The Zhitong Finance App learned that SDIC Securities released a research report saying that the current improvements in bank income statements are being transmitted to balance sheet repairs. The implementation of new insurance credit regulations has brought about a definitive demand for dividend asset allocation. The dividend ratio of major banks increased dramatically in mid-'26, further strengthening the dividend attributes of the sector, compounding the contraction in overseas liquidity and the marginal convergence of actual domestic growth rates, and optimistic about the relative returns of subsequent sectors.
The main views of SDIC Securities are as follows:
The net interest spreads of 26H1 listed banks remained the same as in 25 years, far better than the same period in the past few years. Judging from the performance of both sides of assets and liabilities, 25H2 is an important inflection point
What continues to run through this is a misalignment in the deposit and loan interest rate reduction cycle. On the one hand, there is the difference in the extent of interest rate cuts; on the other hand, there is a natural difference in the repricing cycle between bank deposits and loans, making the misalignment of the interest rate cut cycle even more extreme. Another key factor in the bank's net interest margin performance exceeding expectations is an increase in peer self-regulation.
The market is very concerned about the trend of bank net interest spreads under the acceleration of interest rate marketization
The bank believes that the impact of the acceleration of interest rate marketization on banks' net interest spreads is gradual. The short-term impact is neutral, and may even have phased benefits. The medium- to long-term effects depend on the pace of interest rate changes on deposits and loans:
1. In the short term, banks' non-credit assets and active liabilities are the first to be affected. As of 26H1, the share of listed bank credit/financial investment (OCI+AC) /interbank assets in total assets was 57%/28%/5%, respectively, and the share of deposits/bonds payable/interbank liabilities in total liabilities was 71%/7%/15%, respectively.
2. Along with the policy interest rate change, the bank determined that the bank is expected to gradually adjust interbank deposit pricing, and it is only a matter of time before extending from current period to regular period. If we only consider the downward trend in the current pricing center in the same industry, the positive contribution of static estimates to banks' net interest spreads is about 0.8 BP, and the Chinese stock bank benefits relatively more. If interbank deposits and interbank regularity are also taken into account, the positive impact is expected to be close to 2BP.
3. The impact of bond investment is relatively smooth. 1) Domestic floating rate bonds account for an extremely low share; 2) The impact on interest spreads is mainly achieved through maturing reinvestment and net increase bond allocation. Roughly speaking, 23-24% of annual bond investments (AC+OCI) face substantial heavy pricing, or 6-7% of total assets.
4. The pace of loan interest rate change should not be expected too high. This is the core reason why the bank believes that the short-term impact of interest rate marketization is limited on banks' net interest spreads. The bank understands that loan interest rate anchoring still faces two practical obstacles: 1) Compared with LPR, DR001 fluctuates significantly higher. Furthermore, this fluctuation is not one-sided, so it may lead to an increase in loan interest rates during repricing. The degree of customer acceptance remains to be seen. 2) The absolute pricing level or low level of linked DR001 loans. The bank understands that regulation may also be concerned about the impact of loan interest rate anchoring on banks' net interest spreads. Currently, short-term loans account for about 20% of loans. Looking at the medium to long term, agricultural commercial banks and some urban commercial banks, which account for a high proportion of short- and long-term loans, may face more disturbances.
Bank net interest rate outlook 2027: still focusing on discussions on deposit repricing and loan interest rate declines
1) The supporting effect of time deposit repricing on 27-year bank net interest spreads was about 6BP, or about 40% of the 26-year repricing effect. 2) There may be many differences in judgment on the loan side, and the bank makes a judgment on this from the perspective of sensitivity measurement. Referring to the decline in loan interest rates of listed banks in the first half of '26 by about 24 BP (median value), the bank determined that the decline in interest rates in '27 was between 15-20 BP, and the net interest spread was still facing some downward pressure (3-6BP), but net interest income remained stable in the positive range of year-on-year growth, which means that the improvement in the profit sheet to the balance sheet is still sustainable.
Risk warning: Fiscal policy falls short of expectations; monetary policy exceeds expectations; real estate policy impacts bank asset quality in the short term.