时间:2017年08月11日 20:05:54 中财网
What is included here
Ping An Bank - Fundamental recovery takes time; Hold
Trust Financing to Property Developers Down 39% MoM in July
BoCom Said to Have Discussed Funding Cost Control
Huishan Diary Released Restructuring Plan with 14-20% Recovery Rate
Hua Xia Bank Reported Flattish 1H17 Earnings
China Liquidity Monitor – PBOC Injects Zero Net Liquidity via OMO into theMarket on Friday
DB Research
Ping An Bank - Fundamental recovery takes time; Hold
PAB reported 2Q17 net profit of Rmb6.3bn, up 2% yoy; 1H17 earnings were up2% yoy, accounting for 51% of our 2017 forecast. The uninspiring 2Q17 resultswere mainly characterized by higher funding cost, which we believe representsa read-across to other wholesale-funded joint-stock banks (JSBs). NIM fellanother 15bps qoq. Asset quality has yet to see major improvement, whilecapital remains a concern that is not solved by convertible bond issuance. Theonly sweet spot is the retail strategy, which started to bear fruit in 1H17 with a40%/64% contribution to revenue/ profit (vs. 29% in 1H16). Net net, we believeit will take more time before we see a fundamental recovery. Hold.
Top Stories
Trust Financing to Property Developers Down 39% MoM in July (Shanghai Sec.Journal, Aug 11)
According to UseTrust Data, only Rmb21.0bn property trust was set up in July,down 39% mom compared with Rmb34.6bn in June and Rmb39.9bn in May,local media reported. Due to the tightening regulations, trust financing todevelopers is shrinking and banks’ interbank business and WMPs can nolonger invest in these property trust products. Current compliant property trustproduct are active managed by trust companies and are mainly bought byretail investors with rising fund raising pressure. Some trust companies arealso turning cautious on property market and raise their criteria in selectingproperty projects. Meantime, developers are seeking other financing channels– July overseas bond issuance by Chinese developers amounted to US$3.28bn,much higher than US$709mn in July 2016.
BoCom Said to Have Discussed Funding Cost Control (21Jingji, Aug 11)
All departments within BoCom are required to discuss NIM management andhow to control funding cost, which was a top priority of the bank emphasizedinternally at the beginning of 2017, local media reported. In 1H17, BoCom’sNIM is under pressure especially in retail banking and treasury department(1Q17 NIM down 23bps qoq to 1.57%), according to the report. BoComresearch development department said current environment negativelyimpacted those banks with high funding cost and mid-level asset yield. As ofJune 2017, market-rate driven liabilities portion in BoCom was c. 20% higherthan big four banks. BoCom has set up a team specializing in researchingfuture interest rate change in short-term/medium-term/long-term to improveNIM performance.
(DB view) As a read-cross, PAB saw NIM down 15bps qoq in 2Q17 (vs. down19bps in 1Q17), and we think this implies funding pressure to continue in 2Q17for wholesale-funded joint-stock banks.
Huishan Diary Released Restructuring Plan with 14-20% Recovery Rate (Sina,August 10)
Local media reported Huishan Diary has released its financial restructuringplan in early August, which is said that more than two-third creditors will agreewith this plan. Major steps of the restructuring plan include (1) all HuishanDiary Group’s asset will be taken to repay debt, (2) creditors will establish anew company and Huishan’s asset/liability will be injected into it, (3) creditorsneed to transfer 15% share stakes of the new company to Huishan’s oldmanagement team, (4) creditors’ will receive 14-20% repayment of theiroriginal debt exposure. However, some creditors are doubtful about this plan,mainly due to 15% shares given to old management team considering theirduty in Huishan’s financial crisis has not yet been clarified, and there’s stillRmb10bn gap between Huishan’s reported liabilities versus creditor banks’accounting audit. It is reported Huishan’s total borrowing exposed to financialinstitutions came at Rmb380bn, among which Bank of China (BOC) has thelargest lending exposure Bank of China (BOC) has the largest lending exposureof nearly Rmb4bn to Huishan Dairy, accounting for 0.04% of its 2016 totalloans balance or 2% of its 2016 PBT. Meanwhile, PAB granted HK$2.4bn loansto Huishan Dairy pledged by 3.4bn stock shares of the company, which wasonly worth HK$1.4bn on March 24. For other creditors’ exposure: Rmb2bn inICBC, Rmb2.2bn in MSB, Rmb1.35bn in Jilin Jiutai Rural Commercial Bank,Rmb1.3bn in CDB, Rmb1bn in BoCom, Rmb0.9bn in Bank of Jilin.
Hua Xia Bank Reported Flattish 1H17 Earnings (Sina, August 11)
Hua Xia Bank reported its 1H17 results with net profit of Rmb9.8bn, up 0.1%yoy. Total asset grew by 7.7% yoy with loan growth by 12.5% yoy; NIMdropped by 38bps yoy. Deposit declined by 0.4% yoy. Fee income was up 30%yoy, supported by wealth management fee (+44.6%)/bank card fee (+72%)growth. PPoP grew by 3% yoy. Annualized credit cost dropped by 13bps yoy in1H17 to 126bps. Asset quality stabilized with NPL ratio at 1.68%, down 1bpqoq; coverage ratio dropped by 10ppt qoq to 157.6%. Capital adequacyremained pressured on the banks, its CET1 ratio came at only 8.29% in 2Q17,down 8bps qoq.China Liquidity Monitor – PBOC Injects Zero Net Liquidity via OMO into theMarket on FridayWith financial deleveraging to continue (Rising funding pressure, Series I, II , IIIand IV ), it is important to closely track China’s liquidity stance from theperspective of both volume and price.
(Liquidity volume) We look at PBOC’s open market operation (OMO) andmedium-term lending facility (MLF). So far in August, PBOC withdrewRmb70bn net liquidity, compared with net liquidity injection of Rmb472.5bn inJuly, Rmb107bn in June and Rmb70bn in May.
OMO – PBOC sold Rmb130bn reverse repos at flat yields on Friday, whichincludes Rmb70bn of 7-D reverse repos at 2.45% yield and Rmb60bn of14-D reverse repos at 2.60% yield. Offset by Rmb130bn of reverse reposmatured, PBOC injects zero net liquidity into the market on Friday. So far inAugust, PBOC totally withdrew Rmb70bn net liquidity from the market viaOMO, compared with OMO net liquidity injection of Rmb470bn in July,Rmb40bn in June and Rmb20bn in May.
MLF – PBOC sold Rmb360bn of 1-Y Medium-term Lending Facility (MLF)
at flattish yield of 3.20% on July 13. Offset by Rmb357.5bn of MediumtermLending Facility (MLF) having matured, PBOC injected Rmb2.5bn netliquidity into the market via MLFs in July, compared with net liquidityinjection of Rmb67bn in June and Rmb50bn in May.
(Liquidity pricing) We view China’s liquidity flows through four layers, i.e.from central bank to banks, between banks, from banks to NBFIs, fromindividuals/corporates to NBFIs.
OMO and MLF rates measure the liquidity from central bank to banks.OMO rates were maintained at 2.45%, 2.60% and 2.75% for 7-day, 14-dayand 28-day respectively. MLF rates were maintained at 3.05% and 3.20%for 6-month and 1-year respectively.
DR007 measures the liquidity between all banks. As of Aug 10 2017,DR007 was quoted at 2.90%, down 2bps day on day and 31bps YTD,which is 45bps higher than PBOC 7-day reverse repo rate. In addition,interbank CD rates measures the liquidity from big banks to smaller banks.Interbank CDs were quoted at 4.42% for 3-month duration as of Aug 102017, up 1bps day on day and 35bps YTD. Meanwhile, total issuanceamount of interbank CDs was Rmb1.58trn in July 2017, compared withthat of Rmb2trn in June and Rmb1.2trn in May.
R007 measures the liquidity from banks to NBFIs. The rate was quoted at3.19% as of Aug 10 2017, down 6bps day on day and up 17bps YTD,which is 28bps higher than DR007. The average rate of R007 was 3.32% inJuly, down 14bps mom.
GC001 measures the liquidity from individual/corporates to NBFIs. GC001was quoted at 3.05% as of Aug 10 2017, down 2bps day on day and down18bps YTD, which is 14bps lower than R007’s price. The average rate ofGC001 was 3.73% in July, down 49bps mom. In addition, Yu’E Bao yield, amoney market fund yield, was quoted at 3.98% as of Aug 10 2017, down15bps mom and up 72bps YTD.
(DB views) Aiming to maintain a balance between financial deleveraging andsupporting the real economy, the central bank is carefully maintaining a stableliquidity volume but is keeping the interbank rates elevated. As such, we seelimited chance of re-occurrence of liquidity squeeze like the one in June 2013,but smaller banks are likely to continue to suffer from higher funding cost.
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