Agricultural Bank (601288) 2019 Third Quarterly Report Review: Net interest margin declines at intervals

Agricultural Bank (601288) 2019 Third Quarterly Report Review: Net interest margin declines at intervals

Agricultural Bank of China disclosed the third quarter report of 2019. The first three quarters of 2019 achieved a net profit attributable to mothers of RMB 18.01 million, an increase of 5%.

3%.

Declining net interest margin dragged down ROA’s expected average ROE14 in the first three quarters of 2019.

1%, falling by 1 every year.

The four averages are mainly due to the decline in equity multiplier due to the effect of the tail-lift effect in the second quarter of last year, and a small part is due to the decline in ROA.

ROA1 in the first three quarters of 2019.

02%, a slight decrease of 0 a year.

03 single, the core reason is that the net interest / average assets (we restore FVPL investment income to interest income) gradually expand, that is, the net interest margin continues to decline.

Net interest margin performance is poor. Net interest margin for the first three quarters of this year calculated using the balance at the beginning and end of the period2.

14%, down 15 basis points a year.

From the attribution analysis, the decline in net interest margin was mainly affected by rising debt costs, and the first three quarters of this year denied interest rate1.

74%, an increase of 15bps each year.

Judging from the data in the interim report, it is usually the result of the rising cost of deposits. At the same time, competition for deposits through price means is related.

The non-performing loan ratio fell, but the provisioning effort weakened the NBC non-performing loan ratio at the end of the third quarter1.

41%, a decrease of 2bps from the previous month; the provision coverage ratio at the end of the period was 281%, a decrease of 3 indicators from the previous quarter, and we noticed that the 南京桑拿论坛 asset impairment loss in the first three quarters of this year only increased by only 0.

9%, so the company may reduce its provisioning efforts in the third quarter.

In terms of asset growth and stable balance sheet, total assets increased in the first three quarters.

6%, basically unchanged from the previous month.

In the third quarter, the supplementary interest-generating assets in a single quarter were 9058 trillion, which increased US $ 317.3 billion in debt, which was significantly higher than the same period last year, and other types of assets also increased;

Investment advice The overall performance of Agricultural Bank is basically in line with expectations. Considering that the internal evaluation level of the company is very low, we maintain its “Buy” rating.

Risks suggest that the continued weakening of macroeconomic expectations may adversely affect the quality of bank assets.