The Zhitong Finance App learned that Guoxin Securities released a research report saying that considering that banks are still in a centralized deposit repricing cycle, supporting net interest spreads are expected to achieve a phased and steady recovery; structural risk exposure is still expected to be supported by policies, and banking revenue is expected to continue to improve in 26-27. At the same time, considering that the pressure on bank stock equalization funds to reduce their holdings has been greatly eased, the rebalancing of market risk appetite and style has helped banks increase their winning rate of obtaining relative returns in stages. It is recommended to focus on two main lines: 1. High-quality small and medium-sized banks with determined fundamentals; 2. Major state-owned banks with stable fundamentals and good defensive value.
Guoxin Securities's main views are as follows:
Net interest spreads may continue to be stable, but credit investment is relatively weak, and the growth rate of net interest income is expected to decline slightly
(1) Interest spread: The supporting effect of deposit maturity repricing on interest spreads is 70% or more in H1. Under interbank debt self-regulation, pricing behavior is gradually regulated, and there is room for improvement or marginal narrowing; however, considering that LPR remains stable, the downward drag effect of debt on stock assets weakens, and self-regulatory pricing requirements for new loans, the decline in asset-side returns is expected to narrow at the same time. It is predicted that the net interest spreads of listed banks in 26Q3 will be basically the same as 26H1. China's banks, stock banks, urban commercial banks, agricultural commercial banks are -0.1BP/-1.0BP/-1.2BP, respectively. (2) The credit growth rate has declined quarterly, the pace of government bond issuance is moderate, and the Q3 asset expansion growth rate is expected to continue to slow. By the end of September, the growth rate of loans and social finance had declined to 4.8%/7.1%, -1.6 pct/-1.2 pct, respectively, compared to the beginning of the year. Demand for credit continues to weaken. Since the beginning of the year, both corporate and retail loans have increased significantly, but the implementation of policy financial instruments has supported credit data in stages. The year-on-year decline in corporate medium- and long-term loans narrowed significantly in September. Looking ahead, it is expected to gradually drive project commencement and supporting credit investment and slow the downward slope of credit; in addition, the pace of issuing government bonds is still relatively lagging behind, and banks' non-credit asset expansion may also be under pressure. Listed bank loans are predicted to grow 6.20% year-on-year at the end of 26Q3, down 0.3 pct from 26H1, 6.58% growth in interest-bearing assets, and 1.0 pct lower than 26H1. Combining net interest spreads and volume growth, it is predicted that the net interest income of listed banks will grow 7.57% year-on-year in the first three quarters of '26, down 0.8 pct from 26H1.
Revenue growth is expected to slow, and other non-interest income may be the main support
(1) Revenue: Since Q3, the cumulative premium income growth rate has been steep. The decline in premium income in a single quarter increased, the average monthly daily turnover of the Shanghai and Shenzhen markets fell 20% + from the previous quarter, and the Shanghai and Shenzhen 300 Index's pullback deepened. The size of public funds contracted slightly at the end of August compared to the end of June, all indicating that processing fee revenue for the third quarter may be under some pressure. The net handling fee revenue of listed banks in the first three quarters of '26 is forecast to increase by 0.36% year-on-year, down slightly by 0.7 pct from 26H1. (2) Other non-interest rates: Long-term interest rates declined significantly in Q3. Combined with last year's lower base, gains and losses from changes in fair value are expected to increase significantly. State-owned Governor Xin's shareholding income confirmation will effectively support other non-interest income performance, but the support effect will also be distributed relatively smoothly from quarter to quarter. Assuming that the fair value change profit and loss is calculated based on Changxin Technology's 30% discount on September 30, the fair value change's contribution to the performance of a completed year is measured, and preliminary estimates are made based on each bank's full-year revenue profit for 25 years. It is estimated that it will contribute 1.3%-4.9% to the annual revenue and 3.3%-11.1% to the net profit due to the mother. Among them, CCB is the most significant. Furthermore, Q3 floating profit cashout was either relatively restrained, or the growth rate of investment income was slightly reduced. Other non-interest income is forecast to increase 14.28% year over year, up 5.4 pct from month to month.
Active risk management is still ongoing, and profit growth remains stable
First, there was no inflection point in the disclosure of loan risks. Some banks accelerated risk identification and disposal of Internet loan aid in Q3; second, a new real estate policy was introduced at the end of August, which placed higher requirements on housing companies' financial strength, cash flow management, etc., and compounded the relevant policies to expire at the end of the year. It is not ruled out that they will actively and orderly expose risks after the provision plan is fully raised. Banks will continue to centrally dispose of defects in key areas. It is predicted that 26Q3 listed banks accrued credit impairment losses at a rate of 19.5% year-on-year, an increase of 1.7 pct over 26H1.
Based on the above key assumptions, it is predicted that the 26Q3 revenue growth rate of listed banks will be 7.6%, a slight increase of 0.2 pct from 26h1, and the PPOP growth rate will be 9.6% year-on-year, which is basically stable from month to month. Net profit to mother will grow 3.5% year on year, a further increase of 0.5 pct from 26H1. The overall growth rate of performance is stable, and major state-owned banks continue to excel.
Risk Alerts
Monetary policy exceeds expectations and tightens; fiscal policy falls short of expectations; measures related risks.