2023-08-27 14:13:43
Hangzhou Bank Interim Report: Revenue and profit double growth capital adequacy indicators are under pressure, relying on fixed increase to “enrich blood”
Node Finance 2023-08-27 22:13:43
It’s the financial report season again, as a leader among city commercial banks, Bank of Hangzhou is the first to announce its mid-term performance report.
Data show that in the first half of 2023, Bank of Hangzhou achieved operating income of 18.356 billion yuan, a year-on-year increase of 6.09%; net profit of 8.326 billion yuan, a year-on-year increase of 26.29%; basic earnings per share of 1.36 yuan, a year-on-year increase of 28.3%.
However, in terms of quarters, in Q2 alone, Bank of Hangzhou’s revenue and net profit attributable to the mother increased by 4.6% and 24.5% year-on-year respectively, and the growth rate dropped by 3.0% and 3.6% respectively compared with Q1.
In terms of asset quality, as of the end of June 2023, Hangzhou Bank’s non-performing loan ratio was 0.76%, which was flat month-on-month, down 0.03% year-on-year; the provision coverage ratio was 571.1%, up 2.4% month-on-month, down 10.5% year-on-year; increased by 3%, and decreased by 28% year-on-year.
Horizontally, Bank of Hangzhou’s non-performing ratio has hit a new low, which is at a relatively low level in the industry, and its provision coverage ratio is at a relatively high level in the industry, indicating that its ability to make up for loan losses and prevent loan risks is relatively strong.
But it is worth noting that, with a provision coverage ratio of more than 550%, which is almost three times the industry average, and even suspected of “hidden profits”, Bank of Hangzhou is still throwing out a cap of 12.5 billion at the end of June this year. A huge amount of additional issuance is used to supplement core tier 1 capital matters.
As a result, this behavior caused strong doubts in the market, and Bank of Hangzhou had to lower the upper limit of additional issuance to 8 billion yuan at the speed of light.
As of the end of the first quarter of 2023, Bank of Hangzhou’s core Tier 1 capital adequacy ratio was 8.1%. Although it has improved to a certain extent, it is still at the end of the listed city commercial banks.
According to regulatory requirements, the core tier 1 capital adequacy ratio of commercial banks shall not be lower than 7.5%. In other words, the core tier-1 capital adequacy ratio of Bank of Hangzhou is close to the regulatory red line, coupled with the weakening of the external operating environment, the gap between deposit and loan interest rates continues to narrow, and the banking industry is facing greater operating pressure. “Family” is particularly important.
The question is, why does the Bank of Hangzhou insist on asking for money from the market, that is, exogenous financing, instead of releasing profits and conducting endogenous financing?
According to public information, since the bank went public in 2016, it has raised a total of about 52.16 billion yuan to supplement capital through various methods such as fixed increase, preferred shares, tier-two capital bonds, and convertible bonds.
But on the other side of the coin, since its listing, the cumulative dividends of Bank of Hangzhou have only been 9.394 billion yuan, and the scale of dividends is very different from the scale of fundraising.
In fact, while announcing the fixed increase, Bank of Hangzhou also announced a bond financing plan of no more than 65 billion yuan. As of the close on August 25, the bank’s total market value was less than 70 billion yuan.
Author: Qigong
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