BANK OF CHINA(601988) Xin Lang Cai Jing·2025-05-09 10:28Core Viewpoint - The bank reported a slight increase in revenue for Q1 2025, driven by strong non-interest income, but net profit experienced a decline due to rising costs and taxes [1][2]. Revenue and Profit Analysis - Q1 2025 revenue reached 164.93 billion yuan, up 2.56% year-on-year, with non-interest income contributing significantly at 57.20 billion yuan, a year-on-year increase of 18.91% [1][2] - The net profit attributable to shareholders was 54.36 billion yuan, down 2.90% year-on-year, impacted by increased costs and tax expenses [1][2] - The cost-to-income ratio for Q1 2025 was 26.17%, an increase of 0.8 percentage points compared to the same period last year [2] Loan and Deposit Growth - The total loans and advances reached 22.61 trillion yuan by the end of Q1 2025, an increase of 1.01 trillion yuan, or 4.7% year-to-date [3] - Corporate loans grew by 966.36 billion yuan, a 6.6% increase, while personal loans saw a modest increase of 48.89 billion yuan, or 0.72% [3] - Total deposits amounted to 25.61 trillion yuan, up 1.41 trillion yuan, or 5.82% from the end of the previous year, with personal deposits growing by 6.6% [3] Asset Quality and Interest Margin - The non-performing loan (NPL) ratio remained stable at 1.25%, with the NPL balance increasing to 281.2 billion yuan [4] - The provision coverage ratio was 198%, down 2.6 percentage points from the end of the previous year, indicating a stable asset quality [4] - The net interest margin for Q1 2025 was 1.29%, a decrease of 11 basis points from the end of 2024, primarily due to downward pressure on asset pricing [4] Investment Outlook - The bank plans to raise up to 165 billion yuan through a targeted A-share issuance to strengthen its core tier one capital [5] - Revenue growth forecasts for 2025-2027 have been adjusted to 2.2%, 3.7%, and 4.3%, while net profit growth forecasts are set at 0.4%, 3.2%, and 3.4% [5] - The target price is set at 6.36 yuan, with a corresponding target price-to-book ratio of 0.75x for 2025 [5]