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, and Ping An Bank released their 2022 first-quarter reports respectively. The first-quarter net profit of the three banks increased by 20.80%, 20.56%, and 26.83% year-on-year, respectively.
Prior to this, Bank of Nanjing, Zhangjiagang Bank, China Merchants Bank, Changshu Bank, Zheshang Bank, and Hangzhou Bank also released their first-quarter results. %, 11.84%, 31.39%.
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 Bank achieved a net profit of 3.309 billion yuan, a year-on-year increase of 31.39%; Zhangjiagang Bank achieved a net profit of 433 million yuan, a year-on-year increase of 29.74%; Changshu Bank achieved a net profit of 659 million yuan, a year-on-year increase of 23.38% ; Bank of Nanjing achieved a net profit of 5.015 billion yuan, a year-on-year increase of 22.33%.
The joint-stock banks China Merchants Bank and Ping An Bank also recorded double-digit growth in net profit in the first quarter. In the first quarter of this year, China Merchants Bank achieved a net profit of 36.022 billion yuan, a year-on-year increase of 12.52%; Ping An Bank achieved a net profit of 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, the non-performing loan ratio of Bank of Nanjing was 0.9%, down 0.01 percentage point from the end of last year; the non-performing loan ratio of Bank of Hangzhou was 0.82%, down 0.04 percentage points from the end of last year; the non-performing loan ratio of Bank of Ningbo was 0.77%, compared with the end of last year. It was flat at the end of last year, continuing to maintain a low level in the industry; Changshu Bank’s non-performing loan ratio was 0.81%, the same as the end of last year; Zheshang Bank’s non-performing loan ratio was 1.53%, which was the same as the end of last year.
The non-performing loan ratio of individual banks has risen, but to a lesser extent. For example, the non-performing loan ratio of China Merchants Bank was 0.94%, an increase of 0.03 percentage points from the end of last year.
In this regard, China Merchants Bank said that the company will closely track changes in the macro situation, continue to adjust customer structure and credit structure, strengthen risk monitoring and early warning in key areas such as real estate, local government credit, and large-value group customers, and formulate targeted control plans. , effectively prevent, resolve and dispose of 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, Zhuang Lingjun, president of Bank of Ningbo, said: “The epidemic has had a certain impact on our daily operations, but from recent market research, customer In terms of communication and other situations, the overall situation is 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, Zheng Qingming, an analyst at Shenwan Hongyuan, said that it is currently in the transitional stage of “widening credit and stable growth”. 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.
