BANK OF SUZHOU(SZ:002966) EBSCN·2024-09-01 11:42Investment Rating - The report maintains a "Buy" rating for Suzhou Bank (002966.SZ) with a current price of 7.01 CNY [1]. Core Views - Suzhou Bank demonstrated strong resilience in performance, achieving a revenue of 6.4 billion CNY in the first half of 2024, a year-on-year increase of 1.9%, and a net profit of 2.95 billion CNY, up 12% year-on-year [1][2]. - The bank's net interest margin (NIM) was 1.48%, showing a narrowing trend but with a deceleration in the rate of decline [2]. - Non-interest income grew by 12.5% year-on-year, accounting for 35% of total revenue, indicating a shift towards diversified income sources [2]. - The bank's asset quality remains stable, with a non-performing loan (NPL) ratio of 0.84% and a strong provisioning coverage ratio of 486.8% [3][4]. - The capital adequacy ratios are robust, with a core Tier 1 capital ratio of 9.4% and a total capital adequacy ratio of 14% [3][4]. Summary by Sections Financial Performance - Revenue for the first half of 2024 was 6.4 billion CNY, with a net profit of 2.95 billion CNY, reflecting a 12% increase year-on-year [1]. - The bank's net interest income and non-interest income growth rates were -3% and 12.5%, respectively, indicating a mixed performance in income sources [1][2]. Asset Quality - The NPL ratio stood at 0.84%, with a slight increase from the previous quarter, while the overdue loan ratio was 0.93% [3]. - The bank's provisioning coverage ratio was 486.8%, indicating strong risk mitigation capabilities [3]. Capital Adequacy - The core Tier 1 capital ratio was reported at 9.4%, with a total capital adequacy ratio of 14% [3][4]. - The bank has a 5 billion CNY convertible bond with a low conversion ratio, suggesting potential for capital enhancement [3]. Future Outlook - The bank's EPS forecasts for 2024-2026 are 1.45 CNY, 1.63 CNY, and 1.80 CNY, respectively, with a current price-to-book (PB) ratio of 0.59 [4]. - The report emphasizes the bank's strong growth potential in both corporate and retail banking sectors, supported by a favorable economic environment [4].