Jiangyin Bank (002807): The interest margin has improved significantly and the NPL ratio has continued to decline

Jiangyin Bank (002807): The interest margin has improved significantly and the NPL ratio has continued to decline

Event: On March 14, Jiangyin Bank released the 2018 annual report, and the company achieved operating income of 31 in 2018.

900 million, +27 per year.

1%; realized net profit attributable to mother 8.

600 million, ten years +6.

1%.

Focus on the main business and improve quality and efficiency.

Jiangyin Bank’s deposit market share in Jiangyin’s jurisdiction exceeded 21% and continued to lead.

Credit investment grew rapidly, with a loan balance of 59.8 billion yuan, +12 in ten years.

3% (2018Q3: 12.

3%; 2017: 5.

8%).

Among them, small and medium-sized micro loans accounted for 86%, and private enterprises accounted for 78%, which were “benchmarks” for inclusive finance.

Banks set up a “quick loan center” dedicated to small and micro enterprises, strictly controlling risks and improving efficiency.

In addition, the company successfully issued 2 billion convertible bonds, and the core tier one capital adequacy ratio will further increase.

Performance growth continued to increase, benefiting from improved interest margins and other non-interest income growth.

Operating income of Jiangyin Bank in 201831.

9 trillion, +27 a year.

1% (2018Q3: 28.

7%; 2017: 1.

5%), ranked third among 24 listed banks that have published 18-year results; net profit attributable to mothers 8.

600 million, ten years +6.

1% (2018Q3: 5.

4%; 2017: 3.

9%).

Among them, the difference between the contribution rate of net interest margin and other non-interest income to performance growth was 36.

9%, 52.

7%; asset impairment has increased significantly, with an impact on performance of -99.

6%.

Profit before provision was 20.

50,000 yuan, a significant increase in the annual growth rate (2018: 45.

4%; 2018Q3: 32.

2%: 2017: -9.

0%).

The interest margin has improved significantly and profitability has improved.

In 2018, Jiangyin Bank’s net interest margin was 2.

67% (Q3 2018: 2.

57%; 2017: 2.

33%), an increase of 10 BP from the end of the third quarter, and has increased for three consecutive quarters.From the asset side, the average rate of return on loans 北京夜生活网 and securities investment expanded and increased, which were 5 in 2018.

66%, 4.

26% (2017: 5).

61%, 3.

66%); from the debt side, the average deposit interest rate dropped by 19 BP (2018: 2.

02%; 2017: 2.

21%) The weighted average ROE in 2018 was 8.
.

92% (2018Q3: 7.

68%), and profitability has improved.

NPL ratio decreased by 13 BP month-on-month, and loans overdue for more than 90 days decreased by more.

By the end of 2018, bad 2 per second.

15% (2018Q3: 2.

28%; 2017: 2.

39%).

NPL balance 13.

5 trillion, +1 a year.

3% (Q3 2018: 6.

8%).

Loans overdue for more than 90 days11.

9 ‰, at least -2.

4% (2018H: -4.

4%), the proportion of total loans replaced 1.

9% (2018H: 2.

2%), asset quality is further optimized.

Investment suggestion: Jiangyin Bank’s interest margin has improved significantly, and its performance growth is highly certain; the non-performing ratio has dropped significantly, and loans overdue for more than 90 days have been reduced; convertible bonds have been issued to supplement capital, and business scale expansion has been supported.

It is estimated that the net profit attributable to mothers will be 10 in 19/20.

6% / 10.

2%, corresponding to BVPS6.

4/6.

8 yuan, the current price is 0.

99/0.

93 times PB.

Target price for 2019 is 7.

6 yuan, corresponding to 1.

2x PB, 21% of current price space, give “Buy” rating.

Risk reminders: the risk of macroeconomic downturn; the policy risk of strict supervision; the credit risk; the market risk.

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