Most Chinese bank stocks advanced in Hong Kong trading. At the time of writing, Bank Of Chongqing Co.,Ltd. rose 3.6% to HK$8.05; BANK OF TIANJIN increased 2.53% to HK$2.43; China Merchants Bank Co.,Ltd. climbed 2.44% to HK$48.66; and PSBC gained 2.15% to HK$5.23.
The positive movement follows a recent credit market work conference held by the People's Bank of China, focusing on plans for 2026. The conference emphasized the need to accurately assess economic and financial changes during the "16th Five-Year Plan" period, balance development and security, and enhance high-quality financial services for major strategies, key sectors, and weaker areas of the economy.
Market analysts suggest the central bank's conference is expected to bring multi-faceted benefits to the banking sector. Zhongtai Securities previously noted that strong early-year loan disbursements and continued front-loading of annual lending are likely to sustain year-on-year growth in credit expansion for high-quality regional banks. While corporate loan rates have seen a slight sequential decline, the drop is expected to be smaller than last year's. Retail loan rates have stabilized, with new mortgage rates holding at 3.06% for three consecutive quarters. Even amid expectations of interest rate cuts, the decline in net interest margins is projected to narrow year-on-year.
Supported by interest income, full-year bank revenues and profits are anticipated to remain robust. The sector currently offers strong earnings certainty, stability, and attractive dividend yields, presenting favorable investment value.
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