The 2023 annual report disclosure drama of listed banks has not yet come to an end, and a number of listed banks have successively "released" the results of the first quarter of 2024. On April 28, a reporter from Beijing Business Daily found that among the 42 listed banks, 22 banks have disclosed their reports for the first quarter of 2024, and in the first quarter of this year, the overall operation of the banking industry remained stable, and 19 banks maintained growth in net profit attributable to their parent companies. However, while the performance is stable and improving, the pressure on banks' net interest margins in the first quarter is still continuing, and it is urgent to continue to optimize the asset-liability structure to "decompress".
9 local banks achieved "double increase" in net profit
In the first quarter of this year, the performance of local small and medium-sized banks was "outstanding". On April 28, according to the statistics of a reporter from Beijing Business Daily, among the 22 banks that have disclosed the data of the first quarter, 19 banks have achieved an increase in net profit attributable to the parent company.
In the first quarter of this year, the bank achieved a net profit of 5.133 billion yuan, an increase of 21.11% over the same period last year. The net profit attributable to the parent company of eight banks, including Qilu Bank, Suzhou Rural Commercial Bank, Ruifeng Rural Commercial Bank, Bank of Chengdu, Jiangyin Rural Commercial Bank, Bank of Suzhou, Qingdao Rural Commercial Bank and Bank of Jiangsu, also achieved double-digit growth, which were 15.98%, 15.83%, 14.69%, 12.83%, 12.72%, 12.29%, 10.14% and 10.02% respectively.
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The net profit attributable to the parent company of Bank of Wuxi, Bank of Changsha, Zijin Rural Commercial Bank, Bank of Chongqing, Bank of Lanzhou and other banks increased by 0.8%-9.5% year-on-year.
In the net profit growth index, local small and medium-sized banks performed eye-catching in the first quarter. In the first quarter, the bank's net profit (attributable to shareholders of the parent company) was 24.988 billion yuan, a year-on-year increase of 1.44%; among the joint-stock banks, Ping An Bank's net profit attributable to the parent company increased by 2.3% year-on-year; and Industrial Bank's net profit attributable to the parent company in the first quarter was 24.336 billion yuan, a year-on-year decrease of 3.10%, mainly due to the bank's enhanced risk resistance and the year-on-year increase in impairment provisions.
Talking about the more eye-catching performance of local small and medium-sized banks in this round of performance growth, the well-known economist Pan and Lin pointed out in an interview with a reporter from Beijing Business Daily that the performance of small and medium-sized banks is more elastic, and when the economy recovers cyclically, the performance of small and medium-sized banks tends to be more sensitive, so the growth rate of local small and medium-sized banks in the first quarter is bright because China's economic state is improving, and small and medium-sized banks are more sensitive to economic conditions. Comparatively speaking, due to their large scale, large banks tend to lack elasticity in performance growth and are less sensitive to economic cycles.
However, it is worth noting that although the performance growth rate is generally good, there are also two local listed banks operating income, net profit attributable to the parent growth rate has "double decline", Guiyang Bank mentioned in the financial report that during the reporting period, affected by factors such as the continuous concession of the real economy and the overall decline in market interest rates, the net interest margin further narrowed, achieving operating income of 3.645 billion yuan, down 2.51% from the same period last year, and achieving net profit attributable to the parent company of 1.549 billion yuan, down 3.65% from the same period last year.
In the first quarter of this year, Chongqing Rural Commercial Bank achieved operating income of 7.128 billion yuan, down 2.88% from the same period last year, and net profit of 3.662 billion yuan, of which the net profit attributable to shareholders of the bank was 3.524 billion yuan, down 8.77% and 10.81% respectively from the same period last year, and the net profit attributable to shareholders of the bank after deducting non-recurring gains and losses was 3.503 billion yuan, down 10.30% from the same period last year. In response to how to improve profitability in the next step, a reporter from Beijing Business Daily interviewed Bank of Guiyang and Chongqing Rural Commercial Bank respectively, but did not receive a reply as of press time.
Downward pressure on spreads continues
Compared with large banks, small and medium-sized banks tend to focus more on regional markets or specific customer groups, such as small and micro enterprises, individual consumers, etc., to gain competitive advantages by providing customized and differentiated financial services.
However, it is worth noting that although profitability is stable and improving, due to factors such as the continuous decline in loan yields and the rising trend of deposit regularization, the pressure on net interest margin has become an urgent problem for banks in the first quarter of 2023.
Of the eight banks that published their net interest margin indicators, only one saw an increase in their net interest margin. In the first quarter of this year, the bank's deposit interest rate decreased by 30 basis points from the beginning of the year, and the net interest margin reached 1.60%, an increase of 14 basis points from the beginning of the year and an increase of 12 basis points from the same period last year.
Among the local banks, the net interest margin of Bank of Guiyang, Jiangyin Rural Commercial Bank, Ruifeng Rural Commercial Bank, Qingdao Rural Commercial Bank and Bank of Suzhou all fell by more than 20 basis points. Specifically, as of the first quarter of this year, the net interest margins of the above five banks were 1.77%, 1.70%, 1.60%, 1.66% and 1.52% respectively, down 41 basis points, 35 basis points, 28 basis points, 25 basis points and 25 basis points respectively from the same period last year.
In the first quarter of 2024, the bank's net interest margin was 2.01%, down 62 basis points from the same period last year.
On March 11 this year, Li Yunze, secretary of the Party Committee and director of the State Administration of Financial Supervision and Administration, said in an interview with the media that "at present, loan interest rates have fallen to a historical low, and the net interest margin of banks has also fallen to the lowest level in 20 years."
According to Oriental Wealth Choice data, a total of 37 banks have announced net interest margin data as of the end of 2023 so far, of which only one bank has risen, and 36 banks have seen a year-on-year decline in net interest margin, with a maximum decline of 48 basis points.
Pressure remains high on the narrowing of interest margins, raising the need for further control of debt costs. Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, said that as far as the bank itself is concerned, it is necessary to solve the problems of rising debt costs and net interest margin pressure by continuously optimizing the asset-liability structure. In light of the actual situation of the deposit market, we should make full use of the market-oriented adjustment mechanism for deposits, set reasonable prices for deposit interest rates, and jointly safeguard the normal order of competition in the deposit market. In terms of development strategies, it is necessary to enhance the development capacity of inclusive finance, increase business expansion in key emerging areas such as weak links in the real economy, science and technology innovation and green, increase business development in line with market demand, increase the development of wealth management and retail businesses, steadily increase the proportion of asset-light and capital-light businesses, enhance customer stickiness, and also facilitate the precipitation of demand deposits and reduce the cost of comprehensive liabilities.
"At present, there is a partial oversupply of liquidity in the banking system, and the low net interest margin will be maintained, but there is little room for further decline. With low net interest margins, banks should expand retail volume by diversifying their business channels, such as considering online channels to conduct business. Pan and Lin said.
Beijing Business Daily reporter Song Yitong