Guotai Haitong released a research report forecasting that the full-year 2025 revenue and net profit attributable to shareholders of listed banks are expected to grow by 1.5% and 2.2%, respectively. This represents an improvement of 0.3 percentage points for both metrics compared to the first three quarters of 2025, primarily benefiting from stable net interest margins (NIM) and a continued decline in credit costs.
Regarding NIM, the report estimates the average NIM for banks in 2025 will hold steady at 1.40%. With NIM stabilizing, the growth rate of net interest income is anticipated to turn positive, with a full-year projected growth of 0.3% (compared to a -0.6% growth in the first three quarters of 2025). This stabilization is attributed to the repricing of matured high-cost, long-term deposits, coupled with unchanged Loan Prime Rates (LPR) and a deceleration in the decline of new loan issuance rates during the period.
The main points from Guotai Haitong are as follows: Performance Outlook: The full-year 2025 revenue and net profit attributable to shareholders for the sample banks (26 listed banks) are forecast to grow by 1.5% and 2.2%, respectively. This is an improvement of 0.3 percentage points for each metric compared to the first three quarters, mainly due to steady NIM performance and a continued decrease in credit costs.
Scale: The growth rates of interest-earning assets and loans in Q4 2025 are projected to be 9.04% and 8.07%, respectively, down by 0.12 and 0.05 percentage points from Q3 2025. According to central bank credit data, the loan growth and bond investment growth for financial institutions at the end of December 2025 were 6.9% and 16.4%, respectively, down by 0.3 and 2.0 percentage points from the end of September 2025. Among them, large banks and small-to-medium banks recorded loan growth rates of 8.4% and 5.4% at the end of December, down by 0.4 and 0.1 percentage points from the end of September, indicating that large banks maintained relatively high credit growth.
NIM: The average NIM for 2025 is expected to remain at 1.40%. With NIM stabilizing, the growth rate of net interest income is expected to turn positive, with a full-year projected growth of 0.3% (compared to -0.6% in the first three quarters of 2025). Benefiting from the repricing of matured high-cost, long-term deposits, unchanged LPR, and a slowing decline in new loan issuance rates (the rates for new corporate loans and personal housing loans in December were approximately 3.1%, flat compared to September, while the annual average new corporate loan rate decreased by about 30 basis points), bank NIM has temporarily stabilized.
Fee-based Income: The growth rate for 2025 is forecast at 5.1%, up 0.1 percentage points from the growth rate in the first three quarters of 2025. Against the backdrop of low interest rates, the appeal of participating insurance products, which combine "guaranteed returns + floating dividends," has become prominent. Efforts in the bancassurance channel are expected to drive growth in fee income. In recent years, banks have de-emphasized sales-based income, shifting focus instead to growth in assets under custody. With the equity market maintaining its momentum, wealth management income is also expected to show good growth.
Other Non-interest Income: The growth rate for 2025 is projected at 4.8%, down 2.8 percentage points from the growth rate in the first three quarters of 2025. In the fourth quarter, bond market rates first declined and then rose, with the yield on 10-year government bonds remaining essentially flat compared to the end of September. The closing price of the ChinaBond Total Price Index fell by 0.08% compared to the end of September. As fair value gains/losses are linked to interest rate changes, banks may have made preemptive portfolio adjustments in Q4 to mitigate the immediate impact of rate volatility on performance. The drag from bond valuation changes in Q4 is expected to diminish sequentially. However, considering the rapid decline in bond market rates during the same period last year (the 10-year government bond yield fell by 48 basis points in Q4 2024), bank earnings from bond investments still face a high base effect pressure. The performance of individual stock investment returns will depend on the banks' intertemporal allocation strategies.
Asset Quality: The credit cost for 2025 is estimated at 0.58%, down 8 basis points from the first three quarters of 2025. The non-performing loan (NPL) ratio is expected to remain quarter-on-quarter flat at 1.21%, while the provision coverage ratio is expected to decrease slightly by 4 percentage points quarter-on-quarter to 239.1%. Risks in key corporate sectors are being continuously resolved, and existing burdens are being cleared out. The pace of retail risk exposure may stabilize at a high level. Industry calculations estimate the NPL formation rate for 2025 at approximately 0.67%, basically flat compared to the first three quarters of 2025.
Investment Recommendations: For bank sector investment in 2026, focus on three main themes: 1) Seek targets with potential for accelerating or maintaining high earnings growth, recommending Bank of Ningbo (002142.SZ), China Merchants Bank (600036.SH), and Bank of Nanjing (601009.SH); 2) Pay attention to banks with expectations of convertible bond conversion, recommending Bank of Chongqing (601963.SH) and Bank of Changshu (601128.SH), with related targets including Bank of Shanghai (601229.SH); 3) The dividend strategy is still expected to persist, recommending Bank of Communications (601328.SH), Bank of Jiangsu (600919.SH), Chongqing Rural Commercial Bank (601077.SH), and Shanghai Rural Commercial Bank (601825.SH).
Risk Warning: Credit demand weaker than expected; structural risks exceeding expectations.
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