senior executives of large state-owned banks are speaking out intensively!
2024-09-01
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on august 30, industrial and commercial bank of china, agricultural bank of china, china construction bank and postal savings bank of china successively released their semi-annual report data. so far, the 2024 mid-term "report cards" of the six state-owned banks have all been revealed.
overall, the performance of the six major banks in the first half of the year was relatively stable, and all will implement interim dividends.
△the 2024 mid-term "report cards" of the six state-owned banks have all been released. (data map provided by photo network)
total dividends exceeded 190 billion yuan
in the first half of 2024, the six state-owned banks achieved a total net profit attributable to shareholders of 683.388 billion yuan and a total revenue of 1799.511 billion yuan. as of the end of june 2024, the non-performing loan ratio of five of the banks decreased compared with the end of the previous year.
in the first half of 2024, the asset size of the six state-owned banks all achieved steady growth, among which icbc still ranked first in terms of asset size., up 5.4% from the end of the previous year to 47.12 trillion yuan. the asset scale of agricultural bank of china and construction bank also exceeded 40 trillion yuan, reaching 41.98 trillion yuan and 40.29 trillion yuan respectively. the asset scale of bank of china increased by 4.55% from the end of the previous year to 33.91 trillion yuan. the asset scale of postal savings bank of china and bank of communications increased by 4.37% and 0.84% from the end of the previous year, reaching 16.41 trillion yuan and 14.18 trillion yuan respectively.
as credit quality and efficiency improve and debt costs steadily decrease,the operating efficiency of the six state-owned banks remained generally stable.
in terms of net profit attributable to parent companies, icbc still ranks first, with a net profit attributable to parent companies of rmb 170.467 billion as of the first half of 2024;china construction bank followed closely behind, with its net profit attributable to shareholders also exceeding 150 billion yuan, reaching 164.326 billion yuan; agricultural bank of china achieved a net profit attributable to shareholders of 135.892 billion yuan, a year-on-year increase of 2%; bank of china achieved a net profit attributable to shareholders of 118.601 billion yuan; postal savings bank of china and bank of communications achieved net profits attributable to shareholders of 48.815 billion yuan and 45.287 billion yuan, respectively.
in terms of revenue scale, icbc exceeded 400 billion yuanduring the reporting period, the bank achieved operating income of 420.499 billion yuan, while the operating income of china construction bank, agricultural bank of china and bank of china all exceeded 300 billion yuan, namely 385.965 billion yuan, 366.835 billion yuan and 317.076 billion yuan respectively. the operating income of postal savings bank of china and bank of communications during the reporting period were 176.789 billion yuan and 132.347 billion yuan respectively.
compared with the same period last year, only agricultural bank of china achieved a year-on-year growth in both revenue and net profit attributable to its parent company., with increases of 0.29% and 1.99% respectively.
risk prevention and control is the eternal theme of financial work, and asset quality is the lifeline of commercial banks. overall, the non-performing loan ratios of the five banks have declined compared with the end of 2023. as of the end of june 2024, the postal savings bank had the lowest non-performing loan ratio of 0.84%; the non-performing loan ratio of bank of china was 1.24%, down 0.03 percentage points from the end of the previous year; the non-performing loan ratio of china construction bank was 1.35%, down 0.02 percentage points from the end of the previous year; the non-performing loan ratios of industrial and commercial bank of china, agricultural bank of china, and bank of communications all fell by 0.01 percentage points from the end of the previous year, to 1.35%, 1.32%, and 1.32%, respectively.
in addition, the six state-owned banks all stated that they would implement mid-term dividends.except for the postal savings bank of china, whose dividend plan is to be announced later, the industrial and commercial bank of china plans to pay the largest dividend, reaching 51.109 billion yuan; china construction bank plans to pay a dividend of 49.252 billion yuan, agricultural bank of china plans to pay a dividend of 40.738 billion yuan, bank of china plans to pay a dividend of 35.562 billion yuan, and bank of communications plans to pay a dividend of 13.516 billion yuan.the total dividend amount has now exceeded 190 billion yuan.
postal savings bank of china announced that it plans to implement interim dividend distribution in 2024, and the total amount of interim dividends will account for no more than 30% of the net profit attributable to the bank's shareholders under the caliber of the semi-annual consolidated financial statements in 2024. the 2024 interim profit distribution plan will be implemented after the corporate governance procedures are completed, and the specific content and review status will be subject to the bank's announcement at that time.
the interest rate spread phase stopped falling and stabilized
in terms of interest rate spread, net interest income is the main source of operating income, and many banks have shown signs of stabilization.half of the major banks saw their net interest margins improve or remain the same month-on-month, including the agricultural bank of china, bank of communications, and bank of china, which is largely related to the decline in deposit costs. among them, the net interest income of bank of communications in the first half of the year was 84.234 billion yuan, a year-on-year increase of 2.24%; the net interest margin was 1.29%, an increase of 1bp from the end of last year; the interest margin in the second quarter was 1.30%, an increase of 3bp month-on-month. the net interest income of the agricultural bank of china was 290.8 billion yuan, a year-on-year increase of 0.1%; the net interest margin was 1.45%, an increase of 1bp from the first quarter.
at the same time, bank of china achieved operating income of 317.929 billion yuan, after-tax profit of 126.536 billion yuan, and a net interest margin of 1.44% in the first half of the year, the same as in the first quarter; postal savings bank of china had a net interest margin of 1.91%, continuing to maintain an excellent level among large state-owned banks.
as for the reasons why the interest rate spread has stabilized, analysts believe thatsince last year, the effects of multiple cuts in deposit interest rates have continued to emerge. combined with the "manual interest supplement" and the deposit interest rate cut in july this year, the bank's liability costs have improved significantly.
at the performance briefing, agricultural bank of china president wang zhiheng said that from the liability side, the deposit interest rate was lowered in july, the effectiveness of the deposit interest rate market-oriented adjustment mechanism continued to be released, and the pressure of rising rmb deposit costs would be alleviated. therefore, there is room for improvement in the interest payment cost of deposits.
in this regard,zhou wanfu, deputy president of bank of communications, also pointed out that the yield on interest-earning assets and the cost of liabilities both declined on a month-on-month basis, but the decline on the liability side was greater.zhou wanfu said that on the liability side, the bank has taken multiple measures to reduce liability costs. it has strengthened the refined management of deposit pricing, and is committed to ensuring that each business unit manages deposit pricing within the scope of compliance. the effects of the previous multiple reductions in deposit interest rates are also continuing to emerge; it has strengthened the management and control of high-cost deposits such as structured deposits, long-term deposits, large-denomination certificates of deposit and agreement deposits, and reasonably controlled their total amount, term and pricing.
industry insiders also believe that from a full-year perspective, the pressure to stabilize the net interest margin remains considerable.among them, zhang baojiang, president of bank of communications, said that on the asset side, the 5-year lpr rate has experienced two rounds of cuts this year, which has put downward pressure on bank asset returns. on the liability side, the deposit structure continues to be regularized, and the liability cost is relatively rigid. the narrowing interest rate spread is superimposed on the decline in scale growth, and there is weak interest rate income. commercial banks are facing great pressure on the income side.
several senior executives of state-owned banks said that they expect the net interest margin to remain stable in the second half of the year and that they will continue to strengthen liability cost control.
"since the beginning of this year, the banking industry has further increased its efforts to make concessions on its own initiative in order to better serve the real economy. looking ahead to the next stage, bank of china will continue to leverage the unique advantages of its business structure and institutional layout, and strengthen net interest margin management more actively and proactively. enhance the stabilizing and increasing deposits of businesses such as payroll and cash management, and expand low-cost sources of funds. strengthen the refined management of liabilities, strictly control the proportion of high-cost deposits, increase the deposit of custody and settlement funds, and enhance the diversity of the liability structure." said liu jin, deputy president of bank of china.
banking sector continues to rise
since 2024, amid wide market fluctuations, bank stocks have been independent, with the share prices of the five major banks hitting new highs. although there has been a slight correction recently, the strong trend remains unchanged.
△on august 30, the banking sector rebounded, and the share prices of the five major state-owned banks, including industrial and commercial bank of china, agricultural bank of china, china construction bank, bank of communications, and postal savings bank, all fell by more than 3%. (picture from wind)
regarding the recent decline in bank stocks, jpmorgan chase believes that the long-term trend of funds flowing into high-yield stocks such as banks has not changed:the decline is due to the recent outperformance of bank stocks, investors locking in profits, lack of confidence, and mild disappointment in second quarter results. nevertheless, the fundamentals of banks are good, with banks reporting improved net interest margins (nim) and management guiding that nim and asset quality trends remain stable.state-owned enterprise (soe) banks’ share prices are expected to outperform the broader market through year-end, and the recent pullback could be an opportunity to add to investment.
since the beginning of 2023, the share prices of large state-owned banks have continued to strengthen, which basically ended on may 9 in mid-2023. since then, except for the large state-owned banks, which have been relatively resilient, the rest of the bank stocks have experienced significant declines by the end of the year.
the banking sector will continue its rally in 2024, and the trend will spread to some small and medium-sized banks with high dividend attributes.for example, the cumulative increases of bank of nanjing, bank of chengdu, bank of hangzhou and bank of shanghai from the beginning of this year to date are 45.83%, 37.94%, 37.85% and 36.18% respectively.
from the beginning of 2023 to august 28, 2024, the cumulative increases of agricultural bank of china, bank of communications, bank of china, industrial and commercial bank of china and china construction bank were 90.64%, 87.91%, 80.83%, 67.74% and 64.84% respectively.
△picture from wind.
as for the outlook for bank stocks, cicc believes that banks will be able to maintain a stable profit growth rate and high dividends, becoming scarce assets in the market.in addition, inflows of funds from index funds and insurance also drove a rebalancing of allocations to the banking sector.looking ahead to the next three to six months, the market environment of low interest rates and high dividends that supports banks' outperformance has not changed.
source: china business news wechat compiled from china fund news, securities daily, 21st century business herald, etc.
