Release Date: April 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Postal Savings Bank Of China Co Ltd (PSTVY, Financial) achieved operating income of RMB349.133 billion in 2024, marking a year-on-year increase of 1.81%.
- The bank's net profit attributable to the parent company was RMB86.479 billion, with a YoY growth rate of 0.24%.
- Total assets exceeded RMB17 trillion, an increase of 8.64%, demonstrating strong asset growth.
- The bank maintained a low non-performing loan (NPL) ratio of 0.9%, indicating good asset quality.
- Postal Savings Bank Of China Co Ltd (PSTVY) received a capital injection from the Ministry of Finance, enhancing its capital base and future growth potential.
Negative Points
- The banking industry faces pressure on retail loan asset quality, with a noted increase in NPLs for personal loans.
- The net interest margin (NIM) is under pressure due to a low interest rate environment, affecting profitability.
- There is increased competition in the deposit market, which may impact the bank's ability to maintain low interest costs.
- The bank's reliance on agency deposits poses challenges in a low interest rate environment, necessitating adjustments to the agency fee structure.
- The macroeconomic environment, including the real estate market decline, poses risks to asset quality and loan performance.
Q & A Highlights
Q: What are the plans and outlook for the future development of Postal Savings Bank of China (PSBC) as the 14th five-year plan ends and the 15th begins?
A: Guoyu Zheng, Chairman of the Board, stated that PSBC will accelerate strategic optimization to build a top-tier retail bank that is inclusive, balanced, resilient, intelligent, and dynamic. The bank aims to provide high-quality financial services, enhance digitalization, and maintain a prudent risk appetite to achieve sustainable growth.
Q: How will PSBC respond to the challenges of a low-interest rate environment, and what are the expectations for the Net Interest Margin (NIM)?
A: Jianjun Liu, Head of the Bank, explained that PSBC will enhance asset and liability management to build a stable balance sheet. The bank will focus on balanced credit extension, core liability competitiveness, and flexible non-credit allocation to maintain NIM at an excellent level despite downward pressure.
Q: Can you summarize the non-interest income features in 2024 and the outlook for 2025?
A: Xueming Xu, Deputy Head of the Bank, highlighted that non-interest income grew by 3.1% in 2024, driven by corporate business, asset management, and retail sectors. In 2025, PSBC aims to diversify non-interest income further by expanding investment banking, transaction banking, and wealth management services.
Q: What measures has PSBC taken to enhance its competitiveness using AI and digital tools?
A: Jianjun Liu, Head of the Bank, noted that PSBC has invested in cloud platforms, AI, and big data to strengthen its digital ecosystem. The bank has developed AI applications for sales, risk control, and customer service, aiming to integrate these technologies into core business operations.
Q: How does PSBC plan to leverage the recent capital injection, and what impact will it have?
A: Xueming Xu, Deputy Head of the Bank, explained that the capital injection will boost PSBC's capital ratio by 1.5 percentage points, enhancing its ability to serve the real economy. The bank plans to use the funds to support growth initiatives and improve profitability, while ensuring efficient capital management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
