The first quarterly report of A-share listed banks: 24 companies increased their revenue and net profit, and 26 of them decreased their provision coverage ratio

The first quarter report of A-share listed banks in 2024 has been fully disclosed, and the reporter found that among the 42 listed banks, 24 have achieved double growth in revenue and profit, and 31 have a year-on-year increase in net profit attributable to the parent company, among which the performance growth rate of small and medium-sized banks in economically developed regions is more eye-catching. However, behind the "good start" of performance, the provision coverage ratio of non-performing loans of many listed banks has declined year-on-year, and asset quality still needs to be paid attention to.

24 Listed Banks "Double Increase"

When the reporter counted the first quarter report of the listed banks, it was found that there were 27 revenue growth increases, the highest increase was Bank of Qingdao, with a growth rate of 19.28%, Zheshang Bank, Ruifeng Bank, Qingnong Commercial Bank, Changshu Bank, Bank of Jiangsu, and Sunong Commercial Bank all recorded double-digit growth in revenue.

Another 12 banks saw double-digit year-on-year growth in net profit attributable to their parent companies. In first place is Bank of Hangzhou, with a growth rate of 21.11% in the first place, Changshu Bank, Bank of Qingdao, Qilu Bank, Sunong Commercial Bank, Ruifeng Bank, Bank of Chengdu, etc. to achieve double-digit growth in net profit attributable to the parent company, growth rates of 19.80%, 18.74%, 15.98%, 15.83%, 14.69%, 12.83% respectively. There are also 19 banks to achieve net profit growth, an increase of 0.25% ~ 9.41%, from the growth rate from high to low, including Wuxi Bank, Zhangjiagang Bank, Bank of Ningbo, Changsha Bank, Zijin Bank, etc. When the reporter combed through, it was found that most of the banks that achieved year-on-year growth in net profit were urban commercial banks and rural commercial banks, and a few joint-stock banks performed outstandingly.

Industry insiders told reporters that a number of urban and rural commercial banks in developed areas have achieved good results in the first quarter, and the economic recovery in developed areas behind the increase in profit growth has provided support for the "good start" credit delivery of regional small and medium-sized banks, and many banks have expanded their scale and increased non-interest income.

Dai Zhifeng, an analyst at Zhongtai Securities, pointed out that the performance of individual stocks to achieve high growth, mainly scale and other non-interest contributions, respectively, to the performance of the contribution of more than 10%, on the one hand, is driven by the regional economy, on the other hand, the bank's target customer growth and the core competitiveness of its customer operation support, and finally to grasp the opportunity of bond market allocation, to pull other non-interest high growth.

The reporter noted that with the help of the bond bull market in the first quarter, many banks achieved high growth in non-interest income in terms of investment income, fair value change gains and losses, supporting the "half of the sky" of non-interest income. For example, Ping An Bank's investment income in the first quarter was 4.702 billion yuan, an increase of 42.4% year-on-year, and the fair price change profit and loss reached 1.572 billion yuan, an increase of 2811.1% year-on-year. Bank of Hangzhou's investment income in the first quarter reached 1.914 billion yuan, a year-on-year increase of 28.19%, and the fair price change profit and loss reached 105 million yuan, a year-on-year increase of 10.15%.

However, there are still many banks that have seen a decline in revenue and net profit. Among them, Chongqing Rural Commercial Bank, Minsheng Bank, and Guiyang Bank saw the most significant declines, with net profits falling by 10.81%, 5.63%, and 3.65% year-on-year respectively. The six large state-owned banks performed poorly, the net profit of Bank of China, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China decreased by 2.9%, 2.78%, 2.17% and 1.63% year-on-year respectively, and the revenue fell by 3.01%, 3.41%, 2.97% and 1.76% year-on-year respectively, while the revenue of the Postal Savings Bank increased by 1.44% year-on-year, the net profit decreased by 1.35%, and only the Bank of Communications recorded growth, with a net profit of 24.988 billion yuan in the first quarter, a year-on-year increase of 1.44% , but the revenue fell by 0.03%.

Spread tightening continues

Judging from the quarterly reports disclosed by listed banks, the narrowing of interest rate spreads continues. According to Wind data, among the 41 listed banks (except for Bank of Chengdu), 34 banks' interest margins continued to narrow, and only 5 widened. The interest rate spreads of 31 banks are below the 1.8% desirable level set by the regulator, and the Bank of Xiamen, Bank of Nanjing and Bank of Shanghai are almost as low as 1%.

Wind data shows that Bank of Communications, Bank of Chongqing, Shanghai Pudong Development Bank, Bank of Hangzhou, Zheshang Bank, Minsheng Bank and other interest rate spreads narrowed, and many banks saw a "big decline", Bank of Nanjing narrowed by about 90 bp to 1.14%, Bank of Jiangsu and Ping An Bank narrowed by about 37 bp to 1.06% and 2.01% respectively, and Bank of Changsha, Jiangyin Bank, Bank of Guiyang, and Sunong Commercial Bank all narrowed by more than 30 bp.

In terms of interest margin performance in the first quarter, the decline of stock banks was the most obvious. The above-mentioned person told reporters that the downward trend in the pricing level of the asset side is an important reason for the continued weakening of interest margins, and the downward range of interest rate spreads is larger, one is the weaker asset placement under retail pressure; ”

According to Dai Zhifeng's calculations, the net interest margin of the industry continued to decline by 2bp month-on-month, and the net interest margin of large banks, joint-stock banks, urban commercial banks and rural commercial banks changed by -1, -8, +3 and 0bp month-on-month respectively. He pointed out that the decline in the overall net interest margin of listed banks in the first quarter was dragged down by the asset side, and the competition for both corporate and retail placements was greater, and it was dragged down by the repricing of loans and the price competition of the opening price.

A number of banks also said at the first-quarter results meeting that the narrowing of interest margins was mainly affected by factors such as the decline in market interest rates and LPR (loan prime rate) and the repricing of interest rates on existing first home loans. The management of IB said at the results meeting that if the LPR is not lowered, it is expected that the interest rate spread will continue to decline due to the continuous maturity and replacement of high-yield assets previously released, but the downward pace will gradually slow down.

Wang Yifeng, chief analyst of the financial industry at Everbright Securities, expects that there will still be great downward pressure on the pricing of bank assets in the first quarter, and the current deposit interest payment rate is still at a high level, so the net interest margin of the banks will still narrow by 10 bp to 15 bp in the first quarter of this year.

The provision coverage ratio of 26 companies decreased year-on-year

Overall, the asset quality of the 42 listed banks was relatively stable. When the reporter combed through, it was found that 16 of the 42 banks had a non-performing loan ratio of less than 1%, and the non-performing loan ratio of Bank of Chengdu was the lowest in the industry, at 0.66%. Compared with the same period last year, the non-performing loan ratio of 30 listed banks remained unchanged or decreased, with the largest decrease being Qingnong Commercial Bank, which decreased by 0.29 percentage points to 1.8%.

At the same time, the non-performing loan ratio of 12 listed banks increased, with Bank of Xi'an rising the most, up 0.19 percentage points year-on-year to 1.43%. The non-performing loan ratios of Bank of Qingdao, Bank of Lanzhou and Shanghai Pudong Development Bank are among the top in the industry, reaching 1.87%, 1.83% and 1.45% respectively.

Zhongtai Securities pointed out in the research report that the non-performing rate of listed banks continued to decline month-on-month, basically at a historical low since 2014. The pressure of stock baggage is small. The overall NPL rate of the banking industry in the first quarter was 1.25%, down 1bp from the previous quarter and the lowest since 2014.

In the first quarter, the retail non-performing ratio of listed banks maintained a slight increase, while the mortgage non-performing ratio increased simultaneously. Among the 32 listed banks (excluding 10 listed banks that did not disclose their information), 22 of them saw an increase in the personal non-performing loan ratio, with the most obvious increase being Zheshang Bank, which increased by 0.41 percentage points, and Bank of Chongqing, Qingnong Commercial Bank, Ruifeng Bank, and Chongqing Rural Commercial Bank were among the top gainers, rising by 0.33 percentage points, 0.29 percentage points, 0.28 percentage points, and 0.26 percentage points respectively.

Among the 21 listed banks (excluding the 21 listed banks that did not disclose their information), 11 of them saw an increase in the non-performing rate of personal mortgages, with Qingnong Commercial Bank increasing by 0.31 percentage points, and Chongqing Rural Commercial Bank and Minsheng Bank both increasing by 0.10 percentage points.

Although the non-performing loan ratio remained stable in the first quarter, the asset quality of listed banks should still be concerned from the perspective of the provision coverage ratio. In terms of provision coverage ratio, 16 listed banks achieved an increase in the provision coverage ratio compared with the same period last year, while 26 banks decreased year-on-year. Bank of Hangzhou, Bank of Chengdu, Bank of Wuxi and Changshu Bank all have non-performing loan provision coverage ratios of more than 500%, of which Bank of Hangzhou ranks first among listed banks with a provision coverage ratio of 551.23%. Minsheng Bank had the lowest provision coverage ratio of 149.36%. The provision coverage ratio of non-performing loans of Bank of Xiamen in the first quarter was 412.01%, an increase of 38.74 percentage points year-on-year over the same period in 2023.

Zhangjiagang Bank's provision coverage ratio declined the most, at 107.3%, and Bank of Ningbo, Jiangyin Bank and Postal Savings Bank all fell by more than 50%, with 69.84%, 55.82% and 54.25% respectively.

(This article is from Yicai)