Hua Er Jie Jian Wen·2025-03-25 10:01Core Viewpoint - The stabilization of net interest margin (NIM) at the Bank of Communications (BoCom) indicates a potential recovery in the banking sector, despite ongoing challenges in non-interest income [1][2]. Group 1: Net Interest Margin - Since 2020, the NIM in the banking industry has been under pressure, but recent data shows signs of stabilization, particularly for BoCom, where the NIM decline has narrowed from 20 basis points year-on-year to just 1 basis point in 2024 [1][2]. - In 2024, BoCom's NIM for the four quarters was reported at 1.27%, 1.30%, 1.26%, and 1.24%, indicating a trend of slight decline [2]. - The external factors supporting the stabilization of NIM include a moderately loose monetary policy and improved asset-liability management strategies [4]. Group 2: Revenue and Profit Growth - BoCom's revenue and net profit attributable to shareholders increased by 0.87% and 0.93% year-on-year, respectively, surpassing the previous year's growth rates [1]. - The bank's retail loan growth has been a significant contributor to this performance, with retail loans growing at over 10% against an overall loan growth of 7.52% [5][9]. Group 3: Non-Interest Income Challenges - BoCom faced a decline in non-interest income, with net income from fees and commissions dropping by 14.16% in 2024, reflecting a broader industry trend [8]. - The decline in non-interest income is attributed to market adjustments and increased competition in the insurance and fund sectors, leading to a 30% reduction in average commission levels since the implementation of new regulations [8]. Group 4: Retail Loan Strategy - BoCom is focusing on increasing the proportion of retail loans, which are seen as a new growth point, with retail loan growth reaching 11.29% in 2024 [9]. - The bank has significantly increased its personal consumption loans, with growth rates of 86.25% and 90.44% in 2023 and 2024, respectively [9]. - Despite the growth in retail loans, there are concerns about asset quality, as the non-performing loan (NPL) ratio for personal loans exceeded 1.08%, indicating a need for heightened vigilance [11][10].