2065438+On February 28th, 2008, China Banking Regulatory Commission issued the Notice on Adjusting the Supervision Requirements of Commercial Banks' Loan Loss Provisions (Yin Jian Fa [2065438+08] No.7), and decided to adjust the supervision requirements of commercial banks' loan loss provisions.

The regulatory requirement for provision coverage ratio is adjusted from 150% to 120%~ 150%.

The regulatory requirement for loan provision ratio is adjusted from 2.5% to 1.5%~2.5%.

Let's talk about the significance of two indicators: provision coverage ratio and loan provision ratio. These two indicators are important regulatory indicators reflecting the quality of bank assets.

Provision coverage ratio: also known as "provision adequacy ratio", it is the ratio between the utilization ratio of bad debt provision in bank loans and the actual possibility, and the ratio between loan loss provision and non-performing loan balance. The coverage ratio of non-performing loan provision is an important indicator to measure the adequacy of loan loss provision of commercial banks.

Loan provision ratio: that is, the ratio of bad debt reserve to Shenzhen's withdrawal; Refers to the ratio of loan loss provision to loan balance, which is one of the important regulatory indicators reflecting the level of provision provision for commercial banks.

The numerator between them is the same, but the denominator is different. According to the new standard, the molecular-loan loss reserve is reduced.

Second, how will it affect bank statements?

Let's start with the conclusion. In theory, banks' profits will increase and their balance sheets will be more stable.

From the accounting point of view, in the balance sheet and income statement, we should borrow an asset impairment loss and an asset impairment reserve. The provision ratio is actually the impairment provision for loans, but the denominators of the two indicators are different.

Suppose a bank needs to make provision according to the provision coverage ratio of 150%, and needs to make provision for asset impairment of 1 100 million at the lender, then it needs to borrow an asset impairment loss at the same time, and this loss is included in the current profit and loss. If the provision coverage ratio is reduced, it is assumed that the asset impairment reserve with the same loan balance is reduced from 654.38+0 billion yuan to 80 million yuan after reduction, and the asset impairment loss borrowed in the current profit and loss is also 80 million yuan, and the profit of this profit and loss is increased by 20 million yuan. This is the most direct impact, profit increase.

Second, the balance sheet is more solid, because an asset impairment provision for loans needs to be deducted from the original value and recorded in the balance sheet. Now this is lower than the asset impairment reserve, and the assets in the balance sheet look more.

Third, how to transmit it to the bond market?

According to the above logic, due to the lack of reserves, the liquidity of banks will increase, and more funds will flow out to stimulate the bond market.

Judging from the performance of the bond market, after the news came out on the 6th, the bond market really started to be hot, breaking the long-term consolidation pattern, and bond futures closed up sharply, with the main contract of 10-year bond futures hitting a two-month high.

Teacher Kyushu Securities explained the transmission logic of lowering the provision ratio to benefit the bond market:

First, with the increase of bank capital, banks can invest in credit bonds and expand the scale of outsourcing, which is beneficial to the bond market.

Second, the increase of bank capital will help banks "transfer from off-balance sheet to on-balance sheet", and the "transfer from off-balance sheet to on-balance sheet" will proceed smoothly, and the impact on financial markets will also be reduced.

However, regarding the stimulating effect of the bond market, some investors in private placement bond said that the decrease of the provision ratio may be beneficial to the decrease of the default rate of credit bonds, but it remains to be seen whether it will promote the bond market.

Fourth, will the profitability of banks be substantially improved?

In the eyes of the industry, the decline in the provision ratio is more a book change, but it seems that the bank's profits may increase, but the bank's profitability has not improved significantly. Even the book profit may not be released obviously. Therefore, the bank's small partners don't have to expect a salary increase for the time being.

Lin Xiong, asset investment manager of Huanju Times, said that the impact on profits can be ignored, because the lower provision requirement does not mean that banks will release profits, because many banks have reached the requirement of 150%, which is equivalent to relaxing the bottom line, and banks will not release profits according to the bottom line, so it has no impact on bank profits.

The director of a large private equity investment said that most banks are up to standard, and there is a high probability that they will not release profits in the short term, because banks have always adopted the mode of counter-cyclical supervision in their history, and when there are many bad debts, they will make less provision. When the market is good and bad debts decrease, they will make more provisions to hedge the next cycle, especially for the four major banks. Banks are relatively conservative and will not release profits quickly because of the relaxation of standards. The prudence of the bank determines that this will not happen.

However, James Zhu, director of Mu Yi Asset Investment, also said that if the real bad situation is not far from the book, the provision will decrease and the profitability can indeed be improved.