For stock investors, authoritative, professional, timely and comprehensive analyst research helps uncover potential thematic opportunities. The disclosure of Q3 2026 earnings reports by A-share listed banks has now concluded. Wind data shows that in the first three quarters of this year, 42 A-share listed banks together generated operating revenue of 4.66 trillion yuan, up 7.81% year on year, and net profit attributable to parent company shareholders of 1.75 trillion yuan, up 3.78% year on year. Some market participants believe that in the current low interest rate environment, the banking sector offers attractive dividend allocation value, but divergence within the sector is pronounced, with state-owned major banks and some high-quality city commercial banks posting relatively strong results.
State-owned major banks all achieve dual growth
By bank type, state-owned major banks continued to play their role as ballast, delivering dual growth in both revenue and net profit. In the first three quarters, the six state-owned major banks together generated operating revenue of 2.98 trillion yuan, up 9.44% year on year, and net profit attributable to parent company shareholders of 1.14 trillion yuan, up 6.14% year on year. These two figures accounted for 64% and 65% respectively of the totals for all listed banks. Among them, Industrial and Commercial Bank of China Ltd (ASX: 601398) continued to lead with revenue of 695.947 billion yuan and net profit attributable to parent company shareholders of 285.64 billion yuan, up 8.74% and 5.83% respectively year on year; Agricultural Bank of China Ltd (ASX: 601288) posted revenue of 618.812 billion yuan and net profit attributable to parent company shareholders of 236.546 billion yuan, up 12.33% and 7.10% respectively year on year, with both growth rates ranking first among the six major banks; China Construction Bank Corp (ASX: 601939) reported revenue and net profit attributable to parent company shareholders of 638.939 billion yuan and 274.226 billion yuan, up 11.37% and 6.55% respectively year on year; Bank of China Ltd (ASX: 601988) recorded revenue of 526.365 billion yuan and net profit attributable to parent company shareholders of 187.482 billion yuan, up 7.16% and 5.53% respectively year on year; Bank of Communications Co Ltd (ASX: 601328) reported revenue and net profit attributable to parent company shareholders of 215.653 billion yuan and 74.262 billion yuan, up 8.02% and 6.1% respectively year on year; Postal Savings Bank of China Co Ltd (ASX: 601658) posted revenue and net profit attributable to parent company shareholders of 281.61 billion yuan and 80.056 billion yuan, up 6.24% and 4.56% respectively year on year. Guotou Securities analysis suggests that in the first three quarters of 2026, listed banks' results overall exceeded expectations, with both revenue and profit growth improving on a quarter-on-quarter basis, but divergence between large and small banks was clear. Among them, state-owned major banks were the only sub-sector to see quarter-on-quarter improvement in net profit growth, mainly because the contribution from net interest margin improved notably on a quarter-on-quarter basis.
Among joint-stock banks, in the first three quarters, all nine listed banks achieved revenue growth, with an overall increase of about 3.80%; however, profit divergence was evident, with five joint-stock banks posting growth in net profit attributable to parent company shareholders and four recording declines. Among the 17 listed city commercial banks, 16 achieved revenue growth, with only Bank of Shanghai Co Ltd (ASX: 601229) declining 1.29% year on year; meanwhile, 14 city commercial banks posted growth in net profit attributable to parent company shareholders, with only Bank of Shanghai Co Ltd (ASX: 601229), Bank of Guiyang Co Ltd (ASX: 601997) and Bank of Lanzhou Co Ltd (ASX: 001227) declining 24.49%, 10.34% and 10.03% respectively year on year. Among the 10 listed rural commercial banks, six achieved revenue growth and nine achieved growth in net profit attributable to parent company shareholders. CICC said that state-owned major banks' net profit rose 7.7% year on year in the third quarter, with growth accelerating by 1.4 percentage points from the second quarter, mainly due to stable balance sheet expansion and interest margins and relatively high non-interest income growth; while profit growth at small and medium-sized banks slowed, mainly because some banks stepped up disposal of existing assets and faster growth in provisions dragged on profit growth.
Bank asset quality generally stable
In terms of asset quality, listed banks remained generally stable. Looking at the non-performing loan ratio, by the end of the third quarter, 12 of the 42 banks had seen a decrease compared with their half-year reports, 24 remained unchanged, and only six had increased. Specifically, Bank of Chengdu Co Ltd (ASX: 601838) kept its non-performing loan ratio at 0.68%, remaining the lowest among listed banks; Jiangsu Changshu Rural Commercial Bank Co Ltd (ASX: 601128), Bank of Ningbo Co Ltd (ASX: 002142), Wuxi Rural Commercial Bank Co Ltd (ASX: 600908), Bank of Hangzhou Co Ltd (ASX: 600926) and Xiamen Bank Co Ltd (ASX: 601187) also kept their non-performing loan ratios unchanged, all below 0.8%, indicating relatively good asset quality. However, some banks saw a notable rise in their non-performing loan ratios in the third quarter. For example, Bank of Shanghai Co Ltd (ASX: 601229) saw its non-performing loan ratio reach 1.99% at the end of the third quarter, surging 57 basis points from 1.42% in its half-year report; Bank of Lanzhou Co Ltd (ASX: 001227) also saw its non-performing loan ratio rise to 1.98% from 1.78% in its half-year report, an increase of 20 basis points. Bank of Shanghai Co Ltd (ASX: 601229) explained that its asset quality faces phased pressure due to weakened operations and debt-servicing capacity of certain existing real estate and construction sector clients, and that in order to accelerate the resolution of subsequent individual risks, it proactively downgraded asset classifications based on risks emerging in corporate or project operations. In the next stage, Bank of Shanghai Co Ltd (ASX: 601229) will accelerate case-by-case disposal, strictly control new risks, and continue to solidify its asset quality foundation. In terms of provision coverage, 32 of the 42 listed banks exceeded 200%, and 18 exceeded 300%. Among them, Bank of Hangzhou Co Ltd (ASX: 600926), Bank of Chengdu Co Ltd (ASX: 601838), Jiangsu Changshu Rural Commercial Bank Co Ltd (ASX: 601128) and Wuxi Rural Commercial Bank Co Ltd (ASX: 600908) all had provision coverage ratios above 400%, reaching 470.95%, 448.06%, 406.24% and 402.19% respectively. CICC said that for state-owned major banks and high-quality small and medium-sized banks with relatively solid provision levels, dividend and profit levels can achieve steady growth, and they still offer relatively high investment value.
As one of the core indicators measuring banks' profitability and pricing levels, net interest margin data also drew much attention. Wind data shows that among the 25 listed banks that disclosed net interest margin in their third-quarter reports, 17 had net interest margins above 1.4%, and only eight were below that level. Among them, Jiangsu Changshu Rural Commercial Bank Co Ltd (ASX: 601128) led with a net interest margin of 2.42%, and was also the only listed bank with a net interest margin above 2%. According to estimates by Ping An Securities, listed banks' annualized net interest margin in the third quarter was about 1.34%, flat on a quarter-on-quarter basis. Looking ahead to the fourth quarter, Ping An Securities believes that the dividend on the liability side of banks is still in the release channel, and combined with easing downward pressure on asset-side pricing, bank interest margins are expected to remain stable in the future. Huatai Securities believes that since the start of this year, the banking sector has risen against the trend amid market volatility. With external uncertainty still present and demand for stable returns rising, the banking sector combines earnings resilience and dividend sustainability, which helps support continued valuation repair. CICC said that listed banks' Q3 2026 reports were generally in line with expectations, with profits improving quarter by quarter. However, divergence among banks is intensifying, with some small and medium-sized banks accelerating asset disposal and higher impairment provisions dragging on profit performance. Looking ahead, listed banks' results are expected to remain stable, and it is advisable to focus on leading banks with stable fundamentals and dividends.
Comments