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<Research>CLSA Expects Steep Narrowing in NIM Decline for CN Banks This Yr; Profit Recovery Backed; TPs Raised Broadly
Recommend 29 Positive 36 Negative 20 |
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The downtrend in revenue for Chinese banks since 2023 is over, CLSA opined in its research report. Based on positive signs in NIM and wealth management fee income in 4Q25, the broker forecast the decline in NIM to narrow drastically in 2026 and stabilize QoQ from 2H25. Coupled with the recovery in fee income, this should underpin Chinese banks’ PPOP to normalized low-to-mid-single-digit growth. The broker believed that moderate revenue growth and stable dividends will become the new normal for the industry. It raised its target prices for BANK OF CHINA (03988.HK) from HK$3.9 to HK$6.7; CCB (00939.HK) from HK$10.4 to HK$10.9; BANKCOMM (03328.HK) from HK$9.2 to HK$9.3; and ICBC (01398.HK) from HK$5.2 to HK$7.5. All were rated Outperform. Meanwhile, CLSA trimmed its target price for PSBC (01658.HK) from HK$6.7 to HK$6.3, maintaining its Outperform rating. It also lowered its target price for Bank of Communications (601328.SH) from RMB9.4 to RMB9.3, and its target price for PING AN BANK (000001.SZ) from RMB13 to RMB12.7. All of these stocks received an Outperform rating. The top picks were CM BANK (03968.HK) (TP HK$70 kept with Outperform rating), BOC, and CCB. Auto-translated by AI AASTOCKS Financial News |
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