Agricultural Bank of China (1288) H1 2024 earnings summary

Executive summary

• Net profit for H1 2024 reached RMB136.5 billion, up 2% year-over-year, with operating income at RMB367.1 billion, up 0.4% year-over-year.

• Total assets grew 5.3% from year-end 2023 to RMB42 trillion; total loans and advances rose 7.8% to RMB24.4 trillion.

• Asset quality remained stable with NPL ratio at 1.32% and allowance to NPLs at 303.94%.

• Strong growth in client base and support for rural revitalization, green finance, and inclusive finance, with significant increases in county area, green, and SME loans.

Financial highlights

• Net interest income was RMB290.8 billion, up 0.1% year-over-year; net interest margin stabilized at 1.45%.

• Net fee and commission income declined 7.9% to RMB46.7 billion, while other non-interest income rose 19.9% to RMB29.6 billion.

• Deposit interest-bearing rate declined to 1.63%, down 0.08 percentage points.

• Cost-to-income ratio was 27.44%, stable year-over-year.

• Allowance to NPLs stood at 303.94%.

Outlook and guidance

• Management expects stable NIM in H2 2024, with ongoing pressure from low interest rates but offset by deposit cost reductions.

• Focus on rural revitalization, green finance, inclusive finance, and tech-driven sectors, with continued vigilance on NPLs and risk control.

• Dividend payout ratio to remain above 30%, with interim dividend of RMB40.7 billion proposed.

• Expects continued stable operation and long-term positive growth in China's economy, supported by proactive fiscal and prudent monetary policies.