Securities Times reporter Pan Yurong
The bank’s semi-annual report has recently kicked off. China Merchants Bank and Bank of Ningbo illuminate the entire banking sector with a year-on-year growth rate of over 20% in net profit. This is also the highest growth rate in the semi-annual reports of the two banks in the past eight years.
Benefiting from the economic recovery and last year’s low base, the profitability of the banking industry was generally better in the first half of this year. According to the banking supervision data for the second quarter of 2021 disclosed by the China Banking and Insurance Regulatory Commission, commercial banks achieved a net profit of 1.14 trillion yuan in the first half of the year, an increase of 11.12% year-on-year, and a year-on-year increase of 2.36% in the first quarter. In terms of types, the net profit growth rate of large banks was 13.07%, the shareholding sector was 11.79%, the city commercial sector was 4.54%, and the rural commercial sector was 9.82%.
In the first half of the year, the central bank adopted a series of measures to guide financial institutions to make reasonable profit transfers to the real economy and to further reduce actual loan interest rates. The weighted average interest rate of corporate loans in the first six months was 4.63%, a decrease of 0.16 percentage points from the same period last year, and a decrease of 0.09 percentage points from the entire year of the previous year. Against this backdrop, the banking industry’s net interest margin in the second quarter fell slightly from the first quarter to 2.06%. Among them, the interest margin of major banks and joint-stock banks narrowed, and the performance of the interest margin of city commercial banks and rural commercial banks improved. Bank spreads remained stable overall.
Some people were worried that bad bank credit assets would be exposed this year. However, data in the first half of the year showed that the quality of credit assets of commercial banks remained stable. At the end of the second quarter of 2021, the balance of non-performing loans of commercial banks was 2.8 trillion yuan, an increase of 2.5 billion yuan from the end of the previous quarter; the non-performing loan ratio of commercial banks was 1.76%, a decrease of 0.05 percentage points from the end of the previous quarter.
Profits are being repaired, and banks’ risk offsetting capabilities have also been strengthened. At the end of the second quarter of 2021, the balance of loan loss provisions, provision coverage ratio, and loan provision ratio of commercial banks increased compared with the end of the first quarter.
Bank performance is closely related to the economic situation, and there is a certain lag in performance. The divergence of the performance of listed banks is also obvious. Since the end of July, the subject long-term credit ratings of many small and medium-sized banks have been downgraded by rating agencies, while the ratings of many banks have also been upgraded over the same period.
As the economic recovery continues, the certainty and sustainability of the improvement of bank fundamentals is increasing, but the bank’s own business strategy is also very important. For example, China Merchants Bank and Bank of Ningbo achieved a growth of more than 20% in net profit in the first half of the year, thanks to the stable net interest margin and the substantial increase in non-interest income. However, for some listed banks, it is already very difficult to keep the net interest margin level from falling further. In the second half of the year, it is necessary to continue to reduce non-standardized investment and increase asset disposal. The challenges and pressure are not small.Return to Sohu to see more
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