Summary: I hope that 2024 will be better throughout the year (welcome to pay attention to leveraged games)
Written by Zhang Yinyin & Editor | Xin Xinran
Ping An Bank's luck seems to be a bit bad.
Last Friday (May 17, 2024), the administrative penalty information disclosure table disclosed by the State Financial Authority showed that Ping An Bank was confiscated and fined a total of 67.2398 million yuan for five major violations of laws and regulations, including 60.7398 million yuan for the head office and 6.5 million yuan for the branch.
Prior to this, Leveraged Games noted that Ping An Bank's revenue continued to decline in the first quarter of 2024 following the recent decline in revenue in 2023.
At the same time, the news of Ping An Bank's salary cut also came out......
2024 is off to a bad start.
1. Due to the "five crimes" five years ago, Ping An Bank was fined 67.2398 million yuan
As mentioned above, according to the penalty announcement of the State Financial Authority, Ping An Bank was confiscated of illegal gains and fined a total of 67.2398 million yuan due to corporate governance, credit, wealth management and other business issues.
In response to the media, Ping An Bank said:
In 2019, the Bank was inspected by the former China Banking and Insurance Regulatory Commission (CBIRC) and recently received an administrative penalty decision from the State Administration of Financial Regulation. Our bank attaches great importance to it and sincerely accepts the punishment. Over the past five years, our bank has conscientiously implemented the requirements of supervision and inspection, and the rectification work has been completed. The Bank will take this opportunity to draw inferences from one case to another, establish a normalized compliance review and investigation mechanism, and strengthen the construction of compliance culture and institutional mechanisms.
Five years ago, all the rectifications have been completed. What the hell is going on?
The announcement said:
The first is corporate governance and internal control. Including: individual senior executives actually perform their duties without qualification approval, the same shareholder actually nominates an excessive proportion of directors, the proportion of deferred payment of performance remuneration for some positions is lower than the regulatory requirements, and the failure to review and approve major related party transactions in accordance with regulatory regulations.
The second is credit business. Including: issuing credit loans to related parties, issuing M&A loans, working capital loans, and personal loans in violation of regulations, non-compliance with the use of working capital loans and personal loans, and insufficient accountability after the determination of credit liability.
The third is the interbank business. Including: accepting credit guarantees from third-party financial institutions in violation of regulations, branches assuming credit risks of non-standard investments, covering up asset losses, delaying risk exposure, providing land reserve financing through interbank investment, advancing redemption funds for a product in violation of regulations, failing to calculate risk-weighted assets in the non-standard investment business of the same industry, and using funds financed in the form of precious metal industry funds for equity investment in violation of regulations.
Fourth, wealth management business. Including: providing financing to wealth management products in violation of regulations, fictitious risk mitigation products, failing to accrue risk-weighted assets, using wealth management funds on behalf of customers for the Bank's proprietary business, mutual trading of wealth management products, non-compliance in information disclosure of wealth management products, wealth management investment in "famous stocks and real debts" assets that are not included in the investment statistics of non-standard creditor's rights assets, and the essence of structured deposit business is "fake structure".
Fifth, other aspects. Including: some off-site regulatory statistics are inconsistent with the facts, the margin of bank acceptance bills comes from loan funds, and the policyholders are not analyzed and risk tolerance are assessed.
In addition, other fines issued by the State Administration of Financial Authority disclosed that the individuals punished by Ping An Bank included: Cai Xinfa, then special assistant to the president of Ping An Bank, Fu Zhongqiang, president of the auto finance division, and Zhu Junxia, president of the retail operation and consumer loan division.
According to the punishment information, Cai Xinfa was warned and fined 50,000 yuan, and Fu Zhongqiang and Zhu Junxia were both warned.
Li Chinese, then president of Ping An Bank Wuhan Branch, Zhu Hanming, vice president, and Li Hui, assistant to the president, were responsible for Ping An Bank's illegal use of funds raised by the precious metal industry fund model for equity investment. Li Chinese and the other three were all warned and fined 50,000 yuan.
2. Revenue continued to grow negatively
1) According to the recently released first quarter report of Ping An Bank in 2024, in the first quarter, the bank achieved operating income of 38.77 billion yuan, a year-on-year decrease of 14%; In the same period, the attributable net profit was 14.932 billion yuan, a year-on-year increase of about 2.3%.
Regarding the decline in operating income, Ping An Bank said that it was mainly affected by factors such as continuous concessions to the real economy and adjustment of asset structure.
If we compare the data of listed banks in the first quarter, we find that Ping An Bank, Shanghai Pudong Development Bank, Everbright Bank and Minsheng Bank have seen a large decline in revenue, which fell by 14%, 5.7%, 9.6% and 6.8% respectively.
Not only that, as of the end of March, Ping An Bank's total assets were 5,729.398 billion yuan, an increase of 2.5% from the end of 2023. In terms of asset quality, non-performing loans amounted to RMB37.122 billion, an increase of 3% from the end of 2023; Ping An Bank's non-performing loan ratio was 1.07%, up 0.01 percentage points from the end of 2023.
The balance of overdue loans accounted for 1.42%, unchanged from the end of 2023; The deviation of loans overdue for more than 60 days and loans overdue for more than 90 days were 0.77 and 0.61, respectively.
The provision coverage ratio was 261.66%, a decrease of 15.97 percentage points from the end of 2023.
According to the first quarterly report, the balance of personal loans of Ping An Bank was RMB1,878.130 billion, down 5.0% from the end of 2023, of which the balance of housing mortgage loans was RMB302.874 billion, basically unchanged from the end of 2023;
the balance of operating loans was RMB581.562 billion, down 5.4% from the end of 2023;
the balance of consumer loans was RMB510.720 billion, down by 6.3% from the end of 2023;
The balance of credit card receivables was RMB482.974 billion, down 6.1% from the end of 2023.
As of the end of March, the total balance of Ping An Bank's real estate-related actual and contingent credit, proprietary bond investment, proprietary non-standard investment and other credit risk bearing business was 289.233 billion yuan, an increase of 5.037 billion yuan from the end of 2023.
The total balance of businesses that do not bear credit risks, such as wealth management fund contribution, entrusted loans, management and distribution of trusts and funds by cooperative institutions, and lead underwriting of debt financing instruments, totaled 78.791 billion yuan, a decrease of 2.004 billion yuan from the end of 2023.
In addition, Ping An Bank's wealth management fee income decreased year-on-year due to the reduction of bancassurance channels and the decline in sales of equity funds, which in the first quarter of 2024, wealth management fee income was only 1.074 billion yuan.
2) Ping An Bank's revenue decline is not only in 2024, the 2023 annual report released not long ago disclosed that the bank's revenue in 2023 fell by about 8.4% year-on-year, and the quarterly report leverage game was also written before.
Specifically, in 2023, Ping An Bank will record revenue of 164.70 billion yuan, a year-on-year decrease of 8.4%; attributable net profit was 46.46 billion yuan, a year-on-year increase of 2.1%; The capital adequacy ratio was 13.43%, up slightly by 0.42 percentage points, and the net interest margin (i.e., net interest margin) was 2.38%, down slightly by 0.37 percentage points.
The non-performing loan ratio was 1.06%, a slight increase of 0.01 percentage points, and remained stable overall.
The provision coverage ratio was 277.63%, a year-on-year decrease of 12.65 percentage points. In 2016 and 2020, Ping An Bank was reported by the media that its profits were eroded due to the increase in the provision coverage ratio.
In 2023, its provision coverage ratio will be more than 10 percentage points lower than that in 2021 and 2022 respectively.
If we look at the details, we will find that in 2023, Ping An Bank's net interest income will be 117.991 billion yuan, a year-on-year decrease of 9.3%.
Non-interest net income was 46.708 billion yuan, down 6.1% year-on-year.
Among them, it was mainly affected by the decline in net fee and commission income (29.430 billion yuan), which decreased by 2.6% year-on-year; As well as due to market fluctuations, foreign exchange gains and losses caused by foreign exchange business and other factors, other non-interest net income (17.278 billion yuan), a year-on-year decrease of 11.7%.
I hope that in 2024, Ping An Bank's revenue will recover.
3. Firewood
In addition to fines and continued negative revenue growth, Ping An Bank's salary cut was also hotly discussed by the media not long ago.
A number of media quoted Ping An Bank employees as saying that the performance bonuses of themselves and their departments had decreased to varying degrees that month.
It should be said that there is nothing wrong with linking performance and income. According to different media reports, the salary cuts of different departments of Ping An Bank are also different.
After all, the first quarter of 2024 is indeed not good enough, and the situation in some departments is even worse. At the same time, at the end of the year, the year-end bonus will be calculated according to the bank's annual performance and individual performance.
However, looking at the whole year, it is not necessarily optimistic. The 2023 annual report shows that Ping An Bank's per capita salary will decline in 2023, falling to 480,100 yuan - as written in the leverage game above, it is not surprising that the bank's revenue has declined, and I will explain it in detail below.
At Ping An Bank's 2023 results conference in mid-March, the bank's leaders repeatedly mentioned reducing costs and increasing efficiency, and making careful calculations, emphasizing the need to "focus on full-caliber profits and per capita yields" and calculate the general ledger. When it comes to cost reduction, he bluntly said that some offices used to like to put out flowers, and suggested "is it possible to put potted plants".
Will Ping An Bank start a wave of bank salary cuts? In fact, if we look back at the annual reports of various banks in 2023 or the sharing of bank practitioners, we know that some banks have already done this, and Ping An Bank will only continue to do so.
The reporter of Nandu Bay Finance Society noticed that "living a tight life" has become the vane of the banking circle.
According to the 2023 annual report data released by listed banks, from the perspective of banks with higher per capita salaries, Zheshang Bank is 584,100 yuan, China Merchants Bank is 582,600 yuan, Industrial Bank is 558,100 yuan, Minsheng Bank is 509,000 yuan, and Ping An Bank is 480,100 yuan, but the average salary of many of the above banks has decreased compared with 2022, of which Ping An Bank has decreased by 43,500 yuan and China CITIC Bank has decreased by 38,600 yuan.
It can be expected that against the backdrop of narrowing interest rate spreads, the number of banks "living in tight days" may increase further.
The financial charts and graphs not attributed in this article are all from relevant announcements, and are hereby explained and acknowledged
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