WeBank's net profit increased by 21% year-on-year last year, and the consignment product pool expanded nearly three times

21st Century Business Herald reporter Huang Zixiao reported from Shenzhen

On the evening of April 30, WeBank released its 2023 annual report, in which the bank achieved operating income of 39.361 billion yuan, a year-on-year increase of 11.3%, a net profit of 10.815 billion yuan, a year-on-year increase of 21%, an asset scale of 535.6 billion yuan, an increase of 13% from the beginning of the year, and the number of individual effective customers reached 399 million, an increase of about 37 million from the end of the previous year.

WeBank's net interest income increased by 21%. At the same time, the bank is focusing on financial investment and wealth management business. In 2023, the bank's financial investment balance will increase by 124.12% year-on-year, and the pool of consignment financial products will be expanded by nearly three times.

From the perspective of the industry as a whole, according to the data disclosed by the State Administration of Financial Supervision and Administration, the net interest margin of private banks is the only one that has expanded among the six categories of commercial banks. In 2023, private banks achieved a net profit of 20.4 billion yuan, a year-on-year increase of 15.9%.

Net interest income increased by more than 20%

In 2023, WeBank will achieve operating income of 39.361 billion yuan, a year-on-year increase of 11%, of which net interest income will be 30.162 billion yuan, a year-on-year increase of 20.79%, and net profit will be 10.815 billion yuan, a year-on-year increase of 21%.

According to the data disclosed by the State Administration of Financial Supervision and Administration, in 2023, private banks across the country will achieve a total net profit of 20.4 billion, so WeBank's net profit accounts for more than 53% of private banks, and this indicator is 50.8% in 2022, which shows the bank's leading position as a private bank.

From the perspective of income, WeBank's net interest income accounted for 76.63%, non-interest net income accounted for 23.37%, and the net interest income was 30.162 billion yuan, a year-on-year increase of 20.79%.

Against the backdrop of pressure on net interest income in the banking sector, why has WeBank been able to grow against the trend? The bank explained the reason for this due to the growth of interest-bearing assets.

It is worth noting that WeBank is not simply "making up the price by volume", but "rising both volume and price".

Although WeBank does not have the habit of disclosing net interest margin in its annual report, the reporter can still find three clues. First of all, according to the data of the State Administration of Financial Supervision and Administration, the net interest margin of state-owned banks, joint-stock banks, urban commercial banks, rural commercial banks, and foreign-funded banks will all narrow significantly in 2023, but the net interest margin of private banks will rise against the trend, from 3.94% to 4.39%.

At the same time, WeBank's interest income in 2023 will be 39.754 billion yuan, a year-on-year increase of 20.45%, and interest expense will be 9.592 billion yuan, a year-on-year increase of 19.38%, and the growth rate of interest income will be faster than the growth rate of interest expense.

In addition, the 21st Century Business Herald reporter learned from the bank's 2024 interbank certificate of deposit issuance plan that the bank's net interest margin in June 2023 was 6.0%, which has been continuously improved in the past three years.

Based on the above information, it can be judged that WeBank's control of the liability side and the cost side is relatively stable, and the net interest margin level is at a good level.

In terms of risk control, the bank's non-performing loan ratio decreased from 1.47% to 1.46%, and the proportion of concerned loans decreased from 1.79% to 1.35%.

In addition, WeBank had 399 million individual effective customers at the end of 2023, an increase of about 37 million from the end of the previous year. The bank's per capita profit contribution is only about 28 yuan, reflecting the bank's characteristic positioning of focusing on long-tail customers.

The balance of financial investments increased by 124.12%

WeBank's 2023 annual report shows that the bank's liquidity coverage ratio decreased from 346.11% to 139.80%.

Why is this indicator falling so sharply? The bank's cash flow statement reveals some of the reasons.

In 2023, the bank's net cash inflow from investment activities was RMB803 million, a year-on-year decrease of RMB24.692 billion, mainly due to the increase in net outflow of financial investment. Specifically, at the end of 2023, WeBank's financial investment balance was 5.755 billion yuan, an increase of 3.187 billion yuan or 124.12% from the end of the previous year, mainly due to the increase in the bank's investment in trading interbank certificates of deposit.

In addition to the investment side, WeBank is also expanding its business scale on the fundraising side. The bank's net cash inflow from fundraising activities in 2023 was RMB20.898 billion, an increase of RMB15.249 billion year-on-year, mainly due to the increase in the net inflow of issuing interbank certificates of deposit.

Generally speaking, the issuance of interbank certificates of deposit can help banks alleviate the pressure on the liability side and optimize the liability structure. The 21st Century Business Herald reporter combed WeBank's interbank certificate of deposit issuance plan over the years and found that from 2022 to 2024, the bank's total application quota will be 8 million, 9 million, and 10 million respectively, showing a trend of increasing year by year, and the bank did not issue interbank certificates of deposit in 2021.

In addition, the bank's net cash outflow from operating activities in 2023 was RMB32.321 billion, a year-on-year decrease of RMB11.516 billion, mainly due to the increase in net inflows of borrowings from the central bank and net inflows of interbank deposits.

In 2023, WeBank's capital adequacy ratio will reach 12.80%, which has been improved for two consecutive years

The product pool has nearly tripled

Under the trend of narrowing net interest margins in the banking industry, many banks have begun to focus on the asset-light business of wealth management. It is reported that "WeBank Wealth+" is the bank's wealth management business, which mainly provides financial product sales services through digital means.

Previously, a Shenzhen public fund person told the 21st Century Business Herald reporter, "Recently, WeBank has been rapidly expanding its product pool, and all special areas are being revised. This statement is confirmed by the annual report.

The 21st Century reporter noticed that in the past year, WeBank's cooperative asset management institutions have increased significantly, and the number of financial products sold by WeBank has increased nearly three times as much as before.

According to WeBank's 2022 and 2023 annual reports, the number of fund companies cooperating with the bank increased from 57 to 71, the number of wealth management subsidiaries increased from 19 to 23, and the number of insurance companies increased from 9 to 11, but the number of trust companies decreased from 8 to 7. The number of consignment products has increased from more than 1,700 to more than 4,900, and the product pool has been nearly tripled.

The balance of assets under management at the end of 2023 was 2,577.8 billion yuan, an increase of 37% from the end of the previous year. WeBank said that the growth of the bank's assets under management was mainly driven by the growth of the distribution business. Among them, the bank's agency sales are mainly asset management products, and the balance of asset management products is 2,200.8 billion yuan.

It is worth mentioning that while WeBank's agency business fee income in 2023 increased by 13.20% year-on-year to 11.49 billion yuan, the agency business fee expenditure decreased by 7.89% year-on-year, so the agency business has made a positive contribution to the bank's performance.

Gu Min, Chairman of WeBank, said in his speech at the annual report that WeBank continues to introduce professionals in the fields of technology, risk and wealth management.

A number of private banks have released their annual results

A number of private banks have released their 2023 annual reports, and most of the industry leaders have achieved both revenue and profit growth.

According to MYbank's 2023 annual report, the bank's assets are 452.13 billion yuan, the cumulative number of small and micro customers served exceeded 53 million, the operating income was 18.743 billion yuan, a year-on-year increase of 19.49%, and the net profit was 4.203 billion yuan, a year-on-year increase of 18.8%.

According to the information released on the official WeChat account of Jiangsu Suning Bank, in 2023, the bank will achieve operating income of 4.565 billion yuan, a year-on-year increase of 12.28%, total assets of 116.356 billion yuan, a year-on-year increase of 11.57%, and net profit of 1.055 billion yuan, a year-on-year increase of 4.98%.

The annual report released by China CITIC Bank also disclosed the operating results of its Baixin Bank in 2023. In 2023, Bacera Bank achieved a net operating income of 4.534 billion yuan, a year-on-year increase of 14.27%, and a net profit of 855 million yuan, a year-on-year increase of 30.25%.

Overall, although the overall scale of private banks is only comparable to that of a leading city commercial bank, it has achieved positive growth in performance in the competition of the banking industry by virtue of its more sinken positioning and digital characteristics.

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