Latest Search
Quote
| Back Zoom + Zoom - | ||||
|
<Research>HSBC Research: PBOC Rate Cut Expectations Within Yr Lower; CN Banks' NII Seen Expanding; ICBC, CCB, BOC H Shrs Preferred
Recommend 23 Positive 29 Negative 13 |
||||
|
||||
|
HSBC Global Investment Research noted in a report that the People's Bank of China (PBOC) removed the wording on "potential RRR or rate cuts" in its 1Q26 monetary policy report. This moderated market expectations for any Loan Prime Rate (LPR) cuts during the remainder of 2026. Starting from 3Q26, banks are urged not to let "high interest rate" interbank time deposits account for more than 10% of the total. Such "anti-involution" policies will reduce price competition among banks, leading to a moderate decline in funding costs. The banks covered by the broker had an average interbank funding cost of 1.76% in 2H25, while one-week to one-year SHIBOR stood at around 1.3-1.5%, indicating considerable room for decline. ICBC (01398.HK) and BANKCOMM (03328.HK) may benefit more. Corporate banking of Chinese banks continued to outperform retail: (1) TSF data for April 2026 confirmed positive MoM growth in corporate loans, while retail loans were negative, likely due to weakness in credit cards and mortgages. (2) As more time deposits are reallocated to wealth management products, insurance products and mutual funds, deposit competition may intensify. Banks with high loan-to-deposit ratios may face pressure first, such as MINSHENG BANK (01988.HK), CITIC BANK (00998.HK) and CEB BANK (06818.HK). Among Chinese bank stocks, the broker preferred ICBC H shares, CCB (00939.HK), BANK OF CHINA (03988.HK) and CMB (600036.SH). Industry developments reinforce its conviction that, supported by sustained NII expansion, stronger fee income and favorable policies, price-to-earnings and price-to-pre-provision profit ratios may see re-rating. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
AASTOCKS Financial News |
||||
Copied to Clipboard
 |
||||
