Changsha Bank (601577): Deposit growth picks up and asset quality improves

Changsha Bank (601577): Deposit growth picks up and asset quality improves
Event: On October 30, Changsha Bank disclosed three quarterly reports.In the third quarter of 19, operating income was 124.02 billion, up + 22.0%, which belongs to the net profit of shareholders of listed companies 41.4.8 billion, an increase of +11.2%.NPL ratio 1.24%, 5bp lower than the previous 1H19.Provision coverage ratio in the third quarter of 19 was 274.55%, loan-to-loan ratio of 3.39%.The average ROE for the third quarter of 19 was 12.88%, down by 1 every year.87 units.The asset budget was 5,919 trillion, an increase of 12 earlier.40%. Opinion: The revenue growth rate is growing rapidly, and the interest margin is under pressure for 3Q19 revenue YoY + 22.0%, down 4 from the previous 1H19.4%, in line with industry trends, and still maintained at a high level; net profit attributable to mother YoY + 11.2%, slightly lower than the previous 1H19 (12%). Profit growth mainly comes from scale growth, non-interest income and cost savings. The interest rate differential has decreased from the previous quarter.We estimate that the net interest margin in 3Q19 is 2.32%, a decrease of 6 bp compared to the previous 1H19, mainly due to the decline in the rate of return on interest-earning assets.We estimate that the income from interest-earning assets will increase by 4 in 3Q19.81%, a decrease of 12 BP from 1H19, is expected to be caused by the increase in the lending interest rate, which is expected to continue to decline slightly in the future. The asset structure was optimized, and the proportion of debt risk mitigation loans increased.The ratio of loans to interest-earning assets in the third quarter of 19 was 42.32%, 1 higher than 1H19.83 bonds; bond investment ratio was basically the same as 1H19; issue and deposit ratio was 6.79%, down from the previous month.69 units; interbank investment accounted for 1.45%, a decrease of 1 from 19H19.37 units. The growth rate of deposits rose.In the third quarter of 1919, it absorbed 3757 deposits.10,000 yuan, an increase of 10 in ten years.34%, a growth rate of 1 higher than 1H19.33 units.In the third quarter of 19, the proportion of deposits to interest-bearing debt was 67.87%, a decrease of 0 from the previous 1H19.21 units.The growth rate of deposits returned to normal (the only increase at the end of 18 years1.4%), market demand eased. The quality of assets improved, and the provision coverage ratio decreased month-on-month.24%, 4bp lower than 1H19.Pay attention to the loan ratio 2.51%, a decrease of 39bp from the end of 18 years, or caused by the downward migration of interest-oriented loans after writing off non-performing loans Provisions have declined.Provision coverage ratio in the third quarter of 19 was 274.55%, a decrease of 11 from 1H19.09 averages, more than 22 in 3Q18.41 units.Loan ratio of 3.39%, 30bp lower than the previous 1H19. Investment suggestion: Reduce deposit relief and maintain “overweight” rating. Changsha Bank changed its average ROE to 17 in 3Q19.17% (annualized), maintaining a high level.Revenue and net income attributable to mothers continued to grow better since 1H19.Quarterly loan growth was as high as 28.3%, leading to further optimization of asset structure optimization, and the interest margin is still at a relatively high level among listed city commercial banks.We forecast the company’s 返回码: 500 网站打不开?重查 19/20 net profit growth to be 10.9% / 9.9%.Maintain Changsha Bank’s target assessment 1.29 times 19 PB, corresponding to 13.13 yuan / share, maintaining the “overweight” rating. Risk warning: the quality of assets deteriorates badly; deposits grow less than expected.