Bank of Communications (601328) semi-annual report comment: retail transformation achieved significant rise in bad credit card revenue

Bank of 杭州桑拿 Communications (601328) semi-annual report comment: retail transformation achieved significant rise in bad credit card revenue

Event: On August 27, the Bank of Communications disclosed its 19-year interim report.

Revenue was 1182 trillion, a year-on-year increase of +16.

02%; net profit attributable to mother is 4.27 million yuan, +4 year-on-year.

85%; annualized ROE is 12.

57%, -19BP in one year; non-performing loan return 1.

47%, one year -2BP; provision coverage rate is 173.

5%, +0 from the end of the previous year.

4pct.

  Opinion: Revenue growth rate has continued to pick up, and retail has gradually achieved outstanding performance growth rate is still at a relatively high level.

1H19 revenue was 118.2 billion yuan, a year-on-year increase of +16.

0%, slightly lower than the 26 of 19Q1.

5%, but the trend of high growth remains unchanged.

Net interest income + other non-interest income was 81.6 billion, a year-on-year increase of +17.

8%; the median income was 231 billion yuan, a year-on-year increase of +9.

2%.

Net interest margin has improved.

1H19 net interest margin is 1.

58%, previously + 17BP, is attributable to the cost of interbank liabilities, and loan yields have increased.

The profit before provision was 84.2 billion yuan, a year-on-year increase of +9.

9%, 7 higher than 18H1.

0 pct, profit growth is still strong; net profit attributable to mothers is 42.7 billion, +4 year-on-year.

9%, mainly due to the expansion of net interest margin and scale expansion.

ROE went down slightly.

  In 1H19, the ROE reached 12.

57%, before -19BP, the gap with the average of other major banks may still exist.

  The retail transformation has achieved remarkable results.

At the end of 19H1, the Bank’s personal financial assets (AUM) reached 3.

28 trillion, an increase of 7 from the beginning of the year.

3%.

In the first half of the year, the Bank’s retail profit before tax was 151.

4 billion, a year-on-year increase of + 36%. The operating income of this segment was +25 year-on-year.

1%, the contribution to the bank’s income also reached 37.

6%, +2 per year.

7 pct.

  The scale expansion mainly relies on government bonds, and credit card loans contracted in 1H19. In the real estate-related areas, most of them were contracted.

Of the four industries where the 19H1 ratio of public debt increased from the beginning of the year, the construction + real estate industry increased by 71 billion yuan, accounting for 37% of the increase in public debt.

  Individual loans were +18.6 billion earlier (housing mortgages +60.2 billion and credit cards -50.5 billion).

As a major bank, BoCom has relatively high-quality real-estate corporate customers and a more standardized mortgage business, which may not be affected by the tightening of real estate financing.Another major factor for the expansion of 1H19 was government bonds. The “government bonds and central bank bills” account increased by 140.8 billion from the initial period, accounting for 86% of the 1H19 increase at the investment end, and the asset quality was enhanced.

  Credit card non-performing ratios increased and loan balances contracted.

Bad credit rate at the end of 19H1 2.

49%, 97BP from the morning.

At the same time, credit card loans fell by 50.5 to 454.7 billion, and their share of total loans fell by one.

5 pct, risk appetite may be reduced, and asset security may be improved.

During the period, credit card non-performing balances increased from 76.

800 million to 113.

200 million, a 47% growth rate in half a year, the risks are currently exposed.

  The overall asset quality is steadily improving, with ample capital and ample wealth. Multiple risk indicators are steadily decreasing.

19H1 late adverse rate / attention rate / overdue 90+ rate were 1.

47%, 2.

32%, 1.

27%, down 2BP / 13BP / 3BP, respectively, asset quality is steadily improving.

Provision coverage rate was 173.

5%, basically the same as the beginning of the year.

Capital is abundant.

19H1 core tier 1 / tier 1 / overall capital adequacy ratios are 10 respectively.

86%, 11.

86%, 13.

84%.

On August 16, 40 billion secondary capital bonds were issued; on July 19, it was announced that the CBRC had approved its 40 billion perpetual bonds.

Based on the static RWA 佛山桑拿网 calculation at the end of 19H1, the capital adequacy ratio will be increased, and the tier 1 capital accumulation rate will be 67BP each.

  Investment advice: Retail transformation promotes high performance, credit card tightening makes risk mitigation 19H1 performance maintains high growth, and retail conversion produces outstanding results.

It is estimated that the growth rate of net profit attributable to mothers in 19-21 will be 5.

1% / 6.

4% / 7.

3%, the corresponding EPS is 1.

04/1.

11/1.

19 yuan, given a target assessment of 0.

9 times 19 years of PB, corresponding to 8.

38 yuan / share, maintaining the overweight rating.

  Risk reminder: The advancement of interest rate marketization will continue to narrow the interest margin; policy tightening will exacerbate the “asset shortage”.