Shanghai Rural Commercial Bank (601825) H1 2024 earnings summary

Executive summary

• Achieved stable growth with total assets reaching RMB 1.45 trillion, up 4.51% from year-end 2023; net profit attributable to shareholders was RMB 6.97 billion, up 0.62% year-over-year.

• Maintained strong asset quality with NPL ratio at 0.97% and provision coverage at 372.42%.

• Capital adequacy ratio improved to 17.15%, with core Tier 1 at 14.68%, exceeding regulatory requirements.

• Continued focus on retail, inclusive, green, and technology finance, with retail AUM up 3.71% and green credit up 21.70% from year-end 2023.

• Non-interest income grew 8.86% year-over-year, accounting for 26.85% of operating income.

Financial highlights

• Operating income for H1 2024 was RMB 13.92 billion, up 0.23% year-over-year; net profit was RMB 7.14 billion, essentially flat year-over-year.

• Net interest margin declined to 1.56% (down 16bps year-over-year); net interest income fell 2.61% year-over-year.

• Non-interest net income rose 8.86% year-over-year, driven by investment and asset disposal gains.

• Total loans and advances reached RMB 735.88 billion, up 3.43% from year-end 2023; deposits were RMB 1.05 trillion, up 3.05%.

• Cost-to-income ratio was 29.11%, up 0.20 percentage points year-over-year.

Outlook and guidance

• Management expects continued pressure on net interest margin due to weak credit demand and ongoing deposit repricing.

• Plans to further grow non-interest income, strengthen risk management, and focus on retail, technology, green, and inclusive finance.

• Capital adequacy and liquidity expected to remain robust, supporting stable dividend policy.