Source: Beijing Business Daily
In 2023, the banking industry will encounter operating pressure. Some listed banks will "increase profits but not incomes", and the net interest margin will generally narrow and intensify. In 2024, the plight will not change with the arrival of the new year. In the environment where market interest rates are low and the recovery momentum of the real economy remains to be consolidated, the profit space will become increasingly limited.
This time, it is still Ping An Bank Take the lead in handing in the "answer sheet". In the first quarter of 2024, the bank's net profit increased by 2.3% year on year, showing a certain resilience, but its operating revenue continued the decline of the previous year, showing a double-digit year-on-year decline. The net interest margin is also in the downward phase, down 0.37 percentage points. In terms of retail business, which has always been the focus of the market as "New King", the scale of consumer loans, business loans, credit cards and other sectors has also declined.
Still "increasing profits without increasing income"
Seen from the latest quarterly report, influenced by factors such as continuous interest transfer of the real economy and adjustment of asset structure, Ping An Bank achieved an operating income of 38.770 billion yuan in the first quarter of 2024, a year-on-year decrease of 14.0%. Through digital transformation to drive operation cost reduction and efficiency increase, strengthen asset quality control, and strengthen non-performing asset collection and disposal, the net profit was 14.932 billion yuan, up 2.3% year on year.
The phenomenon of "increasing profits without increasing income" did not start in the first quarter of this year, but actually appeared in 2023 and ran through the whole year. In the first quarter of 2023, Ping An Bank realized an operating income of 45.098 billion yuan, down 2.4% year on year; The net profit was 14.602 billion yuan, up 13.6% year on year.
Since then, the phenomenon of "increasing profits without increasing revenue" has continued. In the first half of 2023, the bank's operating revenue has declined by 3.7% year on year, and its net profit has increased by 14.9% year on year; In the first three quarters of 2023, affected by factors such as the continuous interest granting real economy and market fluctuations, the Bank's operating revenue fell by 7.7% year on year and its net profit increased by 8.1% year on year.
In 2023, Ping An Bank achieved operating revenue of 164.699 billion yuan, down 8.4% year on year, and net profit of 46.455 billion yuan, up 2.1% year on year.
In June last year, the former president of Ping An Bank stepped down, and Ji Guangheng took over the post and officially took the post of secretary of the Party committee and president of Ping An Bank. Shortly after the arrival of the "veteran" in the banking industry, he started a large-scale organizational restructuring, abolished the industry business department that had existed for ten years, abolished the retail business management departments in the eastern, northern and southern regions, and opened up resource allocation, This is also the first quarterly report data handed over by the new management.
At the previous 2023 annual performance conference, the management of Ping An Bank said frankly when talking about the performance of "increasing profits without increasing revenues", on the one hand, the interest margin narrowed, on the other hand, it was the economic environment since the second half of last year to actively control high-yield and high-risk businesses, which had an impact on short-term operating revenue.
In 2024, Ping An Bank also continued to adhere to the strategy of "temporarily giving up high operating income". Under the measures of continuing to yield profits to the real economy and adjusting the asset structure, in the first quarter of 2024, the bank's net interest margin was 2.01%, down 62 basis points from the same period last year, and down 37 basis points from 2.38% at the end of 2023.
Pan Helin, a well-known economist, said in an interview with the Beijing Business Daily that "increasing profits without increasing income" is related to the business structure of Ping An Bank and the current environment. Ping An Bank has many high interest risk products, which are seriously impacted in the current economic environment, and pressure drop and business structure optimization need a process, However, the current banking business is also in the stock game stage, and the adjustment is still difficult.
Negative growth of personal loans
It can be seen from the dismantling of the first quarterly report that the main business composition of Ping An Bank is divided into retail business, corporate business, inter-bank business and digital operation. As a "new king of retail", Ping An Bank's profit model in the past was often highly dependent on the interest income from personal loan business.
But now, there are different changes. In the first quarter, Ping An Bank's personal loan performance grew slowly. The balance of personal loans was 1878.130 billion yuan, down 5.0% from the end of the previous year. Except that the balance of housing mortgage loans was basically unchanged from the end of the previous year, the balance of business loans, consumer loans, and credit card receivables declined.
Among them, the balance of consumer loans was 510.72 billion yuan, down 6.3% from the end of the previous year, significantly exceeding the overall average. In the first quarterly report, Ping An Bank explained that "we should optimize the customer group structure, strengthen the acquisition of high-quality customers, and focus on expanding the medium and low risk customer group".
All kinds of signals confirm that this joint-stock bank, which is famous for marketization, is entering a period of adjustment. Ji Guangheng once said, "In doing business, we need to calculate the general ledger. Before that, during the process of retail transformation and economic boom, Ping An Bank had made a lot of high interest risk products. In the process of economic downturn, it had a great impact on retail business, so it faced certain retail pressure. Therefore, since 2023, Ping An Bank has taken compression measures for high-risk product retail, temporarily giving up high operating income and avoiding the window breaking effect of retail loans. ". Due to the consideration of improving the proportion of high-quality assets, the average yield of personal loans of Ping An Bank in the first quarter was 6.04%, down 103 basis points compared with the same period last year. The interest income of personal loans was 28.794 billion yuan, down 6.55 billion yuan compared with 35.344 billion yuan in the same period last year.
Liao Hekai, an analyst of Jinle Function, said in an interview with the Beijing Business Daily that the "increase in profits and no increase in income" of Ping An Bank in the first quarter was mainly due to the continuous adjustment of the bank's business structure, and the weak expansion intention. Focusing on strengthening risk control, increasing revenue and reducing expenditure, and strengthening operations to improve profit levels, Ping An Bank continued to reduce the business direction of high risk and high income, The interest income from personal loans accounted for a high proportion, and the decline in this part of business was the main reason for the decline in operating income.
Against the background of shrinking personal loans, the growth of corporate loans has become the main driving force for Ping An Bank to increase its total loans. By the end of March 2024, the balance of corporate loans of the Bank had amounted to 1603.958 billion yuan, an increase of 12.2% over the end of the previous year.
Ji Guangheng once said frankly, "In 2024, the pressure of Ping An Bank's corporate business will be on deposits, and the pressure of its retail business will be on loans. At present, the recovery growth of corporate deposits and loans is very good, and the capital business is also good. Corporate and retail need to help each other, hoping that corporate business can top up, and strive for breathing opportunities for retail".
From the perspective of business performance in the first quarter, the corporate business of Ping An Bank has been on the top. From the strategic perspective, the Bank also emphasized that it should focus on core customer groups, go deep into the industry scene, make a forced industrial, differentiated and comprehensive product portfolio, use the ability of "finance+technology" to constantly innovate the business model, optimize the financial service experience, and improve the customer's comprehensive service ability.
Where is the next step?
The top students of this retail bank have entered a period of deep adjustment and cultivation. From the perspective of key indicators of asset quality, as of the end of the first quarter of 2024, the non-performing loan ratio of Ping An Bank was 1.07%, up 0.01 percentage points from the end of the previous year.
As for all kinds of loan businesses, under the background of insufficient consumer market momentum and rising personal credit risk, the asset quality of Ping An Bank in this field was impacted. The non-performing rate of consumer loans was 1.39%, up 0.16 percentage points from the end of last year; The non-performing rate of operational loans was 0.88%, up 0.05 percentage points from the end of last year, which also showed that the uncertainty of the operating environment of small and micro enterprises had an impact on the bank's loan quality.
In the first quarterly report, Ping An Bank disclosed that 17.687 billion yuan of loans had been written off, up 12.1% year on year; The total amount of non-performing assets recovered was 8.596 billion yuan, including 5.992 billion yuan of the principal of non-performing assets recovered and written off. In the future, we will closely follow the changes in the macro situation, continue to strengthen control measures, maintain a good level of risk offset, firmly hold the risk bottom line, and ensure that asset quality is controllable.
From "leading by science and technology, retail breakthrough, and doing better for the public" to today's "strengthening retail, doing better for the public, and doing better for the industry", the "new king of retail" is not easy to wear. How Ping An Bank can strengthen its strategic objectives remains to be tested over time. For the performance of the first quarter, retail and public exhibition industry, the reporter of Beijing Business Daily contacted and interviewed the relevant people of the bank, but did not receive a positive response.
In Pan Helin's view, in the current stock game of the banking industry, if banks want to break through, they should not only reduce high risks, but also seek business innovation. Ping An Bank still considers more cooperation with online platforms to promote consumer loan business and intermediate business, and outlets and online work together to reverse the decline.
"In the next step, the retail business of Ping An Bank will still unswervingly adopt the strategy of reducing high-risk products and continue to promote business restructuring," said Liao Hekai.
Beijing Business Daily reporter Song Yitong
When the stock market recovers, open an account first! Intelligent fixed investment, condition sheet, individual stock radar... for you>>
Massive information, accurate interpretation, all in Sina Finance APP
