Changshu Bank: Millennium Fund (MLP), JPMorgan Chase and other two institutions investigated our company on October 21

On November 1, 2021, 601128 Bank issued an announcement that the Millennium Fund (MLP) and JPMorgan Chase surveyed our company on October 21, 2021.

The main contents of this survey are:

Q: What are the main sources of profit growth potential next year or beyond?

A: The first is to optimize the structure of assets and liabilities and stabilize the level of interest margins. The asset side improves and optimizes the credit structure, increases the proportion of high-interest assets, taps the potential of the liability side, adjusts the structure, stabilizes customer stickiness and reduces the proportion of high-priced products. The second is to change the concept of development and increase the proportion of revenue. Make wealth management bigger and stronger, promote the professional capacity building of the marketing team, cultivate professional investment advisory ability, mobilize the enthusiasm and initiative of all employees of the bank to expand intermediate business channels, and promote the stable growth of intermediate business income. The third is to improve the level of risk management and improve asset quality. Controlling risks is to increase efficiency, in recent years, the non-performing rate of our bank has always been below 1%, the provision coverage ratio has remained high, and it is relatively stable, and the risk offsetting ability is better, providing a strong guarantee for the improvement of ROE. The fourth is to strictly control costs and expenses, and continue to reduce costs and increase efficiency. We will strive to improve per capita labor productivity, empower business with science and technology, achieve the organic combination of online and offline, improve the level of input and output, and stabilize the cost-income ratio.

Q: Changshu Bank's net interest margin in the third quarter of 2021 was 3.08%, a further increase of 1bp from the previous quarter. Is the future sustainable?

A: On the asset side, we proposed a small, downward, biased and credit strategy at the beginning of the year, by optimizing the asset structure, to improve the level of yield of our loans, on the whole, whether it is a company, retail, small and micro or a village bank, the interest rate of the new loans issued by our bank is increasing month by month, while dynamically adjusting the scale of the same industry and stabilizing the income level of the same industry. On the liability side, we proposed price priority at the beginning of the year, reduced the proportion of high-interest deposits, continued to adjust the debt structure, and at the same time enhanced the inflow of public deposits, grabbed the flow of funds, and continued to increase the proportion of settlement deposits with lower financing costs, and the cost of deposits was effectively controlled. In the future, our bank will further sink the focus of service, deepen the rural market, increase the proportion of credit insurance loans, and stabilize the cost of deposits, and it is expected that the interest margin will further recover next year.

Q: Changshu Bank saw the sinking of customers in the process of pricing improvement, how to control the risk in the process of customer sinking?

A: First, manage the direction. We adhere to the market positioning of "three rural areas and two small", sink services, support the development of small and micro enterprises and individual industrial and commercial households, control the credit line of single households, do small and scattered, and do not build large households. The second is to manage the industry well. Through the assessment and transmission of clear capital investment, we have formulated 15 industry review standards, adhering to differentiated treatment, and there are advances and retreats. Based on a large number of small and micro customer data, he completed 180 industry summary and analysis reports, and accumulated rich experience in risk control. The third is to manage employees well. Identify and present the risk information of customers through visual means, improve the ability to judge risks, and strictly control the occurrence of credit risk and moral hazard through the "three strict" principles of personnel access, technical prevention and control, and moral management. The fourth is to build a good system. Continue to optimize and improve the customer risk early warning system, deploy the early warning rule model, deepen the application of data, conduct multi-dimensional risk scanning for customers, actively identify risks, and improve the quality and efficiency of risk management.

Q: What is the impact of the recent industrial electricity supply on customers?

A: Our bank always pays attention to the impact of this policy, according to the recent situation of the targeted comprehensive investigation, as of the end of September, our bank has a total of more than 200 credit customers involved in temporary production restrictions, no suspension of production. The loan scale of this part of the customer in our bank is about 2 billion yuan, accounting for 1.2% of the total loans, accounting for a relatively small proportion, and the customer classification is mainly excellent, and the five-level classification is normal (the pledge rate is 71%). At present, most enterprises have actively taken countermeasures, such as staggered peak night production, self-generated power generation, etc. Although the power curtailment has a certain impact on the operation of the enterprise temporarily, the overall risk is controllable and will not have a substantial impact on the asset quality of our bank. On the one hand, our bank continues to pay close attention to the trend of power curtailment policies in various places and pay attention to the risks of existing customers. On the other hand, our bank has recently set up a full-time department "Green Finance Department", which will guide powerful enterprises to accelerate the high-quality development of the manufacturing industry, tap the green credit needs and cooperation space of these enterprises, and promote the development of green credit work.

Q: Wealth management business ideas and progress, future outlook.

A: (1) Strategic level: Retail, companies and asset management jointly promote the wealth management business of the whole bank, highlight the marketing of all employees, and strengthen the concept of net inflow assessment. In the second half of the year, a special assessment plan was introduced for the wealth business, and multiple departments and multiple lines forced a hole to jointly promote. (2) Product level: build a shelf-type product system, including deposits; cash, fixed income, fixed income + equity and other self-operated wealth management; funds, trusts, gold, insurance, counter bonds and other consignment products. At present, we have built a relatively complete product system in terms of self-operated wealth management, providing cash management, fixed income, fixed income +, equity FOF and other products according to customer risk preferences, and also integrating the strength of multiple departments to promote the introduction of consignment products, including selected funds, consignment wealth management, trusts, etc. (3) Sales level: The full-time wealth consultant + branch wealth supervisor model of the head office gradually builds a professional wealth team with points and areas. (4) Service level: According to the township, urban area, and off-site, we will launch differentiated service methods and provide personalized and characteristic services for different customer groups. In recent years, the wealth management business has become a "must fight for the family" of various financial institutions, which is an opportunity and a challenge for our bank, on this road, we still have a lot to do: on the one hand, we must gradually change from deposit thinking to wealth management thinking, from single product marketing to portfolio product marketing, from seller product sales model to buyer investment mode. From the perspective of asset allocation, the products that match the risk-return period are selected for customers, which can be simple wealth management portfolios, fund portfolios, or diversified product combinations, so as to create value for customers. On the other hand, we should also create an open platform, strengthen cooperation with tripartite institutions, and provide customers with personalized needs other than wealth preservation and appreciation, such as providing customers with education, pension, medical and health services, and further enhance customer stickiness through diversified services.

Changshu Bank's main business: absorbing deposits from the public; Issuance of short-, medium- and long-term borrowings; Handle domestic settlement; Handle bill acceptance and discounting; Acting as an agent for the issuance, redemption and underwriting of government bonds; Buying and selling government bonds and financial bonds; Engaged in interbank lending; Engaged in the business of bank card debit card; Acting as an agent for payments and payments and insurance business; Provision of safe deposit box services; Other business approved by the Banking Regulatory Authority.

Changshu Bank's 2021 third quarter report shows that the company's main revenue was 5.633 billion yuan, up 12.96% year-on-year; net profit attributable to the mother was 1.66 billion yuan, up 19.04% year-on-year; deducted non-net profit was 1.664 billion yuan, up 18.97% year-on-year; among them, in the third quarter of 2021, the company's single-quarter main revenue was 1.954 billion yuan, up 24.4% year-on-year; single-quarter net profit attributable to the mother was 660 million yuan, up 24.8% year-on-year. In a single quarter, the non-net profit was 660 million yuan, up 24.92% year-on-year; the debt ratio was 91.49%, and the investment income was 421 million yuan.

In the past 90 days, a total of 25 institutions have given ratings, 17 buy ratings and 8 overweight ratings; the target average price of institutions in the past 90 days has been 9.25; the net outflow of financing in the past 3 months has been 38.9198 million, and the balance of financing has decreased; and the net inflow of margin is 22.9588 million, and the balance of margin has increased. The Securities Star Valuation Analysis Tool shows that Changshu Bank (601128) has a good company rating of 4 stars, a good price rating of 4 stars, and a comprehensive valuation rating of 4 stars.