NJBK(601009) 光大证券·2024-08-01 04:31Investment Rating - The report maintains a "Buy" rating for Nanjing Bank (601009 SH) with a current price of 10 09 yuan [1] Core Views - Nanjing Bank achieved a 7 9% YoY increase in revenue to 26 2 billion yuan and an 8 5% YoY increase in net profit to 11 6 billion yuan in the first half of 2024 [2] - The bank's net interest income decreased by 6% YoY while non interest income surged by 25 5% YoY [3] - The bank's non performing loan (NPL) ratio remained stable at 0 83% with a strong risk coverage ratio of 345% [7] - The bank's net interest margin (NIM) narrowed by 8bps YoY to 1 96% in the first half of 2024 [6] Revenue and Profit Analysis - Revenue and profit growth accelerated in 1H24 with revenue up 7 9% YoY and net profit up 8 5% YoY [3] - Non interest income grew significantly by 25 5% YoY contributing 51% to total revenue [6] - Net fee and commission income increased by 13% YoY to 2 6 billion yuan driven by wealth management and advisory services [6] Deposit and Loan Trends - Deposit growth remained slow with a 4 2% YoY increase in deposits and a continued shift towards term deposits [4] - Loan growth slowed slightly with a 13 5% YoY increase in loans and a 13 5% YoY increase in interest earning assets [5] - Corporate loans grew by 16 7% YoY while retail loans grew by 4 4% YoY [5] Asset Quality and Risk Management - The NPL ratio remained stable at 0 83% with a slight increase in the overdue ratio to 1 25% [7] - The bank's provision coverage ratio stood at 345% indicating strong risk absorption capacity [7] - Credit impairment losses increased by 7 6 billion yuan YoY to 21 4 billion yuan in 2Q24 [7] Capital and Shareholder Confidence - The bank's core tier 1 capital ratio decreased to 9 0% due to dividend payouts but remained stable at 9 3% excluding dividends [7] - Major shareholder BNP Paribas increased its stake to 17 68% demonstrating confidence in the bank's future [7] - The bank has 16 6 billion yuan of convertible bonds outstanding with a conversion price of 8 57 yuan per share [7] Future Outlook - The bank is expected to maintain a high ROE of around 13 5% with EPS forecasts of 1 93 yuan 2 10 yuan and 2 33 yuan for 2024 2025 and 2026 respectively [9] - The bank's PB valuation is projected at 0 68x 0 61x and 0 56x for 2024 2025 and 2026 respectively [9]