For example, on July 23, the semi annual report disclosed by Hubei bank showed that the net profit in the first half of the year decreased significantly. Net profit was 667 million yuan, down 39.77% year-on-year. The bank did not disclose its operating income. In addition, the net profits of Suizhou agricultural commercial bank, Zhaoqing agricultural commercial bank and Laizhou agricultural commercial bank decreased by 43.81%, 46.37% and 54.29% respectively.
In the first half of the year, we have indeed been under a lot of pressure. The non-performing rate of our small and medium-sized enterprises has increased, from 1.8% at the beginning of the year to 2.5% at the end of May, which is still quite large. General manager of Enterprise Finance Department of a city commercial bank told time weekly.
According to the latest report of GF Securities, as of the end of the second quarter, the proportion of bank shares held by public funds was 2.40%, which continued to drop by 1.85 percentage points compared with 4.25% in the first quarter, and dropped sharply for two consecutive quarters. From the perspective of individual stocks, the top five reducing positions are postal savings bank, China Merchants Bank, industrial bank, Ping An Bank and industrial and Commercial Bank of China, all of which are state-owned banks or joint-stock banks.
We still pay more attention to the risk of banks and pay more attention to indicators such as provision coverage and non-performing loans. On July 23, a mutual fund manager in Shanghai told time weekly.
Negative growth of net profit
Although no listed banks have published their semi annual reports, as of July 26, 35 local banks have disclosed their first half year performance data. On the whole, under the epidemic situation, the profitability of local banks was under pressure, and the net profit of 19 banks showed negative growth.
The small and micro businesses of local banks have heavy tasks, and large enterprises have insufficient loans, which means that the probability of bad debts in the future will increase. In general, the demand of manufacturing industry is insufficient, and many bosses dare not expand. The non-performing rate of small and micro enterprises shows obvious signs of rising. Recently, the first loan problem occurred in our branch, so the best way now is to do more enterprises with discount and collateral. On July 26, the person in charge of corporate business of a first level branch of a joint-stock bank in South China told the times weekly.
Taking Dongguan bank and Huzhou bank as examples, the growth rates of operating income and net profit of Dongguan bank in the first half of the year are - 2.25% and 2.99% respectively, compared with 21.18% and 15.04% in 2019; the growth rates of operating income and net profit of Huzhou bank in the first half of the year are 3.41% and 6.56%, respectively, and 5.99% and 54.90% in 2019. The growth of the two banks has slowed down significantly.
The business scope of local banks is relatively concentrated, which is related to the local industrial structure. Some industries are greatly affected by the epidemic, which will also affect the operation of banks. Said the general manager of the enterprise finance department of the city commercial bank.
The research group of the Research Bureau of the central bank pointed out that, with the lagging effect of real economic difficulties transmitting to the financial sector, as well as the influence of some policy factors, the pressure on the disposal of non-performing loans and capital consumption in the later stage of the bank has obviously increased, and the growth rate of bank profits may decline, which does not exclude the possibility of zero growth or negative growth in the year.
With the continuous strengthening of regulatory policy guidance and the gradual improvement of LPR formation mechanism, the overall interest margin level of the banking industry is still facing greater pressure. At the same time, under the downward pressure of asset quality, the provision provision increases, and the overall profitability is weakening. The performance of small and medium-sized banks is more obvious, and the impact will be higher than that of large banks. According to a report released by China integrity international.
In the first half of the year, there was also a lot of bad pressure on the banking sector. Recently, the supervision has repeatedly mentioned the problem of banks dealing with non-performing assets. On July 23, the cbcirc announced on its official website that the mid-2020 work forum and discipline inspection and supervision work (teleconference) meeting held on July 20 required us to plan ahead of time to cope with the substantial growth of non-performing assets in the banking industry, strictly classify the quality of assets according to the principle that substance is more important than form, consolidate profits, make adequate provisions, supplement capital, and enhance the ability to resist risks.
The adverse pressure is great. Affected by the epidemic situation, many enterprises are hard to return to work, especially small and micro enterprises, whose production capacity is less than half of last years, which seriously affects their efficiency and repayment ability. July 24, a joint-stock bank branch president told the times weekly.
Among them, the balance of non-performing loans and non-performing loan ratio of Hubei bank both increased. By the end of June 2020, the balance of non-performing loans of the bank was 3.809 billion yuan, an increase of 48.79% over the beginning of the year; the non-performing loan ratio was 2.7%, an increase of 0.71 percentage points over the beginning of the year, and the non-performing rate reached the highest value in recent seven years.
According to the data, at the end of June, the balance of non-performing loans of Chinas banking industry was 3.6 trillion yuan, an increase of 400.4 billion yuan over the beginning of the year, the non-performing loan ratio was 2.10%, 0.08 percentage points higher than the beginning of the year, and the provision coverage rate was 178.1%, 4% lower than the beginning of the year.
In this regard, Li Yan, assistant vice president and analyst of Moodys financial institutions department, recently said that this is because, on the one hand, the exposure of non-performing loans generally lags behind for 6-9 months; on the other hand, it is because the ability of major banks to digest indigestion with existing provisions is still effective. She expects that the risk exposure of bank asset quality will respond in the second half of this year to the first half of next year.
Wang Yanglin, manager of Yibo investment fund, told time weekly that with the impact of the epidemic, the generation of non-performing loans of banks will be reflected in the financial reports in the next few quarters, and the market expectation is poor.
At the end of the second quarter of this year, the proportion of bank shares held by public funds was 2.40%, the second lowest in history. Specifically, the largest reduction was in the stock banks, with a month on month decrease of 0.91 percentage points, followed by large state-owned banks, with a month on month decrease of 0.89 percentage points. For the logic of this change, Ni Jun, chief analyst of Guangfa Securities and banking industry, said that in the process of transferring interest from the financial system to entities, large state-owned banks and stock banks are expected to bear more, and the central bank has given more policy care to urban commercial banks and rural commercial banks. In addition, by the end of the first quarter, the absolute level of non-performing rate of joint-stock banks was the highest, and the safety cushion of urban commercial banks and rural commercial banks was thicker. In addition, since July, shareholders of 7 banks have reduced their own bank shares. In addition to Bank of communications and postal savings bank, Zhangjiagang bank, Bank of Ningbo, Bank of Guizhou, Bank of Gansu, Bank of Luzhou, Sunong bank, etc. have issued plans to reduce shareholders and senior executives holdings in A-shares and H-shares, or completed substantial reduction. Source: time weekly editor: Wang Xiaowu_ NF
For the logic of this change, Ni Jun, chief analyst of Guangfa Securities and banking industry, said that in the process of transferring interest from the financial system to entities, large state-owned banks and stock banks are expected to bear more, and the central bank has given more policy care to urban commercial banks and rural commercial banks. In addition, by the end of the first quarter, the absolute level of non-performing rate of joint-stock banks was the highest, and the safety cushion of urban commercial banks and rural commercial banks was thicker.
In addition, since July, shareholders of 7 banks have reduced their own bank shares. In addition to Bank of communications and postal savings bank, Zhangjiagang bank, Bank of Ningbo, Bank of Guizhou, Bank of Gansu, Bank of Luzhou, Sunong bank, etc. have issued plans to reduce shareholders and senior executives holdings in A-shares and H-shares, or completed substantial reduction.