BANK OF SUZHOU(SZ:002966) ZHESHANG SECURITIES·2025-04-30 07:55Investment Rating - The investment rating for Suzhou Bank is "Buy" (maintained) [9] Core Views - Suzhou Bank's performance remains positive, with revenue growth of 0.8% year-on-year in Q1 2025, although the growth rate has slowed by 2.3 percentage points compared to 2024. The net profit attributable to shareholders increased by 6.8% year-on-year, with a slowdown of 3.4 percentage points compared to 2024. The bank's non-performing loan generation has improved, and the decline in interest margin has narrowed [2][4][5]. Summary by Sections Financial Performance - In Q1 2025, Suzhou Bank's revenue grew by 0.8% year-on-year, while net profit attributable to shareholders increased by 6.8%. The growth rates have slowed compared to 2024, primarily due to fluctuations in non-interest income, which saw an 8% year-on-year decline [2][3]. - The bank's interest income decreased by 0.6% year-on-year, while non-interest income from fees increased by 22.5% [2][14]. Loan and Deposit Growth - In Q1 2025, Suzhou Bank's loans increased by 12.7% year-on-year, although the growth rate has decreased by 1 percentage point compared to Q4 2024. The majority of the loan growth was from corporate loans, which accounted for 95% of the increase [3]. - Deposits saw a slight increase of 1.2 billion, with personal deposits decreasing by 4.7 billion year-on-year, while corporate deposits increased by 3.5 billion [3]. Interest Margin - The interest margin for Q1 2025 narrowed by 18 basis points to 1.31% year-on-year, with the decline in margin narrowing by 11 basis points compared to Q4 2024. This improvement is attributed to a larger reduction in funding costs [4]. Asset Quality - The non-performing loan ratio remained stable at 0.83% as of Q1 2025, with a coverage ratio of 447%, which is still considered high among listed banks. The true non-performing loan generation rate decreased by 14 basis points year-on-year to 0.65% [5]. - The bank's corporate loan non-performing rate improved, while the personal loan non-performing rate increased, particularly in personal business loans [5]. Dividend Policy - Suzhou Bank's dividend payout ratio for 2024 was 34%, an increase of 2 percentage points from 2023, with an estimated dividend yield of 4.85% based on the current price [6]. Profit Forecast and Valuation - The forecast for net profit attributable to shareholders for 2025-2027 is expected to grow by 7.04%, 5.58%, and 5.89%, respectively. The target price is set at 9.79 yuan per share, corresponding to a price-to-book ratio of 0.85 for 2025, indicating a potential upside of 19% [7].