Core tips:
1. In 2021, Liaoshen Bank's net interest margin and net interest margin will be -1.51% and -1.23%, respectively.Interest income was 679 million yuan, interest expenses were 2.085 billion yuan, and net interest income was -1.406 billion yuan.
2. The operating income in 2021 is -475 million yuan, the net profit attributable to the parent is -1.19 billion yuan, and the revenue and net profit are double negative.Liaoshen Bank explained the reason in its annual report, saying, "It is mainly caused by the inversion of interest rate spreads."
3. At the end of 2021, the non-performing loan ratio of Liaoshen Bank on a consolidated basis was as high as 6.02%.It has exceeded the regulatory upper limit for the highest non-performing ratio of commercial banks.
4. The shareholders are strong, and four senior executives including the chairman and the president are from China Merchants Bank.Strive to fully resolve the liquidity risk in one to two years, strive to turn losses into profits in three years, and strive to repair the balance sheet in three years.
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Phoenix.com Financial News Recently, a news from Xinhuanet Shenyang showed that under the organization of the State-owned Assets Supervision and Administration Commission of Liaoning Province, Liaoning-Shenzhen Bank has successfully connected with many state-owned enterprises in the province, and both banks and enterprises have reached a credit agreement amounting to 10 billion yuan.It is understood that 2.76 billion yuan of credit has been completed.
This is undoubtedly a major positive for Liaoshen Bank, which has just been established for a year, especially for the bank's loan business.Because the total amount of loans and advances issued by Liaoshen Bank in 2021 will only be 21.447 billion yuan, but the total deposits will reach 193.629 billion yuan, and the loan-to-deposit ratio is only 11.1%.
Therefore, the newly added 10 billion credit intention will be of great help to improve the loan-to-deposit ratio of Liaoshen Bank.Moreover, the enterprises with credit intentions are all provincial state-owned enterprises such as "Liaoning Urban and Rural Construction Group Co., Ltd., Liaoning Airport Management Group Co., Ltd.", and the credit quality will also be greatly guaranteed.
However, the low loan-to-deposit ratio is not the only problem to be solved urgently by Liaoshen Bank.The serious inversion of the interest rate spread has put a lot of pressure on the bank, and some media even described it as "wonderful" when reporting the matter.
In 2021, Liaoshen Bank's net interest margin and net interest margin will be -1.51% and -1.23%, respectively.Interest income was 679 million yuan, interest expenses were 2.085 billion yuan, and net interest income was -1.406 billion yuan.
In other words, it is extremely rare for Liaoshen Bank to lose money in the most common business of taking deposits and issuing loans.
Moreover, Liaoshen Bank seems to have difficulty solving the problem of interest rate inversion in a short period of time.Because the bank's deposit balance of principal and interest is 200.015 billion yuan, of which time deposits account for as high as 82.63%, and personal customer deposits account for as high as 83.71%.
Liaoshen Bank has realized the seriousness of the problem and clearly stated in its 2021 annual report that it will adjust the deposit structure.One of the measures taken is to "strengthen the connection with provincial and municipal finance, state-owned capital development and reform, economic and credit channels, and expand the basic advantages of institutional business." Judging from the aforementioned reports, the progress is relatively smooth.
1. The inversion of interest margins causes both revenue and net profit to be negative
Net interest income usually occupies a very large proportion in the operating income of commercial banks.The net interest loss of up to 1.406 billion yuan is doomed that the revenue of Liaoshen Bank will not be very good.
The annual report shows that the operating income of Liaoshen Bank in 2021 will be -475 million yuan, the net profit attributable to the parent will be -1.19 billion yuan, and the revenue and net profit will be double negative.Liaoshen Bank explained the reason in its annual report, saying, "It is mainly caused by the inversion of interest rate spreads."
Source: Liaoshen Bank Annual Report
However, Liaoshen Bank not only has negative net interest income.The "net fee and commission income", another major source of revenue, was also negative, with a loss of 10.9379 million yuan.In 2021, Liaoshen Bank's fee and commission income will be 5,000,400 yuan, and its expenditure will be 15,938,200 yuan.It is worth noting that, in addition to regular handling fees such as "settlement, clearing, bank card services, foreign exchange", the amount of "other handling charges" was 13.7398 million yuan, accounting for 86.2%.
"The negative net profit of Liaoshen Bank is mainly due to the fact that the bank's integration has not been completed for a long time, and the historical burden is relatively heavy. The main focus of the current period is still integrating and solving previous historical problems." Jinle Function Analyst Liao Hekai said.
In its 2021 annual report, Liaoshen Bank considered revenue and net interest margin issues as "key issues in operations" and proposed solutions.It stated that it would solve the problems of revenue and net interest margin from four aspects: "improving the asset structure" and "improving the liability structure".
"Improve the asset structure and increase the income level from the perspective of increasing income. First, increase the issuance of high-quality credit projects. Second, actively develop the bill business to balance liquidity and profitability. The third is to strengthen inter-bank, investment banking and financial market business. Improve high-yield Asset ratio, strengthen the ability to expand transactional non-interest income. Fourth, start with mortgage and other consumer credit, establish a dual-drainage mechanism for retail loans and wealth business, and increase the profit contribution of retail business.”
"Improve the debt structure and improve the interest payment level by reducing costs. First, we will increase the company's business development, expand demand settlement deposits, and actively market and distribute customers. Second, increase the balance and proportion of demand in retail deposits. The third is to expand Interbank business, increase financing channels, and reduce interest payment levels through financing diversification.”
2. The non-performing ratio exceeds 6%, and the asset quality is worrying
Compared with profitability indicators, Liaoshen Bank's asset quality is also under greater pressure.As of the end of 2021, the consolidated non-performing loan ratio of Liaoshen Bank was as high as 6.02%.It also admitted in the financial report, "The quality of its non-performing loans is under pressure. As of the end of 2021, overdue loans reached 2.018 billion yuan."
The defect rate is 6.02%!This has exceeded the regulatory upper limit for the highest non-performing ratio of commercial banks.According to Article 19 of the Guidelines for Corporate Governance and Related Supervision of State-owned Commercial Banks, “State-owned commercial banks shall classify credit assets in strict accordance with the five-level classification standards, and evaluate the quality of credit assets according to the five-level classification criteria. After the financial restructuring, the non-performing loan ratio should be kept below 5%.”
Even according to the single data caliber mentioned many times in the annual report of Liaoshen Bank, the bank's non-performing loan ratio is still as high as 4.93%.
Fenghuang.com's "Bank Caiyan" combed the annual report of Liaoshen Bank and found that under the high non-performing rate of 6.02%, it seems that there are deeper hidden worries.
The total amount of various loans of Liaoshen Bank is 21.447 billion yuan. According to the five-level classification of loans, the total amount of normal loans is 20.156 billion yuan.However, in the details, the amount of "normal" loans is only 7.782 billion yuan, and the "special attention" loans are as high as 12.374 billion yuan.That is to say, of the total 21.447 billion yuan of loans of Liaoshen Bank, the proportion of "normal" loans that are completely risk-free is only 36.28%.
Screenshot of annual report data
It is relatively good that among the overdue loans totaling 2.018 billion yuan, 1.238 billion yuan are secured loans, accounting for more than 60%.
Screenshot of annual report data
Another data that can greatly alleviate market concerns is that the two safety indicators of Liaoshen Bank far exceed the industry average.
In 2021, the core tier 1 capital adequacy ratio of Liaoshen Bank is 21.98%, the tier 1 capital adequacy ratio is 21.98%, and the capital adequacy ratio is as high as 24.98%.Provision coverage ratio exceeds 600%.
Market analysts believe that for banks, a higher provision coverage ratio indicates more robustness, but if it is too high, it is suspected of hiding profits. The regulatory requirement is 120%-150%.
Liaoshen Bank also gave specific plans to improve asset quality in its annual report: 1. Adhere to the concept of comprehensive risk management.2. Build a professional and efficient risk management team.3. Establish a sound non-performing asset management system.Among them, it is specially mentioned, "Accelerate the collection and disposal of non-performing assets exposed to risks. Strengthen the supervision and management of the collection and management of non-performing assets, do a good job in classified management, actively expand market-based means of non-performing asset disposal, and use cash collection and litigation collection. , debt restructuring, package disposal, auction disposal, debt repayment by agreement, market-based debt-to-equity swap, write-off disposal and other methods to speed up the disposal of retained non-performing assets.”
3. Provision for impairment loss of goodwill of RMB 76.96 million
In addition to the conventional operation and safety indicators, another concern is that Liaoshen Bank also provided a goodwill impairment loss of 76.9605 million yuan in its annual report.
Liaoshen Bank explained this in its annual report: This merger transaction is a package deal under the leadership of the government. The Bank's merger of the original two banks (the original Liaoyang Bank and the original Yingkou Coastal Bank) was implemented simultaneously, and the non-performing assets were divested and transferred. It is not suitable to be accounted for as two separate merger and absorption transactions.Therefore, the amount of RMB 76,960,470.72 in which the merger cost was higher than the share of the fair value of the identifiable net assets on the merger date of the original two banks was recognized as goodwill.
Liaoshen Bank stated that since it could not be allocated reasonably, the goodwill belongs to the asset group with negative identifiable net assets on the purchase date.Yingkou Branch of Liaoshen Bank apportioned goodwill of RMB 72,129,838.19, and Liaoning Dengta Rural Bank Co., Ltd., a subsidiary of Liaoshen Bank, apportioned goodwill of RMB 4,830,632.53.
4. Four senior executives including the chairman and the president with strong shareholders are from China Merchants Bank
According to public information, Liaoshen Bank is the first provincial city commercial bank in Liaoning Province. It was officially established on June 7, 2021, and officially opened on June 9.It is jointly established by 8 state-owned shareholders, and 7 Liaoning local state-owned enterprises represented by Liaoning Financial Holding Group hold 95% of the shares of Liaoshen Bank.Among them, Liaoning Financial Holdings is the largest shareholder with a shareholding ratio of 52.5%; Liaoning Communications Construction Investment Group is the second largest shareholder with a shareholding ratio of 25%.
Among the eight shareholders, the only non-local state-owned enterprise in Liaoning Province is the Deposit Insurance Fund Management Co., Ltd., which holds 5% of the shares. According to Tianyancha, the Deposit Insurance Fund Management Co., Ltd. is a wholly-owned subsidiary of the People's Bank of China.
Such a shareholder background is powerful.The shareholders’ performance of duties disclosed in the annual report also indicates that shareholders are “willing to help the Bank to deal with and solve capital and liquidity problems, assist the Bank to deal with various risks, and actively cooperate with the Bank’s business and development work.” .Perhaps because of such a powerful shareholder, Liaoshen Bank was able to successfully connect with a number of state-owned enterprises in Liaoning Province under the organization of the Liaoning State-owned Assets Supervision and Administration Commission, and reached a credit intention of 10 billion yuan.
Echoing the strong shareholder background is the executive team of Liaoshen Bank.
Fenghuang.com's "Bank Caiyan" noted that both Wang Mohan, chairman of Liaoshen Bank, and Gong Changlin, president of Liaoshen Bank, were from China Merchants Bank.
Wang Mohan is a "veteran" who has worked in China Merchants Bank for 20 years. He was a member of the Party Committee and Vice President of China Merchants Bank Shenyang Branch, a member of the Party Committee, Secretary and President of China Merchants Bank Harbin Branch, and a member of the Party Committee and Secretary of China Merchants Bank Shenyang Branch. , President, Business Director and Inspector of China Merchants Bank Head Office.
Gong Changlin used to be the deputy director of the credit department, deputy general manager and general manager of the business department of China Merchants Bank Shenyang Branch, deputy general manager of the asset protection department, president of Dandong Branch, assistant to the president of Shenyang Branch, member of the party committee, and vice president of China Merchants Bank Harbin Member of the Party Committee, Vice President and Secretary of the Disciplinary Committee of the branch, member of the Party Committee, Vice President and Secretary of the Disciplinary Committee of Shenyang Branch.
Not only the chairman and the president, Liaoshen Bank also has an independent director and an employee supervisor of the board of supervisors who are also from the China Merchants Bank system.Shi Zhaobin, an independent director, once served as a member of the party committee, vice president, secretary of the party committee and president of China Merchants Bank Shenyang Branch; inspector of the head office of China Merchants Bank.Liu Xingjun, an employee supervisor of the board of supervisors, once served as the deputy director of the office of China Merchants Bank Harbin Branch, the general manager of the administrative management center, and the director of the office (Party Committee Office).
Most of the other executives came from the administrative or financial system of Liaoning Province.
In addition, it is worth noting that Liu Xuesong, the chief operating officer of Liaoshen Bank, has resigned on December 2, 2021, and has served for less than half a year.According to the annual report, Liu Xuesong resigned for personal reasons.
Despite the strength of the eight major shareholders and the experienced senior management team, "turning losses into profits" as soon as possible is still the most urgent issue facing Liaoshen Bank.
In the annual report of Liaoshen Bank, "turning losses into profits" is also one of the next key work goals."2022 is the first year for Liaoshen Bank to enter normal operation and management, and it is also a transition period and integration period for the completion of absorption and merger. The board of directors will focus on 'maintaining liquidity, turning losses into profits, restoring balance sheets, IT construction and digital operation, party building "Five articles" such as "cultural integration", clarify strategic goals, business plans and implementation paths, implement the "three-year action plan", strive to fully resolve liquidity risks in one to two years, and strive to turn losses into profits in three years , and strive to repair the balance sheet in three years.”
Now, just over a year has passed since the official opening of Liaoshen Bank. In the face of such a heavy "historical burden", how Liaoshen Bank will break through in the future, Phoenix.com Finance "Bank Caiyan" will continue to pay attention.
(Editor in charge: Wei Jingting)
