BANK OF SUZHOU(SZ:002966)2024-09-06 07:09Investment Rating - The report maintains a "Buy" rating for Suzhou Bank [4][8][9] Core Views - Suzhou Bank's performance in the first half of 2024 shows a revenue of 6.4 billion yuan, a year-on-year increase of 1.9%, and a net profit attributable to shareholders of 3 billion yuan, up 12.1% year-on-year [4][8] - The bank's asset quality remains stable, with a non-performing loan (NPL) ratio of 0.84% in Q2 2024, unchanged from the previous quarter [4][8] - The report highlights the bank's strategic focus on leveraging public sector loans for growth while managing retail loan adjustments [5][8] Financial Data and Earnings Forecast - Total operating income (in million yuan) is projected to be 11,762.96 in 2024E, with a year-on-year growth rate of 8.62% [3] - Net profit attributable to shareholders is expected to reach 3,918.44 million yuan in 2024E, reflecting a year-on-year growth rate of 26.13% [3] - The report anticipates a gradual increase in return on equity (ROE) from 11.50% in 2024E to 12.22% in 2026E [3] Loan and Asset Quality Analysis - Public sector loans are driving credit growth, with a loan growth rate exceeding 20% in Q2 2024 [5][8] - The bank's NPL generation rate is low, with a projected annualized NPL generation rate of only 0.38% for the first half of 2024 [4][8] - The provision coverage ratio stands at 487%, providing a solid buffer against potential asset quality deterioration [4][8] Interest Margin and Revenue Drivers - The net interest margin for the first half of 2024 is reported at 1.48%, a decrease of 20 basis points compared to 2023 [8][9] - Interest income has been impacted by a decline in loan pricing, with net interest income down 2.3% year-on-year [4][8] - Non-interest income has shown resilience, with an 11% year-on-year increase, contributing positively to revenue growth [4][8]