渝农商行：息差降幅收窄，资产质量稳健

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 21.514 billion yuan for the first three quarters of 2024, a year-on-year decrease of 1.8%, while the net profit attributable to shareholders was 10.308 billion yuan, an increase of 3.5% year-on-year [2][10] - Interest income remains under pressure, but other non-interest income has contributed positively to performance, with investment gains showing a remarkable growth of 148.3% year-on-year [2][10] - The company is expected to benefit from the strong credit demand in the Chengdu-Chongqing economic circle, with projected net profit growth of 5.1%, 6.5%, and 7.4% for 2024-2026 [4][20] Summary by Sections Interest Income Pressure and Non-Interest Contribution - The company experienced a decline in revenue, with a total of 21.514 billion yuan for 1-3Q24, down 1.8% year-on-year. The net profit for the same period was 10.308 billion yuan, up 3.5% year-on-year [2][10] - Interest income is under pressure, contributing negatively to performance, while non-interest income, particularly from investment gains, has significantly improved [2][10] Steady Growth in Scale and Balanced Corporate and Retail Loans - As of 3Q24, total loans amounted to 715.4 billion yuan, reflecting a year-on-year increase of 5.3%, with balanced growth in both corporate and retail loans [3][13] - Total deposits reached 939.9 billion yuan, up 3.5% year-on-year, although the growth rate has slowed [3][13] Liability Cost Optimization and Narrowing Interest Margin - The net interest margin for 1-3Q24 was 1.61%, a year-on-year decrease of 16 basis points, but the decline has narrowed by 5 basis points [14][15] - The company has effectively managed its liabilities, leading to a reduction in interest costs [14][15] Asset Quality and Adequate Provision Coverage - The non-performing loan ratio stood at 1.17% at the end of 3Q24, showing a slight decrease from the end of 1H24, with a provision coverage ratio of 359% [17][19] - The company’s asset quality is expected to remain stable as it continues to mitigate risks in key areas [17][19] Investment Recommendations - The company is expected to benefit from the robust credit demand in the Chengdu-Chongqing economic circle, with a projected price-to-book (PB) ratio of 0.53, 0.50, and 0.47 for 2024-2026 [4][20]