Core Viewpoint - The implementation of new regulations for internet lending by commercial banks is imminent, with many banks and consumer finance companies disclosing their "white lists" of cooperative institutions [1][2]. Group 1: Company Overview - Fubon Bank has disclosed a total of 52 cooperative institutions for internet lending, including banks, consumer finance companies, internet platforms, micro-loan companies, and financing guarantee companies [2][3]. - The bank's internet loan balance accounted for 33% of its total loans by the end of 2021, and its personal loan balance has doubled over four years, exceeding 25 billion yuan by the end of 2024 [2][3]. Group 2: Regulatory Context - The new regulations, effective from October 1, 2023, require banks to disclose their cooperative institutions for internet lending, enhancing transparency and consumer protection [3][4]. - The regulations limit the comprehensive financing cost to a maximum annualized rate of 24%, addressing concerns over high interest rates in the market [4]. Group 3: Market Dynamics - Fubon Bank collaborates with lending platforms to quickly expand its consumer credit offerings, addressing its customer acquisition challenges [3][4]. - The bank's internet loan rates are reported to be around 5% to 5.8%, but additional costs from guarantee institutions can raise the total financing cost to approximately 22.26% [5][6]. Group 4: Risk and Compliance - The bank emphasizes compliance with legal and regulatory requirements, conducting regular assessments of its cooperative platforms to mitigate risks [4][6]. - The reliance on guarantee institutions is seen as a way to manage higher default risks associated with internet loans, which may affect the bank's profitability [6][7].

Group 1 - The first batch of 8 banking financial institutions in Shenzhen has publicly announced a list of third-party cooperation agencies for credit business, which includes major banks such as Industrial and Commercial Bank of China, Agricultural Bank of China, and China Bank [1] - The third-party agencies primarily cover three categories: marketing and customer acquisition, guarantee and credit enhancement, and collection services [1] - Financial institutions will continuously update the list based on business developments and encourage customers to verify the legitimacy of any third-party claims [1] Group 2 - The public disclosure of the third-party cooperation agency list is an effort to implement regulatory requirements, protect financial consumers' rights, and combat illegal loan intermediaries [2] - Illegal loan intermediaries have been a significant issue in the financial sector, with instances of companies falsely claiming partnerships with banks to attract customers [2] - Common tactics used by illegal loan intermediaries include impersonating legitimate financial institutions, offering low-interest rates, and making false service promises, which can lead to consumer financial losses and data breaches [2] Group 3 - Regulatory authorities have intensified efforts to combat financial "black and gray industries," focusing on illegal loan intermediaries and related financial crimes [3] - A new regulation from the National Financial Supervision Administration mandates that commercial banks manage and disclose lists of platform operators and credit enhancement service providers, effective October 1 [3] - The regulation prohibits banks from collaborating with institutions not on the approved list for internet lending services [3]

Core Viewpoint - The State Council's recent implementation of personal consumption loan interest subsidy policies and service industry operating entity loan interest subsidy policies is expected to lower credit costs for residents and financing costs for service industry entities, thereby stimulating consumption potential and enhancing market vitality [1] Group 1: Impact on Banking Sector - The personal consumption and operating loan interest subsidy policies are anticipated to stimulate economic recovery and consumption growth, benefiting banks' net interest margins and overall fundamentals, especially for banks with a high proportion of these loans [1] - Ping An Bank has the highest proportion of personal consumption and operating loans among joint-stock banks, at 29.82% [1] Group 2: Financial Products and Services - Ping An Bank has introduced the "Orange e-loan" product, increasing the maximum loan amount from 200,000 to 300,000 yuan and extending the loan term from 4 to 7 years, with interest rates as low as 3% for qualified customers [3] - The bank has also launched the "Orange business loan" product for small and micro enterprises, with a maximum loan amount of 10 million yuan and similar interest rate benefits [3] - Ping An Bank's retail credit business now covers four major customer groups, focusing on various financial needs including business, consumption, and housing [3] Group 3: Achievements in Inclusive Finance - As of March 2025, Ping An Bank's inclusive small and micro enterprise loan balance reached 496.328 billion yuan, with a year-on-year growth of 6.22 billion yuan and a 22.5% increase in new loans issued in the first quarter [4] - The bank has implemented innovative products and services in inclusive finance, including expanding collateral options and introducing low-risk pledge models [4] Group 4: Future Strategies - Ping An Bank plans to continue aligning with national strategies to expand domestic demand, aiming to lower credit costs for residents and financing costs for service industry entities, thereby enhancing consumption potential and market vitality [5]

Investment Rating - The report gives a "Buy" rating for Nanjing Bank [3][10]. Core Views - Nanjing Bank is entering a new five-year planning cycle, with three major turning points driving value reassessment: 1) Market share enhancement cycle, 2) Interest rate decline cycle, and 3) Cost-to-income ratio improvement cycle [3][10]. - The bank's current PB valuation is 0.81x for 2025, with a dividend yield of 4.5%, making it a strong investment recommendation [3][10]. Market Share Enhancement Cycle - The management team, led by Chairman Xie Ning, is driving operational efficiency through comprehensive reforms and management optimization, following a significant expansion of branch networks [7][21]. - By the end of 2024, Nanjing Bank will have 290 branches, with a focus on increasing market share through a "three-year customer doubling action plan" [7][22]. - The favorable economic environment in Jiangsu province, with a credit growth rate close to 10% as of May, supports sustainable revenue growth for Nanjing Bank [7][25]. Interest Rate Decline Cycle - Nanjing Bank benefits from a favorable asset-liability structure in a low-interest-rate environment, with a high proportion of time deposits (78%) compared to peers [8][10]. - The bank has already passed the peak pressure on net interest margin (NIM) in 2023, and NIM is expected to stabilize as deposit costs decline [8][10]. Cost-to-Income Ratio Improvement Cycle - The cost-to-income ratio has risen to 30.5% from 2019 to 2023, but is projected to decrease to 28.1% in 2024 due to operational efficiencies and a three-year financial management plan [9][10]. - The bank's asset quality is stabilizing, with a focus on government-related loans, while retail loan risks are expected to improve in the coming years [9][10]. Investment Recommendations - Nanjing Bank is expected to maintain a leading position in ROE and performance growth among listed banks, with a dividend payout ratio above 30% [10]. - The completion of a 20 billion yuan convertible bond conversion enhances capital, supporting the bank's growth trajectory [10].