Ping An Bank (000001): Achieved a performance increase beyond the expected strategy significantly improved
Event On August 7, Ping An Bank took the lead in publishing its 2019 semi-annual report, in which revenue increased by 18 in the first half.
50%, net profit attributable to mothers increases by 15 per year.
Brief comment one, the performance growth rate reached a new high, and the profitability increased in the first half of the year. Ping An Bank realized a total of 678 operating income.
29 ppm, an increase of 18 years.
50%, a record high growth rate; net profit attributable to mothers was 154.
30,000 yuan, an increase of 15 in ten years.
19%, the growth rate hit a new high at the same time, and slightly higher than our expectations (14.
From a single quarter point of view, the second quarter achieved revenue of 353.
53 ppm, an increase of 21 in ten years.
01%, 5 higher than the previous quarter.
13 single; realized net profit attributable to mother 79.
570,000 yuan, an increase of 17 in ten years.
41%, 4 higher than the first quarter.
The company’s second quarter revenue and net profit growth averaged higher than a quarter, unlike other banks’ second quarter revenue growth rate convergence phenomenon, the achievement is not easy, mainly due to the continuous improvement of its net interest margin.
Profitability continued to improve.
The average annualized ROE for the first half of the year is 12.
63%, 0 higher than the same period last year.
27 averages; EPS is 0.
85 yuan / share, 16 higher than the same period last year.
4%; BVPS at the end of the second quarter was 13.
78 yuan / share, up 7 earlier.
Second, NIM improved quarter-by-quarter better than expected, retail stabilized asset returns, and eased interest rate pressure on the company in the first half of the year. The company achieved net interest income of 436.
390,000 yuan, an increase of 16 in ten years.
6%; of which interest rate income increased by 6 in ten years.
2%, mainly from the loan business and the inter-bank lending; while the index expenditure has increased negatively.
5%, mainly from the decline in the cost of bonds payable and interbank debt.
The annualized NIM was 2 in the first half of the year.
62%, 36 and 27 blood pressures higher than the same period of last year and the whole year of last year, respectively, and continued to rise 9 blood pressures from the first quarter.
Among them, the comprehensive yield of interest-earning assets increased by 28 BP to 5.
23%, mainly because the loan yield has increased by 68 BP, the return on other assets has decreased; the comprehensive cost rate of interest payment resistance has dropped by 20 BP to 2.
69%, in addition to the cost of deposits rose by 14 BP, other debt sources cost rate increased and decreased.
Judging from the single-quarter pricing trend, the second quarter NIM was 2.
71%, 18 BP higher than the first quarter; the comprehensive yield of interest-earning assets is 8 BP higher than the first quarter; the yield on loans and debt investment is 13 and 2 BP higher; the comprehensive cost rate of interest-bearing liabilities continues to decrease from the first quarter 11 The average cost of various types of debt is falling, especially the cost of deposits has fallen by 6 BPs.
Under the influence of asset repricing, Ping An Bank’s net interest margin still needs to improve quarter by quarter, exceeding market expectations, but in line with our gradual judgment: it is expected to improve the pressure on defective terminals.
Performance: lower, the yield of retail loans and corporate loans rose by 33 and 45 BP in the first half of the year, but in the single quarter, the retail yield in the second quarter was higher than 38 BP in the first quarter, but for corporate loansThe yield is lower than 27 BP in the first quarter.
In another part, the cost ratio of corporate deposits in the first half of the year will fall by 13 BP, but retail deposits will increase by more than 9 BP. From a single quarter perspective, the cost ratio of corporate deposits in the second quarter will fall by 9 BP in the first quarter, but retail deposits will stillHigher than 2 BP in the first quarter.
Third, non-interest income is increasing by 22 per year.
1%, the contribution increased.
In the first half of the year, non-interest income was 241.
90 ppm, an increase of 22 in ten years.
1%, accounting for 35 of total revenue.
7%, an increase of 1 per year.
Among them, the net income from program fees and commissions reached 183.
91 ppm, a 10-year increase2.
5%, but accounted for a decrease of 4 compared to the same period last year.
2 up to 27.
1%; and other non-interest net income amounted to 57.
99 ppm, an increase of 210 in ten years.
In terms of fee and commission income, it mainly came from the continuous increase of bank card business income, which reached 148 in the first half of the year.
68 ppm, an increase of 11 per year.
2 billion yuan, an increase of 8.
At the same time, the agency and commission business and settlement business also increased by 9 respectively.
68 and 3.
10,000 yuan, an increase of 46.
90% and 23.
00%; while asset custody business and consulting business continued to decline17.
3% and 35.
In terms of other non-interest income, it was mainly affected by the increase in investment income from trading financial assets, with investment income reaching 49.
38 ppm, an increase of 37 per year.
51 trillion, an increase of 316%.
Fourth, the overall quality of assets has improved, and the adequacy of provisioning has increased significantly.
At the end of the second quarter, the balance of non-performing loans was 349.
25 trillion, a slight increase of 0 earlier.
1%, basically stable, but poor implantation1.
68%, down 7 BPs from the beginning of the year, and continued to drop 5 BPs from the end of the first quarter.
Concerned loans accounted for a decrease of 10 BP month-on-month.
At the end of the second quarter, attention-oriented loans were 515.
76 trillion, an earlier decline of 5.
5%, the proportion is 2.
48%, a decrease of 25 BP from the beginning of the year, and continued to drop 10 BP from the end of the first quarter.
The company’s loan surplus and proportion of overdue for more than 90 days continued to decline.
At the end of the second quarter, the company had a loan balance of 327 over 90 days.
79 trillion, an earlier decrease of 3.
46%; the proportion of loans overdue for more than 90 days is 1.
58%, a decrease of 0 from the beginning of the year.
12 percentage points; the non-performing loan deviation was 94%, which was an earlier decline of 3 examples.
The adequacy of provisioning has improved significantly.
At the end of the second quarter, provision was made for covering coating 182.
52%, up 27 from the beginning of the year.
The 29 averages continued to rise from the first quarter.
94 units; the loan-to-loan ratio is 3.
06%, an increase of 0 earlier and the end of the first quarter.
35 and 0.
V. Retail Transformation 2.
The effect of 0 is consolidated, and the indicators are improved significantly. The company’s retail transformation has entered 2 in 2019.
In Phase 0, for the first time, the “3 + 2 + 1” business strategy of the retail business was fully put forward, that is, the “three major business modules” of basic retail, private wealth and consumer finance were promoted to enhance the “two core capabilities” of risk control and cost managementTo promote the continuous empowerment of the “1 platform” with AI as its core, achieve breakthrough growth in performance, and make every effort to create “China’s most outstanding and globally leading intelligent retail bank.”
From the perspective of effects, the benefits are very significant, as follows: First, the retail business’s contribution to the Group’s performance is consolidating and continues to increase.
In the first half of the year, the revenue and net profit contribution of the retail financial business reached 56 respectively.
9% and 70.
2%, an increase of 5 over the same period last year.
7 and 2.
Three averages, an increase of 3 from last year’s average.
9 and 1.
Secondly, the proportion of retail loans increased, yields increased but unfavorable declines.
At the end of the second quarter, retail loans reached 1.
22 trillion yuan, accounting for 58 of total loans.
8%, which increased by 1 at the beginning of the comparison and at the end of the first quarter.
1 and 0.
In terms of revenue, the average return on retail loans increased in the first half of the year.
74%, an increase of 33 blood pressure over the same period last year, and an increase of 19 blood pressure over the first quarter.
At the same time, the retail loan non-performing ratio remained relatively stable in the form of increased retail co-debt risks, and the retail non-performing ratio at the end of the second quarter replaced 1.
09%, only 2 BP up from the beginning of the year, and 1 BP down from the end of the first quarter.
Among them, the new one loan, auto financing loan, mortgage loan, and credit card increased by 13, 8, 6, and 5 BP to 1, respectively, earlier.
15% and 1.
37%, while the non-performing rate of pledged loans and small consumer loans fell by 34 BP to 1.
Third, the retail customer base has been continuously consolidated.
At the end of the second quarter, the company’s managed retail customer AUM reached 1.
76 trillion yuan, an increase of 23 over the beginning of the year.
9%, personal deposit balance 5407.
79 trillion, an earlier increase of 17.
2%; 9019 retail customers.
420,000 households, an increase of 7 from the beginning of the year.
5%; the number of registered customers of Pocket Bank APP is 7,431.
930,000 households, an increase of 19 over the beginning of the year.
4%, 2835 monthly customers.
130,000 households, an increase of 9 earlier.
Sixth, the continuous advancement of the fine and strong public sector has achieved initial results in the past two years. During the company’s retail transformation process, a series of loans to the public sector have been reduced.
Then starting from 2019, the company began to focus on the strategy of “doing fine work for the public” through the adjustment of the management organizational structure.
Therefore, the “3 + 2 + 1” strategy for the operation of public business is also proposed, that is, the “3 pillars” of strengthening industrial banks, transaction banks and comprehensive finance, focusing on the “2 major pillars” of strategic customers and small and micro customers.”Customer group”, adhere to the “1 lifeline” of asset quality, strengthen 重庆耍耍网 the business ecology, rich business scenarios, provide comprehensive financial solutions, and deliver more high-quality assets for retail.
On the asset side, the company’s total loans increased from earlier periods4.
2%, of which corporate loans increased by 1 compared with the beginning of the year.
60%, began to resume positive growth, but the current major proportion of discounted bills, an increase of 49.
3%, general corporate loans are still down slightly, down to zero.
9%. It is expected that after the company makes up the core level, the growth of general corporate loans is also expected to change from negative to positive.
On the debt side, the balance of corporate deposits at the end of the second quarter was 1.
80 trillion yuan, an increase of 8 from the beginning of the year.
1%, of which the corporate current deposit balance is 5878.
9.9 billion yuan, an increase of 10 from the end of last year.
2%, the corporate deposit current rate increased, mainly through payment and settlement and transaction banking products to promote continuous optimization of the deposit structure.
At the middle income level, the non-interest income from corporate business continued to grow in the first half of the year.
Among them, the growth rate is cross-border financial services income, which increases 15 times per year; the agency insurance business income, which increases 7 times per year; domestic certificate issuance and forfaiting disposal fee income, which have increased by 12 times.
Seventh, continue to promote the empowerment of AI, and the cost-to-income ratio has dropped. Ping An Bank regards “technology leadership” as the bank’s primary development strategy.
In terms of technology spending, on the basis of a high growth rate of 82% last year compared to previous technology spending, the first half of 2019 will continue to expand spending, and IT capital expenditures and expenses will increase.
Under the technology-led strategy, the company enhances efficiency and efficiency through AI-enabled management and business, and increases innovation to maintain sustained growth momentum and promote continuous optimization.
Looking at the overall effect, the cost-income ratio in the first half of the year was 29.
46%, 20 blood pressure drops compared to the same period last year, 86 blood pressure drops compared to the same period last year.
Specifically: in terms of operating costs, through comprehensive and refined management and process transformation, transforming the operating process and management chain, further streamlining the operating and administrative administrative expenses, and reducing retail operating costs, such as realizing a 10% reduction in SMS spending, centralized operationsPer-piece cost reductions of 7%, etc., are driving down overall operating costs.
In terms of fixed costs, through the standardization, intelligentization, and lightweight conversion of outlets, the cost of a single outlet was reduced, and the rental of operating outlets was reduced by 1 in the first half of the year.
80,000 square meters, the comprehensive benefits of outlets continued to increase; beyond the expansion, a total of 2 reductions in operating and fixed cost expenses.
In terms of capacity efficiency, through the implementation of AI strategies to empower business and management, retail human productivity has been further improved, and per capita revenue has increased by 14%.
While retail transformation and maintaining rapid business growth, the retail cost-to-income ratio has continued to be optimized over the past two years.
8. The capital adequacy ratio continued to increase. At the end of the second quarter of the expected forced conversion of convertible bonds this year, the company’s core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio were 8, respectively.
71% and 12.
62%, an increase of 0 from the beginning of the year.
32 and 1.
The 12 averages continued to rise by 0 from the end of the first quarter.
12 and 1.
The continuous improvement of the company’s capital adequacy mainly comes from two aspects: one is to establish a comprehensive performance evaluation mechanism with economic value added (EVA) and economic capital return rate (RAROC) as the core, and to guide low-risk businesses through business deployment(Mainly the transformation of retail business), increase the taxation of nuclear sales, increase resistance to the disposal of debt assets, reduce the occupation of invalid capital, and improve the level of capital; the second is to actively expand external sources of capital replenishment.
On January 25, the company successfully issued 26 billion convertible bonds, and it has begun to convert shares on July 25, forcibly converting to 13.
96 yuan, 3Q is expected to complete the mandatory conversion, will increase the core tier one capital adequacy ratio, and public debt will continue to pick up in the second half.
In addition, on April 25, the company also issued 30 billion second-tier capital bonds.
Nine, investment advice In the first half of the year, Ping An Bank achieved very good results.
The performance is as follows: first, the performance increase is increasing year by year, and the net profit growth rate is faster than expected; second, the NIM continues to improve on a sequential basis; third, the quality improvement indicators are improved, and the proportion of loans overdue for more than 90 days will continue to decline, and inventory risksFourthly, the retail business asset side, the proportion of retail loans is still rising, the performance contribution continues to increase, the comprehensive rate of return rose while maintaining a relatively stable NPL ratio; fifth, the retail business liability side, retail deposit growth rateAccelerating, the continuous improvement of retail AUM will consolidate the foundation of practical results. Sixth, the initial effect of the strategy of strengthening public finances will be changed initially, and public debt will start to achieve positive growth, while reducing public debt pressure at the same time.
The company’s 2019 PB estimate is only 0.
84 times, in an underestimated state.
In the short-term market competition and its retail non-performing ratio, loss costs and other issues, from the first half performance, these reductions will be significantly eased.
We believe that the materiality of potential risks on the asset side of the company will continue this year, and the retail side will continue to improve, so it is estimated that the repair requirements are higher.
We expect the company’s operating income in 19/20 will increase by 20% / 22%, net profit will increase by 15% / 16%, and EPS will be 1.
92 yuan, BVPS is 16 respectively.
78 yuan, corresponding PE is 8.
05 times, the corresponding PB is 0.
6-month target price of 19 yuan, maintain “Buy” rating.