Agricultural Bank of China Limited, Q3 2024 Earnings Call, Oct 30, 2024 - SEHK:1288

SEHK:1288

- Q3 Performance Overview: Net profit reached CNY 215.3 billion, operating income up 1.3% Y-o-Y, net interest income up 1% Y-o-Y, net interest margin remained at 1.45%, domestic loan balance increased by CNY 2.2 trillion (8.2% Y-o-Y), personal loan balance CNY 8.75 trillion, corporate finance CNY 14.3 trillion, rural revitalization loans increased by CNY 956.3 billion (10.9% Y-o-Y).

• Asset Quality: NPL ratio dropped to 1.32%, down 0.01 percentage points, provisioning coverage ratio above 800%.

• Future Outlook: Economic recovery and market demand increase will create a favorable environment, but LPR decline and mortgage rate adjustments may increase market volatility and pressure on operating profits. Focus on key businesses, revenue growth, and asset quality maintenance.

• Interest Rate Trends: Net interest spread maintained at 1.45%, asset side interest rates under pressure due to LPR decline and mortgage rate adjustments, liability side pressure eased by deposit rate reductions. Expected limited impact on net interest spread.

• Real Estate: NPL ratio stable, sufficient provisioning to ensure risks are manageable. Support for real estate recovery and sustainable development, focus on house delivery and leasing.

• County Area Focus: Emphasis on integrated urban-rural development, digital technology, and professional service systems. Increased loan disbursement and risk control in county areas.

• Credit Disbursement: Growth in business and county area loans, tech and strategic emerging industries, green credit, and personal loans. Focus on real economy, SMEs, and inclusive finance.

• Investment Strategy: Bond market investment decline, adjusted asset allocation strategies, coordinated bond categories, and duration. Support for economic development and 5 priorities, higher-than-market-average returns.

• Personal Loans and Consumption: Personal loan balance up 8.5%, personal consumption loan up CNY 666.8 billion, NPL ratio 0.88%, asset quality controllable. Emphasis on risk control and tech-driven management.

• Deposit Trends: Time deposits increasing, stabilizing liability structure. Adjusted deposit rates to optimize deposit structure and support real economy.

• Capital and Dividends: Maintained high dividend payout ratio (over 30%), cumulative dividends CNY 815.2 billion. Short-term dilution of dividends per share due to capital supplementation, long-term focus on abundant dividend payout.