Guotou Securities·2025-05-05 15:45Investment Rating - The investment rating for Postal Savings Bank is "Buy-A" with a target price of 6.31 CNY over the next six months [5]. Core Views - The report highlights that the bank's revenue in Q1 2025 decreased by 0.07% year-on-year, while the pre-provision profit grew by 6.20%. However, the net profit attributable to shareholders fell by 2.62% year-on-year. The main drivers for performance were the expansion of interest-earning assets and cost reduction, while narrowing net interest margins and increased provisioning negatively impacted growth [1][11]. Summary by Sections Financial Performance - As of the end of Q1 2025, Postal Savings Bank's total assets grew by 8.31% year-on-year, with total loans increasing by 9.78% and financial investments by 9.45%. The bank added 604.5 billion CNY in total assets and 443 billion CNY in loans during the quarter [1]. - The bank's net interest margin for Q1 2025 was measured at 1.71%, down 21 basis points year-on-year and 10 basis points quarter-on-quarter, but still remains competitive within the industry [4][9]. - Non-interest income increased by 14.83% year-on-year, with net fees growing by 8.76% and investment income rising by 21.70% [10]. Loan Growth - Corporate loans saw a significant increase of 15.17% year-on-year, with a quarterly addition of 362 billion CNY, leading among major banks [2]. - Retail loans grew by 4.27% year-on-year, with a quarterly addition of 678 billion CNY, although this was a decrease compared to previous quarters [2]. Deposit Growth - Total deposits increased by 9.22% year-on-year, with corporate and retail deposits growing by 20.46% and 7.94% respectively. The bank focused on low-cost self-operated deposits, adding 141.7 billion CNY in corporate deposits during the quarter [3]. Asset Quality - The non-performing loan ratio stood at 0.91% at the end of Q1 2025, remaining stable. The provision coverage ratio was 266.13%, indicating a solid buffer against potential loan losses [10][11]. Future Outlook - The bank plans to enhance support for key sectors such as new productivity and inclusive small and micro enterprises, while also increasing consumer loan offerings in response to policy opportunities. The cost advantage on the liability side, combined with adjustments in agency fee rates, is expected to support performance [11].