■Yang Rui
In the first half of 2018, the characteristics of the eight listed rural commercial banks in my country were: operating income maintained double-digit growth; loan proportion increased, deposits grew steadily; asset quality showed differentiation, and overall decline in attention-based loans. In the second half of the year, there may be three trends.
Revenue maintained double-digit growth
The proportion of non-interest income increased
In the first half of the year, the profitability of 8 listed rural commercial banks steadily increased, with operating income totaling 32.492 billion yuan, a year-on-year increase of 15.9% over 2017; net profit totaled 11.35 billion yuan, a year-on-year increase of 8.8% over the previous year. The reason for the steady growth of profitability of listed rural commercial banks is: First, in the context of marketization of interest rates, by strengthening active management of asset-liability and interest rate pricing management, the profitability of interest-generating assets is enhanced and the cost control is improved; Second, the cost and expense budget mechanism is continuously optimized, and the refined cost control ability is continuously improved; Third, closely combining with the trends of the financial market, optimizing the investment structure and allocation model, and improving investment returns.
In the first half of the year, the non-interest income of listed rural commercial banks increased by 8.48% to 20.75% compared with the same period last year. Net interest income was RMB 23.689 billion, a decrease of 5.6% from the same period last year. In 2018, listed rural commercial banks implemented the new financial instrument accounting standards for the first time, and the income generated by financial assets measured at fair value and included in the current profit and loss account is included in the transaction net profit and loss account and is no longer included in the "interest income". Therefore, net interest income decreased significantly compared with the previous year. In the first half of the year, the net income of handling fees and commissions in non-interest income of listed rural commercial banks was 2.595 billion yuan, a decrease of 13.5% from the same period last year. This is mainly due to the significant reduction in financial service handling fees. For example, in the first half of 2018, Chongqing Rural Commercial Bank's financial management service income fee decreased by 79% year-on-year compared with the previous year. The proportion of loans in
has increased
deposits has grown steadily in the first half of the year, the total asset size of the eight rural commercial banks was 2.4 trillion yuan, an increase of 6.8% over the same period last year; credit assets increased by 15% year-on-year to 1.1 trillion yuan, and the proportion of credit assets in total assets was 45.2%, an increase of 3.2% over the middle of the previous year. Jiutai Rural Commercial Bank experienced " reduction ", and its asset size decreased by 18.7% compared with the same period last year. On the one hand, this is due to the fact that the bank's credit assets decreased by 6.4% compared with the same period last year; on the other hand, it is mainly because the bank's deposits of interbank funds in the first half of the year decreased by 45.18% compared with the same period last year.
In the first half of the year, the total debt scale of the 8 listed rural commercial banks was 2.26 trillion yuan, with a year-on-year growth rate of 6.3%. Among them, the total deposit scale was 1.68 trillion yuan, with a year-on-year growth rate of 8.4%. Deposits account for 74.4% of the debt scale. Except for Jiutai Rural Commercial Bank, the scale of liabilities and deposits have declined due to the "balance sheet reduction". The deposits of the other seven listed rural commercial banks all maintained growth, among which the deposit growth rates of Chongqing Rural Commercial Bank, Guangzhou Rural Commercial Bank and Changshu Bank were above double digits, at 10.6%, 11.9% and 16.8% respectively. Rural commercial banks have been deeply engaged in counties to fill in the insufficient financial services at the grassroots level and have a high voice in counties. Deposits mainly come from the local area and are mostly used in the local area, maintaining a stable and strong relationship with the "three rural areas" and counties. Therefore, compared with other types of banks, deposits can maintain relatively stable growth.
Asset quality differentiation
Focus loans overall decline
In the first half of the year, the balance of non-performing loans of 8 listed rural commercial banks totaled 15.57 billion yuan, an increase of 11.6% over the same period last year; the average non-performing loan ratio was 1.55%, a slight decrease of 0.08% over the same period last year. On the one hand, the non-performing loan balances and non-performing loan ratios of three rural commercial banks in Jiangsu Province, Changshu Bank, Wujiang Bank and Zhangjiagang Bank, "double reductions" in the first half of the year, with the non-performing loan balances falling by 5.2%, 4.2% and 0.9% respectively compared with the same period last year, and the non-performing loan ratios decreased by 0.28%, 0.25% and 0.25% respectively compared with the same period last year. On the other hand, the non-performing loan balances and non-performing loan ratios of Wuxi Bank, Chongqing Rural Commercial Bank and Jiutai Rural Commercial Bank still showed a "double increase" trend. The balance of non-performing loans in the first half of the year increased by 12.2%, 42.3% and 12% respectively compared with the same period last year, and the non-performing loan ratio increased by 0.02%, 0.26% and 0.32% compared with the same period last year. The quality of the asset quality of rural commercial banks is greatly affected by the local economic development situation, and is also closely related to the bank's internal credit policies and risk control capabilities.
In the first half of the year, the eight listed rural commercial banks' attention loans were 29.26 billion yuan, a decrease of 9.2% from the same period last year. The average proportion of attention loans fell from 4.21% in the first half of 2017 to 2.78%. Except for Chongqing Rural Commercial Bank and Guangzhou Rural Commercial Bank, the proportion of the six listed rural commercial banks has decreased to varying degrees. Wujiang Bank's largest decline in loans of interest was 51.9% in the first half of the year compared with the same period last year. At present, regulatory authorities require banks to raise the standards for identifying non-performing loans. All loans overdue for more than 90 days will be included in the non-performing statistics, and "efford" some of the concerned loans, which corresponds to the increase in the balance of non-performing loans. In the first half of the year, eight listed rural commercial banks increased their provision for non-performing loans, with a provision coverage ratio of 240.73%, an increase of 12.92% over the same period last year.
In the second half of 2018, my country's domestic economic situation will maintain a steady and positive trend and change. With the intensive introduction of various regulatory measures, debt control on government platforms has become stricter, bond maturity defaults have increased, and structural contradictions in various regions still exist. It is expected that in the second half of the year, listed rural commercial banks will combine local economic characteristics and focus on the differentiated market positioning of serving the "three rural areas" and "two small", and improve market competitiveness. Operations and management may present three trends:
First, credit risks will continue to be exposed in the short term. In 2018, the non-performing loan ratio of my country's rural commercial banks increased significantly. According to statistics from the China Banking and Insurance Regulatory Commission, in the second quarter of 2018, the non-performing loan ratio of rural commercial banks was 4.29%, an increase of 1.48% over the same period last year; the balance of non-performing loans was 538 billion yuan, an increase of 80.8% over the same period last year. On the one hand, this is related to the stricter recognition of bank non-performing loans since 2018, but on the other hand, this reflects the problems of rural commercial banks' own credit investment inadequately and the level of risk prevention and control needs to be improved. The asset quality of listed rural commercial banks is better than the overall level of rural commercial banks. In the second half of the year, it is expected that the "double increase" of the non-performing loan balances and non-performing loan ratios of some listed rural commercial banks will continue. At the end of 2018, the overall non-performing loan ratio of listed rural commercial banks is expected to be controlled at around 1.5%, but the balance of non-performing loans will increase by more than 10% from the end of 2017.
Second, the asset side may become a breakthrough in retail transformation. On the debt side, personal deposits account for half of the deposits of listed rural commercial banks. In the first half of the year, the total personal deposits of eight listed rural commercial banks were 942.93 billion yuan, an increase of 5.1% from the end of the previous year, and the proportion of personal deposits to 56.1% of the total deposits. From the asset side, personal loans account for a relatively low proportion of total loans, but they grow faster. In the first half of the year, the personal loans of listed rural commercial banks were 324.32 billion yuan, an increase of 20.4% over the same period last year and 8.3% over the end of the previous year, and personal loans accounted for 29.4% of the total loans. The focus of the transformation of retail business of listed rural commercial banks will be on the asset side. Combined with the positioning of serving the "three rural areas" and small and micro, we will pay attention to the development of retail loan businesses such as personal business loans, personal consumer loans, credit cards, etc., increase the proportion of personal loan balances and personal loan yields, and improve the level of capital use. In the second half of the year, it is expected that the balance of personal loans of listed rural commercial banks will increase significantly with a year-on-year growth rate of about 20%, and the proportion of personal loans to total loans will hover around 30%.
Third, capital pressure remains unabated, convertible bonds may become a "weapon". In the first half of 2018, more than half of listed rural commercial banks whose credit assets accounted for more than 50% of the asset scale. In the second half of the year, under the business philosophy of interbank leverage, business operations return to their main business and business focus returns to their local business, the overall credit assets of listed rural commercial banks are expected to account for more than 45%. Under the situation of strict supervision, penetrating supervision has been strengthened, off-balance sheet assets are "returned to balance sheets" and provisions are increased to enhance risk compensation capabilities. These factors have put pressure on the capital of rural commercial banks. As the market supervision of the fixed-increase market became stricter, in the first half of the year, four A-share listed urban commercial banks, Changshu Bank, Wuxi Bank, Zhangjiagang Bank and Jiangyin Bank, respectively issued convertible bonds to supplement capital. The average capital adequacy ratio of listed rural commercial banks increased by 1.33% to 13.84%, and the average core tier 1 capital adequacy ratio increased by 0.22% to 10.84%. It is expected that the average capital adequacy ratio and core tier 1 capital adequacy ratio of listed rural commercial banks will be around 13.5% and 11% respectively in the second half of the year. (The author is a researcher at Hengfeng Bank Research Institute)
(Editor in charge: Xiong Ruoyang)
