Changshu Bank (601128) 2019 Interim Report Review: Profitability Continues to Improve

Changshu Bank (601128) 2019 Interim Report Review: Profitability Continues to Improve

Changshu Bank disclosed that in the first half of 2019, the interim report of 2019 achieved net profit attributable to mothers8.

50,000 yuan, an annual increase of 20.

2%.

Small and micro businesses continued to grow. Personal operating loans increased by 12% earlier. Based on past experience, the upstream and downstream self-employed households in the garment industry in Changshu often have active production growth in the second half of the year.

In addition, the company’s single-family loan of less than 1 million this year is close to zero growth, mainly due to the initiative to reduce the size of consumer loans.

ROA has improved at least, and the increase in net interest margin contributed to the average ROE of large companies falling by 0 in 2018.

4 averages, but ROA exceeds 0.

06 excellent to 1.

07%, a significant increase.

From DuPont’s analysis, the increase in profitability is mainly due to the increase in net interest margin and the decline in actual yield (mainly because of the increase in tax-free investment, so the net interest margin can be increased after reduction).

The net interest margin has risen slightly, a slight decrease from the previous month. In the first half of 2019, the average daily net interest margin of the parent bank of Changshu Bank rose by more than 16bps to 3.

03%, a significant contribution to the improvement of ROA.

Specifically, it is mainly due to the decline in the rate of denied interest payments caused by the interbank financing costs exceeding the previous decline.

Looking at the net interest margin chain data, the daily average net interest margin in the first half of this year was 13bps lower than that in the second half of last year, mainly due to the impact of tax-free income. We estimate that the comparable net interest margin after the reduction can only 杭州桑拿网 decrease by 6bps.

Asset quality is generally stable. Looking at the main indicators of non-performing loans: the NPL ratio at the end of the period was flat at 0.

96%, the attention rate decreased by 23bps to 1.

72%, the overdue rate dropped 32bps to 0 compared with the initial period.

87%, non-performing loans overdue for more than 90 days increased by 21 from the earlier period to 171%.

In the first half of the year, the bad generation rate increased by 23bps to 0 every year.

99%, which is close to the overall trend of the industry.

The overall asset quality of the company is generally stable.

Investment recommendation The overall performance of the company is in line with expectations, and we maintain its “overweight” rating.

Risks suggest that the continued weakening of macroeconomic expectations may adversely affect the quality of bank assets.