PSBC: The retail asset quality is under pressure due to the epidemic
On March 31, Postal Savings Bank of China (601658.SH, 1658.HK) held its 2021 annual results conference.By the end of 2021, PSBC’s assets exceeded 12 trillion yuan, reaching 12.59 trillion yuan, an increase of 10.87 percent over the previous year.Its operating revenue reached 318.762 billion yuan, up 11.38% year on year;Net profit attributable to bank shareholders reached 76.17 billion yuan, up 18.65 percent year-on-year.On how to further improve comprehensive profitability, Zhang Jinliang, chairman of PSBC, said that it would unswervingly promote the wealth management strategy and increase the proportion of intermediate business income.In 2021, PSBC’s intermediary business revenue reached 22.07 billion yuan, up 33.42% year on year.In the three years from 2019 to 2021, the annual growth rate will reach 23%.Liu Jianjun, president of PSBC, said the AUM of individual customers was 12.5 trillion yuan at the end of last year, of which deposits accounted for 78 percent and investment and wealth management accounted for 22 percent.Wealth management has just started, and there is still a gap with the future development goals.In the future, wealth management will be progressive.The phased goal is to gradually reduce the proportion of deposits in AUM, while expanding the proportion of other investment and financial assets.The ultimate goal can be summarized as follows: VIP client asset allocation reaches the ideal state, and PSBC AUM structure optimization is formed: deposits and fixed income assets account for 30%-40%, and other assets, such as equity and insurance assets, account for 20%, 30%-40%.The end customer achieved a scientific configuration that resulted in an overall AUM structure improvement.Zhang Xuewen, vice president of PSBC, pointed out that investment banking is a new business for PSBC and a potential source of revenue growth.For example, the fee of syndicated business increased by more than 100% year on year, and the fee income of asset securitization also increased by 148% year on year.Next, the post office bank to seize the opportunity for local bond issuance this year, further bond underwriting market share, at the same time should also vigorously develop syndicate, explore small enterprise asset securitization, to continue to do big scale of investment banking at the same time, optimize the structure of investment banking, strive to make 2022 years growth remains high,They want to maintain a growth rate of more than 20%.By the end of 2021, the proportion of non-performing loans and loans overdue for more than 90 days accounted for 1.35 of PSBC’s total non-performing loans overdue for more than 60 days, and the proportion of non-performing loans overdue for more than 30 days reached 93.03%.The non-performing loan balance of the company was 17.451 billion yuan, 1.198 billion yuan less than that at the end of last year, and the non-performing loan ratio was 0.78%, 0.17 percentage points lower than that at the end of last year.The non-performing balance of personal loans was 35.224 billion yuan, an increase of 3.516 billion yuan from the end of the previous year, and the non-performing loan ratio was 0.94%, down 0.04 percentage points from the end of the previous year.Among them, the non-performing loan ratio of personal housing loans was 0.44%, 0.03 percentage points lower than the end of the previous year;The non-performing loan ratio of individual petty loans was 1.67%, and that of credit cards was 1.66%, down 0.33 and 0.17 percentage points respectively from the end of the previous year.Regarding the asset quality, Liang Shidong, chief risk officer of PSBC, said that PSBC does not rule out the possibility that some large corporate clients may be exposed to risks in some individual areas (such as urban investment, real estate and manufacturing) in the public sector.The retail sector is mainly affected by the epidemic. On the one hand, there is a time lag in the impact of the epidemic in the early stage, and customers’ repayment ability has not fully recovered. On the other hand, there are repeated outbreaks in some areas.Liang Shidong introduced that, at present, PSBC will be more than 60 days overdue all loans into non-performing, overdue customers more than 30 days into the non-performing ratio of more than 93%.Second, adequate risk offset, provision coverage reached 418.61%, relatively thick cushion.Third, we will adhere to forward-looking risk management. In the public sector, all large risk clients will be included in the list management system, and the risk situation will be dynamically monitored.Fourth, strengthen the application of intelligent risk control.Especially in the retail field, risk management of retail credit customers throughout their life cycle can be achieved through accurate portraits of customers, enhanced loan use management and accurate and forward-looking post-loan warning.Fifth, we will further strengthen the disposal of non-performing assets this year and expand disposal channels.Last year, two issues of non-performing asset-backed securities totalled 3.2 billion yuan.At the end of December 2021, The independent legal-owned direct bank ZhongyouyouHuiwanjia Bank Co., LTD. (hereinafter referred to as YouHuiwanjia Bank), which has been preparing for one year, officially opened, attracting much attention.In 2020, after the direct bank joint venture between China Merchants Bank and JINGdong Data Science was approved for establishment, PSBC’s wholly owned direct bank subsidiary was also approved for establishment, making PSBC the only direct bank approved for establishment among large state-owned banks.Liang Shidong introduced that Youhuiwanjia bank wants to build a light smart bank, which also reflects the importance of YouHuiwanjia as the experimental field of PSBC transformation: first, the experimental field of system and mechanism, and second, the experimental field of digital operation.In terms of wealth management, Youhui Wanjia Bank pays more attention to the long-tail customers in the parent bank, and also pays more attention to the online operation.This can not only expand the service coverage of the parent bank, but also improve the activity of the tail customer group of the parent bank.As for inclusive credit, YouhuiWanjia Bank will focus on agriculture, rural areas and small and micro areas, and the core is to build risk control ability.PSBC has nearly 40,000 physical outlets covering urban and rural areas. By the end of 2021, PSBC had 39,603 business outlets, including 7,828 self-operated outlets and 31,775 agent outlets.We served 637 million individual customers and managed individual customer assets (AUM) of 12.53 trillion yuan, of which personal deposits exceeded 10 trillion yuan. Personal banking revenue increased by 11.99% year-on-year, accounting for 69.60% of the operating revenue.Liang Shidong concluded that, on the whole, YouhuiWanjia Bank will enrich the group’s differentiated competitive advantages and form online and offline coordination.PSBC has nearly 40,000 branches, and the E-commerce and express delivery scenes of PSBC are very rich. In particular, PSBC has 600,000 Postal shops and 400,000 offline teams, which are rich in collaborative resources.