The First Round Of Interest Rate Cuts In Bank Stocks Are Bullish.

A few days ago, the central bank dropped the benchmark, which is a real good for the banking sector. But from the trend, it is very depressed. It is the first trading day after lowering the standard, which is also very low. It is far from the expectations of the market experts. It is quite different from the trend of the first time the central bank cut interest rates in 14 years. What are the reasons for this?

The people's Bank of China decided to reduce the RMB loans and deposit benchmark interest rates of financial institutions since November 22, 2014.

The one-year lending benchmark rate of financial institutions dropped 0.4 percentage points to 5.6%; the one-year deposit benchmark interest rate dropped 0.25 percentage points to 2.75%.; the central bank also announced that, in combination with advancing the interest rate marketization reform, the upper limit of the floating interval of the deposit interest rate of financial institutions could be adjusted to 1.2 times that of the deposit interest rate 1.1 times.

From the point of view of reducing interest rates, banks should be the biggest victims, because the use of asymmetric interest rate cuts is obviously required for the banking sector to pfer profits to the real economy, especially the heavily indebted local governments to pfer profits. According to the data, the local platform debt is about 16 trillion yuan, which can pay less than 240 billion yuan interest.

In November 24th, Shanghai Composite Index and Shenzhen stock index all went higher and higher.

The Shanghai Composite Index rose more than 2% in the intraday market, and the rise in the Shenzhen stock index index was even higher, with an intraday increase of up to 3.76%.

When the day closed, the Shanghai Composite Index rose 1.85%, Shenzhen Composite Index rose 2.95%.

In November 25th, the Shanghai Composite Index rose 1.37%, and the Shanghai Composite Index closed to 2600 in November 26th.

Not only the index rose, but also the banking stocks took the lead. After a short correction, they began to soar and became the two city's leading sector.

Why?

It lies in the optimism of the market and the highly consistent market expectations. The central bank's interest rate cut will help to slow down the financing difficulties and financing of the real economy, help the economic recovery, contribute to the increase of local government revenue, help the real estate recovery, help increase the land revenue, and further reduce the pressure of local platforms, thereby greatly reducing the bad loan pressure of banks, thereby restoring the growth of bank profits.

Unfortunately, after the baptism of time, the downward pressure on the real economy is getting bigger and bigger, especially in the process of stock going. The local governments are still keen on investment. They are still keen on debt building. The bad loans will not rise and fall, and the pressure will be bigger and bigger. The profit growth rate will be even lower. Even the zero growth will appear. The three quarterly report of the bad loans of the Agricultural Bank will even have a warning line of 2%.

After 5 rounds of interest rate cuts, several rounds of asymmetric interest rate cuts, the net interest margin of banks has been much worse than before, the profit margins have been greatly reduced, coupled with the continuous encroachment of Internet finance, the development space has been suppressed, and the market has also continued to condemn bank profiteering, and the call for lower fees has been increasing. At the same time, the market is worried that banks are in deep trouble with bad loans, and the share price is also sluggish.

This is the outstanding performance of city commercial banks.

The growth rate has not been curbed, but the rising trend of bad loans has gradually increased.

Because the author can not find the change data of the bank's provision rate, it is impossible to accurately determine the gold content of the profit growth, whether it is eating the old and adjusting the provision rate, because there are many banks in the three quarterly report to adjust the profit through the provision rate. If the provision rate is adjusted, many banks' actual profit growth will decline to a large extent.

From the perspective of the development of bad loans, there is no turning point. The state is carrying out the production of surplus industries, and the iron and Steel Coloured bears bear the brunt. How to guarantee the safety of iron and steel and coal is a big problem. What is worrying is that the problems in the capital intensive industries such as real estate, iron and steel, coal and nonferrous metals will probably be exposed. The state has already introduced policies to compress 1--1.5 million tons of iron and steel production capacity, and 5 million tons of coal production capacity. Among them, the bank loan is an astronomical figure. How to ensure that the security of credit funds does not become a bad loan is a big problem. If the debt is 3 trillion according to the 10 billion tons of iron and steel production capacity, the debt size of roughly 100 million ~1.5 billion tons of production capacity should be at least 300 billion -4500 billion yuan.

The elimination of steel mills should be enterprises with poor environmental management, high indebtedness and even insolvency, and how to ensure the safety of bank loans. Once the market is adopted to solve the problem and the country does not take effective measures to prevent malicious debt evading, it will be difficult for the banking industry to bear the pain.

5 billion tons of coal production capacity involved in the number of bank funds, so far there is no statistical data, but the author estimates that it will not be low, there will probably be hundreds of billions of loans involved.

Recently, the people's Bank of China decided that since March 1, 2016, the RMB deposit reserve ratio of financial institutions has been generally reduced by 0.5 percentage points, so as to maintain a reasonable and abundant liquidity in the financial system, and guide the steady growth of monetary and credit, so as to create an appropriate monetary and financial environment for the structural reform of the supply side.

As a result, banks are the most direct beneficiaries, because they can get more low-cost long-term funds. The cost of capital obtained by commercial banks through MLF is basically over 3.25%, and the reverse repo rate is mostly around 2.25%.

According to a relatively conservative estimate, last year, commercial banks acquired these short-term liquidity instruments.

The comprehensive cost should be around 2.75%, while the interest rate paid by the central bank on the statutory reserve fund is 1.62%, and the difference between the two is over 1%. According to the scale of 700 billion yuan, commercial banks can get a direct benefit of 5 billion yuan, which does not include extra income from the monetary multiplier factor. In addition, according to the central bank's statement, the appropriate monetary and financial environment for the supply side structural reform is created. The real economy is also the biggest beneficiary, and the bank is indirectly benefited from the recovery of assets in the economic recovery.

However, judging from the trend, the banking sector basically did not move after the drop in the benchmark, and basically maintained a weak concussion. The bank index was always at the end of the inflation table, far away from the big market. As of now, the banking index has risen 2.45%, while the Shanghai Composite Index has risen 3.87% over the same period, and the difference between the two banks is 1.

42%, why is that?

Take the Shanghai Pudong Development Bank, the first annual report of the bank, for example, the first annual banking performance report released by Pudong Development Bank yesterday showed that the bank's net profit attributable to shareholders reached 50 billion 600 million yuan last year, an increase of 7.6% over the same period last year. Its operating income was 146 billion 500 million yuan, an increase of about 19% over the same period last year, and the basic earnings per share was 2.66 yuan / share. 2015.

In terms of asset quality, as at the end of 2015, the Shanghai Pudong Development Bank's bad rate was 1.56%, a 0.2 percentage point increase from the end of last three quarter, an increase of 0.5 percentage points from the beginning of last year.

Bad loans are still heavy.

Huaxia Bank (600015) released its performance bulletin on Monday. The company expects net profit of 18 billion 883 million yuan last year, an increase of 5.02% over the same period last year.

Earnings per share were 1.77 yuan.

During the period, the company realized

58 billion 844 million yuan, an increase of 7.21% over the same period last year.

By the end of 2015, the non-performing loan ratio of Huaxia Bank was 1.43%, up 0.34 percentage points from 1.09% at the end of 2014.

Minsheng Bank (600016) released its performance bulletin on Thursday, which achieved a net profit of 46 billion 111 million yuan last year, up 3.51% over the same period last year.

Earnings per share were 1.3 yuan.

During the period, the company achieved operating income of 154 billion 425 million yuan, an increase of 13.99% over the same period.

By the end of 2015, the non-performing loan ratio of Minsheng Bank was 1.6%, up 0.43 percentage points from 1.17% at the end of 2014.

Looking at the evaluation of the performance of the banks, the quality of assets is still not seen at the turning point, and the provision is still under pressure. For example, Shen Wan Hongyuan's evaluation of Huaxia Bank is still difficult to get warmer in the short-term macroeconomic situation and the downside of the industry boom. The company's performance is still under pressure.

A large number of leveraged funds came into play. We looked back at the financial stocks and the bar financing. At that time, a bank stock often bought billions of dollars or even over ten billion yuan in financing, and there was no statistics on the buying data of the off field leveraged funds. Under the joint promotion of all the market funds, the natural share price rose sharply, and now the two exchange buying funds only had a total area of about one billion yuan, not to mention the off field leveraged funds, and the amount of funds in the field has not been as high as before, which has been reduced by half over the peak period. The key is that investors have lost a lot of confidence after a few rounds of slump, and confidence has also been somewhat lost. From another perspective, at the end of 14, the market has just started, regulators encourage financial innovation, encourage leveraged funds to enter, and investor confidence has been fully activated.

It can only be used by big funds to help the stock market crash, but it is hard to become the focus of the market and become the plate of making money.