Breaking trillions!, Another City Commercial Bank
China Fund News reporter Yi Shan
On the evening of September 21, Changsha Bank disclosed the latest data, which showed that as of August 31, 2023, the total assets of the bank had exceeded one trillion yuan, reaching 1009.756 billion yuan, becoming the first listed trillion yuan city commercial bank in Hunan and central China.
It is worth noting that the semi annual report data released by Chengdu Bank previously showed that the total assets of the bank at the end of the reporting period also exceeded one trillion yuan. At this point, two city commercial banks have achieved the goal of exceeding one trillion yuan in asset size this year, and the number of A-share trillion yuan city commercial banks has increased to eight.
Changsha Bank's total assets have exceeded the trillion yuan mark
On the evening of September 21, Changsha Bank issued a voluntary disclosure announcement regarding its business situation. As of August 31, 2023, the total assets of the bank were 1009.756 billion yuan, an increase of 105.023 billion yuan or 11.61% compared to the end of the previous year, and the total asset size of the bank exceeded one trillion yuan. At this point, Changsha Bank has become the first listed trillion yuan city commercial bank in Hunan and central China.
As early as 2015, Changsha Bank proposed a ten-year development strategy of "doubling in three years, surpassing the trillion yuan in ten years, leading the central and western regions, and advancing to the top twelve". According to the bank's 2023 semi annual report data, as of June 30 this year, the total assets of Changsha Bank have approached trillions of yuan, reaching 998.248 billion yuan. With the latest announcement, the bank achieved its strategic goal of "trillion yuan" assets two years ahead of schedule.
According to official website information, Changsha Bank was established in May 1997 and is the first regional joint-stock commercial bank and the largest corporate financial enterprise in Hunan Province. It was listed on the main board of the Shanghai Stock Exchange on September 26, 2018 and is the first listed bank in Hunan Province.
From the financial report data of the five years since its listing, Changsha Bank's profitability has steadily improved, with revenue increasing from 13.941 billion yuan in 2018 to 22.868 billion yuan in 2022, an increase of 64%; The net profit increased from 4.479 billion yuan in 2018 to 6.811 billion yuan in 2022, an increase of 52%. In terms of asset quality, the non-performing loan ratio of the bank has achieved four consecutive decreases since its listing; The provision coverage rate has also been continuously increasing, from 275.40% in 2018 to 313.01% by the end of June 2023.
According to the evaluation results of the "Top" evaluation system for the stable development ability of commercial banks in 2022 released by the Industry Development Research Committee of the China Banking Association, Changsha Bank scored a comprehensive score of 84.7 points, ranking seventh on the national list of urban commercial banks.
Changsha Bank stated in its latest announcement that since 2023, the bank has fully implemented the spirit of the 20th National Congress of the Communist Party of China, actively responded to national macroeconomic policy requirements, actively responded to various external risks and challenges, made steady progress in business development, served entities with promising responsibilities, and implemented solid and effective risk prevention and control, presenting a stable and positive development trend.
Two new companies were added within the year, and the number of A-share trillion city commercial banks increased to 8
It is worth noting that according to the semi annual report data previously released by Chengdu Bank, as of the end of June 2023, the total assets of the bank reached 1028.251 billion yuan, which also exceeded one trillion yuan for the first time. At this point, two city commercial banks have achieved the goal of exceeding one trillion yuan in asset size this year, and the number of A-share trillion yuan city commercial banks has increased to eight.
In addition to the two newly recruited employees mentioned above, as of the end of the first half of this year, among the 17 listed city commercial banks in A-shares, the remaining 6 trillion yuan city commercial banks are Bank of Beijing, Bank of Jiangsu, Bank of Shanghai, Bank of Ningbo, Bank of Nanjing, and Bank of Hangzhou. Among them, Bank of Beijing, Bank of Jiangsu, and Bank of Shanghai all have asset sizes exceeding 3 trillion yuan, ranking in the first tier; Both Ningbo Bank and Nanjing Bank have asset sizes exceeding 2 trillion yuan, ranking in the second tier; The asset size of Hangzhou Bank reached 1.74 trillion yuan.
From the perspective of asset growth rate, except for Xiamen Bank, the total assets of 16 urban commercial banks have all increased to varying degrees compared to the beginning of the year, with four banks including Jiangsu Bank, Chengdu Bank, Changsha Bank, and Suzhou Bank increasing by more than 10%.
On the other hand, based on the comprehensive semi annual report data, the overall performance of A-share listed city commercial banks in the first half of the year was stable. Among them, 13 urban commercial banks achieved year-on-year revenue growth, and 6 banks including Qingdao Bank, Changsha Bank, and Chengdu Bank saw growth rates exceeding 10%; Fifteen urban commercial banks achieved year-on-year growth in net profit, with four banks including Jiangsu Bank, Hangzhou Bank, Chengdu Bank, and Suzhou Bank increasing by over 20%.
In terms of non-performing loan ratios, the non-performing loan ratios of 15 urban commercial banks have steadily decreased compared to the end of last year, and 7 banks have non-performing loan ratios below 1%. There are 13 urban commercial banks with an increase in provision coverage compared to the end of last year. In addition, in terms of net interest margin, 15 city commercial banks saw a narrowing of their net interest margin in the first half of the year compared to the end of last year.
However, it is worth noting that since September, following the successive cuts in fixed deposit interest rates by state-owned banks and joint-stock banks, several city commercial banks, including Bank of Beijing, Bank of Shanghai, and Bank of Suzhou, have followed suit. Industry insiders believe that the reduction in deposit interest rates may help alleviate the pressure of narrowing the net interest margin of urban commercial banks.
According to a research report by Guojin Securities, nearly half of the banks listed in the 2023 interim report showed that their net interest margin was below 1.8%, below the agreed level. Lowering deposit interest rates helps banks maintain reasonable profit and net interest margin levels, enhancing the sustainability of supporting entities.
According to a research report by Zhongtai Securities, taking into account the current round of deposit and loan adjustments, the reduction in deposit interest rates can effectively mitigate the impact of the reduction in mortgage interest rates. The impact on the net interest margin of listed banks is less than 2.4 BP, and the impact on the interest margin of rural commercial banks, urban commercial banks, joint-stock banks, and state-owned banks is+0.9 BP,+0.0 BP, -2 BP, and -2.86 BP, respectively. This means that it may have a positive impact on the rural commercial bank and urban commercial bank sectors.
