Bank of Ningbo(002142) 国投证券·2024-04-30 12:02Investment Rating - The investment rating for Ningbo Bank is "Buy - A" with a target price of 30.41 CNY for the next six months [3][7]. Core Views - Ningbo Bank's performance in Q1 2024 shows steady growth, driven primarily by asset expansion and a slowdown in cost expenditures, despite challenges such as a narrowing net interest margin and a slowdown in non-interest income growth [1][6]. - The bank's net interest margin improved on a quarter-over-quarter basis, reaching 1.90%, although it decreased by 10 basis points year-over-year [1][6]. - The bank's non-interest income declined by 4.7% year-over-year, with a significant drop in net fee and commission income by 22.8% due to various factors affecting wealth management [6][7]. - The bank's asset quality is under scrutiny as the non-performing loan generation rate has accelerated, particularly in retail credit [6][17]. Summary by Sections Financial Performance - In Q1 2024, Ningbo Bank reported a revenue growth rate of 5.78%, a pre-provision profit growth of 8.80%, and a net profit growth of 6.29% [1][6]. - The average daily balance of interest-earning assets increased by 18.09% year-over-year, supported by accelerated credit issuance [1][10]. - Total assets increased by 176.5 billion CNY year-over-year, with new loans amounting to 108.9 billion CNY, significantly higher than the previous year's 49 billion CNY [1][11]. Income and Expenses - The bank's net interest income is projected to grow to 42.75 billion CNY in 2024, with a growth rate of 4.50% [21]. - The cost-to-income ratio improved to 31.5%, down 2.2 percentage points year-over-year, indicating effective cost management [6][21]. - Non-interest income is expected to decline further, with net fee income projected to drop to 3.46 billion CNY in 2024, a decrease of 40% [21]. Asset Quality - The non-performing loan ratio remained stable at 0.76%, but the attention ratio increased to 0.74%, indicating potential future risks [17][21]. - The annualized non-performing loan generation rate reached 1.23%, up 32 basis points year-over-year, highlighting increased credit risk exposure [6][17]. - The bank's provision coverage ratio decreased to 431.63%, reflecting a relatively low provisioning level amid rising non-performing loans [6][17]. Market Position and Outlook - Despite recent valuation declines, Ningbo Bank is considered a strong competitor within the banking sector, with expectations for valuation recovery contingent on macroeconomic stabilization [7][8]. - The projected revenue growth for 2024 is 3.30%, with a net profit growth of 8.20%, indicating a cautious but positive outlook [7][21].