Core Viewpoint - Everbright Bank reported a revenue of 33.086 billion yuan in Q1 2025, a year-on-year decrease of 4.06%, while net profit attributable to shareholders was 12.464 billion yuan, showing a slight increase of 0.31% year-on-year. The bank's income structure is becoming more balanced, with net interest income and non-interest income showing different trends [1][2][3]. Group 1: Financial Performance - In Q1 2025, Everbright Bank achieved a net interest income of 22.538 billion yuan, down 6.84% year-on-year, but the decline was less than that of the entire year of 2024 [1]. - Non-interest income for Q1 2025 was 10.548 billion yuan, reflecting a year-on-year increase of 2.46%, driven by growth in fee income and investment net income [1]. - The bank's projected net profit for 2025-2027 is 41.7 billion, 41.8 billion, and 42.4 billion yuan, with year-on-year growth rates of 0.05%, 0.20%, and 1.51% respectively [1]. Group 2: Loan and Deposit Growth - As of the end of Q1 2025, the total loan principal was 4.11 trillion yuan, representing a year-to-date growth of 5.24%, which is higher than the growth rates observed in 2024 [2]. - The deposit balance at the end of Q1 2025 was 4.27 trillion yuan, an increase of 3.49% year-on-year, reversing the negative growth trend seen in the previous three quarters [2]. - The bank's deposit cost rate decreased by 14 basis points to 2.18% year-on-year, partially offsetting the decline in asset yield [2]. Group 3: Asset Quality and Dividends - The non-performing loan ratio remained stable at 1.25% at the end of Q1 2025, indicating overall asset quality stability [3]. - The provision coverage ratio was 174.44%, down 6.15 percentage points from the end of 2024 [3]. - The cash dividend payout ratio increased to 30.14% of net profit attributable to ordinary shareholders, up from 28.41% in 2023, with a dividend yield of 4.86% as of April 28, 2025 [3].

Investment Rating - The report maintains an "Accumulate" rating for Hangzhou Bank [2][6][12] Core Views - Hangzhou Bank's revenue in Q1 2025 grew by 2.2% year-on-year, although the growth rate decreased by 7.4 percentage points compared to the end of the previous year. Despite challenges such as a slowdown in net interest income growth and fluctuations in the bond market affecting non-interest income, the company managed to maintain positive revenue growth [6][7] - The bank's asset quality remains strong, with a non-performing loan ratio of 0.76%, stable compared to the end of the previous year. The provision coverage ratio decreased to 530.07%, but overall, the asset quality is still considered excellent [9][10] - The bank's loan balance increased by 57.7 billion yuan in Q1 2025, with a year-on-year growth of 14.3%. Deposits also saw a significant increase, growing by 76.22 billion yuan in the same period, with a year-on-year growth rate of 21.1% [9][10] Summary by Sections Financial Performance - Revenue for 2022 was 32,927 million yuan, with projections of 35,010 million yuan for 2023, 38,379 million yuan for 2024, 41,900 million yuan for 2025, and 45,665 million yuan for 2026. The year-on-year growth rates are expected to be 12.2%, 6.3%, 9.6%, 9.2%, and 9.0% respectively [2][12] - The net profit attributable to the parent company was 11,679 million yuan in 2022, projected to grow to 14,383 million yuan in 2023, 16,982 million yuan in 2024, 19,643 million yuan in 2025, and 22,651 million yuan in 2026, with year-on-year growth rates of 26.1%, 23.2%, 18.1%, 15.7%, and 15.3% respectively [2][12] Asset Quality - The non-performing loan ratio for Q1 2025 is 0.76%, remaining stable compared to the previous year. The provision coverage ratio is at 530.07%, indicating a strong buffer against potential loan losses [10][11] - The bank's loan-to-asset ratio increased by 0.4 percentage points to 44.8% in Q1 2025, reflecting a solid lending position [9] Market Position and Strategy - Hangzhou Bank has a significant regional advantage, with a strong presence in Zhejiang Province and strategic branches in developed economic zones such as the Yangtze River Delta and Pearl River Delta, which enhances its growth potential [6][12] - The bank's retail financial services are expected to grow, driven by consumer credit and wealth management initiatives [6][12]