报告名称：Ping An Bank(000001)Correct provision policy
报告类型：点评报告
报告日期：2016-04-21
研究机构：中金公司
股票名称：平安银行,平银优01
股票代码：000001,140002
页数：6
简介：Results in line
Net profit growth of 8.1%, higher than peers. NII, net fee andPPOP grew 21.5%, 50.4% and 44% YoY. Provision chargesincreased 101% YoY.
Trends to watch
NIM improved slightly. 1Q16 NIM (average of beginning &ending balances) of 2.96% was up 4bp QoQ. Specifically, IEAyield dropped 9bp while IBL cost fell 12bp QoQ. Aside fromhigh-yield retail loans, receivables investment grew 54.9%YoY,higher than asset growth.
Fee-based income increased 50.4% YoY. Non-interestincome accounted for as much as 33.2%. Investment banking,custodian and agency business maintained high growth. CIR of29.3% was 41bp lower YoY.
NPL ratio of 1.56%, +11bp QoQ and +39bp YoY withcontinued risk exposure. Net NPL formation ratio of 3.00% in1Q16,-15bp QoQ. SML accounted for 4.31%, up 16bp QoQ. TheNPL formation pace may not slow significantly in the short term.
Large provisioning. Strong revenue growth provided acushion for making provisions, which reached Rmb9.55bn, or+101% YoY, with provision coverage ratio of 161.0%, down 5bpQoQ. Credit cost was 3.08%, down 1.02bp QoQ, still high.
Earnings forecast
Maintain earnings forecast unchanged.
Valuation and recommendation
Maintain BUY with TP of Rmb12.93, implying 1.01x 2016eP/B. Asset quality remained the overhang on valuations, butfaster NPL disposal and larger provisions should ease concern.
Risks
Worse than expected asset quality deterioration.
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