<div id="readability-page-1"><div>BANK OF CHINA (03988.HK) -0.060 (-1.158%) Short selling $523.78M; Ratio 39.575% opened 0.6% lower this morning after announcing its 1Q26 results, and was last quoted at HKD5.11, down 1.4%, with turnover of HKD262 million. Citi said the bank's 1Q26 pre-provision operating profit (PPOP) rose 7.2% YoY (vs 7.8% YoY in 4Q25), mainly supported by a stable NIM and solid fee income, partly offset by weaker trading gains and a deteriorating cost-to-income ratio. Net profit increased 4.2% YoY to RMB56.6 billion (23% of FY2026 market forecast), as higher credit costs were partly offset by a lower effective tax rate. Earnings growth in 1Q26 slightly beat Citi's expectations. Return on assets (ROA) and return on equity (ROE) fell 3 bps and 63 bps YoY to 0.58% and 8.4%, respectively. Citi reiterated its Buy rating with a TP of HKD5.92.BANK OF CHINA reported 1Q26 operating income of RMB178.822 billion, up 8.44% YoY. Net profit rose 4.17% YoY to RMB56.631 billion, with EPS of RMB0.18. Net interest income increased 7.81% YoY to RMB116.143 billion, while NIM was 1.26%. Net fee and commission income grew 5.58% YoY to RMB27.082 billion. Asset impairment losses climbed 18.73% YoY to RMB38.286 billion. The non-performing loan (NPL) ratio edged down 0.01 ppts from end-2025 to 1.22%, while the NPL coverage ratio rose 2.8 ppts to 203.17%. As of end-March 2026, the bank's CET1 ratio was 12.18%, Tier 1 capital ratio 13.92%, and total capital adequacy ratio 18.23%.Results Beat ExpectationsCiti noted that 1Q26 net profit growth of 4.2% YoY beat expectations, ranking second among the six major state-owned banks. Looking ahead, Citi continues to name the bank's H shares as its sector top pick, expecting them to be a key beneficiary of continued accumulation of Chinese bank stocks by insurers. Overseas ROE, which previously dragged overall profitability, has recovered and now exceeds domestic ROE, making the bank's ROE trend more attractive than peers. Citi also highlighted that the bank offers the highest dividend yield among the Big Four state-owned banks (4.9% for H shares vs 4.7% sector average) and faces no equity dilution risk as it completed capital replenishment in 2025.JPM said 1Q26 results delivered a modest beat. Revenue rose 8% YoY and profit 4% YoY, exceeding its forecasts by 4% and 1%, respectively. The outperformance was driven by a positive NIM surprise and broad-based growth in net interest and non-interest income, with PPOP 4% above expectations. Revenue upside was partly offset by higher impairment costs (up 19% YoY), though credit cost at 64 bps was only 3 bps above JPM's estimate, suggesting a deliberate rebuilding of provision buffers amid solid revenue momentum. Asset quality continued to improve, with the NPL ratio declining to 1.22% and coverage ratio rising to 203%. JPM expects a mildly positive share price reaction and assigned a Buy rating with a TP of HKD5.8.G Sachs said overall 1Q26 results of the six major state-owned banks were generally better than expected. PPOP rose 12% YoY (6% above its forecast), supported by a 2 bps QoQ rebound in NIM (4 bps above forecast), driving an 8% YoY increase in net interest income (4% above forecast). Operating efficiency improved, with the cost-to-income ratio down 2 ppts. Non-interest income was broadly in line. Fee income grew 7% YoY (1% above forecast), while investment income surged 89% YoY on a low base. The six banks posted an annualised ROE of 9% and risk-weighted asset density of 54.5% (down 18 bps YoY) in 1Q26. For BANK OF CHINA, PPOP and net profit rose 7% and 4% YoY, respectively. G Sachs maintained a Buy rating with a TP of HKD5.35.------------------------------BrokerInvestment RatingTP CitiBuyHKD5.92 JPMBuyHKD5.8 G SachsBuyHKD5.35This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation.</div></div>

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BANK OF CHINAreported a 1Q26 net profit increase of 4.2% YoY to RMB56.6 billion, slightly beating expectations. Citi maintained a Buy rating with a target price (TP) of HKD5.92, while JPM and G Sachs also rated it Buy with TPs of HKD5.8 and HKD5.35, respectively. The bank's operating income rose 8.44% YoY, supported by stable net interest margins and solid fee income, despite higher impairment losses. The NPL ratio improved to 1.22%, and the CET1 ratio stood at 12.18%.

Brokers' Latest Ratings and TPs on BANK OF CHINA After 1Q26 Results