liu jianjun of postal savings bank: we will never follow the path of extensive development of "trading quantity for price" for scale
2024-09-02
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the 2024 interim report season has just ended, and data shows that the profitability of the banking industry is under pressure in the first half of the year. taking the state-owned "big six banks" and china merchants bank as examples, most of them have experienced a "double decline" in revenue and net profit year-on-year, which has also become a common problem that the management of the state-owned "big six banks" need to face at performance conferences.
on september 2, china postal savings bank co., ltd. (601658.sh, i.e. "postal savings bank") held a press conference for the 2024 semi-annual report performance. liu jianjun, executive director and president of the bank, said that in the second half of the year, postal savings bank will continue to adhere to long-termism and unswervingly promote connotative development.
it is worth noting that, unlike in the past, in the first half of this year, the retail loans of postal savings bank were generally weaker than corporate loans. the two-pronged strategy of "stabilizing net interest and increasing non-interest" chosen by the bank's management to improve performance in the second half of the year reflects, to some extent, the bank's current emphasis on corporate business.
building an excellent bank is a marathon that requires long-termism
the semi-annual report shows that as of the end of june, postal savings bank of china achieved operating income of approximately 176.789 billion yuan, a year-on-year decrease of-0.11%; and achieved net profit attributable to shareholders of the parent company of approximately 48.815 billion yuan, a year-on-year decrease of-1.51%.
according to the reporter's statistics, the performance of postal savings bank of china's financial data in the first half of the year was better than that of bank of communications in the same period among the data statistics of the state-owned "big six banks" and china merchants bank.
figure/comparison of operating income and year-on-year growth rate of the state-owned "big six banks" and china merchants bank in the first half of 2024 (beike finance reporter compiled the map based on the 2024 semi-annual report data of relevant banks)
figure/comparison of net profit attributable to shareholders of the state-owned "big six banks" and china merchants bank in the first half of 2024 and year-on-year growth rate (beike finance reporter compiled the map based on the 2024 semi-annual report data of relevant banks)
as for postal savings bank, where did the performance pressure in the first half of the year come from? looking ahead to the growth of revenue and profit for the whole year, what plans does the management of postal savings bank have?
"it is true that china's banking industry has faced very great challenges since last year, especially in the first half of this year. due to the combined influence of factors such as lpr, reduction in existing mortgage interest rates, and the 'reporting and banking integration' policy, the banking industry is facing greater pressure." liu jianjun admitted.
liu jianjun analyzed the situation faced by postal savings bank itself. he believes that compared with other banks (mainly large state-owned banks), the proportion of housing loans in total credit of postal savings bank is relatively high, and the proportion of agency insurance fees in non-interest income is also relatively high, so the impact on postal savings bank is greater. "we estimate that these factors have lowered the revenue growth rate of postal savings bank by 7.5 percentage points," he analyzed.
liu jianjun believes that the more pressure there is, the less panic one should have and the more one should stick to one's strategy and original intention. according to him, postal savings bank will continue to promote the implementation of the company's established strategy.
"building an excellent bank is a 'marathon' that requires adherence to long-termism, and those who work hard will succeed. we are determined and capable of creating new momentum and new advantages for development. in any environment, we can form our own differentiated advantages, take a different path, and live up to the trust and support of our shareholders, customers and society." liu jianjun said.
in the first half of the year, retail loans of postal savings bank of china were generally weaker than corporate loans.
specifically in terms of revenue, liu jianjun clearly stated that postal savings bank of china will adhere to the two-pronged approach of "stabilizing net interest and increasing non-interest".
first, regarding "stable net interest", he proposed that postal savings bank will strengthen the balance between quantity, price and insurance. "the current balance between quantity, price and insurance is very important. we will never take the path of extensive development such as 'trading quantity for price' for the sake of scale."
liu jianjun said that in the first half of the year, the net interest income of postal savings bank increased by 1.83% year-on-year, and the net interest margin remained at 1.91%. these two indicators still have certain advantages in the industry. in the second half of the year, the bank will continue to increase the issuance of credit assets on the basis of maintaining a stable and moderate total amount.
"the competition for high-quality credit assets is very fierce now. you may have noticed that commercial banks' credit supply has been relatively weak in recent months. in this situation, we have proposed a direction called 'finding market gaps'," said liu jianjun.
through research, the postal savings bank team found that the shortage of credit demand is largely due to the fact that the financial supply side is not doing well enough. there are many cross-industry, cross-capital, and cross-regional enterprises that urgently need more comprehensive and tailored service solutions from banks.
"so we want to find assets with balanced quantity, price and insurance by increasing our ability to find gaps. for this purpose, we launched the 'top ten gaps' to guide the entire bank to find customers with balanced quantity, price and insurance," liu jianjun said. this strategy has begun to bear fruit. "some of the measures we have taken have not only met customer needs, injected vitality into the economy and financial vitality, but also brought us relatively satisfactory income."
in this regard, xu xueming, vice president of postal savings bank, further introduced that in the second half of the year, the credit supply of postal savings bank will focus on four aspects:
first, we will increase credit support for major national strategies, key areas and weak links, and focus on providing financial services in the areas of agriculture, rural areas and farmers, small and micro businesses, household consumption and new productivity.
second, the bank will strive to make greater efforts in inclusive finance. to this end, the postal savings bank has also proposed “ensuring that the vast majority of farmers have access to credit from the postal savings bank.”
third, keep up with the changes of the times and innovate service models. we will serve technology-based enterprises with the "look to the future" credit review model, give full play to the linkage advantages of china post insurance, china post securities, china post capital and china post wealth management under the bank in equity investment within the post group, and provide comprehensive services of "commercial bank + investment bank + investment" to provide all-round high-quality financial services for scientific and technological enterprises and specialized and new enterprises.
fourth, we should proactively seek for development gaps. on the premise of maintaining risk control capabilities, we should segment markets and customer groups, strive to build business characteristics in market gaps and local areas, and adhere to the path of differentiated development.
it is worth noting that among the four key credit focus areas identified by postal savings bank of china in the second half of the year, half are directly related to serving new productivity and technological innovation enterprises.
the reporter also noticed that unlike in the past, in the first half of this year, the retail loans of postal savings bank were weaker than corporate loans. as of the end of june, the corporate loans of postal savings bank increased by 318.2 billion yuan, an increase of 9.9%; retail loans increased by 217.4 billion yuan, an increase of 4.86%, and the growth rate of corporate loans was 5.04 percentage points higher than that of retail loans. unlike other large state-owned banks, postal savings bank is a bank that attaches great importance to retail business. its management team, such as president liu junjian, has worked for china merchants bank, which is famous for its retail business, for more than 20 years and has served as the general manager of the retail banking department of china merchants bank for a long time.
this situation may be just as xu xueming said, "the changes in effective credit demand (in the first half of the year) reflect the well-being of various market players."
secondly, regarding "increasing non-interest" and increasing the contribution of non-interest income, liu jianjun said that he has always believed that non-interest business is an important manifestation of a bank's competitiveness and innovation, not a matter of resource consumption.
for the second half of the year, he proposed that postal savings bank will take the balanced development of various sectors as the driving force, increase the development of wealth management business, promote the stable growth of aum (asset management scale), allocate assets to more customers, and adhere to the intermediary business of making up for the price with quantity. "(for example) for corporate business, we will make efforts in settlement, trade financing and syndicated loans, and at the same time continue to improve asset trading capabilities, open up non-interest income growth space, and further alleviate the impact of the decline in agency insurance income." liu jianjun said.
huang xinyu, reporter of beijing news shell finance
editor: wang jinyu
proofread by liu baoqing
