Citi: Large and Regional Chinese Banks' 1Q26 Results Beat; NIM Recovery
I'm LongbridgeAI, I can summarize articles.Citi Research reported that in 1Q26, the average pre-provision operating profit (PPOP) growth for 21 Chinese banks was 9.5% YoY, up from 2.6% in 4Q25, driven by loan growth and NIM recovery. Sector earnings rose 3% YoY, with credit costs increasing as banks prepared for future risks. BANK OF BJ led with 24% PPOP growth, while CEB BANK saw a 1.8% decline. Top picks include BANK OF CHINA and PING AN BANK, with target prices raised. Overall, large and regional banks outperformed joint-stock banks.
Citi Research said that among the 21 Chinese banks under its coverage, average pre-provision operating profit (PPOP) growth accelerated to 9.5% YoY in 1Q26, compared with 2.6% in 4Q25. The improvement was mainly driven by resilient loan growth, NIM recovery, as well as solid trading gains and fee income. However, performance diverged across banks, with large banks and regional banks outperforming joint-stock banks.
Sector earnings in 1Q26 recorded a moderate 3% YoY increase. Credit costs edged higher as banks took advantage of strong PPOP growth to increase provisions against potential future risks. Most banks indicated that NIM has stabilized and expect full-year revenue and earnings growth to surpass last year.
During the period, BANK OF BJ (601169.SH) 0.000 (0.000%) posted the strongest PPOP growth in the sector at 24% YoY, while CEB BANK (06818.HK) -0.010 (-0.318%) Short selling $847.36K; Ratio 12.380% was the weakest with a 1.8% YoY decline. CHANGSHU BANK (601128.SH) -0.060 (-0.813%) recorded the fastest earnings growth at 11% YoY, whereas MINSHENG BANK (600016.SH) -0.040 (-1.070%) saw earnings fall 9.6% YoY, ranking at the bottom.
CCB (00939.HK) -0.130 (-1.471%) Short selling $402.98M; Ratio 42.500% , ICBC (01398.HK) -0.100 (-1.445%) Short selling $236.26M; Ratio 33.241% , ABC (01288.HK) -0.130 (-2.189%) Short selling $167.01M; Ratio 39.549% and PING AN BANK (000001.SZ) -0.030 (-0.260%) delivered results above expectations; while CM BANK (03968.HK) -0.400 (-0.850%) Short selling $221.89M; Ratio 41.995% , INDUSTRIAL BANK (601166.SH) -0.250 (-1.375%) , PU DEV BANK (600000.SH) -0.110 (-1.173%) , MINSHENG BANK and CEB BANK missed expectations.
The banks top picks are BANK OF CHINA (03988.HK) -0.040 (-0.786%) Short selling $166.07M; Ratio 29.420% H shares and PING AN BANK. The TP for the former was raised to HKD6.58 from HKD5.92, and the TP for the latter was lifted to RMB15.38 from RMB14.98. Both are rated Buy. For details, please refer to the separate table. (ss/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-04 16:25.) (A Shares quote is delayed for at least 15 mins.)
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