Many A-share listed banks have delivered a decent report card for 2022.

According to Shanghai Securities News reporter statistics, as of January 16, there have been China Merchants Bank, CITIC Bank, Ping'an Bank, Changsha Bank, Changshu Bank, Wuxi Bank, Changsha Bank, Zhangjiagang Bank, seven listed banks released the 2022 annual results snapshot, the profitability of the performance of a relatively strong.

Data show that Ping An Bank, Changshu Bank, Wuxi Bank, Zhangjiagang Bank net profit year-on-year increase of more than 25%; China Merchants Bank, CITIC Bank net profit year-on-year increase of more than 10%; Changsha Bank net profit year-on-year growth rate of 8.04%. "Some banks have obvious regional advantages, asset quality improvement, credit cost decline to drive high earnings growth, the next few years earnings are expected to continue high growth, valuation upgrade space." A brokerage banking analyst told reporters.

"King of retail" assets first broke 10 trillion yuan

Joint-stock banks, quite the market concern "king of retail" China Merchants Bank, last year, revenue and net profit recorded a double increase in asset size first exceeded 10 trillion yuan. The size of the first exceeded 10 trillion yuan.

Chinese Bank 2022 annual results flash report shows that the bank achieved operating income of 344.784 billion yuan, up 4.08% year-on-year; total profit of 165.092 billion yuan, an increase of 11.42% year-on-year; attributable to the shareholders of the bank's net profit of 138.012 billion yuan, an increase of 15.08% year-on-year.

As of Dec. 31, 2022, total assets of China Merchants Bank amounted to about 10.14 trillion yuan, an increase of 9.6 percent from the end of the previous year, while total liabilities amounted to about 9.18 trillion yuan, an increase of 9.53 percent from the end of the previous year.

As for asset quality, the non-performing rate of China Merchants Bank has slightly risen, but still maintained at a low level. As of the end of the reporting period, China Merchants Bank's non-performing loan ratio was 0.96 percent, an increase of 0.05 percentage points from the end of the previous year; the provision coverage ratio was 450.79 percent, a decrease of 33.08 percentage points from the end of the previous year; and the loan provisioning ratio was 4.32 percent, a decrease of 0.1 percentage points from the end of the previous year.

The competitive advantage of China Merchants Bank in terms of deposit taking remains obvious. in 2022, the bank's customer deposits amounted to 7.53 trillion yuan, with a year-on-year growth rate of 18.73 percent.

Sun Yang, a senior researcher of financial technology at Jiangsu Suning Bank, said that China Merchants Bank has already used digitalization to achieve a qualitative change in its deposit business, using a smaller proportion of public loans to obtain a larger proportion of public deposits, with a much higher proportion of demand deposits, and a lower cost rate of deposits than that of traditional big banks.

Ping An Bank, which disclosed its 2022 annual results flash report yesterday, also recorded double-digit growth in revenue and net profit. The bank's 2022 operating income was 179.895 billion yuan, up 6.2 percent year-on-year, while net profit was 45.516 billion yuan, up 25.3 percent year-on-year. In terms of asset quality, Ping An Bank's non-performing rate also rose. at the end of 2022, the bank's non-performing loan ratio was 1.05%, up 0.03 percentage points from the end of the previous year. The provision coverage ratio was 290.28 percent, up 1.86 percentage points from the end of the previous year.

Regional banks maintain high growth in earnings

Some high-quality regional banks continue to grow at a medium to high rate in 2022.

Data showed that Changshu Bank realized operating income of 8.808 billion yuan in 2022, a year-on-year increase of 15.06 percent, while net profit attributable to the bank's common shareholders amounted to 2.744 billion yuan, a year-on-year increase of 25.41 percent.

Bank of Wuxi, also in Jiangsu province, realized total operating income of 4.481 billion yuan in 2022, up 3.04 percent year-on-year, and net profit attributable to shareholders of listed companies of 2.001 billion yuan, up 26.65 percent year-on-year.

Changshu Bank, Bank of Wuxi and Bank of Zhangjiagang are all in a stronger economic regional environment, and their good performance is mainly due to the advantages of credit investment and excellent asset quality.

Zhangjiagang Bank has realized over 10 billion yuan of new credit investment in a single year for five consecutive years. As of the end of 2022, the bank's total assets amounted to 187.619 billion yuan, up 14% from the beginning of the year, of which, loans amounted to 115.028 billion yuan, up 15.24% from the beginning of the year.

As for asset quality, Changshu Bank and Bank of Wuxi continue to remain in the first tier of listed banks and continue to improve. As of the end of 2022, Changshu Bank's non-performing ratio was 0.81%, flat year-on-year, while Wuxi Bank's non-performing ratio was 0.81%, down 0.12 percentage points from the beginning of the year. In addition, these two banks maintain their provision coverage ratios at the headline level of listed banks, both exceeding 530%.

CITIC said in a research report, along with the previous suppressed credit demand gradually released, it is expected that Changshu Bank in 2023 credit injection is expected to price stability and volume rise, driven by revenue in the current high base to continue the double-digit growth trend, superimposed on the low cost of credit, the performance of the growth continue to remain in the forefront of the listed banks of the certainty of strong.

2023 bank valuation enhancement can be expected

Some of the first results of the listed banks, the share price in recent times ushered in the repair market.

For example, on January 13 this year, the total market value of China Merchants Bank's A + H shares returned to more than one trillion yuan after five months, amounting to 1.008 trillion yuan; so far in November last year, Ping An Bank's A share price rose a total of 45.84%.

"As a high-quality joint-stock bank leader, the valuation has significant repair needs, with the substantial dissolution of real estate risk, is expected to China Merchants Bank to repair the overshooting valuation of the first wave of the market certainty is strong." CITIC CIC believes in the research report.

Looking ahead to 2023, CITIC Securities believes that, for bank investment, real estate credit risk is expected to improve, boosting the valuation of bank stocks to repair, superimposed on the long-cycle asset quality inflection point effect, 2023 banking sector valuation of systematic improvement of space can be considerable.

A number of banking market institutions analysts believe that the valuation has a cost-effective, fast-growing performance of regional banks 2023 valuation upgrade can be expected.

Ye Fanjian, chief macro analyst at Southwest Securities, said it is recommended to pay attention to the strong regional economic recovery, outstanding operational capacity of urban and rural commercial banks. Part of the city agricultural and commercial banks to maintain a high rate of growth in operating income, net profit of the mother, at the same time, non-performing rate as a percentage of the provision coverage ratio to maintain a better level in the industry, the margin of safety is higher.