In terms of asset quality, commercial banks are stable as a whole, but their differentiation continues to intensify. In the second quarter of this year, the non-performing rate of commercial banks was 1.81%, up 1 BP annually. State-owned banks, joint-stock banks and agricultural and commercial banks have all improved, while the non-performing rate of urban commercial banks was 2.3% in the first half of this year, an increase of 0.54 percentage points over the beginning of this year. This is the first time that the non-performing loan rate of urban commercial banks has risen to more than 2% since 2009.
The bad rate of urban commercial banks is 2.3%. Although the bad rate of agricultural commercial banks returns to less than 4%, the challenges faced by small and medium-sized banks will continue. Especially under the increasing downward pressure of the economy, the return of off-balance-sheet assets and the stricter supervision, the future should be based on sound operation. Many insiders told the First Financial Journalist.
Interest spreads are rising and may narrow in the second half of the year
At the beginning of this year, many people in the industry talked about the challenges faced by banks, saying that the banking industry is facing the pressure of narrowing the net interest margin, because the profit income of the banking industry mainly comes from interest income, so it may have an impact on the sustained growth of net profit.
These are also supported by the semi-annual reports issued by banks. The net interest margin of Jiangyin Bank in the first half of 2019 was 2.36%, down 0.31 percentage points from 2.67% at the end of 2018. Among the joint-stock banks, the first half of 2019 operating results of Huaxia Bank showed that the net interest margin was 2.09% and the net interest margin was 1.96%, which increased by 23 BP and 26 BP respectively. In addition, the net interest margin and net interest margin of Ping An Bank in the first half of 2019 were 2.54% and 2.62% respectively, which increased by 48 basis points and 36 basis points respectively.
Xu Chengyuan, chief financial analyst of Oriental Jincheng, told First Financial Journalist that the reason for the rise in the net interest margin of the above-mentioned institutions was mainly due to the small increase in the interest rate of asset-side loans. Taking Ping An Bank as an example, the data from the semi-annual report show that the average return on loans of Ping An Bank in the second quarter of 2019 is 1.56 percentage points higher than that at the end of 2018. Joint-stock banks and city commercial banks continued to shrink their interbank liabilities, and the size of general deposits increased further. In the second quarter, banks had sufficient liquidity, and the cost of interbank liabilities fell further. It is also affected by this that the net interest margin of private banks with higher interbank liabilities has increased significantly.
For the second half of the year, Xu Chengyuan said that the change of net interest margin depends on the performance of both asset-side earnings and debt-side costs. On the asset side, the regulatory authorities will continue to guide banks to increase credit. At the same time, the liquidity of the banking system has been sufficient since the second quarter, and the interbank lending rate has declined. It is expected that the return on the asset side of the banking industry will decline. On the debt side, although the downward interbank lending rate is conducive to the downward cost of interbank liabilities, the competitive pressure on bank deposits still exists. Combining assets and liabilities, it is expected that the possibility of narrowing the net interest margin of banks in the second half of the year will still exist.
The Malpractice Rate of City Business Firms Returning to its 10-year High
After the high-speed growth in 2012-2016, subject to internal and external pressures, the problems existing in the city commercial banks themselves and many potential risks are gradually exposed, and the bad rate of the city commercial banks has been showing a continuous upward trend.
Take Anshan Bank as an example. By the end of June 2019, the balance of non-performing loans of Anshan Bank was 3.300 billion yuan, with a non-performing loan rate of 4.52%. The reserve coverage rate and loan reserve rate were 108.89% and 4.92%, respectively. As a regional financial institution, Anshans banking business is closely related to the development of local industrial structure. In recent years, it has been affected by the downturn of regional economy and the pressure drop of the industry oftwo high and one surplus, which has led to the increase of operating pressure on the iron and steel industry and its upstream and downstream enterprises, together with the tightening of the five-level classification supervision and the earlier unclean transfer of credit. Among other factors, non-performing loans are concentrated and the rate of non-performing loans is high. Although the scale of allocation is increased, the level of allocation is still insufficient, and the large-scale allocation of non-performing assets will exert great pressure on the realization of profits. In the future, we still need to pay attention to the disposal of non-performing assets. Anshan Bank said.
At the end of 2018, the data showed that the weighted average non-performing loan rate of 47 listed banks dropped from 1.55% at the end of 2017 to 1.51%, a decrease of 0.04 percentage points. Among them, the non-performing loan ratio of large commercial banks decreased by 0.05 percentage points at the end of last year, the non-performing loan ratio of joint-stock banks decreased by 0.04 percentage points at the end of last year, the non-performing loan ratio of agricultural and commercial banks decreased by 0.06 percentage points at the end of last year, and the non-performing loan ratio of urban commercial banks increased by 0.11 percentage points at the end of last year.
Xu Chengyuan said that the sharp rise in the non-performing rate of urban commercial banks was mainly due to the exposure of large loans risk of some urban commercial banks, which led to the rise of non-performing loans; the tightening of non-performing identification accelerated the exposure of real non-performing loans of urban commercial banks. From the non-performing loan deviation point of view, the non-performing loan deviation of city commercial banks is far greater than 100%, higher than other types of commercial banks. Since 2018, in response to regulatory requirements, commercial banks have recorded loans more than 90 days overdue as non-performing, but the loan deviation of some urban commercial banks is still higher than 100%. With the further implementation of non-performing loan recognition, the level of non-performing loans of commercial banks in this part of the city increases accordingly. The process of returning off-balance sheet assets of some city commercial banks has been accelerated, previously through the hidden out-of-balance sheet bad return table.
A banker told First Financial Journalist that local banking regulators have encouraged conditional banks to incorporate loans that are more than 60 days overdue into non-performing loans. Regulatory authorities are increasingly strict in the standard of non-performing loan recognition. The operation of city commercial banks is mainly based on the local urban business, but the rate of non-performing loans is also higher. In addition, since May, the time of contractor bank, Jinzhou bank and Hengfeng bank has occurred frequently, many city business risks have been exposed, and the asset situation of city business has also been truly reflected.
However, the asset quality of head banks in city commercial banks is better. For example, the non-performing loan rates of Shanghai Bank, Jiangsu Bank, Nanjing Bank, Ningbo Bank and Jiangyin Bank in the first half of 2019 were 1.18%, 1.39%, 0.89%, 0.78% and 1.91% respectively, which were lower than the average level of 2.3% of city commercial banks.
Previously, small and medium-sized banks used interbank liabilities to expand their assets. In the process of de-leveraging, some local risks were gradually exposed. In late May 2019, the contractor bank was taken over because of serious credit risk, which caused the market to pay attention to liquidity risk of some small and medium-sized banks. From the situation after the takeover of the contractor bank, due to the decline of market risk preference, the market financing ability of a few small and medium-sized banks has been affected for a time.
In addition, the central bank said that all types of financial institutions should reduce their excessive dependence on interbank business, and should not follow the old road of overexpansion and neglect of risk management, and do a good job in their liquidity management. On the other hand, we should do a good job in addition, improve the institutional support for small and medium-sized banks, and optimize the banking system structure of our country. The local and structural liquidity risk of some small and medium-sized banks is essentially the result of market selection caused by insufficient real capital level. We should promote the supplementary capital of small and medium-sized banks.
One analyst said that the credit stratification of small and medium-sized banks will continue for some time after the contractor bank incident. At present, the market pays more attention to the introduction of war investment by Jinzhou Bank and Hengfeng Bank, but unlike the contractor bank, the risks of Jinzhou Bank and Hengfeng Bank are mostly due to the imperfect corporate governance and the rapid expansion of business. Nowadays, Industrial and Commercial Bank and Huijin Company can effectively resolve the risks by entering through equity. Reduce the impact and impact on financial markets.
The overall asset quality of commercial banks remains at a good level, but the differentiation of different banks is obvious, and some banks are facing downward pressure on asset quality. The risk management system of state-owned big banks and joint-stock banks is perfect, their business covers the whole country, and the bad rate is expected to remain at a relatively low level. Some small and medium-sized regional banks are facing great downward pressure because of the adjustment of industrial structure and the continuous exposure of regional credit risks. In addition, the stricter standards of bad identification and the return of off-balance-sheet assets will test the quality of some bank assets with high degree of bad deviation. Xu Chengyuan said.
Source: First Financial Responsibility Editor: Guo Chenqi_NBJ9931