HUA XIA BANK(SH:600015) 清华金融评论·2025-10-25 08:50Core Viewpoint - The banking industry is currently facing three major challenges: insufficient effective credit demand, increased risk prevention pressure, and sustainable profitability under pressure [5][6][8]. Group 1: Insufficient Effective Credit Demand - Effective credit demand is weak, evidenced by a decline in overall loan demand, with a cumulative increase of 12.31 trillion yuan in RMB loans from January to July 2025, showing a year-on-year decrease of 0.07 trillion yuan [8][10]. - Corporate loans have increased overall, but medium to long-term corporate loans have seen a continuous year-on-year decline for eight consecutive quarters, with a cumulative increase of 6.91 trillion yuan from January to July 2025, down by 1.3 trillion yuan year-on-year [10][12]. - The trend of deleveraging in the household sector is evident, with household loans increasing by only 680.7 billion yuan, accounting for just 5.3% of new loans, a significant year-on-year decrease of 569.4 billion yuan [14][15]. - Bond financing is increasingly substituting loans, with local governments actively restructuring debt, issuing 2.11 trillion yuan in bonds in the first half of 2025, a substantial year-on-year increase of 125% [15][16]. Group 2: Increased Risk Prevention Pressure - As of the end of the second quarter of 2025, the non-performing loan balance of commercial banks reached 3.4 trillion yuan, an increase of 0.1 trillion yuan compared to the end of 2024, with a slight decrease in the non-performing loan ratio from 1.50% to 1.49% [16][17]. - The pressure on provisions is significant, with the provision coverage ratio at 211.97% as of the end of the second quarter [17]. - Retail credit remains in a risk release cycle, with the non-performing loan ratio for retail loans among 23 A-share listed banks at 1.44%, a year-on-year increase of 21 basis points [18][20]. - Credit risk management pressure for corporate loans persists due to various factors, including the exit of platform companies and the clearing of the real estate market [18][19]. Group 3: Sustainable Profitability Under Pressure - The net interest margin has been continuously narrowing, with the net interest margin for commercial banks dropping to 1.42% in the first half of the year, down from 1.74% in the first quarter of 2023 [21][22]. - Non-interest income has also faced challenges, with an average year-on-year decline of 1.87% in the first quarter of 2025, influenced by market volatility [21][22]. - The decline in non-interest income is attributed to a significant drop in investment income and fair value changes, with a 3.18% year-on-year decrease in other non-interest income [21][22]. Group 4: Strategic Responses - The banking industry should increase credit investment in an orderly manner, focusing on priority areas and strengthening strategic cooperation with local enterprises [23][24]. - Continuous optimization of asset allocation is necessary to enhance comprehensive financial service capabilities, targeting high-quality assets and improving industry-specific service capabilities [27][28]. - Adjusting the liability structure and managing capital and credit risk costs are crucial, with strategies including deepening transaction banking services and enhancing credit risk management [28][29]. - There is a need for counter-cyclical policy adjustments to support the banking sector, including innovative monetary tools and fiscal policy support [29][30].