Industrial Bank (601166): PPOP Continues High Growth and Stable Asset Quality

Industrial Bank (601166): PPOP Continues High Growth and Stable Asset Quality

Report Summary: Event: On October 29, Industrial Bank announced its 3Q19 financial report: net profit attributable to mother was 549.

100 million, a year-on-year increase of +8.

5%; revenue 1366.

100 million, a year-on-year increase of +19.

2%, annualized 杭州桑拿网 ROE 11.

72%, a decline of 0 per year.

25 averages.

At the end of September 19, total assets were 6.

98 trillion, non-performing rate 1.

55%, provision coverage ratio of 197.

87%, core tier 1 capital adequacy ratio9.


Opinion: Ten-year increase in net profit in the first three quarters.

5% is better than 1H18, mainly because PPOP maintains a high increase and the provisioning strength decreases.

The growth rate of the growth rate of net profit increased earlier than the previous interim report, which was mainly due to the fact that the growth rate of PPOP remained strong, and the provision and provisioning strength decreased slightly compared with the interim report.

In the first three quarters, PPOP increased by 22 in ten years.

0% (1H19 is 25.

4%), which is the highest level since the adjustment of the asset and liability structure in 16 years. The horizontal comparison is also better than the comparable peers in the disclosed three quarterly reports.

Under the current loose liquidity pattern, the continuous decline in the cost of interbank liabilities is the main contribution.

Net interest margin remained stable.

1H19 net interest margin (display value) 2.

0%, 1Q19 estimated net interest margin 2.


CITIC’s performance is better, mainly due to the credit card business and wealth management agency business.

Q3 credit continued to grow rapidly, with personal loans and bill assets as the mainstays.

In the third quarter of 19, the asset size decreased slightly from the previous quarter. From the perspective of asset allocation, Q3 continued to reduce investment and peers. Resources were tilted towards credit and loans increased by 20%.

0%, an increase of 15 over the beginning of the year.


The ratio of credit to interest-earning assets increased by 2 from the previous quarter.

1 up to 49.

7%, of which Q3 was mainly invested in bill assets and personal loans, which increased by 50 from the early stage.

5%, 19.

4%, an increase of 31.

8%, 6.

3%, or related to the lack of effective demand for public credit, and asset interest rates have fallen, the initiative to increase high-yield personal credit.

On the debt side, the structural structure continued to optimize. At the end of the third quarter, deposits increased slightly month-on-month, accounting for 59% of interest payment resistance, and continued to increase quarter-on-quarter.

Following the gradual tightening of the bad report in the interim report, the bad rate and concern rate are down from the previous month.

Non-performing rate in the third quarter of 1955%, down 1bp from the previous month; pay attention to the loan ratio of 1.

85%, a decrease of 3bps from the previous month; asset quality continued to be stable and good.

From an absolute level, the ratio of non-performing + concerned loans has also remained better among peers.

Full caliber provision.

The market has insights into the risk exposure of Industrial Bank’s investment assets in real estate projects, and there are hidden concerns about potential risk exposure.

From the perspective of provisioning, the company’s current full-caliber provisioning is adequate or insufficient.

It is estimated that the provision ratio of non-standard assets in 1H19 reached 2.


Provision coverage ratio in the third quarter of 19 was 197.

9%, loan-to-loan ratio of 3.


Investment suggestion: The “Commercial Bank + Investment Bank” strategy is actively promoted and optimistic about strategic benefits. In the context of comprehensive services that mainly focus on indirect financing for corporate financial services and achieve indirect + direct financing, Industrial Bank actively promotes the “Commercial Bank + Investment Bank” strategy.Strategic forward-looking and long-term perspective.

Considering the high degree of marketization of the company’s mechanism and system, strong strategy execution, 重庆耍耍网 continued to be optimistic about the company’s strategic advancement, and the gradual consolidation of the customer base has brought about improvement in profitability.

It is expected that the net profit growth rate in 19/20 will be 8.

9% / 14.

9% given to the company 1.

Double the 19-year PB target estimate, corresponding to 28.

27 yuan, “highly recommended” level.

Risk Warning: Declining Economic Stallion Deteriorates Asset Quality; Unexpected Changes in Regulatory Policies