BANK OF SUZHOU(SZ:002966) Xiangcai Securities·2024-05-15 03:32Investment Rating - The investment rating for Suzhou Bank is "Buy" [2] Core Views - Suzhou Bank has demonstrated strong credit expansion momentum, with total assets growing by 14.7% year-on-year in 2023 and 16.8% in Q1 2024. Loans increased by 17.1% and 19.8% respectively, while deposits grew by 15.0% and 13.0% [2] - The bank's net interest margin was 1.68% in 2023, down by 19 basis points year-on-year, primarily due to a decline in loan yields, particularly in personal loans. However, cost-saving effects are expected to alleviate pressure on the net interest margin in 2024 [2] - Operating income increased by 2.1% year-on-year in Q1 2024, with net profit rising by 12.3%, supported by stable asset quality and sufficient provisions [2] - The non-performing loan ratio remained stable at 0.84%, with a provision coverage ratio of 491.66%, indicating strong asset quality [2] - The bank plans to maintain a dividend payout ratio above 30%, with a proposed dividend of 0.39 yuan per share for 2023, reflecting a dividend yield of 5.19% [2] Financial Forecasts - Projected operating income for 2024 is 12,027 million yuan, with a growth rate of 1.4% [4] - Expected net profit for 2024 is 5,169 million yuan, with a growth rate of 12.4% [4] - Earnings per share (EPS) is forecasted to be 1.47 yuan for 2024, with a price-to-earnings (P/E) ratio of 5.11 [4][6] - The bank's return on equity (ROE) is expected to be 10.99% in 2024 [6] Asset Quality and Capital Adequacy - The bank's core capital adequacy ratio is projected to be 9.39% at the end of Q1 2024, slightly up from the previous year [2] - The non-performing loan balance is expected to increase gradually, but the non-performing loan ratio is projected to remain stable around 0.83% in 2024 [6]