Bank of Communications (601328) Annual Report Commentary Report: Interest Margin Increased Quarterly, Provisions Raised to Recent Highs

Bank of Communications (601328) Annual Report Commentary Report: Interest Margin Increased Quarterly, Provisions Raised to Recent Highs

Event: On the evening of March 29, the Bank of Communications disclosed its 18-year report: it actually realized operating income of 212.7 billion yuan, exceeding its value added8.

5%; net profit attributable to shareholders of the parent company was 736.

300 million, an increase of 4.

9%; total assets at the end of the year 9.

5 trillion, non-performing rate 1.

49%, provision coverage 173.


The 18-year average ROE is 11.


  Opinion: The net interest margin has improved quarter by quarter. The growth rate of net profit before provisioning has increased to the highest point in recent years. The 18-year profit and profit dismantling has mainly contributed from the growth of the scale of interest-generating assets, and the interest margin has remained stable; this has affected the strength of provisioningIncrease.

The improvement in revenue is more sustainable, and the profit growth rate before the provision in 18 years reached 12.

9% high in recent years.

18-year net interest margin 1.

51%, flat for one year, but on a quarterly basis, it continues to improve (18Q1-Q4 are 1 respectively.

36%, 1.

45%, 1.

59%, 1.

63%), mainly benefiting from the rising interest rate of the 18H1 asset side and the apparent pressure relief of the 18H2 rejection side cost.

The cost rate of interest-bearing debt in 20182.

62%, a decrease of 3BP from 1H18. It is expected that 19H1 will be accompanied by high-cost structural deposits, and interbank deposit certificates will be terminated. The cost of liabilities must be extended to the downside to support a steady upward increase in net interest margin.

  The middle income maintained positive growth.

Revenue for the 18 years was 41.2 billion (19% of revenue).

4%), higher than the value-added 1.

7%, the bank card income rose by 23 in ten years.

6%, which accounted for 50% of the total income, and the contribution from the credit card business increased.

  The asset quality has improved, and provisions have further increased the NPL ratio at the end of 18 years.

49%, maintaining a low level; paying attention to the amount and proportion of loans, the overdue loan amount and the proportion of prolonged down significantly, asset quality continued to improve.

The proportion of loans in non-performing high-income industries was further downgraded. At the end of 18, the proportion of loans in manufacturing and wholesale and retail trades.

1% (21 for 16 years.


With the continuous optimization of credit structure and more prudent risk control, the company’s ability to resist risks in the downturn of the economy has increased.

  At the end of 18, the provision coverage ratio was increased to 173.

13% high in recent years, up 18.

4 units.

The loan-to-loan ratio at the end of 18 was 2.

59%, an increase of 28bps earlier.

Provisions are sufficient.
  Endogenous capital supplementation and enhancement. The dividend distribution plan is only delayed at the end of 18 years from the core capital adequacy ratio, and has been repeatedly overlapped. The endogenous capital supplementation situation is better.
  The annual report has not yet announced a dividend distribution plan, which is included in the statement that, after the issuance of convertible bonds, etc., the plan will be formulated as soon as possible and submitted to the board of directors.

Little impact.

 无锡夜网论坛 Investment suggestion: Deepen financial reforms and advance steadily. Fundamentals are stable and upwards. Net interest margins have room for improvement in 19 years. In view of the economic downturn, the company may increase its provisioning efforts. We slightly reduce the net profit growth in 19/20Speed prediction 6.

7% / 8.

3% to 5.

1% / 6.


  The current ROE of Bank of Communications is low, but its estimated value is only 0.

65 times 19 PB.

In the long run, as a regular major bank with innovative reform genes, the deepening of financial reforms has been steadily advanced, and the level of corporate governance has been gradually and continuously improved, and the fundamentals have steadily improved.

Give 0.

9x 19PB target estimate (comparable line average PB (LF)), corresponding to 8.

67 yuan / share, 深圳桑拿网 increase the level of holdings.

  Risk warning: the economic downturn exceeds expectations leading to deterioration of asset quality; debt costs rise and rise.


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