高盛-銀行業(yè)-Q4的五個(gè)主題 Five themes in 2Q24 A cautious path forward 0820 2024

19August2024|7:30PMHKT

ChinaBanks

Fivethemesin2Q24:Acautiouspathforward

Asweheadintolargebanks’2Q24earningsattheendofAugust,wesee?vekeythemeswhichweexpectinvestorstofocuson:

ShuoYang,Ph.D.

+852-2978-0701|shuo.yang@GoldmanSachs(Asia)L.L.C.

ClaireOuyang

1)WillNIMstabilize?Notlikely,inourview.While2Q24systemNIMreportedby

+852-2978-6686|

claire.x.ouyang@

the?nancialregulatorshows?atNIMforlargeSOEbanks,wedon’texpectbankNIMtostabilizefromhere,butinsteadexpectmountingdownwardpressureon

GoldmanSachs(Asia)L.L.C.

lowerassetyieldsandlowerdepositcostsavingtoreduceNIM.

2)Willbondinvestmentreturnspeakoutin2Q24?Likely,giventhePBOC’s

guidancetosupportlong-termrates,bondinvestmentreturnsshouldmoderatewithalowerdeclineinrates.Moreover,ourdatashowsthatourcoveredbanksincreasedMTMbondexposureby15%yoyin1Q24,withFVTOCIasa%CET1capitalat

~100%.Thissuggestsbanksmayneedtoconsiderdownsizingtheirexposuretobettermanagemarketrisk.

3)Whattoexpectregardingpropertyloangrowth?Mostinvestorswetalked

withthinknewpropertyloangrowthmaybeamissgiventhePBOC’sguidedloanquotaofRmb0.5tnin2024vs.GSeofRmb1.5tn.Weexpecttoseeanincreaseinpropertyloansin2Q24,reversingtheshrinkingbalancetrendofthepastfew

quarters.Contrarytomarketconsensus,wethinknewpropertyloanswillcome

fromlocalgovernment/SOEtofacilitatethereductioninhousinginventory(seeThePathForward).Thismeansmorepropertyloansarelikely.

_

4)HowdobanksviewtheNPLcycle?Weexpectbankstobemorecautiousonassetquality,withlessprovisionsreleasedin2Q24.WenotetheimpliedNPLratiohasbeenedgingupbasedonconsensusEPScutsandtheincreaseinNPLsfromthemanufacturingindustryandthesupplychainwhichaccountfor~40%ofour

estimatedsystemNPL.

5)Whattoexpectforbankdividendsin1H24?WefocusonDPSwherewecouldseemissesonweakerEPSgrowthandpayoutratiocutsin1H24.Wedonotruleoutthepossibilitythatbanksmayincreasedividendsbyusingreservedcapitalto

maintain?atfullyearDPSin2H24.However,weseethelikelihoodofthisaslowduetoacon?uenceofweakerNIMandmorecreditlosses,despitemorecapital

GoldmanSachsdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthe?rmmayhaveacon?ictofinterestthatcouldaffecttheobjectivityofthis

report.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcerti?cationandotherimportantdisclosures,seetheDisclosureAppendix,orgoto

/research/hedge.html.Analystsemployedbynon-USaf?liatesarenotregistered/quali?edasresearchanalystswithFINRAintheU.S.

GoldmanSachsChinaBanks

beingreleasedandmoreimportantlymuchhighervaluationmultiplescurrentlyvs.12monthsago.

Re?ectingthis,we?ne-tuneour2Q24Eestimates,loweringourPPOP/netpro?tby

-1.6%/-0.2%onavgvs.prior,resultinginyoygrowthof-3.5%/-1.4%onlessprovisionreleasein2Q24E,andtweakourFY24-26EPPOP/netpro?testimatesby-1.8%/-0.9%onlowerNIM,withournew12-mTPschangingby-1.2%/-2.4%onaverageforA/H

shares.WehighlightBuyratedCCBforitsstrongerbalancesheettomaintainDPS.

Exhibit1:Newvs.old:2Q24EPPOP

Rmbmn

Exhibit2:Newvs.old:2Q24ENPAT

Rmbmn

(Rmbmn)

ICBCCCBBOCABC

BoCom

PSBC

CMB

PAB

Industrial

Huaxia

BONJ

BONB

New

150,008

133,229

100,687

116,616

42,329

34,535

56,247

27,209

41,916

14,091

9,103

10,672

2Q24EPPOP

Old

150,117

133,713

105,472

116,180

43,815

34,870

56,779

26,823

41,916

14,091

8,015

11,195

2Q24EPPOP

Change

-0.1%-0.4%-4.5%0.4%-3.4%-1.0%-0.9%1.4%0.0%0.0%13.6%-4.7%

New

-2.8%

-2.3%

-2.4%

-1.8%

-5.4%

-4.0%

-4.3%

-13.5%

5.8%

-17.0%

17.2%

8.5%

Old

-2.7%

-2.0%

2.2%

-2.2%

-2.1%

-3.0%

-3.4%

-14.7%

5.8%

-17.0%

3.2%

13.8%

yoy

Change(ppts)

-0.1-0.4-4.60.4-3.3-0.9-0.91.20.00.014.0-5.3

(Rmbmn)

ICBCCCBBOCABC

BoCom

PSBC

CMB

PAB

Industrial

Huaxia

BONJ

BONB

New

82,696

77,557

65,302

61,186

21,424

23,127

36,559

10,947

18,424

5,730

5,908

6,746

2Q24ENPAT

Old

82,095

76,727

67,304

60,812

21,663

22,731

37,657

9,722

18,424

5,730

5,503

6,686

New

-1.5%

-0.8%

-1.0%

-0.9%

-0.9%

-1.0%

-1.8%

1.5%

3.8%

-10.4%

12.0%

5.9%

Change

0.7%1.1%-3.0%0.6%-1.1%1.7%-2.9%12.6%0.0%0.0%7.4%0.9%

2Q24ENPAT

Old

-2.2%

-1.8%

2.0%

-1.5%

0.2%

-2.7%

1.2%

-9.9%

3.8%

-10.4%

4.3%

5.0%

yoy

Change(ppts)

0.71.1-3.00.6-1.11.7-3.011.40.00.07.70.9

2Q24numbersofBONJandPABareactualdata.

Source:GoldmanSachsGlobalInvestmentResearch

2Q24numbersofBONJandPABareactualdata.

Source:GoldmanSachsGlobalInvestmentResearch

1.WillNIMstabilize?

Notlikelyinourview,although2Q24systemNIMreportedbythe?nancialregulator

shows?atNIMforlargeSOEbanks,whichislargelyinlinewithGSe.Wedon’texpectbankNIMtostabilizefromhere,butinsteadexpectmountingdownwardpressureonlowerassetyieldsandlessdepositcostsavingtolowerNIM.Wethinkthat:

_

1.Furtherpolicyratecutswouldlikelylowerthefundingcostofgovernmentdebtfori)debtrollover(seeTheTrinityreportI)andii)housinginventoryreduction(seeThe

PathForward).ThiscouldweighonbankNIM.Basedontherecent10bpspolicy

ratecut,ouranalysissuggeststhiscouldlowerbankNIMby-1.6/-5.4/-5.4bpsin

2024E/25E/26E.SystembankNIMcouldstabilizeat~1.3%in2H25vs.1.54%ofthesystemreportingin2Q24,providedtherearenomorepolicyratecuts.

2.Moreimportantly,webelieveshiftingbankassetmixtoloweryieldgov’tdebt

shouldreducebankNIM.Thisismainlydrivenbytheweakcreditdemandofretail

andcorporate,butstronggov’tcreditdemand,whichcanbeevidentinmonthlytotalsocial?nancing(TSF)datathatwetrack.Since2H23,monthlynewgov’tbondshaveaccountedfor53%oftotalnewcreditsonaverage,andthegov’tbondbalancehascontinuedtoedgeup,to19%oftheTSFbalancein7M24.Weexpectthistrendto

continue,withmoregov’tdebttakenonbythebanks,butlookforslowerloanbalancegrowthonearlyrepaymentofmortgagesandweakcapex?nancingofcorporatestolowerbankassetyield,andthuslowerNIM.

3.Banksdepositcostscandecreasefurther,inourview,buttolessextentthanwe

19August20242

GoldmanSachsChinaBanks

hadinitiallyexpected.Thisisbecausedepositcostshavebeengraduallydecliningtohistoricallylowlevels;forexample,the3-yeartimedepositrateis1.75%currently

vs.2.75%in1Q22.Wearealsoseeingbankstakingmoretimedepositswithlongertenure,drivenbyincreasingretaildemandinsearchofyield,againstthebackdropoflowersystemrates.

Overall,weexpecttoseelowerNIM,butalsothinkitlikelythat:

nLargeSOEbanksmayreportlessNIMcontractionvsothersmallerbanks.Thisis

mainlyduetoChina’sratepricingmechanism,whichcannotimmediatelyresetratesontheback-endbooksofbothloansanddepositswhenpolicyratechanges.Rate

repricingbasedonloancontracttenureanddepositmaturitydrivesthesizeand

paceofNIMchange.Thus,largeSOEbankswithbothlongermaturityofassetsandliabilitiesmayrepriceslower,resultinginlessNIMcontraction.

nForothersmallerbanks,thelowerNIMcontractionwouldmainlyrelyonmore

depositcostsaving.Thus,fundingcostmanagementofthesmallerbankswouldbekeytosetthemapartfromtheirpeers,inourview.WewouldexpectsmallerbankslikeBONBandBONJtohavemoredepositcostsaving,whichwouldmeantheir

NIMwoulddecreaseless.

nHavingsaidthis,westillexpectmostbankstoguideconservativelyonNIMtrendsdespitethelikelybetter-than-expected2Q24prints.

Exhibit3:SystembankNIMmaystabilizeat~1.3%in2H25vs.1.54%ofthesystemreportingin2Q24,providedtherearenomorepolicyratecuts

Exhibit4:Monthlynewgov’tbondshaveaccountedfor53%oftotalnewcreditsonaveragesince2H23...

2.2

2.07

2.0

%

1.8

1.6

_

1.4

1.2

1.0

2020

Coveredbanksavg.NIMbeforeLPRcut

2.01

1.87

1.64

202120222023

AfterLPRcut

1.46

1.38

1.44

1.32

2024E2025E

1.37

1.32

2026E

160%140%120%100%80%60%40%20%0%

Newgovbondas%ofnewTSF

142%

90%

85%

77%

53%onavg.

40%

59%

47%48%

38%

26%

24%

10%

5%

Jul-23Sep-23Nov-23Jan-24Mar-24May-24Jul-24

Source:Companydata,GoldmanSachsGlobalInvestmentResearchSource:PBOC

19August20243

GoldmanSachsChinaBanks

Exhibit5:...andthegov’tbondbalancehascontinuedtoedgeup,to19%ofthetotalsocial?nancingbalancein7M24

Exhibit6:Depositcosthasbeengraduallydecliningtohistoricallylowlevels;forexample,the3-yeartimedepositrateis1.75%

currentlyvs.2.75%in1Q22

Govbondbalanceas%ofTSFbalance

19.0%

19%

18.5%

18.0%

17.5%

17.0%

16.5%

Jul-23Sep-23Nov-23Jan-24Mar-24May-24Jul-24

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

WMPyield:6mDepositrate:1yrDepositrate:3yr

2.75%

1.75%

1.50%

1.35%

1Q223Q222Q233Q234Q232Q24

Source:PBOCSource:Wind

Exhibit7:Durationofassetsandliabilitiesofourcoveredbanks

Asof2023

Exhibit8:NIM:Newvs.Old

4.03.53.02.52.01.51.00.50.0

3.5

3.5

(yrs)

0.9

1.0

Assetduration

3.4

3.4

3.3

3.1

1.0

0.8

0.9

0.6

Liabilityduration

3.02.9

0.9

0.6

2.52.5

0.9

0.7

2.5

2.2

1.1

0.8

New2025E

1.221.431.141.231.041.671.721.381.351.571.510.97

Company

2024E

1.371.511.241.341.141.751.811.451.421.691.571.04

2026E

1.201.411.111.201.021.641.701.381.331.541.500.96

ICBC

CCB

BOC

ABC

BoCom

PSBC

CMB

Industrial

HuaXiaPAB

BONBBONJ

NIM(%)

2026E

1.211.441.151.231.041.661.771.381.361.641.531.01

Old

2024E

1.371.511.251.341.141.761.841.451.431.711.611.06

2025E

1.221.451.181.231.041.691.771.381.381.641.541.00

Change(bps)

2024E2025E2026E

(0)(0)(1)

(0)(2)(3)

(1)(4)(4)

(0)(0)(3)0(0)(2)

(1)(2)(2)

(3)(5)(6)

---

(1)(2)(3)

(1)(7)(10)

(4)(4)(3)

(2)(4)(5)

Source:Companydata,GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearch

2.Willbondinvestmentreturnspeakoutin2Q24?

_

Wethinkso,giventhePBOC’sguidancetosupportlong-termrates(seehere),and

drawinglessonsfromtheSVBcaseintheUS,thePBOChassaidtheywanttopreventsomethingsimilarfromhappeninginChina.Weexpectbondinvestmentreturnsto

moderateonalowerdeclineinrates.

However,BONJ‘s2Q24resultreportedstrongbondinvestmentreturnsof33%/4%

yoy/qoq.WeseethisasabeatdespitethePBOC’sguidancetosupportlong-termrates

sinceMay.WenoteBONJ’sstrongbondinvestmentreturnsweredrivenbythe

increasingsizeofitsmark-to-market(MTM)bondportfolioin2Q24–bookedunderfairvaluechangeofpro?tandloss(FVTPL)andfairvaluechangeofothercomprehensiveincome(FVTOCI)–up18%/6%yoy/qoq.Thissuggeststousthatthesestrongreturnsmaynotbesustainableas1)BONJhasalreadyincreasedthesizeofitsMTMbond

portfoliotoboostthereturns,and2)theincreasingvolatilityoflong-termratesthatstartedinAugustcouldincreasethemarketriskofitsbondportfolio.

19August20244

GoldmanSachsChinaBanks

Wesummarizethestatisticsonbanks’reportedMTMbondportfoliosandnotethat

startingfrom1Q23to1Q24,1)theMTMbondportfoliosofourcoveredbanksgrewby15%;2)theMTMbondportfoliosownedbysixlargeSOEbanksgrewby20%vs.2%ofothersmallerbanks;3)FVTOCIasa%ofCET1capitalchangedby+12ppts;and4)thelargeSOEbanksincreasedtheFVTOCIasa%ofCET1capitalby15pptsvs.the

othersmallerbankswhichdecreaseditby-2ppts.

WeconcludethatbanksmaybeloadingupontoomanyMTMbonds,whichcould

exposethemtomoremarketrisk.Wethinkthepolicycomboofguidancetosupportlong-termratesandtherecentLPRcutcouldhelpbankstodownsizetheirMTM

exposurewhichwouldhelpsmoothanyearningsimpact.

Lookingahead,itisalsopossiblethatbankscouldmovetheirMTMbondexposureto

theamortizedcostaccountinordertoreducemarketrisk.Asaresult,weexpectbanks’NIMandalsoPPOPROAtodecline.Weestimatebondinvestmentincomeforour

coveredbankstochangeby29%/-22%yoy/hohin2H24Eonaverage.

Exhibit9:Bondinvestmentincomeasa%oftotalrevenueforourcoveredbanks

Exhibit10:Weestimatebondinvestmentincometochangeby29%/-22%yoy/hohin2H24Eonavg.

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1Q23

40%

27%

23%

19%

16%

13%

1Q24

12%

10%

7%

6%

4%

3%

30

25

Rmbbn

20

15

10

5

0

Investmentincome2H24Eyoyhoh

100%80%

84%

55%

27%

16%

-1%-15%

-47%

35%

15%

-4%

-16%-16%

-23%

57%

18%

-21%-34%

49%

0%

-12%

-20%

-29%

60%40%20%

0%

-6%

-20%

-32%

-40%-60%

Source:CompanydataSource:GoldmanSachsGlobalInvestmentResearch

_

Exhibit11:TheMTMbondportfoliosofourcoveredbanks(whichaccountfor10%ofbankingassets)grewby15%

Rmbtn

Exhibit12:TheMTMbondportfoliosownedbysixlargeSOEbanksgrewby20%vs.2%ofothersmallerbanks

Rmbbn

24

23

Rmbtn

22

21

20

19

18

FVTPL+FVTOCIFVTPL+FVTOCIas%oftotalassets(RHS)

9.9%

10.0%

9.5%9.4%9.5%9.5%

+15%

1Q232Q233Q234Q231Q24

9.0%

8.0%

7.0%

6.0%

Rmbbn

ICBC

CCB

BOC

ABC

BoCom

PSBC

CMB

PAB

IndustrialHuaxia

BONJBONB

LargeSOEbanks

Othersmallerbanks

4Q23

1Q23

1Q24

3Q23

3,139

2,842

3,555

2,366

1,522

1,372

1,388

592

1,577

719

620

843

14,795

5,738

2Q23

3,043

2,837

3,799

2,750

1,530

1,399

1,445

618

1,534

618

641

816

15,358

5,673

3,191

2,702

3,256

2,216

1,489

1,374

1,360

588

1,605

662

601

831

14,227

5,647

3,214

2,961

3,992

3,871

1,518

1,517

1,461

653

1,466

641

687

853

17,073

5,761

3,210

2,860

3,448

2,286

1,488

1,323

1,344

586

1,526

703

618

838

14,616

5,615

yoy

1%10%23%75%2%10% 7%11%-9%-3%14%3%20%2%

Source:CompanydataSource:Companydata

19August20245

GoldmanSachsChinaBanks

Exhibit13:ThetotalFVTOCIasa%ofCET1capitalchangedby

12ppts...

Exhibit14:ThelargeSOEbanksincreasedtheFVTOCIasa%ofCET1capitalby15pptsvs.theothersmallerbankswhich

decreaseditby-2ppts

FVTOCIas%ofCET-1capital

100%

95%

92%

91%91%

90%

87%

85%

80%

1Q232Q233Q234Q23

99%

1Q24

120%

102%

100%

84%

80%

60%

40%

20%

0%

1Q23

LargeSOEbanksOthersmallerbanks

101%90%

100%89%

100%

102%

99%

88%

2Q233Q234Q231Q24

Source:CompanydataSource:Companydata

3.Whattoexpectregardingpropertyloangrowth?

Weexpecttoseeanincreaseinpropertyloansin2Q24,reversingtheshrinkingbalance

trendofthepastfewquarters.Contrarytomarketconsensus,wethinknewpropertyloanswillcomefromlocalgovernment/SOEtofacilitatethereductioninhousing

inventory(seeThePathForward).Thismeansmorepropertyloansarelikely.

InourPathForwardreport,wenotedthatweexpectRmb4.5tninnewpropertyloansin2024E-26Etobackstopthedebtrolloverriskofpropertydevelopers.ThismeansRmb~1.5tninnewpropertyloansin2024E,whichismuchhigherthantheRmb0.5tninnew

propertyloansonthePBOC’sRmb0.3tnre-lendingquota.Mostinvestorswetalkedwiththinknewpropertyloangrowthwouldbeamissgiventhegapbetweenour

estimatesandthePBOCquota.Wethink:

_

nThePBOC’sRmb0.3tnrelendingquotaisfundingwithcheapercostthatcanbeusedbybankstodonewpropertyloans.

nMoreimportantly,theavailabilityofcollateralandtheloantovalue(LTV)shouldbekeydriversofpropertyloangrowth.Asdiscussedpreviously,weexpectlocalgov’ttostepupandborrowfrombankstoreducehousinginventory,withhigherLTV,

suchas40%,vs.20%LTVtopropertydevelopers.

WenotethatCMBgrewpropertyloansby+7%qoqin1Q24,reversingitsown

shrinkingbalancetrendofthepastfewquarters.WeexpectthistrendtocontinueandforlargeSOEbankstogrowmorepropertyloansgiventheirlargerbalancesheets.

Questionstobanks’managementontheearningscallscouldinclude1)thepricingandriskofnewpropertyloans,2)whowilltakethenewpropertyloans,localgov’tor

propertydevelopers.

19August20246

GoldmanSachsChinaBanks

Exhibit15:WeexpectRmb4.5tninnewpropertyloansin2024E-26Etofullyreplacepropertybondsandshadowbankinginthreeyears

Exhibit16:Thiswouldresultin?attotalpropertyfunding,which

mayreducerolloverriskandthustheprobabilityofdefault(PD)forbanks

4

3

2

Rmbtn

1

0

-1

-2

-3

Propertybond

23%

10%

20182019

Shadowbanking

5%

0%

20202021

Propertyloan

4%

1%

20222023

Propertyloanyoy(RHS)

4.5tn

20%

7%

4%

2024E2025E2026E

25

20

Rmbtn

15

10

5

0

PropertybondShadowbankingPropertyloanTotalfundingyoy(RHS)

30%25%20%15%10%5%

0%

-5%-10%

20

20

24%

20

18

19

18181818

10%

3%

0%0%0%

-2%

-3%

-6%

2018201920202021202220232024E2025E2026E

Source:GoldmanSachsGlobalInvestmentResearch,PBOCSource:GoldmanSachsGlobalInvestmentResearch,PBOC

Exhibit17:Propertyloansofourcoveredbanksaccountfor3-9%oftotalloans...

Asof2023

Exhibit18:...withanNPLratioof0.1-5.6%

Asof2023

10%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

Propertyloanas%oftotalloans

9.2%

8.0%

7.5%7.4%

6.1%

5.0%

4.2%

4.4%

4.1%4.1%

3.9%

3.1%

5.6%

7%6%5%4%3%2%1%0%

PropertyloanNPLratio

5.5%

5.3%

5.4%5.4%

5.0%

4.2%

2.5%

0.9%0.8%

0.6%

0.1%

Source:CompanydataSource:Companydata

_

4.HowdobanksviewtheNPLcycle?

Weexpectmostbankstocontinuetoreleaseprovisionsforpro?tgrowthin2Q24,but

thatahigherNPLformationratewouldposeupwardpressureonbanks’provisioning

levels,resultinginlessprovisionsreleased.Weexpectthegrowthgapbetweenrevenueandnetpro?ttoconvergewithlessprovisiontoreleasein2Q24.

From1Q24wenotethat1)CMBnarrowedthegrowthgapbetweenrevenue(-5%yoy)andnetpro?t(-2%yoy)withless-than-expectedprovisionsreleased,and2)PSBCandBONBcameinwithahigherNPLformationrateandmoreprovisions.Wethinkwe

couldseemoreofthistrendinourcoveredbanks’2Q24results,aswethinkbanksmay

beefupprovisionstosafeguardtheirbalancesheets,againstthebackdropofachallengingmacro.

Accordingtoourconversationswithinvestors,theassetqualityofthemanufacturing

industryandthesupplychainsistopofmindgiventheovercapacitysituation(seehere).

19August20247

GoldmanSachsChinaBanks

Wenotethat:

nTheimpliedNPLratiobackedoutbytheEBIT/interestexpenseisedgingupbasedondownwardrevisionsof2024E/25Econsensusearnings.

nManufacturingloanscouldaccountfor~22%totalloanbooks,withtheimpliedNPLaccountingfor~40%oftotalestimatedNPLin2025E.

nMoreNPLfromthemanufacturingindustryandthesupplychainson1)weakeningcash?owduetoovercapacity,andfurthermore2)alikelytightercreditsupplytotheprivatesectoronslowersystemcreditgrowthandincreasinggovernmentcredit

demandtosupportgrowthandhousinginventoryreduction(seehere).

Exhibit19:Weexpectthegrowthgapbetweenrevenueandnetpro?ttoconvergeonlessprovisionreleasedin2Q24

2Q23

RevenueyoyProvisionyoyNPATyoydiff(ppts)Revenueyoy

ICBCCCBBOCABC

BoCom

PSBC

CMB

PAB

Industrial

Huaxia

BONJ

BONB

a-3%-2%3%-1%4%1%1%-5%-1%-2%1%10%

-9%-15%19%-13% -3%-31%-26%-17%-9%-11%-35%10%

b3%8%0%7%4%7%10%17%-1%7%2%14%

c=a-b

-7

-10

3

-8

0

-7

-10

-22

-1

-9

-1

-4

a

-4%

-3%

-4%

-2%

0%

1%

-5%

-14%

4%

-7%

3%

6%

2Q24numbersofBONJandPABareactualdata.

Source:Companydata,GoldmanSachsGlobalInvestmentResearch

Exhibit20:TheimpliedNPLratiobackedoutbytheEBIT/interestexpenseisedgingupbasedondownwardrevisionsof2024E/25Econsensusearnings

1Q24

Provisionyoy

-8%

-7%

6%

-2%

-6%

-19%

-13%

-35%

46%

-20%

-6%

6%

NPATyoy

b-3%-2%-3%-2%2%-1%-2%2%-3%1%5%6%

diff(ppts)c=a-b

-1

-1

-1

0

-2

3

-3

-16

8

-8

-3

-1

Revenuea

-3%

-3%

-2%

-3%

-5%

-3%

-5%

-12%

6%

-14%

13%

9%

2Q24E

yoyProvisionyoy

-7%

-5%

-25%

-8%

-10%

-14%

-17%

-23%

3%

-24%

55%

15%

NPATyoyb

-1%

-1%

-1%

-1%

-1%

-1%

-2%

2%

4%

-12%

12%

6%

diff(ppts)c=a-b

-1

-2

-1

-2

-4

-2

-3

-14

1

-2

1

3

Exhibit21:Manufacturingloansperourframeworkcouldaccountfor~22%totalloanbook,andtheimpliedNPLcouldaccountfor

~40%ofthetotalestimatedNPL

NPLmix-Ashare

17.0%

15.0%

13.0%

_

11.0%

9.0%

7.0%

5.0%

3.0%

BasedonMayconsensusBasedonlatestconsensus

11.6%

9.8%

8.4%

8.0%

Property

ConsumerDiscretionaryUtilities

Industrials

ConsumerStaplesEnergy

HealthcareMaterials

InformationTechnology

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

4Q20

1Q21

2Q21

3Q21

4Q21

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2024E

2025E

~40%

NPLfrommanufac-

100%90%80%70%60%50%40%30%20%10%0%

Source:Wind,GoldmanSachsGlobalInvestmentResearchSource:Wind,GoldmanSachsGlobalInvestmentResearch

5.Whattoexpectforbankdividendsin1H24?

WefocusonDPSwherewecouldseemissesforourcoveredbanksonweakerEPSgrowth.Weoutlinetwoscenarios:

nScenario1:Withanunchangeddividendpayoutratioin1H24,DPScoulddecreaseby-5%onaveragevs.1H23forbanksannouncedinterimdividend(assumingthe

19August20248

GoldmanSachsChinaBanks

samepayoutratioasfull-year2023).

nScenario2:WithDPS?atin1H24vs.1H23,thedividendpayoutratiocouldbe-1.4pptsonaveragevs.1H23forbanksthatannouncedaninterimdividend

(assumingthesamepayoutratioasfull-year2023).

WithpotentiallyweakerEPSandnoupliftinthedividendpayoutratio,2H24DPScouldalsobeatriskofamiss.Thisapplies