PSBC(SH:601658) Donghai Securities·2025-04-16 07:01Investment Rating - The report maintains an "Overweight" rating for Postal Savings Bank of China (601658) [1] Core Views - The bank's liability advantages are highlighted, with strategic investments from the Ministry of Finance and increased holdings from the Postal Group demonstrating confidence in the bank's future [1][6] - The bank's 2024 annual report shows a slight increase in operating income and net profit, with total assets growing significantly year-on-year [1][6] - The bank's credit growth is slowing marginally, but it still outperforms the average growth of major state-owned banks [1][6] - The bank's deposit cost advantage remains, with a narrowing decline in net interest margin expected to continue [1][6] - The bank's asset quality remains stable, with manageable credit risks anticipated despite slight increases in non-performing loans [1][6] Summary by Sections Financial Performance - In 2024, the bank achieved operating income of CNY 348.77 billion (+1.83% YoY) and net profit of CNY 86.48 billion (+0.24% YoY) [1][6] - Total assets reached CNY 17.08 trillion (+8.64% YoY) with a non-performing loan ratio of 0.90% [1][6] Credit and Investment - Credit growth is marginally slowing, particularly in credit cards and small loans, but remains relatively strong compared to peers [1][6] - The bank increased its bond investments significantly in Q4, capitalizing on favorable market conditions [1][6] Deposit and Interest Margin - The bank's net interest margin for Q4 was measured at 1.81%, with a slight decline compared to previous quarters [1][6] - The cost of deposits is improving due to a favorable deposit structure, leading to a more pronounced decline in interest expenses compared to other state-owned banks [1][6] Asset Quality - The bank's asset quality is expected to remain stable, with manageable risks in personal loans and commercial sectors [1][6] - The non-performing loan coverage ratio stands at 286.15%, indicating a strong buffer against potential losses [1][6] Strategic Investments - The bank plans to raise CNY 130 billion through strategic investments to bolster its core capital, with significant participation from the Ministry of Finance [6] - The Postal Group's recent share purchase further reinforces confidence in the bank's stability and growth prospects [6] Profit Forecasts - The bank's revenue and net profit forecasts for 2025-2027 have been adjusted upwards, reflecting improved expectations for investment income and cost management [6][34]