Author l Zhou Geng.
Since the beginning of the year, the listed banks have taken a different path.
As one of the six major commercial banks in China, China CITIC Bank's share price has increased from 529 yuan rose to 637 yuan, a cumulative increase of more than 20%, recovering all the declines since the second half of last year.
Stretching the stock price performance of China CITIC Bank,Throughout 2023, its share price will rise from less than 5 yuan at the beginning of the year to a maximum of nearly 8 yuan in early May, and then it will close at 5 by the end of 202329 yuan.
Although China CITIC Bank has been at home in the capital market this year, from a fundamental point of view, China CITIC Bank has not changed its sluggish performance.
On January 22, China CITIC Bank released its earnings report.
According to the data, the bank will achieve revenue of 2058 in 20239.6 billion yuan, down 2 from the same period last year6%；
The net profit was 6701.6 billion yuan, a year-on-year increase of 791%。
China CITIC Bank's 2023 performance report.
It is worth noting that this is the first time in nearly 14 years that China CITIC Bank has experienced negative full-year revenue growth, which adds to the doubts about the already weak performance.
Negative growth in performance
In response to the decline in revenue growth announced in this performance report, China CITIC Bank did not disclose the detailed reasons, but referring to the performance of the first three quarters of 2023, the continuous decline in net interest margin may still be the main reason.
According to the financial report data of China CITIC Bank over the years, from 2019 to 2022, the net interest margin of China CITIC Bank increased from 212% to 197%, further decreasing to 187%。In the third quarter of 2023, its net interest margin fell by 015 percentage points to 182%, down 014 percentage points.
Affected by this, China CITIC Bank's performance in the first three quarters of last year continued to be poor.
In the first quarter of last year, it achieved revenue of 513600 million yuan, a negative year-on-year increase of 494%；
In the first half of the year, the revenue was 106.2 billion yuan, a negative growth of 2 year-on-year05%；
The cumulative revenue in the first three quarters was 156.2 billion yuan, which was also a negative growth of 262%。
Oriental Wealth.
For China CITIC Bank, the net interest margin continues to narrow, or it is related to several aspects:
First, the current income structure of China CITIC Bank is still dominated by interest-bearing assets, but non-interest income also accounts for more than 30%, and these two data are in a negative growth state.
According to its semi-annual report data last year, as of the first half of last year, CITIC Bank's net interest income accounted for 689%, and non-interest net income accounted for 311%。
China CITIC Bank 2023 Semi-Annual Report.
And in terms of revenue contribution,According to the latest data released by China CITIC Bank in the third quarter, its net interest income in the first three quarters of last year was 10923.9 billion yuan, a year-on-year decrease of 190%, non-interest net income 4698.9 billion yuan, down 425%。
In this regard, China CITIC Bank also explained in the third quarterly report that the main reasons for the negative growth of the company's net interest income and non-interest net income in the first three quarters of last year were the downward impact of interest rates, the continued pressure on asset yields, the relative rigidity of deposit costs, and the decline in wealth management fees, as well as the decrease in investment income and fair value change gains and losses.
China CITIC Bank's 2023 third quarter report.
Second, although the overall loan scale of China CITIC Bank maintained a growth level of 6% in the first three quarters of last year compared with the beginning of the year, it was far lower than the industry average of more than 10%.
Combined with net interest margins, which are also below the industry average, it is not surprising that CITIC Bank's performance is under pressure. Another industry analyst said that the slowdown in the growth rate of CITIC Bank's loan scale is difficult to offset the decline in net interest margin, and in this context, it is difficult for CITIC Bank to have outstanding performance.
In fact, judging from the performance of China CITIC Bank in recent years, its revenue growth rate reached 16 in 201537%, and since then it has fallen into a continuous fluctuation range, and the revenue growth rate in 2017 fell to 186%, but by 2019 it had increased to 1379%, and has since returned to single-digit growth.
Oriental Wealth.
The volatile performance directly reflects the lack of sustainable performance growth in terms of revenue, and the lack of effective hedging in the face of objective adverse factors in various businesses.
Despite the pressure, CITIC Bank's provision coverage ratio has continued to increase since 2016. By the first three quarters of last year, the indicator had risen from 155 in 20165% to 20951%。
China CITIC Bank's 2023 third quarter report.
Although this indicator is a direct reflection of a bank's resilience to risk, it needs to consume its cash flow. However, going long on this indicator is also equivalent to increasing cash reserves in disguise, and profits can be adjusted by releasing the provision funds on the standard line in the future.
This move by China CITIC Bank should leave a legacy for the continued decline in future performance.
High risk exposure
Loss-making loans increased by 16984%
Of course, the fluctuating performance of China CITIC Bank has been accompanied by widely criticized operational problems.
According to the data of the annual reports of previous years, at the end of 2015, the bank's non-performing loan ratio was 143%, and the defective rates in the next two years were. 68%。
By 2020, its non-performing loan ratio had dropped to 164%, but the balance of non-performing loans peaked at 7345.2 billion yuan, and the bank's loan loss reserve was as high as 6928.5 billion yuan.
During this period, the main operational risk faced by China CITIC Bank came from the real estate business.
According to public information, by the end of 2017, the business area of China CITIC Bank's largest loan has changed from manufacturing to real estate, accounting for 1793%。It wasn't until 2020 that its manufacturing loan balance surpassed that of its real estate business as the real estate market changed.
Even so, the balance of loans for China CITIC Bank's real estate business was still as high as 2,832 as of the first half of last year0.3 billion yuan, accounting for 10% of the company's total loans33%，At the same time, it is also the industry with the highest non-performing rate of the company, which is 529%。
China CITIC Bank 2023 Semi-Annual Report.
In addition, China CITIC Bank has also been fined large amounts of money for its real estate business many times in recent years.
In 2018, he was fined 22.8 million yuan for 6 violations of laws and regulations, including illegal payment of land money by wealth management funds, illegal payment of land money by self-owned fund financing, and provision of capital guarantee commitments for non-principal-guaranteed wealth management products.
In 2019, real estate development loans were issued in the name of working capital loans due to failure to provide statements in accordance with regulations and failure to correct them within the time limit, misstatement or omission of banking regulatory statistics; Failed to include real estate enterprise loans in the real estate development loan subject and other 13 violations of laws and regulations, and was fined 2223670,000 yuan.
In 2020, he was fined 20.2 million yuan for 19 violations of laws and regulations, such as misappropriation of funds, illegal provision of financing, and insufficient audit.
Today, the real estate business is still at the forefront of all of its lending businesses, even if it doesn't incur new finesHowever, the non-performing level of more than 5% also continues to affect its performance.
At the end of last year, China CITIC Bank received a sky-high fine again for 56 violations, and the amount of fines confiscated exceeded 2$2.4 billion.
The real estate business has not yet been completely cleared, and it has been repeatedly fined sky-high prices, and the quality of China CITIC Bank's operation is really worrying.
Among its non-performing loans, although subprime loans decreased sharply year-on-year, doubtful loans and loss loans with higher risk ratings increased.
According to its data for the third quarter of last year, as of the third quarter of 2023, the company's doubtful loan balance was 2849.4 billion yuan, an increase of 33% from the beginning of the year, and loss loans increased by 169 percent from the beginning of the year84% to 1943.9 billion yuan.
China CITIC Bank's 2023 third quarter report.
In addition, as of the third quarter of 2023, China CITIC Bank's core Tier 1 capital adequacy ratio was 881%；The Tier 1 capital adequacy ratio was 1059%；The capital adequacy ratio was 1265%。
China CITIC Bank's 2023 third quarter report.
Although the three indicators are all on the edge of the red line, they also affect the scale of CITIC Bank's long assets to a certain extent.
In terms of both operational and risk exposure, China CITIC Bank is under pressure on two sides, on the one hand, its performance growth is sluggish, and there is a lack of obvious room for growth, and on the other hand, it has been repeatedly punished with large amounts of penalties and its operating risks remain high.
Under the combined effect of various unfavorable factors, the future operation of China CITIC Bank may not be ideal. And its current focus, compared with performance growth, to accelerate the risk clearance, may be the focus.
Disclaimer: This article is only for knowledge sharing, just to convey more information! This article does not constitute any investment advice, and any person makes investment decisions based on it at his or her own risk. February** Dynamic Incentive Program