Text: Senior Editor of Tsinghua Financial ReviewQin Ting
In 2023, the total assets of commercial banks will be 355 trillion yuan, a year-on-year increase of 11%, and the cumulative net profit will be 24 trillion yuan, a year-on-year increase of 32%, an increase of 22 percentage points. In the fourth quarter of 2023, the net interest margin of commercial banks was 169%, down 0. from the first quarter of 202305 percentage points, the net interest margin of large commercial banks, joint-stock commercial banks, and city commercial banks all decreased compared with the first quarter of 2023. Looking forward to 2024, under the economic growth target, it is expected that various policies will be flexible and moderate to form a synergy, which will provide a macro foundation for the growth of bank deposits and loans and lay the cornerstone of industry profitability.
Recently, the State Administration of Financial Supervision and Administration released the "Data on Main Regulatory Indicators of the Banking and Insurance Industry in the Fourth Quarter of 2023", which shows that the total assets of commercial banks in 2023 will be 355 trillion yuan, a year-on-year increase of 11%, and the cumulative net profit will be 24 trillion yuan, a year-on-year increase of 32%, an increase of 22 percentage points. At the same time, the average rate of return on capital was 893%；The average return on assets is 07%, both down from the end of the previous quarter.
The proportion of assets of large commercial banks has further increased
In terms of capital, at the end of the fourth quarter of 2023, the net core Tier 1 capital of commercial banks (excluding branches of foreign banks) was 23 trillion yuan, and the capital adequacy ratio was 1506%, an increase of 029 percentage points. The Tier 1 capital adequacy ratio was 1212%, up 0. from the end of the previous quarter22 percentage points. The core Tier 1 capital adequacy ratio was 1054%, an increase of 018 percentage points.
In terms of assets, at the end of the fourth quarter of 2023, the total assets of commercial banks were 355 trillion yuan, a year-on-year increase of 11%, and the total liabilities were 327 trillion yuan, a year-on-year increase of 112%。
According to the latest data, the total domestic and foreign currency assets of large commercial banks have reached 424%, up from 40. in 20224% increased by 2 percentage points, compared to 391% is an increase of 33 percentage points.
In the past five years, the growth rate of the asset scale of large commercial banks is faster than the overall asset growth rate of banking financial institutions.
According to the latest statistics of the State Administration of Financial Regulation, by the end of 2023, the total assets of banking financial institutions have increased by 47% compared with 201971%；Among them, the total domestic and foreign currency assets of large commercial banks increased by 59% compared with 201986%。
The Department of Large Banks of the State Administration of Financial Supervision previously pointed out in an article that it is necessary to urge large banks to adhere to their strategic function positioning, guide large commercial banks to become better and stronger, and be the main force in serving the real economy and maintaining financial stability.
At the same time, it is also necessary to explore the establishment and improvement of a monitoring and evaluation system for large commercial banks to serve the real economy. Supervise and urge large commercial banks to actively assume the responsibilities of large state-owned banks, completely, accurately and comprehensively implement the new development concept, strengthen financial support for national strategies and key areas, and promote the economy to achieve qualitative and effective improvement and reasonable quantitative growth. Give full play to the group's diversified financial advantages and improve the timeliness of financial supply. Better coordinate high-quality development and high-level security, focus on the use of financial technology and improve the level of risk control, and broaden the scope of sustainable commercial financial services.
Table 1: List of main indicators of commercial banks in 2023.
*: State Administration of Financial Supervision and Administration.
Table 2: Main indicators of different types of commercial banks.
*: State Administration of Financial Supervision and Administration.
For the first time, the overall net interest margin of commercial banks was below 17%
In terms of profitability, for the whole year of 2023, commercial banks will achieve a cumulative net profit of 24 trillion yuan, a year-on-year increase of 32%, a contraction of 2 from the same period last year2 percentage points. The average return on capital is 893%, down 0. from the end of the previous quarter52 percentage points. The average return on assets is 07%, down 0. from the end of the previous quarter04 percentage points.
In the fourth quarter of 2023, the net interest margin of commercial banks was 169%, down 0. from the first quarter of 202305 percentage points, the net interest margin of large commercial banks, joint-stock commercial banks, and city commercial banks all decreased compared with the first quarter of 2023. At the same time, in the fourth quarter of 2023, the net interest margin of private banks was 439%, compared to the first quarter of 2023**028 percentage points.
CICC said that the decline in interest margins dragged down profits, which is expected to be mainly due to the adjustment of interest rates on existing mortgages, the repricing of loans, and the decline in interest rates on new loans.
It is worth mentioning that, according to the central bank, the weighted average interest rate of new loans issued by financial institutions in China in December 2023 is 383%, down 31bp month-on-month from September and down 31bp year-on-year from the end of 2022. On February 20, the central bank authorized the National Interbank Funding Center to announce that the one-year LPR was 345%, unchanged; LPR for more than 5 years is 395%, down 25 basis points from the previous value.
Minsheng ** research report believes that the previous deposit interest rate cuts, RRR cuts and other behaviors have left room for LPR reductions, so although the interest rate spread has a certain negative impact, the overall impact is limited.
At present, the net interest margin of private banks has always remained at a high level. Zeng Gang, director of the Shanghai Finance and Development Laboratory, said that the future net interest margin of private banks is related to the overall net interest margin of the banking industry and the degree of market competition.
From the perspective of long-term trends, the overall net interest margin of the banking industry will remain at a relatively low level, although the digital and scenario-based operation of private banks has enabled them to avoid fierce competition, but the competition in their segments is also becoming increasingly fierce. At the same time, if the scale of private banks continues to expand, their net interest margins will still converge with the net interest margins of the banking industry as a whole. Therefore, with the passage of time and the increasingly fierce competition in the market, the net interest margin of private banks will be roughly the same as that of the banking industry as a whole.
The non-performing loan ratio of commercial banks is basically controllable, and the provision coverage ratio is sufficient
In terms of asset quality, at the end of the fourth quarter of 2023, the balance of non-performing loans of commercial banks was 32 trillion yuan, basically unchanged from the end of the previous quarter; The non-performing loan ratio of commercial banks is 159%, down 0. from the end of the previous quarter02 percentage points.
At the end of the fourth quarter of 2023, the normal loan balance of commercial banks was 1993 trillion yuan, of which the balance of normal loans is 1948 trillion yuan, and the balance of concerned loans is 45 trillion yuan.
At the end of the fourth quarter of 2023, the balance of loan loss provisions for commercial banks was 66 trillion yuan, a decrease of 86.4 billion yuan from the end of the previous quarter; The provision coverage ratio was 20514%, down 274 percentage points; The loan provision ratio was 327%, down 0. from the end of the previous quarter08 percentage points.
At the end of the fourth quarter of 2023, the liquidity coverage ratio of commercial banks was 1516%, up 8. from the end of the previous quarter06 percentage points; The liquidity ratio is 6788%, up 2. from the end of the previous quarter73 percentage points; RMB excess reserve ratio 223%, up 0. from the end of the previous quarter75 percentage points; The ratio of deposits and loans (in RMB domestic caliber) is 7869%, an increase of 05 percentage points.
In 2024, the fundamentals of bank operations are expected to be builtbottom
In terms of serving the real economy, at the end of the fourth quarter of 2023, the balance of loans (including loans for small and micro enterprises, loans for individual industrial and commercial households, and loans to small and micro business owners) of banking financial institutions for small and micro enterprises was 709 trillion yuan, of which the balance of inclusive small and micro enterprise loans with a total credit line of 10 million yuan and below for a single household is 291 trillion yuan, a year-on-year increase of 233%。The balance of the loan for the affordable housing project is 63 trillion yuan.
Dongguan ** research report believes that although the LPR downturn is negative in the short term, but in the long run, it is good for macroeconomic repair, only when the economic recovery foundation is solid, the operating environment of the banking industry can be fundamentally improved, and the indicators such as asset quality and net interest margin can be stable and good.
The Oriental ** research report pointed out that in 2024, the fundamentals of bank operations are expected to bottom out, focusing on the strength of the disposal and liquidation of banking industry risks after confirmation, the inflection point of new loan interest rates, and the bottoming of bank interest rate spreads after the debt cost of all sectors of society is reduced.
The Bank of China Research Institute pointed out that looking forward to 2024, under the economic growth target, it is expected that various policies will be flexible and appropriate to form a synergy, which will provide a macro foundation for the growth of bank deposits and loans and lay the cornerstone of industry profitability.
The research team of China Minsheng Bank is also optimistic that the growth rate of bank profits is expected to remain stable. At the same time, the central bank has recently frequently stated that it cares for the bottom line of bank profits, which is conducive to alleviating the disorderly competition of low prices on the asset side and enhancing the resilience of bank profit growth. It is expected that there will be no significant fluctuations in bank performance this year, and profit growth will remain stable.
Editor-in-charge丨Qin Ting.
Proofreading丨Lan Yinfan.
Preliminary trial丨Xu Lanying.
Final Review丨Zhang Wei
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