In the first year of the coaching change, the pressure on China Merchants Bank (600036.SH, 3968.HK) with a scale of 10 trillion yuan has not diminished.
The annual report shows that in 2022, China Merchants Bank will achieve operating income of 344.783 billion yuan, a year-on-year increase of 4.08%; the net profit attributable to the bank’s shareholders (net profit, the same below) will be 138.012 billion yuan, a year-on-year increase of 15.08%. By the end of 2022, the total assets of China Merchants Bank will reach 10.14 trillion yuan, reaching a new level of 10 trillion yuan.
However, a reporter from the Changjiang Commercial Daily noticed that behind the steady growth in operating performance and asset scale, China Merchants Bank is also facing pressure from market fluctuations and changes in the macro environment.
Due to factors such as the slowdown in economic growth and the risk release of real estate customers, by the end of 2022, China Merchants Bank’s non-performing loan ratio will be 0.96%, an increase of 0.05 percentage points from the end of the previous year. look up.
As of the end of 2022, the non-performing loan ratio of China Merchants Bank’s real estate industry was 3.99%, an increase of 2.60 percentage points from the end of the previous year. Among them, the non-performing loans of real estate companies were 15.348 billion yuan, an increase of 9.693 billion yuan from the end of the previous year, becoming the largest increase in the bank’s corporate non-performing loans, and the non-performing rate also soared from 1.41% at the end of the previous year to 4.08%. Affected by this, China Merchants Bank’s credit impairment losses on loans and advances in 2022 will be 45.157 billion yuan, a year-on-year increase of 8.137 billion yuan.
However, China Merchants Bank also stated that with the support of relevant favorable policies, it is expected that the tight liquidity of real estate companies will ease, and the asset quality of the bank’s real estate sector is generally controllable.
Photo by Wu Wei, reporter of Changjiang Commercial Daily
Non-interest income growth sluggish due to market volatility
In the 35th year since its establishment, China Merchants Bank has withstood internal and external tests and capital market stress tests, and still maintained a steady momentum of development.
The annual report shows that in 2022, China Merchants Bank will achieve operating income of 344.783 billion yuan, a year-on-year increase of 4.08%; net profit of 138.012 billion yuan, a year-on-year increase of 15.08%; The return on average net assets (ROAE) of shareholders was 1.42% and 17.06%, respectively, an increase of 0.06 and 0.10 percentage points year-on-year.
A reporter from the Changjiang Commercial Daily noticed that in 2022, when the capital market fluctuates greatly, the income structure of China Merchants Bank will also undergo slight changes.
Specifically, in 2022, China Merchants Bank’s net interest margin will be 2.28%, a year-on-year decrease of 11 basis points; the net interest rate will be 2.40%, a year-on-year decrease of 8 basis points, and it is also facing the pressure of narrowing interest margins. However, with the expansion of the scale of interest-earning assets, China Merchants Bank will realize net interest income of 218.235 billion yuan in 2022, a year-on-year increase of 7.02%, and the proportion of current revenue will increase from 61.56% in the previous year to 63.3%.
On the other hand, China Merchants Bank will realize net non-interest income of 126.548 billion yuan in 2022, a year-on-year decrease of 0.62%, accounting for 36.7% of current revenue, a year-on-year decrease of 1.74 percentage points. Among them, the non-interest income of retail finance and wholesale finance business was 60.033 billion yuan and 51.64 billion yuan, respectively, a year-on-year decrease of 3.44% and 1.17%.
If classified by type, among China Merchants Bank’s fee and commission income in 2022, wealth management fee and commission income will be 30.903 billion yuan, a year-on-year decrease of 14.28%; asset management, bank card, settlement and clearing fee and commission income will be 12.457 billion yuan , 21.399 billion yuan, and 15.051 billion yuan, a year-on-year increase of 14.75%, 10.44%, and 8.26%.
However, it should be noted that among other net income, China Merchants Bank’s investment income in 2022 will be 20.538 billion yuan, a year-on-year decrease of 6.01%, mainly due to the impact of capital market fluctuations; It is the decrease in fair value of bond investment and non-monetary fund investment.
To sum up, the narrowing of interest rate spreads and sluggish growth of non-interest income will slow down China Merchants Bank’s annual revenue growth in 2022. However, China Merchants Bank accelerated its digital transformation and optimized expenses. In 2022, China Merchants Bank will invest 14.168 billion yuan in information technology, a year-on-year increase of 6.60%; business and management expenses will be 113.375 billion yuan, a year-on-year increase of 3.32%, and the cost-to-income ratio will be 32.88%, a year-on-year decrease of 0.24 percentage points, expanding the bank’s profit margins.
In addition, in 2022, China Merchants Bank reduced the accrual of financial investment, receivables from peers and other financial institutions for impairment losses. The bank’s total credit impairment losses in the current period were 56.751 billion yuan, a year-on-year decrease of 13.96%. However, it cannot be ignored that in 2022, China Merchants Bank’s provisioning is still very cautious. The credit impairment loss of current loans and advances is 45.157 billion yuan, a year-on-year increase of 8.137 billion yuan.
The non-performing rate of the real estate industry is 3.99%
China Merchants Bank increased the provision for credit risk losses on loans mainly to cope with the impact of the slowdown in economic growth and the release of risks from real estate customers.
As of the end of 2022, the total assets of China Merchants Bank will be close to 10.14 trillion yuan, an increase of 9.62% from the end of the previous year; the total amount of loans and advances will be 6.06 trillion yuan, an increase of 8.64% from the end of the previous year. At the end of the period, the balance of non-performing loans of China Merchants Bank was 58.004 billion yuan, an increase of 7.142 billion yuan from the end of the previous year, and the non-performing loan ratio was 0.96%, an increase of 0.05 percentage points from the end of the previous year; 1.21%, an increase of 0.37 percentage points from the end of the previous year.
It should be noted that this is also the first time since 2016 that China Merchants Bank’s non-performing ratio has risen again after five years.
As of the end of 2022, China Merchants Bank’s loan loss provision balance was 253.413 billion yuan, an increase of 14.228 billion yuan from the end of the previous year; the provision coverage ratio was 467.43%, a decrease of 23.23 percentage points from the end of the previous year; the loan provision ratio was 4.43%, a decrease of 0.12 percentage points from the end of the previous year percentage point.
A reporter from the Changjiang Commercial Daily further sorted out and found that by the end of 2022, China Merchants Bank’s corporate loan non-performing amount was 29.961 billion yuan, an increase of 3.229 billion yuan from the end of the previous year, and the corporate loan non-performing rate was 1.26%, an increase of 0.02 percentage points from the end of the previous year. Among them, the non-performing loans of real estate companies were 15.348 billion yuan, an increase of 9.693 billion yuan from the end of the previous year, becoming the largest increase in the bank’s corporate non-performing loans, and the non-performing rate also soared from 1.41% at the end of the previous year to 4.08%.
As of the end of 2022, China Merchants Bank’s real estate industry loan balance was 333.715 billion yuan, a decrease of 22.262 billion yuan from the end of the previous year, accounting for 5.83% of the bank’s total loans and advances, a decrease of 0.95 percentage points from the end of the previous year; the non-performing loan ratio of the real estate industry was 3.99%, An increase of 2.60 percentage points from the end of the previous year.
China Merchants Bank specifically pointed out that as of the end of the reporting period, the bank’s real estate industry loan customers and regional structure remained sound, among which, the balance of loans to customers with high credit ratings accounted for nearly 80%; from the perspective of project areas, the distribution of more than 85% of the bank’s real estate development loan balance In urban areas of first- and second-tier cities. Looking forward to 2023, with the support of relevant favorable policies, it is expected that the tight liquidity of real estate companies will ease, and the asset quality of the bank’s real estate sector will be generally controllable.
However, as the king of retail, as of the end of 2022, China Merchants Bank’s retail loan balance was 3.16 trillion yuan, an increase of 5.82% over the end of the previous year, and retail loans accounted for 52.25%. low level. Among them, the non-performing rate of personal housing loans was only 0.35%, an increase of 0.07 percentage points from the end of the previous year.
In 2022, the operating income and pre-tax profit of China Merchants Bank’s retail financial business will be 191.422 billion yuan and 94.178 billion yuan, a year-on-year increase of 6.93% and 21.19%, accounting for 55.52% and 57.04%, respectively, a year-on-year increase of 1.48 and 4.6 percentage points .
As of the end of 2022, the total number of retail customers of China Merchants Bank reached 184 million, an increase of 6.36% from the end of the previous year, and the balance of total assets under management (AUM) of retail customers was 12.12 trillion yuan, an increase of 12.68% from the end of the previous year.
It is worth mentioning that as of the end of 2022, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio of China Merchants Bank under the advanced method will be 13.68%, 15.75% and 17.77%, respectively, an increase of 1.02 and 0.81 respectively from the end of the previous year. , 0.29 percentage points, realizing the endogenous growth of capital.