After achieving a reduction in both the NPL balance and NPL ratio in 2020, at the performance briefing held on March 29, the management of Everbright Bank was also quite confident in this year’s asset quality. As of the end of 2020, China Everbright Bank’s (601818.SH, 06818.HK) non-performing loan balance was 41.666 billion yuan, a decrease of 546 million yuan from the end of the previous year; the non-performing loan ratio was 1.38%, a decrease of 0.18 percentage points from the end of the previous year; the provision coverage ratio was 182.71%, An increase of 1.09 percentage points over the end of the previous year.
Yao Zhongyou, vice president of Everbright Bank, said at the performance meeting that the double decline in non-performing loans was due to the significant increase in the inventory of non-performing write-offs, and the rate of the non-performing generation began to gradually fall after experiencing a phased increase. He said that from the perspective of the whole year of 2020, the credit card and personal consumer credit businesses in retail loans are the most affected by the epidemic. The rate of non-performing generation has increased significantly year-on-year, while the level of interest payments on corporate loans has increased in the short term. Since then, there has been a relatively rapid decline, and the rate of increase in non-performing products has declined year-on-year.
“Faced with this situation, on the one hand, in order to hedge against the short-term increase in the rate of non-performing generation, on the other hand, on the other hand, we also proactively responded to the mid-to the long-term negative impact of the epidemic on the quality of bank assets. The scale of write-offs and disposals throughout the year has increased by more than 35% year-on-year. From an objective point of view, the accelerated pace of write-offs and disposals has also pushed up the rate of non-performing generation to a certain extent.” Yao Zhongyou said. Looking forward to the asset quality in 2021, Yao Zhongyou said that the asset quality situation of commercial banks is still facing challenges, but there is still relatively strong confidence in the bank’s asset quality this year.
“One is because the fundamentals of our country’s long-term economic improvement have not changed. During the epidemic, China was the only country in all major economies that achieved positive growth. Our forecast for this year’s economy is also a relatively high growth. Second, because In recent years, China Everbright Bank has further improved its risk management system, its profitability has been further enhanced, its asset quality foundation has been further consolidated, and overall risk resistance has been further enhanced.” Yao Zhongyou said.
At the performance meeting, China Everbright Bank Chairman Li Xiaopeng looked forward to the five leap-forward directions of China Everbright Bank in the next two years.
One is to achieve a new leap in profitability and make profitability stronger. He said that from the perspective of ROA and ROE that measure profitability, China Everbright Bank still has a lot of room. “Especially after the impact of the epidemic in the past year, ROE has declined. In the future, we will focus on capital return, take asset-light development as the direction, innovate various products, and save capital consumption to further improve operational efficiency, and then Realize the further improvement of profit-making ability.” Li Xiaopeng said.
The second is to achieve a new leap in business scale.
“Everbright Bank’s asset scale, deposit scale, and loan scale are not the largest in the industry, and we do not pursue unlimited growth in scale and quantity, but the scale of operations is the basis for structural adjustment and development.” Li Xiaopeng said that in the next two years Vigorously maintain the growth momentum of deposits in the industry, hoping to increase the proportion of demand deposits; to further increase the speed of loan delivery, but also to pay more attention to the management of loan flow; to further increase the importance of major business sectors, such as green middle Market competition in important sectors such as income, financial markets, transaction banking, investment banking, etc.; at the same time, further attention should be paid to the construction of leading banks in important regions Spark Global Limited.