Bank of Beijing (601169): Net interest margin widens and asset quality continues to improve
Report Summary: Events: On October 29, Bank of Beijing announced its 3Q19 financial report: net profit attributable to mothers was 180.
8.5 billion, a year-on-year increase of +8.
8%; revenue 481.
2 billion, a year-on-year increase of +17.
0%, ROE 9.
77%, a decrease of 0 every year.
At the end of September 19, total assets were 2.
68 trillion, non-performing rate 1.
41%, provision coverage ratio 229.
25%, core tier 1 capital adequacy 杭州桑拿网 ratio9.
Operational highlights: Accelerating development of special small and micro finance.
The company continuously improves the development performance of inclusive finance, opens the financing service chain for small and micro enterprises, and makes efforts in the fields of cultural finance and technology finance.
In the future, it will focus on science and technology board services, technology loans, and cultural loans, continue to consolidate special businesses, and strengthen the positioning of serving the capital entity.
The digital transition is progressing steadily.
The company actively explores innovative practices based on new technologies, strengthens research and development innovation; accelerates the mobile-first strategy, and completes the gradual upgrade of mobile banking apps; digital 杭州桑拿网 risk control effectively improves risk resistance, and financial technology empowers the entire business chain with significant effects.
Financial analysis: (1) Net profit growth in the third quarter of 19 was in line with expectations.
Net interest margin widened (3Q19 net interest margin is estimated to be 1.
87%, one year + 3bps, chain ratio + 3bps) + stable growth in scale (loan growth +15.
9%, interest-earning assets for ten years +7.
6%) boosted net interest income by 11.
6%, net interest income maintained a high growth rate (3Q19 extended 39%); PPOP growth rate was 21.
5%, maintaining a high level; provisioning increased by 39.
0%, suppressing net profit increase by 8 in ten years.
(2) Wide net interest margin.
Calculated net interest margin in the third quarter of 19 increased by 3bps to 1.
87%, or benefited mainly from structural optimization, the proportion of asset-side credit increased, and the proportion of debt-side deposits increased.
In the future, it will further optimize the structure through refined management, improve asset-side income and control debt-side costs.
(3) The quality of assets has improved, and sufficient provisions have been made.
The bad rate decreased by 4bps to 1.
41%, provision coverage increased by 16.
8 up to 229.
3%, loan-to-loan ratio increased by 15bps to 3.
Investment suggestion: The quality of assets continues to improve, and the three quarterly results of technology-enhanced fine-tuned management meet expectations.
Bank of Beijing continued to strengthen the service entity, serve the capital positioning, further improve the risk resistance, and the quality of assets may continue to improve.
Continue to make efforts in the fields of “technology finance” and “cultural finance”, and the management is becoming more sophisticated. At present, there is not much pressure on asset quality, and the company is given zero.
8 times the 19-year PB target estimate; the net profit growth rate for 19/20 is expected to be 8.
3% / 8.
7%, corresponding to expected 7.
16 yuan, maintain “highly recommended” level.
Risk warning: the decline of economic stall will lead to deterioration of asset quality; external changes in regulatory policies are expected.