Net profits of 18 banks fell by more than 30% last year, and 100 trust banks fell by more than 2000% year-on-year

Net profit of 18 banks fell by more than 30% last year

Author: Chen Hongjie

[Benefiting from the increasingly comprehensive economic recovery and the slowdown of asset growth, Bank of China The quality of industrial assets will remain stable. However, after the normalization of epidemic prevention and control, economic uncertainty will still be high, so some asset risks still exist. The structural adjustment after the epidemic will increase the non-performing loan generation rate, and banks will use their high loan loss provisions to accelerate the disposal of bad debts.]

[Last year, commercial banks achieved a cumulative net profit of 1.94 trillion yuan, down 2.7% year on year.]

The impact of the epidemic and the regulatory requirements for banks to strictly identify non-performing assets led to a decline in net profits of many banks in 2020. According to incomplete statistics of First Finance, the net profits of nearly 20 banks last year fell by more than 30% compared with 2019, such as Baixin Bank, Harbin Bank, Tianlin Rural Commercial Bank, Shengjing Bank, Changji Rural Commercial Bank, etc.

In terms of non-performing ratio, although the asset quality of some listed banks has deteriorated, the overall quality of listed banks has improved. In addition, the asset quality of unlisted banks did not deteriorate significantly last year compared with 2019. The asset quality of the whole banking industry is relatively stable.

Increase provision and write off of non-performing products, and strictly identify non-performing products

Last year, commercial banks achieved a cumulative net profit of 1.94 trillion yuan, down 2.7% year on year. Net profits of 18 banks declined significantly by more than 30%. It is important to increase the provision and write off of non-performing loans, and strictly identify non-performing loans.

The main financial data of Baixin Bank in 2020 showed that the total assets were 66.473 billion yuan, up 12.93% from the end of the previous year; Total liabilities were 59.9 billion yuan, up 7.7% from the end of the previous year; The net profit was - 388 million yuan, down 2063.5% year on year, compared with 20 million yuan in 2019. The non-performing rate was 1.66%, and the provision coverage rate was 229%.

According to the performance of last year, Li Rudong, president of Baixin Bank, said: "The temporary loss in 2020 is our financial initiative. If Baixin Bank withdraws according to 150% of the provision coverage rate, it can make a profit of more than 100 million in 2020, but did not do so. We have made profits in the first quarter of this year, and it is expected that the revenue and profits of the whole year will increase significantly."

Harbin Bank and Shengjing Bank also saw a sharp decline in net profit. According to the data of Harbin Bank in 2020, although its net interest margin was 2.18%, up 0.16 percentage points over the previous year, and its net interest yield was 2.20%, up 0.10 percentage points over the previous year, the net profit of Harbin Bank last year was 750 million yuan, down 79% year on year.

The main reason is that the credit impairment loss of Harbin Bank last year was 8.3014 billion yuan, with a year-on-year increase of 3.121 billion yuan, or 60.2%. "In accordance with the relevant requirements of the regulatory authorities, taking into account the impact of the epidemic and the economic environment and other uncertainties, we continued to accrue the provision for asset impairment in accordance with the dynamic principle. At the same time, we strengthened the disposal of non-performing loans, and the increase in the amount of non-performing loans written off led to a corresponding increase in impairment losses." Harbin Bank said.

At the end of last year, the non-performing loan ratio of Harbin Bank was 2.97%, an increase of 0.98 percentage points; The core tier one capital adequacy ratio, tier one capital adequacy ratio and capital adequacy ratio were 10.18%, 10.20% and 12.59%, respectively, down 0.04, 0.04 percentage points and up 0.06 percentage points from the end of last year.

In 2020, Shengjing Bank's net profit declined significantly due to the inclusion of all loans over 90 days overdue and loans with non-performing characteristics into non-performing loan management. According to the data, Shengjing Bank realized a net profit of 1.2 billion yuan last year, down 78%. The proportion of loans overdue for more than 90 days in non-performing loans decreased significantly by 131 percentage points to 91% compared with the end of 2019.

The only big state-owned bank and joint-stock bank whose net profit declined by more than 30% is Minsheng Bank 。 Data shows that in 2020, Minsheng Bank will achieve an operating revenue of 184.951 billion yuan, up 2.50% year on year; The net profit attributable to the shareholders of the parent company was 34.309 billion yuan, down 36.25% year on year; The average return on total assets and weighted average return on net assets were 0.51% and 6.81% respectively. Credit impairment loss was 92.988 billion yuan, up 30.181 billion yuan or 48.05% year on year. Of which, loan impairment loss was 76.990 billion yuan, up 16.14 billion yuan year on year; The impairment loss of financial investment was 10.884 billion yuan, with a year-on-year increase of 10.250 billion yuan.

It is worth noting that although the credit impairment loss of Minsheng Bank exceeded 90 billion yuan last year, the non-performing loan ratio at the end of last year was 1.82%, up 0.26 percentage points from the end of last year. The total amount of non-performing loans was 70.049 billion yuan, up 15.615 billion yuan from the end of last year; The total amount of special mention loans was 114.676 billion yuan, an increase of 11.391 billion yuan over the end of the previous year. The proportion of special mention loans was 2.98%, an increase of 0.02 percentage points over the end of the previous year. The provision coverage rate was 139.38%, down 16.12 percentage points from the end of the previous year.

On April 2, Gao Yingxin, Chairman of Minsheng Bank, said at the 2020 annual performance presentation meeting: "In 2020, on the basis of continuing to downgrade the loans overdue for more than 90 days to non-performing loans, we further implemented the requirement to downgrade the loans overdue for more than 60 days to non-performing loans in principle, and the deviation between 60 days overdue and non-performing loans at the end of the year was less than 100%, reflecting asset quality level more prudently. In addition to the number of days overdue, the Bank also prudently downgraded the business whose book is not yet due or overdue for less than 60 days but has exposed certain risk characteristics in strict accordance with the requirements of the risk classification system to non-performing loans. At the same time, we increased the provision for loans, further strengthened the write off of non-performing loans, and further consolidated the quality of assets. "

The quality of some assets deteriorated, but remained stable as a whole

Although the non-performing ratio of Minsheng Bank, Shengjing Bank and Harbin Bank among the above banks has increased, the overall asset quality of listed banks has improved.

　　 CSC According to the research report data, the non-performing ratio of listed banks in the fourth quarter of 2020 dropped by 2BP to 1.49% quarter on quarter, and state-owned banks rose slightly. The identification of non-performing loans of state-owned banks was the most stringent, resulting in a slight increase in non-performing loans, but the increase slowed down. At the end of the fourth quarter of 2020, the deviation of non-performing loans of state-owned banks was only 55.4%, the lowest among all types of banks. The non-performing ratio of state-owned banks, joint-stock banks and rural commercial banks increased by 2BP, decreased by 15BP, and decreased by 2BP to 1.50%, 1.45%, and 1.22% quarter on quarter respectively.

"Last year, the proportion of non-performing+special mention loans of listed banks improved significantly. Among them, the proportion of non-performing+special mention loans of banks at the end of the year was 3.51%, down 16BP month on month, down 22BP from the end of last year. The most significant improvement in the whole year was the three rural commercial banks in southern Jiangsu, followed by joint-stock banks, and finally by big banks. Among the big banks, Bank of Communications saw the largest decline, down 55BP from the end of last year; Among the stock banks, Ping An saw the largest decline, down 136BP from the end of the previous year; Among the three agricultural and commercial banks in southern Jiangsu, the largest decline was Jiangyin Bank , a decrease of 125BP. " The above research report shows that.

Among the unlisted banks, First Financial Statistics found that by the end of 2020, although the non-performing rate of Huichuan Rural Commercial Bank and Yinjiang Rural Commercial Bank exceeded 4%, overall, the asset quality in 2020 did not deteriorate significantly compared with 2019.

Moody's said in its recent outlook that the asset quality of China's banking industry will remain stable thanks to the increasingly comprehensive economic recovery and the slowdown of asset growth. However, after the normalization of epidemic prevention and control, economic uncertainty will still be high, so some asset risks still exist. The structural adjustment after the epidemic will increase the generation rate of non-performing loans, and banks will use their high loan loss provisions to accelerate the disposal of bad debts.

According to the data of the CBRC, in 2020, the banking industry disposed 3.02 trillion yuan of non-performing assets. Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, recently said that the disposal of non-performing loans would remain unchanged in 2021, even more than in 2020.