Industrial and Commercial Bank of China (601398) Company In-depth Study: Changes in Comprehensive Financial Benchmarking Profitability
The customer base has significant advantages. The leader in comprehensive finance has 深圳桑拿网 the advantage of customer base, which has brought new growth.
1H19 ICBC corporate customers 762.
80,000 households, individual customers 6.
2.7 billion households, the bank with the largest number of domestic individual customers.
Relying on financial technology, ICBC sank the county and promoted a full customer strategy. The number of customers continued to grow rapidly.
Similar to the entry of Internet companies such as Alibaba into the sinking market, the sinking will bring new profit growth points to ICBC.
The leader in integrated finance.
ICBC has complete financial licenses, complete diversified layout of subsidiaries, continued to promote the development strategy of big retail, big asset management, big investment banks, diversified businesses promote each other, and the layout of domestic and overseas common development is gradually taking shape, becoming a cross-regional and diversified comprehensiveFinancial platform.
The structure of assets and liabilities is better, resulting in a good negative structure of profitability and a significant advantage in rejecting costs.
Relying on the perfect network layout and excellent customer base, ICBC’s deposit market share in the third quarter of 1912.
25%, ranking first in the industry; debt is mainly deposits, and deposits accounted for 88% of debts in 19Q3.
The cost ratio of interest-bearing debt in 1H19 is only 1.
76%, which is one of the listed banks with the lowest cost of dividend-bearing debt.
Net interest margin remained high and profitability increased.
The advantage of the cost side of the resistor brings higher interest margins, resulting in a higher ROE.
In the third quarter of 19, ICBC’s net interest margin was 2.
26%, higher than the commercial banks 2 over the same period.
19% net interest margin level.
The average ROE for the 3rd quarter of 19 is expected to be 14.
3%, higher than the average of listed banks over the same period.
Excellent asset quality, outstanding hidden worry small asset excellent quality.
ICBC non-performing ratio in the third quarter of 19
44%, a quarter-on-quarter drop of 4bp, a decline for multiple consecutive quarters.
Negative identification is strict, and the ratio of loans overdue for more than 90 days to non-performing loans in 1H19 is only 77%.
The overdue loan rate dropped significantly from 3 in 1H16.
0% excellence dropped to 1 in 1H19.
Overdue loans are used as a forward-looking indicator of asset quality, which means that ICBC’s asset quality will further improve in the future.
Bad worry is small.
ICBC’s assets are mainly loans and bond investments.
Public loans are mainly related to large enterprises and infrastructure, and personal loans are mainly housing mortgages.
Bond investment is mainly government bonds and policy bank bonds, with extremely low non-performing risks.
The low risk of their assets is matched by low returns.
The loan-to-loan ratio in the third quarter of 19 was 2.
85%, wide provision.
Investment advice: Comprehensive financial benchmarking, leading big banks that can enter profitability are based on three major logics. We have been pushing ICBC for 20 years.
1) The current estimate is only 0.
87 times PB (lf), it is estimated to be at the bottom of history and there is little downside risk; 2) ICBC, as a leading bank, benefits from the trend of concentration of leading banks, complete financial licenses, superior customer base, and comprehensive financial strengthLogic; 3) The economy is expected to stabilize in 20 years, ICBC’s asset quality may benefit, and the short-term logic has improved significantly.
Relying on the outstanding customer base, the mutual promotion of corporate and retail businesses, the strategy of large retail, large asset management and large investment banks continue to advance, ICBC is becoming a comprehensive financial benchmarking bank, benchmarking the bank with the world’s largest market capitalization-JPMorgan Chase Bank.
Maintain BUY rating and give target assessment 1.
1 20 PB, corresponding to a target price of 8.
60 yuan / share.
Risk reminders: The unexpected downturn of the economy has caused serious deterioration in asset quality; the risk of a sharp rise in storage costs; the incurred of a bad crisis for inclusive small and micro loans.