Changshu Bank(SH:601128) Ge Long Hui·2025-08-09 18:18Core Viewpoint - Changshu Bank reported strong financial performance for the first half of 2025, with significant growth in revenue and net profit, driven by high non-interest income and stable net interest income growth [1][3][7]. Financial Performance - In 1H25, Changshu Bank achieved revenue of 6.06 billion, pre-provision profit of 3.93 billion, and net profit of 1.97 billion, representing year-on-year increases of 10.1%, 11.3%, and 13.5% respectively [1][3]. - The annualized weighted average ROE was 13.34%, an increase of 0.06 percentage points year-on-year [1]. Asset Quality - As of June, the non-performing loan (NPL) ratio was 0.76%, remaining stable quarter-on-quarter and down 1 basis point year-on-year [2][6]. - The provision coverage ratio stood at 489.5%, indicating strong asset quality management [2][6]. Loan and Deposit Growth - Total assets grew by 9.2% year-on-year, with loans and financial investments increasing by 5.2% and 12.7% respectively [4]. - The bank's loan additions in 1H25 totaled 10.61 billion, with corporate loans, personal loans, and bill financing contributing 5.73 billion, 1.36 billion, and 3.52 billion respectively [4]. Non-Interest Income - Non-interest income surged by 57.3% year-on-year, with fee income increasing by 41.9% due to strong performance in self-operated wealth management and agency services [3][5]. - Other non-interest income rose by 44.6%, benefiting from a recovery in the bond market and improved investment returns [3]. Cost of Liabilities - The cost of liabilities improved significantly, with deposit growth of 9.9% year-on-year and a reduction in interest rates on deposits [5]. - The net interest margin decreased by 21 basis points to 2.58%, but remains at an industry-leading level [5]. Dividend Policy - Changshu Bank announced an interim dividend of 0.15 per share, increasing the payout ratio by 5.5 percentage points to 25.3% compared to 2024 [6][7]. - This reflects the bank's confidence in future profit growth and commitment to shareholder returns [7]. Investment Outlook - The bank is expected to see net profit growth of 13.1%, 12.8%, and 12.3% for 2025-2027, with corresponding BVPS of 9.85, 11.37, and 13.08 [7]. - The current PB valuation is 0.8 times based on the closing price on August 7 [7].