The growth rate of net profit reported by listed banks in the first quarter of this year generally exceeded market expectations. As of the evening of April 26, a total of 9 A-share listed banks released their 2022 first quarter reports, and the net profit attributable to shareholders of the parent company (hereinafter referred to as “net profit”) of the 9 banks maintained a double-digit year-on-year growth rate.
For the overall situation of listed banks, the double-digit growth of net profit in the first quarter is expected to become a trend, and the overall asset quality remains stable. Looking forward to the second quarter, many industry insiders believe that the stable growth policy is good for the banking industry. As the second quarter is a critical period for stable growth, the joint efforts of various policies are expected to improve the demand of economic entities, and the banking sector will be boosted again.
Net profit growth exceeds market expectations
On the evening of April 26,Bank of Ningbo、Bank of Suzhou、Ping An BankThe first quarter reports of 2022 were released respectively, and the net profit of the three banks in the first quarter increased by 20.80%, 20.56% and 26.83% year-on-year respectively.
Before that,Bank of Nanjing、Zhangjiagang Bank、China Merchants Bank、Changshu Bank、Zheshang Bank、Hangzhou BankThe first-quarter results were also released. The first-quarter net profit growth rates of the aforementioned banks were 22.33%, 29.74%, 12.52%, 23.38%, 11.84%, and 31.39%, respectively.
Judging from the current data, the double-digit growth in net profit in the first quarter has become the highlight of the banking sector. Especially for some city commercial banks and rural commercial banks, the growth rate of net profit exceeds 20% or even 30%.
Specifically, in the first quarter of this year,Hangzhou BankRealized a net profit of 3.309 billion yuan, a year-on-year increase of 31.39%;Zhangjiagang BankRealized a net profit of 433 million yuan, a year-on-year increase of 29.74%;Changshu BankRealized a net profit of 659 million yuan, a year-on-year increase of 23.38%;Bank of NanjingThe net profit was 5.015 billion yuan, a year-on-year increase of 22.33%.
stock lineChina Merchants BankandPing An BankNet profit also saw double-digit growth in the first quarter. In the first quarter of this year,China Merchants BankRealized a net profit of 36.022 billion yuan, a year-on-year increase of 12.52%;Ping An BankThe net profit was 12.85 billion yuan, a year-on-year increase of 26.83%.
“Since 2022, the overall operation of the banking industry has remained stable. Judging from the financial reports of the first quarter of this year, the overall performance of listed banks will still maintain growth, and the growth rate of revenue and profit may be ‘stable and slightly down’ compared with the same period last year, which is still in the high level,” said a banking analyst.
Asset quality is stable and improving
Judging from the listed banks that have disclosed the first quarterly report, the asset quality remains stable, and the non-performing indicators show the characteristics of stability and improvement.
Non-performing loan ratios at most banks were flat or declining compared to the end of last year. For example, as of the end of the first quarter of this year,Bank of NanjingThe non-performing loan ratio was 0.9%, down 0.01 percentage points from the end of last year;Hangzhou BankThe non-performing loan ratio was 0.82%, down 0.04 percentage points from the end of last year;Bank of NingboThe non-performing loan ratio was 0.77%, the same as that at the end of last year, and continued to maintain a low level in the industry;Changshu BankThe non-performing loan ratio was 0.81%, the same as that at the end of last year;Zheshang BankThe non-performing loan ratio was 1.53%, unchanged from the end of last year.
The non-performing loan ratio of individual banks has risen, but to a lesser extent.Such asChina Merchants BankThe non-performing loan ratio was 0.94%, up 0.03 percentage points from the end of last year.
To this,China Merchants BankSaid that the company will closely follow the changes in the macro situation, continue to adjust the customer structure and credit structure, strengthen risk monitoring and early warning in key areas such as real estate, local government credit, and large group customers, and formulate targeted management and control plans to effectively prevent and resolve conflicts. To deal with potential risks, fully make provision, take multiple measures to increase the disposal of non-performing assets, and strive to maintain the overall stability of asset quality.
Sector valuations are expected to recover
The disclosure of the first quarter report of listed companies is coming to an end. For investors, they are more concerned about whether the performance of the banking sector can continue to maintain a high growth rate in the second quarter, which was greatly affected by the epidemic.
On April 18, in response to the impact of the epidemic in Jiangsu, Zhejiang and Shanghai since March on banks’ credit issuance and asset quality in the second quarter,Bank of NingboPresident Zhuang Lingjun said: “The epidemic has had a certain impact on our daily operations, but judging from recent market research and customer exchanges, it is generally controllable.”
A few days ago, Wang Yiming, a member of the Monetary Policy Committee of the People’s Bank of China, said, “Stronger policy measures must be taken to ensure that the economic growth rate in the second quarter returns to above 5% and lay the foundation for achieving the expected economic growth target for the whole year.” This also means that In the second quarter, the relevant departments will intensify their plans for more vigorous policies and measures to stabilize growth. Analysts predict that with the “stable growth” entering a critical period in the second quarter, the credit structure of the banking industry will continue to be optimized, and market interest rates are expected to remain stable and moderate, further reducing the financing costs of the real economy.
In the view of Lin Jiali, an analyst at Haitong International Securities, the banking industry is the “intersection” of various industries that are favorable for stabilizing growth policies. Whether it is changes in monetary policy, fine-tuning in the field of infrastructure and real estate, or policies to stabilize growth in some specific real industries, they will all be implemented into the fundamentals of the banking industry.
Looking forward to the second quarter,Shenwan HongyuanAnalyst Zheng Qingming said that it is currently in the transitional stage of “relaxing credit and stable growth”. As the second quarter is a key stage for stable growth, the joint efforts of various policies are expected to improve physical demand, which will benefit the further restoration of the valuation of the banking sector. At the same time, from the perspective of the fundamentals of the banking industry, the impact of the epidemic on asset quality is limited, and high-quality banks will maintain a stable and better performance than their peers.