentiated growth poles, attach importance to it strategically, and continue to make efforts strategically.
Liu Jianjun also introduced the three major action directions of the Postal Savings Bank in the future in the field of "three rural" finance: first, it is necessary to give full play to the advantages of active credit extension and enhance the operation capacity of pure online loans. The Postal Savings Bank has screened more than 100 million customers with fulfillment capabilities through various models among the 660 million retail customers, and the Postal Savings Bank will try to reach customers through a variety of online operation methods such as SMS reach, mobile banking pop-ups, and robot outbound calls. Second, it is necessary to consolidate the existing advantages of the traditional model and extensively establish credit villages. Third, give full play to the synergistic advantages with the postal service.
Through the "three-pronged approach", it is foreseeable that the penetration, customer acquisition and operation capabilities of the "three rural" businesses of the Postal Savings Bank will be greatly improved in 2024.
In 2024, in the face of a new round of tests, only enterprises that take the initiative to innovate and change with the trend will have the opportunity to withstand the pressure and achieve steady growth. In its annual report, the Postal Savings Bank of China proposed to "continue to build five differentiated growth poles driven by innovation", and has made up its mind to consolidate its differentiated competitive advantages and strive to explore a new paradigm to achieve steady growth under the new situation.
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