HZBank(SH:600926) ZHESHANG SECURITIES·2025-04-12 13:15Investment Rating - The investment rating for Hangzhou Bank is "Buy" [7] Core Views - Hangzhou Bank's earnings have shown significant growth, with a 25Q1 revenue and net profit increase of 2.2% and 17.3% year-on-year, respectively, despite a decline in growth rates compared to 2024 [2][6] - The bank plans to increase its dividend payout ratio to 24.5% for 2024, up by 2.0 percentage points from 2023, resulting in a dividend yield of 4.50% [5][6] - The bank's loan and deposit balances grew by 14.3% and 21.1% year-on-year as of 25Q1, indicating a continuation of high growth [2] Summary by Sections Earnings Performance - In 25Q1, Hangzhou Bank's revenue and net profit increased by 2.2% and 17.3% year-on-year, although the growth rates decreased by 7.4 percentage points and 0.8 percentage points compared to 2024 [2][6] - The bank's non-performing loan ratio remained stable at 0.76%, while the provision coverage ratio decreased by 11 percentage points to 530% [1][4] Dividend Policy - The proposed dividend payout ratio for 2024 is 24.5%, which is an increase of 2.0 percentage points from 2023, leading to a dividend yield of 4.50%, surpassing the average for city commercial banks [5][6] Loan and Deposit Growth - As of 25Q1, the bank's loans and deposits grew by 14.3% and 21.1% year-on-year, respectively, reflecting a sustained high growth trend [2] Interest Margin - The bank's interest margin decreased by 9 basis points to 1.35% in 24Q4, primarily due to downward pressure on asset yields [3] - It is anticipated that the decline in interest margin will narrow in 2025, supported by effective cost control on liabilities and a slowdown in the decline of asset yields [3] Asset Quality - While the bank's asset quality indicators showed improvement, there is a noted increase in non-performing loans, particularly in retail assets, with the non-performing loan generation rate rising to 0.80% in 24A, up 35 basis points from 23A [4]