On August 29, Jinshang Bank released its 2024 interim results announcement, handing in an interim answer sheet of "double decline" in revenue and net profit.
As the first provincial-level city commercial bank in Shanxi Province, Jinshang Bank, formerly known as Taiyuan Commercial Bank, was established in 1998 and listed on the Hong Kong Stock Exchange in July 2019 at an issue price of HK$3.82 per share.
Now, five years later, the bank's share price is now only HK$1.46 per share (as of 9:30 on September 6), down 61.78% from the beginning of the listing, a change that is not unrelated to the bank's performance in recent years.
Medium revenue fell 20% Net trading income fell 157% year-on-year
According to the 2024 interim results announcement of Jinshang Bank, during the reporting period, the bank achieved operating income of 2.787 billion yuan, a year-on-year decrease of 1.7%; The net profit was 1.029 billion yuan, down 0.3% year-on-year.
For the decrease in operating income compared with 2.835 billion yuan in the same period last year, Jinshang Bank explained in its financial report that it was due to the decline in market interest rates, the decline in asset yield, and the decline in net interest margin.
Specifically, in the first half of this year, Jinshang Bank's net interest margin fell by 0.05 percentage points to 1.29%. In this regard, Jinshang Bank said that it was mainly due to the decline in the yield on interest-bearing assets from 3.79% to 3.49%, and the decrease in the interest payment rate of some interest-paying liabilities from 2.46% to 2.35%.
Another reason for the decline in revenue is that the bank took the initiative to optimize the asset-liability structure and moderately reduced the scale of transactional financial investment, which was mainly reflected in the "dive" of the total amount of net trading income and net income from investment in securities.
According to the data, in the first half of this year, Jinshang Bank's net transaction income was -99 million yuan, compared with 172 million yuan in the same period last year, a decrease of 157%; The net income from investment in securities was 353 million yuan, a year-on-year increase of 40.6%, while the sum of these two indicators (254 million yuan) decreased by 66.54% compared with the same period last year (423 million yuan).
In addition, a split of the revenue data for the first half of the year can be found that the decline in the bank's revenue may also be the reason for the decline in revenue. According to the data, in the first half of this year, Jinshang Bank's net fee and commission income was 290 million yuan, a year-on-year decrease of 19.1%.
In this regard, Jinshang Bank explained that it was mainly due to the decrease in the settlement volume of bank card business and the decrease in the volume of agency business. Specifically, in the first half of this year, Jinshang Bank's bank card fee income was 58 million yuan, a year-on-year decrease of 27.2%, and agency business fees and other income reached 29 million yuan, a year-on-year decrease of 62.2%.
Unstable revenue Net profit fell for the first time since listing
It is worth noting that although Jinshang Bank has explained the "double decline" in revenue and net profit, the gap is quite obvious compared with Changshu Bank, which has the same asset scale in the same period.
According to Changshu Bank's 2024 interim performance report, in the first half of this year, Changshu Bank achieved operating income of 5.506 billion yuan, double the revenue of Jinshang Bank, and the attributable net profit reached 1.734 billion yuan, which was also higher than the net profit of Jinshang Bank.
In fact, this is not the first time that Jinshang Bank has faced performance pressure. Looking at the interim performance report of the bank since its listing, it can be found that since 2020, although the bank's operating income has shown an overall growth trend, the year-on-year change has fluctuated greatly.
Specifically, in the first half of 2020, Jinshang Bank's operating income increased by 5.2% year-on-year, and in 2021, it decreased by 1.5%, a change of nearly 7 percentage points; More obviously, in 2022 and 2023, Jinshang Bank's operating income increased by 0.3% and 10.3% year-on-year, respectively, with a change of up to 10 percentage points.
In terms of net profit, the first half of this year was also the first time that the bank's net profit declined. According to the interim performance report of Jinshang Bank since 2020, the bank achieved net profits of 775 million yuan, 882 million yuan, 970 million yuan, 1.033 billion yuan and 1.029 billion yuan respectively, a year-on-year increase of 4.4%, 13.8%, 10%, 6.5% and -0.3%.
It can be seen that the year-on-year growth rate of the bank's net profit has gradually slowed down since it peaked at 13.8% on June 30, 2021 - from 10% in the first half of 2022 and 6.5% in the first half of 2023 to -0.3% in the first half of this year.
Asset quality under pressure, non-performing loans and non-performing ratios "both rise"
In terms of asset quality, according to Jinshang Bank's 2024 interim performance report, in the first half of this year, Jinshang Bank's non-performing loans were 3.747 billion yuan, an increase of 12.15% over the same period last year, and the non-performing loan ratio was 1.85%, a year-on-year increase of 0.13 percentage points.
Regarding the double increase in non-performing loans and non-performing loan ratios, Jinshang Bank said that it was mainly due to the continuous weakening of the coal and coke market in the first half of the year, as well as the impact of internal management, and the operation difficulties and loan defaults.
It is worth noting that the bank's corporate non-performing loans have risen "double". According to the bank's interim report, in the first half of this year, Jinshang Bank's corporate non-performing loan ratio was 2.38 percent, a year-on-year increase of 0.12 percentage points, and the balance of non-performing loans was 3.108 billion yuan, a year-on-year increase of 17.59 percent.
In this regard, Jinshang Bank explained in the interim report that it was due to the continuous weakening of the coal trading market and the internal management of some coal mining enterprises and coking enterprise customers in the first half of the year, and the operation difficulties and loan defaults.
In fact, in recent years, Jinshang Bank's non-performing loan ratio has remained high. According to the interim performance report since 2020, the non-performing loan ratios of Jinshang Bank are 1.93%, 1.83%, 1.82%, 1.72% and 1.85% respectively, which are higher than the average level of commercial banks in the same period (1.94%, 1.76%, 1.67%, 1.62% and 1.56%) except in the first half of 2020.
In addition, Jinshang Bank's compliance and internal control also faced challenges. In recent years, Jinshang Bank and its branches have frequently received regulatory fines for loan management and other reasons.
The most recent one was on August 14, the Shanxi Supervision Bureau of the State Administration of Financial Supervision and Administration issued four consecutive fines to the science and technology branch of Jinshang Bank Taiyuan High-tech Zone, and the punishment was due to the branch's violation of the principle of prudent operation, failure to perform due diligence in post-loan management, inaccurate classification of credit assets and other violations of laws and regulations.
The punishment results show that the Shanxi Supervision Bureau of the State Administration of Financial Supervision and Administration decided to fine the Science and Technology Branch of Taiyuan High-tech Zone of Jinshang Bank 700,000 yuan, and warned Cao Xiupeng, the then vice president (presiding over the work) of the branch, and Gao Ping and Guo Zihong, the account managers.
According to incomplete statistics from Beiqing Finance, since the beginning of this year, Jinshang Bank and its branches have been fined nearly 3 million.
Among them, the largest fine was confiscated on February 6, the Shanxi Supervision Bureau of the State Administration of Financial Supervision disclosed 9 administrative penalty information tables in a row, Jinshang Bank Co., Ltd. and its branches were fined a total of 1.95 million yuan for failing to perform their duties in loan management, and 7 responsible persons were punished at the same time.