After four years of continuous decline, the net profit of SPD Bank (600000.SH) has finally returned to a growth trajectory. On the evening of August 19, SPD Bank released its semi-annual report for 2024. The data shows that in the first half of the year, the bank achieved revenue of 88.248 billion yuan, a year-on-year decrease of 3.27%; net profit attributable to shareholders of the parent company reached 26.988 billion yuan, a year-on-year increase of 16.64%, the highest growth rate in nearly a decade.
In recent years, SPD Bank, once hailed as the "King of Corporate Banking," gradually lagged behind, with its performance continuously declining. Last September, both the chairman and president of SPD Bank resigned, and Zhang Weizhong, a veteran corporate banking expert from Construction Bank, took over as chairman. In July this year, SPD Bank's vice president Xie Wei was promoted to president, though his qualification still awaits regulatory approval.
Under the new management, SPD Bank has actively adjusted its organizational structure this year, refocusing on corporate banking. With the implementation of these measures, SPD Bank, which has over 9 trillion yuan in assets, has seen its net profit return to double-digit growth. Several securities firms have described SPD Bank as experiencing a "turnaround from adversity" in their research reports.
On August 20, Xie Wei, deputy secretary of the party committee, vice president, and secretary of the board of SPD Bank, stated at the performance briefing that despite some achievements in the first half of the year, there are still many areas needing improvement. He pointed out that although credit growth has performed well, it has mainly been about making up for past deficiencies. Additionally, he mentioned that SPD Bank's asset structure still needs further optimization.
As of the close on August 20, SPD Bank's stock price had risen by 41.43% this year, making it the best performer among the nine nationwide joint-stock banks listed on the A-shares.
Net Profit Recovery and Retail Business Risks
SPD Bank's performance in the first half of this year was impressive, with net profit attributable to the parent company achieving the highest growth rate in the same period in nearly a decade. However, the challenges SPD Bank faced in recent years cannot be ignored. From 2020 to 2023, SPD Bank's net profit continuously declined from 58.33 billion yuan in 2020 to 36.7 billion yuan in 2023.
In the first half of this year, SPD Bank's performance gradually warmed up. Data shows that as of the end of June, SPD Bank's total assets reached 9.253778 trillion yuan, an increase of 2.74% from the end of last year; net profit attributable to the parent company increased by 16.64% year-on-year to 26.988 billion yuan, and the quarterly net profit growth rate even reached 30.9% in the second quarter.
However, SPD Bank's revenue structure also reveals some issues. In the first half of the year, the bank's net interest income was 58.046 billion yuan, a year-on-year decrease of 3.94%; non-interest net income was 30.202 billion yuan, a year-on-year decrease of 1.95%; among them, the net income from fees and commissions was 12.282 billion yuan, a year-on-year decrease of 12.03%. SPD Bank explained that market environment factors led to a decline in income from the sales of wealth management and fund products, and agency business income decreased by 31.36% year-on-year.
In terms of net interest margin, SPD Bank's net interest margin in the first half of the year was 1.48%, a decrease of 8 basis points compared to the same period last year, but the net interest margin under the parent company caliber rose by 2 basis points compared to the first quarter, indicating a gradual stabilization trend.
The market is also highly concerned about SPD Bank's asset quality. As of the end of June, the bank's non-performing loan balance was 74.758 billion yuan, with a non-performing loan rate of 1.41%, a decrease of 0.07 percentage points from the end of last year. Xie Wei stated that through the strategy of "controlling new and reducing old," SPD Bank's non-performing loan rate has dropped to its lowest level in nearly a decade.
However, the non-performing rate of SPD Bank's retail loans is still rising. As of the end of June, the non-performing rate of retail loans was 1.54%, with credit card and consumer loan non-performing rates of 2.56% and 2.98%, respectively. SPD Bank pointed out that due to the economic environment, the repayment ability of some high-risk loan customers has declined, and it is currently at a peak period of risk exposure.
Challenges in Revitalizing Corporate Banking
SPD Bank was once known for its corporate banking, but it has gradually lost its competitive edge in recent years. With the addition of Zhang Weizhong and Xie Wei, SPD Bank is trying to regain its position as the "King of Corporate Banking." At the beginning of this year, SPD Bank proposed a strategy focusing on five major tracks, including FinTech and supply chain finance. After half a year of efforts, these businesses have begun to show initial results.
As of the end of June, the total amount of SPD Bank's corporate loans reached 3.110595 trillion yuan, an increase of 9.49% from the end of last year. In the first half of the year, corporate loan interest income reached 54.641 billion yuan, surpassing the retail loan interest income of 45.626 billion yuan.
Nevertheless, SPD Bank still faces multiple challenges in its corporate banking business. Currently, there is serious homogenized competition among banks. Although SPD Bank has adjusted its top-level structure, systematic deployment has yet to be completed, requiring continuous efforts.
Xie Wei stated that in the future, SPD Bank will continue to promote the growth of retail loans because retail loans have relatively low risk costs and high returns. He emphasized that SPD Bank must find a balance between corporate and retail businesses to achieve high-quality development.
