[Reading Financial Reports] First-Quarter Performance Summary for Listed Banks: Net Profit Attributable to Parent Company Up Nearly 9% Year on Year

Researchers at Xinhua Finance and Bread Finance have compiled the first-quarter 2022 operating data for 42 listed banks. Overall, these banks posted growth in their first-quarter 2022 results, with total revenue up more than 5% year on year and net profit attributable to shareholders up nearly 9% year on year. Among them, state-owned banks saw moderate growth in both total revenue and net profit, while joint-stock banks and city- and rural commercial banks exhibited markedly divergent trends in revenue and profit growth.

Meanwhile, the overall asset quality of listed banks remains robust. As of the end of the first quarter of 2022, a total of 14 banks maintained non-performing loan ratios below 1%, and 31 listed banks recorded loan-loss reserve coverage ratios exceeding 200%. In terms of changes, as of the end of the first quarter, the non-performing loan ratios of 39 banks either declined from the end of the previous year or remained unchanged; meanwhile, the loan-loss reserve coverage ratios of 32 banks showed an upward trend.

Total revenue for the first quarter reached RMB 1.57 trillion, with significant divergence in revenue growth rates.

Data show that in the first quarter of 2022, the 42 listed banks collectively reported total revenue of RMB 1.57 trillion, up 5.64% from the same period last year. Among them, 36 listed banks recorded year-on-year growth in operating income, while only 6 saw a year-on-year decline.

Figure 1: Revenue and Year-on-Year Changes of Listed Banks in the First Quarter of 2022

Specifically, in the first quarter of 2022, Industrial and Commercial Bank of China ranked first with total revenue of RMB 249.467 billion, followed by China Construction Bank, Agricultural Bank of China, and Bank of China, with total revenues of RMB 232.23 billion, RMB 205.949 billion, and RMB 161.118 billion, respectively.

In terms of revenue growth, joint-stock banks exhibited a stark divergence in Q1 2022: four reported year-on-year revenue increases exceeding 5%, with Zhejiang Commercial Bank leading the pack at 18.37%. By contrast, Shanghai Pudong Development Bank and Everbright Bank both posted year-on-year revenue growth below 1%, while China Minsheng Banking Corp. saw a 14.95% decline in Q1 revenue compared with the same period last year.

Revenue growth among city commercial banks has also become markedly divergent. While some, such as Bank of Nanjing and Xiamen Bank, posted year-on-year revenue increases of more than 18% in the first quarter of 2022, others—including Lanzhou Bank, Qingdao Bank, Chongqing Bank, and Xi'an Bank—experienced year-on-year declines in Q1 revenue.

The situation at rural commercial banks is broadly similar, with significant variation in revenue growth rates in the first quarter of 2022.

Total net profit attributable to parent company reached RMB 562.543 billion in the first quarter, with profits rising across the board.

Data show that in the first quarter of 2022, the 42 listed banks collectively reported net profits attributable to parent company shareholders of RMB 562.543 billion, up 8.71% from the same period last year. In terms of the growth rate of net profit, most banks recorded increases.

Figure 2: Net Profit Attributable to Parent Shareholders of Listed Banks in the First Quarter of 2022 and Year-on-Year Change

Specifically, in the first quarter of 2022, Industrial and Commercial Bank of China reported a net profit attributable to shareholders of RMB 90.633 billion, ranking first; China Construction Bank, Agricultural Bank of China, and Bank of China ranked second to fourth, each posting a net profit attributable to shareholders exceeding RMB 50 billion. In the first quarter, most joint-stock banks recorded a net profit attributable to shareholders of over RMB 10 billion, with only Huaxia Bank and Zhejiang Commercial Bank falling below RMB 10 billion.

In terms of growth rate, a total of 26 listed banks posted year-on-year double-digit growth in the first quarter of 2022. Among them, Lanzhou Bank recorded a remarkable 94% year-on-year increase in net profit attributable to shareholders, making it the listed bank with the highest year-on-year growth in such net profit for the quarter. Hangzhou Bank ranked second with a 31.39% year-on-year increase in net profit attributable to shareholders.

Overall, the parent-company net profits of state-owned banks have all been on an upward trend, with Postal Savings Bank posting year-on-year growth of over 15% and the other state-owned banks maintaining year-on-year growth of around 6%. Among joint-stock banks, net profit attributable to the parent company has shown a polarized performance: five banks recorded year-on-year growth exceeding 10%, while the remaining three saw year-on-year growth below 4% in the first quarter. City and rural commercial banks have exhibited a similar pattern of fluctuating growth rates as the joint-stock banks.

Asset quality remains strong: 14 banks have non-performing loan ratios below 1%, and 31 banks have loan-loss reserve coverage ratios exceeding 200%.

As of the end of the first quarter of 2022, a total of 14 banks maintained non-performing loan ratios below 1%. Among them, Ningbo Bank ranked first with a ratio of 0.77%, followed by Changshu Bank, Hangzhou Bank, and Postal Savings Bank, with ratios of 0.81%, 0.82%, and 0.82%, respectively. As of the end of the first quarter, eight banks had non-performing loan ratios exceeding 1.5%, with Lanzhou Bank recording the highest at 1.82%, making it the listed bank with the highest NPL ratio for the quarter.

Figure 3: Non-Performing Loan Ratios of Listed Banks in the First Quarter of 2022 and Comparative Analysis

In terms of the magnitude of change, as of the end of the first quarter of 2022, the non-performing loan ratios of 12 banks remained unchanged from the end of the previous year, while those of 27 listed banks declined compared with year-end levels. Among them, Jiangyin Bank recorded the largest decline, with its non-performing loan ratio falling by 0.33 percentage points from year-end. Suzhou Bank ranked second in terms of decline, with its non-performing loan ratio decreasing by 0.12 percentage points.

In addition, the non-performing loan ratios of China Merchants Bank, Lanzhou Bank, and Guiyang Bank all increased compared with year-end levels, with Guiyang Bank recording the largest increase—up 0.15 percentage points from the end of the previous year.

Data show that listed banks' loan-loss reserve coverage ratios have generally increased and remain at high levels. As of the end of the first quarter of 2022, a total of 31 listed banks had reserve coverage ratios exceeding 200%. Currently, the listed banks with the highest reserve coverage ratios are predominantly small and medium-sized institutions; among them, Hangzhou Bank leads the pack with a ratio of 580.09%, followed by Changshu Bank, which posted a ratio of 532.73% as of the end of the first quarter.

Figure 4: Loan Loss Reserve Coverage Ratio and Its Changes for Listed Banks in the First Quarter of 2022

Based on the changes, most banks have continued to increase their loan-loss reserve coverage ratios. In the first quarter, 32 of the 42 listed banks saw their reserve coverage ratios rise compared with the previous year; among them, Jiangyin Bank's ratio increased by 126.22 percentage points at the end of the quarter versus the end of the previous year, representing the largest year-on-year gain. Wuxi Bank's ratio also rose by 42.75 percentage points from the end of the previous year.

As of the end of the first quarter of 2022, the loan-loss reserve coverage ratios of 10 listed banks had declined compared with the end of the previous year. Among them, China Merchants Bank recorded the largest drop, with its ratio falling by 21.19 percentage points from the end of the previous year to 462.68%.

Currently, listed banks' loan-loss reserve coverage ratios are generally at high levels, leaving considerable room for future release.

"Reading Financial Reports" is a program co-produced by Xinhua Finance and Bread Finance, with its primary focus on interpreting the financial reports of listed companies. Xinhua Finance is a national financial information platform built by Xinhua News Agency, offering comprehensive coverage of global equity, foreign exchange, and bond markets, as well as authoritative, professional, and all-encompassing financial information services.

Disclaimer: This article is for informational purposes only and does not constitute investment advice to any person.

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