The Zhitong Finance App learned that Citibank released a research report that it predicts that the third-quarter revenue and profit growth of the five major domestic banks will accelerate. The year-on-year revenue growth of domestic bank stocks covered by the bank may accelerate to 8.8% (compared to 7.5% in the second quarter). The increase was mainly due to continued resilience in loan growth (although slightly slower than in the second quarter); net interest spreads remained stable from quarter to quarter; and when the revenue base for transactions in the third quarter of last year was low, the non-interest income performance was fair (although the year-on-year increase in handling fee revenue continued to be weak).
Citi pointed out that asset quality is likely to remain stable in the third quarter, and improvements in corporate non-performing loans offset the pressure on retail loans and non-performing loans. Banks with strong revenue growth continued to make additional provisions to plan ahead, resulting in profit growth (5.5% year-on-year increase expected in the third quarter of 2026, 3.3% year-on-year increase compared to the second quarter) slower than revenue growth. Major banks and regional banks continued to outperform joint stock banks in the third quarter, mainly due to good growth in public loans and fair value returns from Changxin Storage (688825.SH) shares held by the top five banks.
Citibank expects that Agricultural Bank (01288), Bank of Communications (03328), and Chongqing Rural Commercial Bank (03618) will perform better than expected, while Postbank (01658), Bank of China (03988), and Ping An Bank (000001.SZ) may fall short of expectations. In terms of preferred stocks, H shares recommend CCB (00939) and Agricultural Bank (01288); A-shares recommend Bank of Communications (601328.SH) and SPD Bank (600000.SH).