Eric Wang Zhen ...
  • Jayson Kong

Banking - 2019 results review: In-line, but downbeat on NIM and NPL in 2020

We foresee an all-round deterioration in the sector’s fundamentals in 2020,
expecting an 8bp NIM compression and at least 6bp increase in NPL ratio. Banks
should raise more capital in 2020 to prepare for a potentially higher default rate.
Default rate on credit card loans may increase while asset quality on SME loans
should also deteriorate in 2021 and 2022 (due to loan moratorium). Maintain
UNDERWEIGHT on the sector; top pick is China Merchants Bank (3968 HK).
Bank of Ningbo (A)

Bank of Ningbo is engaged in taking in public savings; granting loans; handling domestic settlements; handling discount of negotiable instruments; issuance of financial bonds; acting as an agent for the issue and underwriting of government bonds; buying and selling government bonds; inter-bank funding; providing guarantees; acting as an agent for accounts receivable and payable, and insurance; provision of safety-deposit box service; commission loan operations; foreign exchange deposit, loan and remittance; undertaking foreign currency exchange; international settlement, foreign exchange dealings and borrwings and providing foreign exchange guarantees.

China Construction Bank (H)

China Merchants Bank

Chongqing Rural Commercial Bank Co Ltd

ICBC 1398 HK

Ping An Bank (A)

Ping An Bank is providing commercial banking services approved by Bank of China. Co is engaged in the offering of company loans, deposits, trade finance, company wealth management, and company intermediary services; providing personal loans, deposits, bank cards, personal wealth management services, and other personal intermediary services; local and foreign currency tradings; bond investments and other money market operations; and providing central management on non-performing assets, equity investments and nonclassifiable assets, liabilities, revenues and expenditures. As of Dec 31 2013, Co. had total assets of RMB1,891,741,000,000 and total deposits of RMB1,667,791,000,000.


Eric Wang Zhen

Jayson Kong

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