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Yangtze Business Daily Pentium News reporter Xu Jia

With the net interest margin stabilizing and cost reduction and efficiency improvement being promoted, Pudong Development Bank (600000.SH)'s performance has returned to a growth trend since 2024.

On the evening of August 19, Shanghai Pudong Development Bank released its semi-annual report. In the first half of 2024, the bank achieved operating income of 88.248 billion yuan, a year-on-year decrease of 3.27%. Excluding the one-time impact of the sale of Shanghai International Investment and Morgan Stanley in the same period last year, operating income increased by 1.45% year-on-year; net profit attributable to shareholders of the bank (net profit, the same below) was 26.988 billion yuan, a year-on-year increase of 16.64%.

Regarding the growth of operating efficiency in the first half of the year, Pufa Bank said there were five main reasons. First, it strengthened balance sheet management in accordance with the principles of "forward-looking, efficient, proactive and resilient" to stabilize the net interest margin. The net interest margin of the bank's parent company increased by 2bps compared with the first quarter. Second, it continued to increase credit supply. The net increase of the group's credit in the reporting period hit a record high in the same period, reaching 297.2 billion yuan. The effect of increasing volume to resist the downward trend of market interest rates gradually emerged. Third, the liability structure continued to be optimized, the proportion of settlement deposits increased, and the control of interest rates was effective. The interest rate of general RMB deposits in the parent company fell by 17bps compared with the same period last year, among which the interest rates of corporate customers and retail customers fell by 21bps and 9bps respectively. Fourth, it took the initiative to seize investment and transaction opportunities and actively increase investment income. The group's other non-interest income (excluding handling fees) was 17.92 billion yuan, an increase of 1.08 billion yuan year-on-year, an increase of 6.41%. Fifth, it achieved cost reduction and efficiency improvement through refined and lean management. The group's business and management fees fell by 3.22% year-on-year in the reporting period.

The reporter of Yangtze Business Daily Pentium News noted that in the first half of 2024, the net interest margin (net interest rate) of Shanghai Pudong Development Bank was 1.48%, down 8bps from the same period last year and 4bps from the end of last year. The net interest margin of the parent company increased by 2bps from the first quarter, and the decline in the net interest margin narrowed and gradually stabilized. During the reporting period, Shanghai Pudong Development Bank's net interest income was 58.046 billion yuan, a year-on-year decrease of 2.382 billion yuan, a decrease of 3.94%.

During the same period, Pufa Bank achieved non-interest net income of 30.202 billion yuan, a year-on-year decrease of 1.95%; among them, net income from fees and commissions was 12.282 billion yuan, a year-on-year decrease of 12.03%; other non-interest income was 17.920 billion yuan, a year-on-year increase of 6.41%.

As of the end of June 2024, the total assets of Pufa Bank were 9.25 trillion yuan, an increase of 2.74% from the end of the previous year; of which the total amount of RMB and foreign currency loans (including discounts) was 5.31 trillion yuan, an increase of 5.92% from the end of the previous year.

At the end of the reporting period, the balance of non-performing loans of Pufa Bank was 74.758 billion yuan, an increase of 560 million yuan from the end of the previous year; the non-performing loan ratio was 1.41%, down 0.07 percentage points from the end of the previous year and down 0.94 percentage points from the recent high of 2.35% (end of September 2017); the provision coverage ratio was 175.37%, up 1.86 percentage points from the end of the previous year.

It is worth noting that as of the end of June 2024, the non-performing loan rates of Shanghai Pudong Development Bank's corporate loans and retail loans were 1.48% and 1.54%, respectively, down 0.19 and 0.12 percentage points from the end of the previous year. In particular, among corporate loans, the non-performing loan rate of the real estate industry was 2.74%, down 1.37 percentage points from the end of the previous year.

As of the end of June 2024, the capital adequacy ratio, Tier 1 capital adequacy ratio and core Tier 1 capital adequacy ratio of Pudong Development Bank Group were 12.36%, 10.43% and 8.87%, respectively, all of which declined to varying degrees compared with the end of the previous year.