Banking raising the deposit reserve ratio has little effect on the industry (Figure)

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matter of months:

the People's Bank of China decided to January 20, 2011, the raised deposit-taking financial machine very RMB deposit reserve ratio by 0.5 percentage points. After adjusting for a very large financial institutions and small and medium financial institutions most of the deposit reserve ratio will reach 19% and 17%.

peace perspective:

1, a neutral impact on bank performance. Reserve ratio increases the performance of the bank has two main side effects: 1, less than the deposit reserve rate bonds and assets with the industry rate of return, pay more a part of the reserve will result in the loss spreads, but higher than the amount of small; 2, capital and will push to tighten the bond market with the industry and the level of interest rates, bank bonds and asset classes with the industry rate of return will increase. On the whole, the increase in the impact the profitability of banks is neutral.

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2, for the amount of lending to remain limited. As the third quarter, financial institutions very excess reserve rate was 1.7% in the fourth quarter after three consecutive increases totaling 150 basis points, the current excess reserve ratio has been at a low level, but we still believe that this increase for loans extrusion should be small: the current maturity of commercial banks more than 1 year of non-credit assets accounted for 20%, that is, even taking into account liquidity factors, the bank adjusted interest-earning assets, end of space is very great large. We judge, raised the deposit reserve rate for the loans out to be a marginal increment: 1, with the statutory reserve ratio continues to improve, banks end row of non-credit assets will be more room for adjustment pole small; 2, the tightening of liquidity will continue to push the level of bond market yields, when the bond and loan spreads narrowed to a certain extent, both for the banks will change the relative attractiveness of the loan will no longer be better than the bonds of a strict assets, the reserve ratio for that time out of the loan should be maximized.

3, the valuation of banking stocks compression repair space. As a huge plate market, adequate liquidity valuation of bank shares has been a necessary condition for the uplink center, and the reserve ratio further tightening of liquidity, the valuation of bank shares for repair will have a negative impact .

4, to maintain the recommended rating. Currently, an average of 10 bank stocks Dynamic PE and PB of 10.4 and 1.8 times, respectively, the dynamic 11-year PE and PB were 8.2 and 1.5 times. Despite the tightening of liquidity in the valuation of the central banks will bring about negative impact, but given the current valuation levels have a high margin of safety, to maintain the banking industry's Bank (601,166, stock it), Highlights, Bank of Nanjing (601,009, stock it), Shanghai Pudong Development Bank (600000, stock it).