Bank of Nanjing (601009): Strong revenue and provision rebound
Event: Bank of Nanjing disclosed its semi-annual results for 2019.
In the first half of 19, it achieved operating income of 16.6 billion, an annual increase of 23.
3%; net profit attributable 淡水桑拿网 to mother is 690,000 yuan, an increase of 15 year-on-year.
1%, in line with expectations.
Defective rate was flat at 0 from 1Q19.
89%, provision coverage ratio increased 0 from 1Q19.
06 averages to 415.
Revenue has maintained a high growth. It is expected that the tightening of internal assets and loose inter-industry debt will help Nanjing Bank’s performance growth in the second half of the year increase quarter by quarter.
In 1H19, the growth rate of Nanjing Bank’s performance was basically the same as that of the first quarter, and net profit attributable to mothers increased by 15 per year.
1%, but the revenue continued to report a high growth trend for the first quarter, with an annual increase of 23.
3%, which is expected to have a rapid growth rate in the interim reports of listed banks.
Looking ahead to the second half of the year, we believe that Nanjing Bank, which has a relatively high proportion of market-oriented debt, will continue to benefit from the loose layout of inter-bank market liquidity and reduce cost pressures. It is expected that interest margins will rise quarter by quarter, helping to accelerate performance growth from quarter to quarter.
From the perspective of assets and liabilities, loans increased in the second quarter of 1919.
9%, accounting for a record high of 40% of total assets.
New loans in 1H19 were about 602 trillion, more than the 47.2 billion yuan in 1H18 in the same period last year, accounting for 57% of the total new assets in 1H19.
Debt-side deposits grow by 13 each year.
6%, an increase of 3.
The NPL ratio was stable at a low level, and the provision level rose slightly from the previous month.
Nanjing Bank’s NPL ratio has been flat at zero for three consecutive quarters.
89%, under the support of the bottom-up policy, the macroeconomic downside space is limited, and the pressure on bank asset quality is not great.
From the perspective of provision level, IFRS9 affected the decrease in on-balance-sheet provisions and significantly increased off-balance-sheet provisions, resulting in a significant decrease in provision coverage ratio in 1Q19, but a slight increase from 2Q19 and a slight increase in provision coverage ratio to415.
We believe that the level of provision of Bank of Nanjing is already abundant, second only to Ningbo Bank and Changshu Bank among the original 25 listed banks. Based on the principle of sound prudence, it is expected that the provision base will continue to increase in the future.
Obviously, this also means that there is more room for provisions for back-feeding profits.
The core tier one capital adequacy ratio has increased month-on-month, and it is expected that the future growth will effectively strengthen the capital strength of Nanjing Bank.
On the evening of August 1, the Bank of Nanjing announced that the adjustment of the proposed increase plan triggered the next day’s adjustment. However, we gradually predicted that the purple gold investment will withdraw but the total amount raised will be excessively reduced.Investment ratio requirements are relevant.
In the second quarter of 19th, the core first-level surplus rate of Nanjing Bank increased by 0 from the previous month.
4 up to 8.
Based on 1Q19 data, we statically calculated that 11.6 billion fixed-increased products will increase the core tier one, tier one, and total capital adequacy ratios.
38 single to 9.
07% and 14.
16% will significantly enhance capital strength.
The fundamentals of the Bank of Nanjing are stable in the first echelon, with high revenue growth, interest spreads, and poor corporate stability. It is estimated that it will break through and maintain high returns, with outstanding investment benefits.
It is expected that the growth rate of net profit attributable to mothers will be 18 in 2019-2021.
8% (maintain profit forecast), currently only 0 for 19 years.
89X PB, a 43% discount from the previous Ningbo Bank, 19-year target assessment1.
2X PB, corresponding to 35% of upside, maintain BUY rating and A-shares first recommendation combination.
Risk reminder: adverse risks caused by economic substance.