报告名称：China CITIC Bank Alert(00998.HK)1H15 results – In line higher provision to offse
报告类型：港股研究
报告日期：2015-08-19
研究机构：德意志银行
股票名称：中信银行
股票代码：601998,00998
页数：1
简介：In line results with weakening asset quality and rising non-standard assets
China CITIC Bank (CNCB) released 1H15 NPAT of Rmb22.6bn, up 2.5% yoy, which was in line with our forecasts and accounted for 52% of our full year estimates. The results were driven by a stronger PPOP growth of 13.8% yoy in 1H15 (1Q15: 10.0% yoy), offset by a higher credit cost of 137bps (2014: 107bps) on the back of continued asset quality deterioration. We estimate the bank recorded a gross NPL formation rate of 130bps in 1H15 (2H14: 105bps), after adjusting for the write-off and transfer-out. In addition, CNCB’s exposure to the riskier non-standard assets has risen by 35% hoh to account for 20% of total assets. We maintain a Hold rating on the stock in H-share.
Running 2Q15 numbers
In 2Q15, CNCB reported NPAT of Rmb11.6bn, up 6.7% qoq and 2.9% yoy. The results were driven by a PPOP growth of 17.1% yoy and offset by higher credit costs of 161bps. Its NIM stayed flat at 2.32% in 2Q15. Non-interest income grew by 26.7% yoy due to strong fee income growth of 40% yoy, which was driven primarily by agency (+137% yoy), bank cards (+59% yoy) and wealth management product fees (+49% yoy) given the strong A-share market in 1H15. Thanks to the tight cost control, the OpEx grew merely by 8.1% yoy, leading to an improved CIR of 31% in 2Q15. As deposit growth of 6.1% qoq outpaced loan growth of 2.9% qoq, its LDR dipped by 2.4% qoq to 74.9% as of June 2015. While its total CAR declined by 28bps qoq to 11.88% in 2Q15, its tier-1 ratio nudged up by 2bps to 9.03%. CNCB’s private placement of Rmb11.9bn to China Tobacco is still pending for the approval from the CSRC.
Continued worsening in asset quality
Reflecting an aggressive write-off strategy i.e. Rmb12.6bn in 1H15 (against Rmb11.6bn in 2014), CNCB only reported a modest increase in NPL ratio to 1.32% as of June 2015 from 1.30% as of Dec 2014. Adjusting for the write-off, the NPL formation rate was estimated to be 130bps for 1H15 (2H14: 105bps). We believe the notable rise of 33% hoh in special mentioned loans to 3.92% of total loans may be indicative of further asset quality deterioration. With a credit cost of 1.37% in 1H15, NPL coverage ratio dropped slightly to 179% (2014: 181%), but provision-to-loan ratio stayed at 2.36%.
Non-standardized assets on the rise with fast-growing receivables investments
We believe CNCB has grown its exposure to the riskier non-standard assets by 35% hoh to Rmb906bn, or 20% of total assets. This was mainly driven by strong growth in receivables investments in trust plans (up 49% hoh) and targeted wealth management schemes issued by brokers (up 37% hoh). While the growth in non-standard assets may boost its revenue and deposit growth, it may subject the bank to further earnings and capital risks.

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