Recently, banking stocks, especially the "Chinese prefix" bank, China CITIC Bank (601998.SH, 00998. HK), performed well. On April 17, the trading limit was closed and hit again on April 18, ending up 9.08% at 7.93 yuan per share. Looking back this year, CITIC Bank's A-share has risen by about 50%, far ahead of the joint-stock banks and even the 42 A-share listed banks, and its share price continues to hit a new stage high.
After the market closed on the 18th, CITIC Bank said to the media when responding to the abnormal fluctuation of stock price that the company was operating steadily and would maintain a stable dividend ratio without disclosing the undisclosed content.
According to the analysis of many institutions, the main focus of the current market on banking stocks is still defensive characteristics, low value and high dividends. The new "National Ninth Rule" further drives sentiment. Since last year, the banking sector has gone through a good market under the leadership of large state-owned banks. This year, CITIC Bank has gained more momentum. Among joint-stock banks, the growth rate was about 30 percentage points higher than that of China Merchants Bank (600036. SH, 03968. HK), which was the most favored capital in the past. Over the same period, the growth rate of Minsheng Bank (8.56%) and Industrial Bank (0.56%) was less than 10%.
Behind the differentiation of stock price trend, the fundamental performance of last year's resumption has also shown signs of differentiation. From the data of the annual report that has been disclosed so far, the ranking of the top three banks in terms of asset size changed last year, and CITIC Bank surpassed SPDB to enter the top three; The three most profitable joint-stock banks are still China Merchants Bank, Industrial Bank and CITIC Bank. In terms of revenue, except for Zheshang Bank, the eight joint-stock banks showed negative growth, and the net profit attributable to the parent company of three joint-stock banks showed negative growth, of which two showed a double-digit decline. Zheshang, CITIC, China Merchants Bank and Huaxia maintained a growth rate of more than 5%.
The asset ranking changes and the profitability is difficult
By the end of last year, the total asset size of nine A-share listed joint-stock banks had reached 66.68 trillion yuan, an increase of 7.45% over the end of last year. Among them, the asset growth of five banks, including China Merchants Bank, was higher than the average growth rate, while the growth rate of CITIC Bank, Shanghai Pudong Development Bank, China Minsheng Bank and Ping An Bank was lower than the average.
From the absolute value of asset scale, the asset scale of the nine joint-stock banks has reached more than 3 trillion yuan at present. However, last year, the number of joint-stock banks ranked second, with China Merchants Bank still ranking first with 11.03 trillion yuan, Industrial Bank also jumped to the level of 10 trillion yuan, and continued to rank second. China CITIC Bank surpassed Shanghai Pudong Development Bank and entered the top three, with total assets at the end of the period of 9.05 trillion yuan.
Consistent with the industry trend, the joint-stock banks as a whole faced more severe profit pressure last year, but different from the big banks that increased profits without increasing revenue, the operating revenue of the nine joint-stock banks as a whole decreased by about 58.7 billion yuan, down about 3.68% year on year, and the net profit attributable to the parent company also decreased by about 15 billion yuan, down 2.96% in the same period.
Specifically, the profits of three banks, Shanghai Pudong Development Bank (- 28.28%), China Everbright Bank (- 8.96%) and Industrial Bank (- 15.61%), declined; In the same period, as the only joint-stock bank with positive revenue growth, the net profit attributable to the parent company increased by 10.51% against the trend; China CITIC Bank (7.91%), China Merchants Bank (6.22%), Huaxia Bank (5.3%), Ping An Bank (2.06%) and Minsheng Bank (1.57%) also maintained positive growth, but the growth difference was large.
At present, Shanghai Pudong Development Bank has only disclosed the performance report. From the financial report information of Industrial Bank and Everbright Bank, although the narrowing of interest margin and the pressure on the middle income and other factors affect the profitability, the losses of both are related to the increase of bad provision against the trend, and the disclosure of performance once caused the stock price to fall sharply. （ For details, please refer to the report "What factors caused the negative profit growth of joint-stock banks after the sharp fall of Xingye?" ）
From the perspective of profit influencing factors, among the seven joint-stock banks that have disclosed their annual reports, the net interest margin has declined to varying degrees, of which Ping An Bank has declined by 37BP at the largest, while Everbright Bank, China Merchants Bank and Zhejiang Merchants Bank have declined by 27BP, 25BP and 20BP respectively. At present, Ping An Bank, China Merchants Bank and Zhejiang Merchants Bank maintain the net interest margin above 2%, while CITIC Bank, Everbright Bank and Minsheng Bank have all been below 1.8%.
Against this background, the net interest income of 5 of the above 7 joint-stock banks fell last year, and only Zheshang Bank and Industrial Bank increased year on year; In terms of medium income, as the main component of net income from commission and commission, affected by wealth management and asset management business, the other six joint-stock banks except Zhejiang Merchants Bank all decreased in varying degrees, including Industrial Bank, CITIC Bank, Everbright Bank and China Merchants Bank, which decreased by 38.38%, 12.70%, 11.38% and 10.78% respectively.
In terms of asset quality, 7 of the 9 joint-stock banks improved, the non-performing ratio of Everbright Bank was the same as that at the end of last year, while the non-performing ratio of Ping An Bank increased by 0.01 percentage points. By the end of last year, the balance of non-performing loans of seven joint-stock banks with comparable data was about 358.1 billion yuan, an increase of 9.1 billion yuan over the end of last year, with a growth rate of 2.61%, slowing down compared with 2022.
What are the levels of dividends, valuation and dividend yield
In the capital market, since last year, the defensive characteristics of bank shares have been particularly favored, and the sector has outperformed under the leadership of large state-owned banks. In 2024, the banking sector continued to rise against the trend of turbulence. As the "leader", CITIC Bank has increased by nearly 50% since this year. Other banks with the highest growth rate are urban commercial banks and rural commercial banks.
In the view of many institutions, the main line of this round of bank stock market is still undervalued and high dividends due to the downward interest rate and strong risk aversion. The tradition of large cash dividends has become an important safety pad in the volatile market. According to the 2023 annual report, 22 listed banks that have disclosed dividend plans so far have proposed a total cash dividend of nearly 560 billion yuan.
Among them, except that the state-owned big banks, as the largest dividend holders in the A-share market, have a total dividend of more than 410 billion yuan, seven joint-stock banks have a total planned dividend of about 127 billion yuan, of which the total dividend of China Merchants Bank is close to 50 billion yuan, and that of Industrial Bank is about 21.6 billion yuan. In addition, the dividend amount of CITIC Bank, Ping An Bank and Everbright Bank also exceeded 10 billion yuan. China Merchants Bank and Ping An Bank paid dividends of more than 1 yuan per share, and Ping An Bank (0.719 yuan) and CITIC Bank (0.356 yuan) paid dividends of more than 0.35 yuan per share.
From the perspective of dividend ratio, the dividend ratio of four joint-stock banks was more than 30%, the dividend ratio of China Merchants Bank increased by two percentage points to 35.01% compared with the previous year, Ping An Bank increased from 12% to 30% (denominator caliber is attributable to the bank's shareholders' net profit), and the dividend ratio of Zhejiang Merchants Bank decreased from 37.79% of the previous year to 31.98%. The dividend ratio of CITIC Bank, Everbright Bank and Industrial Bank is between 28% and 30%, of which the dividend ratio of the latter two is slightly higher than that of the previous year.
However, as the banking sector continues to rise, the market is divided on whether the high dividend market can continue. According to the latest closing day stock prices, 15 of the 22 listed banks that have disclosed their annual reports for 2023 still have dividend yields of more than 5%, of which Ping An Bank, Industrial Bank and Chongqing Rural Commercial Bank have dividend yields of more than 6%. From the perspective of joint-stock banks alone, the dividend yield of CITIC Bank, which has the largest share price increase at present, has dropped to below 5%, 4.48%, more than 2 percentage points lower than that at the beginning of the year.
However, in the context of the new "National Ninth Article", the market still expects to increase the dividend distribution of bank shares, which is also considered by some institutions as one of the supporting factors of this round of market, and CITIC Bank, as a "Chinese character" joint-stock bank, is more concerned. Previously, the Opinions on Strengthening the Supervision of Listed Companies (for Trial Implementation) issued by the CSRC mentioned that listed companies are encouraged to pay dividends more than once a year.
After trading on the 18th, CITIC Bank said to the media that it would maintain a stable dividend ratio and return to investors when responding to the abnormal fluctuations of stock prices.
From the information disclosed in the bank's financial report and performance last year, at present, only CCB executives mentioned that the 30% dividend ratio should not change, and said that they were studying, considering various factors such as shareholders' will, capital replenishment, regulatory requirements and long-term sustainable development, to strive for compliance with the law and actively and orderly promote medium-term dividend.
From the perspective of valuation level, the overall net breaking situation of bank shares has not been broken. By the end of April 18, China Merchants Bank's price to book ratio (PB) had risen to more than 0.9 times. CITIC Bank ranked second among joint-stock banks with 0.7 times PB, Ping An Bank and Zheshang Bank PB were about 0.5 times, and Shanghai Pudong Development Bank and Minsheng Bank PB were below 0.4 times.
