Wen/Rui Finance Xu Shumin
The new management led by Chairman Zhang Weizhong made its debut at the SPDB Performance Meeting.
The market is waiting for the answer of Zhang Weizhong, the new helmsman, on how to operate, position, optimize and upgrade the strategy of SPDB.
In the past year, Shanghai Pudong Development Bank was faced with the operational pressure of transformation and development, with both revenue and net profit attributable to the parent company falling, and its profitability was questioned. In addition, the management changes frequently, and the Chairman, Vice Chairman, President and Vice President successively resigned during the year, which caused internal shocks and made the market even more uneasy.
At present, the position of President of SPDB is still vacant.
There are reasons for concern. Shanghai Pudong Development Bank used to be among the top three joint-stock banks in terms of "corporate business", but its performance has declined in recent years.
The average yield of loan business is falling, and the deposit business needs to be stabilized with the advantage of interest rate, which shows the operating pressure of SPDB.
In particular, the proportion of loans invested in the real estate industry is still rising, the non-performing loan rate of the real estate industry is rising, and risks still exist.
After the establishment of the new management, Shanghai Pudong Development Bank has constantly launched a "battle" to face the pressure of performance and pay close attention to the four goals of investment, revenue, comprehensive revenue and clearing.
But Zhang Weizhong also said frankly, In the face of large state-owned banks with strong comprehensive competitive advantages and small banks with intensive cultivation in localization, joint-stock banks are in the "sandwich". Therefore, joint-stock banks need to find their own advantages.
Profit declines year after year
For four consecutive years, the net profit attributable to the parent company of SPDB has declined. From 2020 to 2022, SPDB's net profit attributable to the parent company 0.99%, 9.12% and 3.46% respectively.
In 2023, the net profit attributable to the parent company of Shanghai Pudong Development Bank will continue to decline, with the largest decline. The 2023 annual report shows that the operating revenue of SPDB is 173.434 billion yuan, down 8.05% year on year; The net profit attributable to the shareholders of the parent company was 36.702 billion yuan, A year-on-year decrease of 28.28%.
The revenue and net profit attributable to the parent company decreased year on year, Shanghai Pudong Development Bank, which once ranked among the top three joint-stock banks, has been "weak" in growth. According to statistics, in 2023, among the 42 A-share listed banks, there will be 8 banks whose operating income and net profit attributable to the parent company will decline, and Shanghai Pudong Development Bank is one of them.
With regard to the decline in profits, SPDB explained that the company's performance indicators were under pressure at different stages due to the impact of asset repricing, downward market interest rates, capital market fluctuations, insufficient momentum for the company's credit growth, business restructuring and other factors.
From the perspective of profitability indicators, the lack of earnings momentum of SPDB has already appeared.
Its weighted average return on equity has declined for five consecutive years, From 12.29% in 2019 to 5.21% in 2023; The net interest margin has also continued to narrow for many years. From 2019 to 2023, these data are 2.27%、1.96%、1.77%、1.72%、1.49%。
To some extent, the higher the net interest margin, the stronger the profitability of banks. The declining net interest margin of Shanghai Pudong Development Bank reflects that its profitability has declined year by year.
Annual report disclosure, By the end of 2023, the net interest margin (net interest yield) of SPDB will be 1.52%, a decrease of 25bps compared with the end of last year. Among them, the main reason for the decline of net interest margin is that the loan end yield decreased by 29bps year-on-year due to such factors as fee and interest reduction, LPR reduction, and stock housing loan interest rate reduction.
By region, the revenue of the head office accounted for 39.04%, but the operating profit was -1425 million yuan; The revenue of the Yangtze River Delta accounted for 22.13%, but contributed 56.33% of the operating profit; The proportion of operating profit contribution in the Pearl River Delta, Haixi region, Bohai Rim region, Northeast region and overseas regions is higher than that of revenue.
The head office has negative operating profit, or it is related to the decline of exchange gains and losses, credit card business, etc.
From the point of view of network construction data, The total number of employees of the Head Office was 19700, while the number of credit card centers accounted for 54.3%. By the end of 2023, Pudong Development Bank had issued 103 million credit cards in total and 48.3761 million credit cards in circulation, down 5.76% from the end of the previous year; The balance of credit cards and overdrafts was 385.617 billion yuan, down 11.09% from the end of the previous year.
In 2023, the credit card transaction volume will be 2.26 trillion yuan, A year-on-year decrease of 6.13%; The total income of credit card business was 40.659 billion yuan, A year-on-year decrease of 7.03%.
In the first quarter of this year, the parent net profit of SPDB showed signs of recovery. During the period, Shanghai Pudong Development Bank realized an operating revenue (group standard) of 45.328 billion yuan, down 5.72% year on year, and a net profit attributable to shareholders of the parent company of 17.421 billion yuan, up 10.04% year on year.
However, such growth may lie more in the contribution of investment profits and losses. In the first quarter of 2024, the profits and losses generated from the derecognition of financial assets measured at amortized cost by SPDB were 2.354 billion yuan, an increase of 2.215 billion yuan year-on-year.
Bad risk of real estate
In recent years, SPDB has focused on balancing the non-performing loan rate and improving its ability to resist risks.
The 2023 financial report disclosed that the annual net cash receipts reached a new high, The balance of non-performing loans and non-performing loan ratio have dropped for four consecutive years.
In terms of asset quality improvement, it has achieved some success. The 2023 annual report disclosed that the non-performing loan balance of SPDB at the end of the period was 74.198 billion yuan, a decrease of 421 million yuan from the end of the previous year; The non-performing loan ratio was 1.48%, down 0.04 percentage points from the end of last year; The provision coverage rate was 173.51%, up 14.47 percentage points from the end of last year.
However, a closer look at the financial report shows that the non-performing loan ratio of SPDB's corporate loans has declined, while the non-performing loan ratio of retail loans is on the rise.
By the end of 2023, the non-performing loan ratio of SPDB's corporate loans was 1.67%, compared with 1.91% at the end of the previous year; The non-performing loan ratio of retail loans was 1.42%, compared with 1.29% at the end of last year.
Among them, The balance of personal housing loans was 838.152 billion yuan, and the amount of non-performing loans was 5.171 billion yuan. The non-performing loan ratio was 0.62%, up 0.1 point over the previous year, The non-performing ratio of other retail loans declined.
On the other hand, among the details of SPDB's corporate loans, the non-performing loan rate of the real estate business also increased.
At the end of the reporting period, The balance of real estate loans of SPDB was 345.744 billion yuan, accounting for 6.89% of the total loans, and the non-performing loan ratio was 4.11%, Compared with the end of last year, the loan ratio was 6.57% and the non-performing loan ratio was 3.06%.
The real estate industry is also the industry with the highest non-performing rate in which SPDB invests in the enterprise loan industry.
According to the explanation of Shanghai Pudong Development Bank, during the reporting period, the company supported rigid and improved housing demand in accordance with the requirements of housing related policies of the regulatory authorities, Further increase support for the construction of "three major projects" such as affordable housing, and maintain a reasonable growth in the scale of housing related loans throughout the year.
The real estate industry is still in the process of in-depth adjustment, and the risks of loans to the real estate industry still exist.
In addition to the loan business, SPDB is also trying to stabilize the scale of deposits.
Last year, the deposit growth rate of SPDB was higher than the loan growth rate. By the end of 2023, the total loans of SPDB had reached 5017.754 billion yuan, an increase of 2.39% over the end of the previous year, and the total deposits had reached 4984.630 billion yuan, an increase of 3.28% over the end of the previous year.
In 2023, the deposit interest rate of each bank will be lowered, but SPDB will still maintain its interest rate advantage. During the reporting period, SPDB's customer deposit interest expense was 105.378 billion yuan, up 8.83% over the previous year, The average cost rate of customer deposits was 2.16%, up 0.06 percentage points over last year.
For example, the average cost rate of Shanghai Pudong Development Bank's corporate customers' demand deposits will rise from 1.43% in 2022 to 1.49% in 2023, and the average cost rate of fixed deposits will rise from 2.63% in 2022 to 2.77% in 2023.
On the other hand, the average rate of return on loans is declining.
The corporate loan yield will decline from 3.91% in 2022 to 3.85% in 2023, The average yield of retail loans will decline from 5.86% in 2022 to 5.3% in 2023.
In addition, last year, the investment interest income of SPDB was 65.896 billion yuan, up 6.35% over the previous year, The average rate of return on investment was 3.46%, down 0.08 percentage points over the previous year.
