At present, the number of domestic small and medium-sized banks has reached more than 4000, and the total assets account for about 1 / 4 of the whole banking system, which is an important part of the banking system. However, due to the limited management ability and operation strength of small and medium-sized banks, in the period of economic downturn, the superimposed profit space is squeezed, the rate of non-performing assets is rising and other multiple factors, the development of small and medium-sized banks is facing many challenges.
How to use financial technology to adjust the pace of retail transformation, and then successfully break through in the new round of adjustment, has become the focus of the industry. The reporter of Caijing takes 21 A-share Listed Small and medium-sized banks (urban commercial banks and agricultural commercial banks) as analysis samples, trying to show the survival status of small and medium-sized banks and explore ways to break the situation.
1. Net profit differentiation, some banks rely on investment income excessively
Many people in the industry said frankly that in general, the operation of the banking industry in the first quarter of each year will not be too bad, mainly because they enjoy the cyclical opportunities of the fourth quarter impulse of last year and the first quarter volume of that year.
However, the net profit growth of some small and medium-sized banks deserves attention. According to the latest data released by the CBRC, in the first quarter of this year, urban commercial banks achieved a net profit of 76.6 billion yuan, down from 77.5 billion yuan in the first quarter of 2019 1.16% u3002 This is not the first time that urban commercial banks have negative net profit growth. Many bankers believe that some small and medium-sized banks need to pay attention to their operational difficulties.
According to statistics from Caijing, among the 21 A-share Listed Small and medium-sized banks, 4 urban commercial banks and 1 agricultural commercial bank saw a single digit year-on-year growth in net profit in the first quarter of this year, while another agricultural Commercial Bank (Chongqing Agricultural commercial bank) saw a decline in net profit (- 6.9% uff09u3002 In response, Yunong Commercial Bank (Stock Code: 601077.SH uff09The high net profit in the same period of 2019 is the main reason. It is reported that the banks non recurring profit and loss in the same period of 2019 includes the offset past service cost of supplementary retirement benefits, which increases the banks profit in the same period of 2019.
Specifically, the benefits that should be paid are not paid now. As the expenses are reflected in the current period, but the impact is on the previous profit statement. When the relevant welfare expenses and expected expenditures are not generated now, they need to be added back in the current profit statement. A bank practitioner told Caijing.
Some people engaged in the audit also think that this situation may be that in 2018, the enterprise withdraws more welfare fees and pays less income tax. Later, it may be found by the tax that the enterprise withdraws more welfare fees than required. In this situation, the enterprise must be transferred back, that is to say, it needs to offset the original cost. Due to the adjustment of accounting, the profit will be increased correspondingly in 2019, and finally the income tax will be paid back.
In addition, from the annual report of 2019, most of the 21 A-share Listed Small and medium-sized banks have achieved both revenue and net profit growth: the top three growth rate of revenue are Bank of Qingdaouff08 30.44% uff09Zhangjiagang bankuff08 28.48% ; stock code 002839.SZ uff09And Bank of Jiangsuuff08 27.68% ; stock code 600919.SH uff09The top three growth rate of net profit is Bank of Ningbouff08 22.60% uff09, Bank of Hangzhou ( 21.99% uff09And Changshu bankuff08 20.14% uff09u3002
Behind the differentiation of net profit, the composition of operating revenue of small and medium-sized banks deserves attention. According to statistics from Caijing, among the interest income items supporting the performance of 21 small and medium-sized banks, some of them have a high dependence on investment income (such as bond investment).
According to the ratio of investment income of 21 banks, the average value is 28.36% The corresponding data of 10 banks exceed the mean value; if the urban commercial banks and agricultural commercial banks are classified, the mean value of investment income ratio is respectively 30.31% , 25.18% u3002 Among them, 5 out of 13 urban commercial banks exceeded the average; 3 out of 8 agricultural commercial banks exceeded the average. As a whole, the top three investment returns are: Bank of Zhengzhouuff08 44.72% uff09, Bank of Chengduuff08 41.02% , stock code 601838.SH uff09, Bank of Changshauff08 40.30% uff09u3002
Dong ximiao, a special researcher of the national finance and development laboratory, told Caijing that there was no specific standard to see whether the proportion of investment income was reasonable, but before that, there were some urban commercial banks and agricultural commercial banks whose investment income accounted for too much of their revenue, which indicated that these banks had not developed well in their main businesses such as deposits and loans. In recent years, supervision has guided banks to return to their original sources, requiring them to increase the proportion of deposits in the debt side, the proportion of loans in the asset side, and steadily improve non interest income, so that the development of small and medium-sized banks will be more healthy.
In an interview with Caijing, a senior executive of a large state-owned bank said that in general, the proportion of investment income of small and medium-sized banks is too high, but because the invested assets are greatly affected by the fluctuations in the financial market, it may lead to large fluctuations in the statements. The risk prevention methods that can be considered are: controlling the proportion of investment, selecting high-quality target and controlling the investment period.
2. Net interest margin continued to narrow, and small and medium-sized banks replenish blood through multiple channels
According to Founder Securities Research Report, the roe of Commercial Bank of China in 2019 is 10.96% , higher than 2011 20.40% 46% reduction. On the one hand, it is the result of the decline of bank ROA, on the other hand, it is due to the decrease of leverage ratio.
It is worth noting that under the influence of multiple factors, such as the continuous decline of LPR (quoted interest rate in the loan market) and the intensified competition for reserves, the narrowing of net interest margin has become a common problem faced by the banking industry. As of the end of the first quarter of this year, the net interest margin of urban commercial banks and agricultural commercial banks is respectively 2% , 2.44% , down year on year 0.07% , 0.26% u3002
According to the statistics of Caijing, the net interest margin of 12 of the 21 A-share Listed Small and medium-sized banks decreased year on year in 2019, with Jiangyin Bank (- 0.21% uff09, Bank of Wuxi (- 0.14% ; stock code 600908.SH uff09, and Bank of Ningbo (- 0.13% uff09u3002
Su Xiaorui, an analyst with sack Research Institute, believes that after the implementation of LPR, the narrowing of Bank net interest margin has become an industry trend. From the asset side, supervision guides banks to support and serve small and micro businesses, while from the liability side, its change is not as obvious as that of the liability side. This trend has a greater impact on the head banks. In 2020, the net interest margin of the banking industry will continue to narrow.
The pressure of capital adequacy ratio of small and medium-sized banks is also concerned. According to the data of CBRC, as of the fourth quarter of 2019, the capital adequacy ratios of urban commercial banks and agricultural commercial banks are respectively 12.7% and 13.13% , 10 basis points and 7 basis points lower than the same period last year.
According to statistics from Caijing, the capital adequacy ratio of 21 A-share small and medium-sized banks is generally higher than the industry average in 2019, but the capital adequacy ratio of 7 banks has declined year-on-year in 2019, with the top three banks as Bank of Zhengzhou (- 1.04% ; stock code 002936.SZ uff09, Bank of Wuxi (- 0.96% uff09, Bank of Qingdao (- 0.92% ; stock code 002948.SZ uff09u3002 Many insiders believe that in order to enhance the ability of credit, we should take multiple channels to supplement the capital of small and medium-sized banks.
It is noteworthy that at the 28th meeting of the financial committee held on May 6, it was stressed that relevant departments have formulated work plans for deepening reform and replenishing capital of small and medium-sized banks, which should be implemented as soon as possible.
The capital shortage of small and medium-sized banks has been prominent, which has become the main factor limiting their service ability. In order to solve this problem, the regulatory authorities continue to explore the reform of bank capital replenishment tools, and formulate the work plan of deepening reform and replenishing capital for small and medium-sized banks, which is one of the latest achievements of this series of reforms. Wen bin, chief researcher of Minsheng Bank, believes that with the implementation of the work plan, a number of small and medium-sized banks are expected to receive capital supplement through the issuance of common shares, preferred shares, perpetual bonds and secondary capital bonds, so as to further enhance the ability of small banks to serve small and medium-sized micro enterprises.
The follow-up impact of the epidemic on the financial sector is emerging. A number of front-line operators of small and medium-sized banks interviewed by Caijing said that in the near future, there has been a significant increase in overdue loans within the bank, and many operators have increased the frequency of door-to-door debt collection.
On the other hand, according to the 2019 annual report of 21 listed small and medium-sized banks, the balance of non-performing loans of most banks increased by at least 10% year on year. Among them, Bank of Shanghai (Stock Code: 601229.SH uff09And Guiyang Bank (Stock Code: 601997.SH uff09There was a double rise in the balance of non-performing loans and the non-performing loan rate. However, the non-performing loan ratio of Guiyang bank has changed significantly, and the corresponding data of 2019 and the first quarter of this year have increased year on year respectively 0.1% and 0.17% , up to 1.45% , 1.62% u3002
In this regard, Founder Securities Research Report points out that in 2019, the NPL net generation rates are respectively 0.83% , 99bp lower than that of 18 years (1bp 0.01% uff09The pressure of bad formation is greatly reduced. In contrast, the loan allocation ratio reached in the first quarter of 2019 and 2020 4.2% , 4.5% , the improvement is obvious. It shows that the non-performing recognition standard of Guiyang bank has been relaxed at the end of 2019, which slows down the generation of non-performing assets and reduces the verification of non-performing assets to ensure that the non-performing rate does not rise significantly. In fact, the adverse generation pressure may be greater than what we see.
The top three banks with year-on-year growth in non-performing loan balance in 2019 are Bank of Qingdaouff08 34.69% uff09, Bank of Guiyanguff08 28.42% uff09, Bank of Ningbouff08 23.51% uff09u3002 According to the annual report, among the non-performing loans of Bank of Qingdao, the top two non-performing loan ratios corresponding to corporate loans are manufacturing industryuff08 8.81% uff09, wholesale and retailuff08 2.48% uff09The top two non-performing loan rates of Guiyang bank are accommodation and catering industryuff08 24.39% uff09, wholesale and retailuff08 3.56% uff09; Bank of Ningbo (Stock Code: 002142.SZ uff09The top two non-performing loan ratios are housing Lodging and cateringuff08 4.34% uff09, culture, sports and entertainmentuff08 3.36% uff09u3002
From the perspective of provision coverage, according to the statistics of Caijing, 21 A-share Listed Small and medium-sized banks, Bank of Qingdao and Bank of Zhengzhou have the lowest provision coverage in 2019, respectively 155.09% , 159.85% Other banks provision coverage rate is more than 200%, 7 banks provision coverage rate is more than 300%, 3 banks provision coverage rate is more than 400% (Bank of Ningbo, Bank of Changshu, Bank of Nanjing).
It is worth noting that both the 2019 financial report and the first quarter data of 2020, Bank of Ningbo and Changshu Bank (Stock Code: 601128.SH uff09And Bank of Nanjing (Stock Code: 601009.SH uff09The provision coverage rate of is significantly higher than the regulatory requirements. Among them, the provision coverage rate of Ningbo Bank in 2019 and the first quarter is about 524%, ranking the first among 21 small and medium-sized banks.
Previously, in March 2018, the CBRC issued the notice on adjusting the regulatory requirements for loan loss provision of commercial banks, which pointed out that the regulatory requirements for the provision coverage of commercial banks were adjusted from 150% to 120% - 150%. In addition, according to the data disclosed by the CIRC, by the end of the first quarter of 2020, the provision coverage of Chinas commercial banks is 183.20% Among them, urban commercial bank and agricultural commercial bank are respectively 149.89% , 121.76% , relatively low.
On April 21 this year, Premier Li Keqiang chaired the executive meeting of the State Council. According to the content of the meeting, the regulatory requirements for the provision coverage of small and medium-sized banks were reduced by 20 percentage points in a phased manner to release more credit resources and improve the ability to serve small and micro enterprises.
Huachuang securities once pointed out in the research report that if the provision is reduced, it will contribute to the undistributed profits of the bank and achieve the effect of increasing the dividend rate or thickening the core tier one capital.
Previously, in November 2019, the Ministry of Finance revised the financial rules of financial enterprises and asked for public opinions. If the provision coverage rate exceeds the regulatory requirements by more than two times, it will be considered that there is a tendency to hide profits.
Dong ximiao believes that the increase of provision coverage is due to the fact that banks feel the rebound pressure on the growth of non-performing loans in the later period. With the stricter requirements on the classification of financial assets in the future, the pressure on disposal will also rise. It is reasonable to set the upper limit of 2 times of the minimum standard, and objectively urge commercial banks to accelerate the disposal and write off of non-performing loans on hand. At present, there is no upper limit requirement for financial regulatory authorities.
Some senior bankers also pointed out that it is obviously not in line with the facts to simply think that twice the regulatory target is too high. Financial regulators may also be less likely to agree that banks with a provision coverage of more than 300% need to be artificially reduced to less than 300%. This is against the current goal of preventing and resolving financial risk supervision, and since the prevention of risk, of course, more provision should be made.
As for the excessive provision coverage, the reporter of Caijing asked the Bank of Ningbo for further information. As of the time of publication, there was no reply. According to people close to the bank, in general, provisions will be made in strict accordance with the accounting standards for business enterprises and other provisions to improve the companys ability to resist risks.
4. Consumer loans have become hot cakes, but some banks smell risks
For a long time in the past, banks tended to live by large and medium-sized enterprises. But at present, with the change of economic and industrial structure, the status of individuals and small and micro enterprises as the main consumers is prominent. At the same time, in the face of narrow interest margin, financial disintermediation, increasing adverse pressure and other issues, retail business has become an inevitable choice for small and medium-sized banks to break through.
In recent years, it is obvious that the bank attaches more importance to retail business than to public business. For example, it will transfer the management personnel with outstanding business lines to the corresponding retail business team, the head of retail business of a City Commercial Bank branch told Caijing
From the perspective of 15 A-share Listed Small and medium-sized banks that have disclosed the composition of loans issued in 2019, corporate loans still account for a high proportion, with 14 banks accounting for more than 50% of the total loans. Wuxi bank 71.71% The proportion of. It is worth noting that under the trend of retail transformation, the growth rate of the banks personal loan amount on a year-on-year basis has reached 33.39% u3002
At the same time, the total personal loans of 13 banks increased by more than 20% year on year, and the top five growth rates were: Bank of Xianuff08 56.22% uff09, Bank of Changshauff08 43.24% uff09And Jiangyin bankuff08 41.41% ; stock code 002807.SZ uff09, Bank of Jiangsuuff08 38.97% uff09, Bank of Zhengzhouuff08 35.69% uff09u3002
After combing the financial reports of several banks with the fastest growth rate of individual loan amount, Caijing found that in 2019, Bank of Changsha and Bank of Xian (Stock Code: 600928.SH uff09Personal consumption loan business of Bank of Jiangsu develops rapidly, with year-on-year growth rate reaching 98.37% , 89.40% , 54.07% u3002 In contrast, in 2019, the personal consumption loan business of Bank of Zhengzhou decreased by a year-on-year rate of 36.24% The fastest growing personal loan business is the personal real estate mortgage loan, with a year-on-year growth 84.77% u3002
A number of people in the consumer finance industry told Caijing that in recent years, with the limitation of housing loans, banks have to seek new retail credit channels, and the development of consumer finance has become the first choice for retail transformation, so consumer credit business has become the fastest growing part of retail business of many banks. However, we also need to see that the risk of consumer credit business is gradually exposed due to the superposition of factors such as economic downturn and long-term debt sharing of borrowers.
Zhengzhou bank may smell the risk. According to its 2018 annual report, the non-performing loan ratio of Bank of Zhengzhou from 2014 to 2017 was kept at 0.75% - 1.5% But in 2018, the figure rose to 2.47% , up year on year zero point nine seven Percentage points. Specific to the composition of non-performing loans in that year, in the personal loan business of Bank of Zhengzhou, the non-performing rate of personal consumption loans reached 2.38% , up year on year one point five five Percentage points.
It is mainly due to the weak foundation of retail business of some small and medium-sized banks. The existing strategic management, organizational system, business process system, etc. are mainly based on corporate business, and the risk pricing and prevention and control ability of retail business is obviously insufficient. A senior banking observer pointed out that although there are many technology companies hand in hand with small and medium-sized banks in recent years, the former provides more diversion services, giving them fish, which does not help some small and medium-sized banks to improve their long-term business capacity.
5. Those with high revenue spend a lot of money in financial technology and generally lack long-term investment
Many small and medium-sized banks financial technology capabilities are often evaluated as chicken ribs by industry figures. But this does not mean that small and medium-sized banks are not aware of the importance of financial technology.
The reporter of Caijing noted that among the 21 A-share listed city commercial banks and agricultural commercial banks, the term financial technology appeared in the financial reports of most banks, mainly involving how financial technology can help the development of industry, how to vigorously develop financial technology in the future, and the important strategic position of financial technology.
But who is more willing to throw a lot of money? Only bank of Beijing (Stock Code: 601169.SH uff09, Bank of Shanghai, Bank of Changsha, Changshu bank and other four banks disclosed specific financial technology / IT capital investment. In general, banks with large revenue are more willing to invest heavily, such as Bank of Beijing, which ranked first among 21 small and medium-sized banks in revenue in 2019, and ranked first with 1.8 billion yuan of financial technology investment. It is worth mentioning that although Changshu banks revenue is low, its financial technology investment accounts for a large proportion of its revenue 3.41% , ranking first in the list.
In recent years, in addition to some large-scale urban commercial banks and agricultural commercial banks, most of the small and medium-sized banks pay more attention to the short-term business improvement, or stay in the strategic recognition, preliminary planning and other aspects, ignoring the long-term role of financial technology in business innovation and lack of corresponding investment, which is finally reflected The overall innovation ability of small and medium-sized banks is weak.
The story of finance is actually a story of technology. In the 2019 annual report of Bank of Changsha, William gozmans point of view in the Millennium financial history was quoted to further point out that, unlike those leading enterprises, local small and medium-sized banks in the eye of the storm were once swayed by the hurricane of financial science and technology. From anxiety and hesitation to calmness, we are more and more convinced that the fortress is always broken from the inside, and technology will not defeat the bank. What can defeat us is to be complacent and follow the trend. What can abandon us is only the separation of customers and indifference to innovation.