Haitong: The net profit attributable to the parent company of the bank continued to rise in the first half of 2024, and the overall asset quality remained stable.

Haitong released a research report stating that the year-on-year revenue growth rate of listed banks in the second quarter of 24Q2 was -2.5%, with a narrowing decline from the previous quarter. City commercial banks and rural commercial banks showed good performance in revenue, pre-provision profit, and net profit attributable to the parent company. The proportion of loans in the total assets continued to rise in 24Q2, while the deposit size slightly decreased. The net amount of loans from listed banks in 24Q2 accounted for 58.29% of interest-earning assets, a 60 basis point increase from 24Q1 overall. Asset quality remained stable, with a significant decline in non-performing loan ratio for public real estate. The overall non-performing loan ratio of 41 listed banks in 24Q2 was 1.25%, unchanged from 24Q1, and down 1 basis point from 23Q4, showing stable asset quality and meeting the requirements of the new regulations. City commercial banks and rural commercial banks showed better performance in revenue, pre-provision profit, and net profit attributable to the parent company in 24Q2. The year-on-year revenue growth rate of listed banks in 24Q2 was -2.5%, with city commercial banks and rural commercial banks performing the best at 3.2% and 2.1% respectively. In terms of pre-provision profit, the year-on-year growth rate of 41 listed banks was -3.5% in 24Q2, a narrower decline from 24Q1. Among them, rural commercial banks had the highest year-on-year growth rate of 2.7% in pre-provision profit in 24Q2, with the largest improvement from the previous quarter. City commercial banks followed, with a year-on-year growth rate of 2.6%, maintaining positive growth for four consecutive quarters. In terms of net profit attributable to the parent company, the year-on-year growth rate of listed banks in 24Q2 was 1.38%. City commercial banks, joint-stock banks, and large state-owned banks had year-on-year growth rates of 5.4%, 2.4%, and 0.1% respectively in 24Q2. Rural commercial banks had the best performance with a year-on-year net profit growth of 11.5%, the highest and largest increase. The proportion of loans continued to rise in 24Q2 while the deposit size slightly decreased. The proportion of net loans from listed banks in 24Q2 accounted for 58.29% of interest-earning assets, a 60 basis point increase from 24Q1. Among them, large state-owned banks, joint-stock banks, city commercial banks, and rural commercial banks increased by 90bp, 6bp, 3bp, and 17bp respectively to 59.34%, 58.73%, 50.13%, and 53.48%. In terms of deposits, the proportion of deposits to interest-bearing liabilities of 41 listed banks decreased by 1.39 percentage points to 75.93% in 24Q2 from 24Q1. Non-interest income increased in proportion in 24Q2, with rural commercial banks performing the best. Overall, the year-on-year proportion of non-interest income to operating income of 41 listed banks in 24Q2 increased by 1.11 percentage points to 28.19%, with 36 banks seeing an increase. Rural commercial banks had the best performance, with a year-on-year increase of 5.88 percentage points. City commercial banks, joint-stock banks, and large state-owned banks had year-on-year increases of 3.40, 1.84, and 0.32 percentage points respectively. Asset quality remained stable in 24Q2, with a significant decrease in non-performing loan ratio for public real estate. The overall non-performing loan ratio of 41 listed banks in 24Q2 was 1.25%, unchanged from 24Q1 and down 1 basis point from 23Q4, indicating stable asset quality. In the real estate industry, the overall non-performing loan ratio for public real estate of 41 listed banks in 24Q2 decreased by 42 basis points to 3.24% from 23Q4, with 23 out of 41 banks seeing the ratio remaining the same or decreasing. The overall provision coverage ratio of 41 listed banks in 24Q2 decreased slightly by 0.2 percentage points to 236.56%, up 1.89 percentage points from 23Q4, with 9 banks seeing an increase in provision coverage ratio for two consecutive quarters. The core tier 1 capital adequacy ratio decreased slightly in 24Q2, with 12 banks deciding to implement a midterm dividend plan. The core tier 1 capital adequacy ratio of 41 listed banks in 24Q2 decreased slightly by 6 basis points to 11.35% from 24Q1, up 21 basis points from the end of 23, meeting the requirements of the new regulatory rules. In addition, 12 banks have proposed a midterm dividend plan, including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank Corporation, BANKCOMM, Postal Savings Bank of China, CITIC BANK, Ping An Bank, Hua Xia Bank, Bank of Nanjing, Shanghai Rural Commercial Bank. All six major banks have decided to implement midterm dividends, with the total amount expected to exceed 230 billion yuan. Risk Warning: The decline in corporate debt repayment ability, significant deterioration in asset quality; major changes in financial regulatory policies.