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<Research>UBS Expects CN Banks' 1Q Results to Be Positive Catalyst; Top Picks H-shrs of ICBC/ CCB/ BOC/ CITIC BANK
Recommend 28 Positive 44 Negative 22 |
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Chinese banks will begin announcing their 1Q26 results next Monday (20th), UBS published a research report saying. The results are expected to serve as a positive catalyst, particularly for the big four state-owned banks, benefiting from further revenue improvement, while joint-stock banks may see divergence. Furthermore, details of capital replenishment and injection plans for ABC (01288.HK) and ICBC (01398.HK) are yet to be announced, with pricing per share and fundraising size being critical. Investor focus may center on several areas, including net interest margin (NIM) trends, fee income growth, strength of bond trading income and new non-performing loan formation. Benefiting from lower deposit costs and a low base in 4Q25, BANKCOMM (03328.HK), CCB (00939.HK), PING AN BANK (000001.SZ) and MINSHENG BANK (01988.HK) are likely to record QoQ NIM expansion. Continued fundamental improvement in Chinese banks provided support, UBS added. During the late-April results announcement season, BOC, BANKCOMM, PING AN BANK and CITIC BANK (00998.HK) are expected to outperform peers, while INDUSTRIAL BANK (601166.SH) and MINSHENG BANK may lag. Looking ahead, amid geopolitical uncertainties, weak real estate conditions, RMB appreciation and export risks, the broker remained positive on defensive banks. Dividend yields of H-share banks remained above 5%, and improving fundamentals are expected to continue supporting share prices. Its top picks over the next 12 months are the H-shares of CITIC BANK, BOC, CCB and ICBC. Auto-translated by AI AASTOCKS Financial News |
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