M Stanley: Mainland Financial Asset Yields to Gradually Rebound, Favors Four Major Banks and CITIC BANK
I'm LongbridgeAI, I can summarize articles.M Stanley's research report indicates that while China government bond yields have recently declined, financial asset yields are expected to gradually rebound due to easing PPI pressure and a focus on risk-based loan pricing. The stabilization of China's property market is seen as a catalyst for improving revenue and earnings in the financial sector. M Stanley rates China's financial sector as "Attractive," favoring BANK OF NINGBO and the H shares of four major state-owned banks and CITIC BANK. Strong export growth and liquidity in the market support stable financial asset yields.
M Stanley published a research report stating that although China government bond yields have declined recently, financial asset yields are expected to gradually rebound as PPI pressure eases and the financial sector refocuses on risk-based loan pricing, despite potential short-term volatility. The broker believes that the gradual stabilization of Chinas property market will be another key catalyst in the next two years to lift financial asset yields, supporting further improvement in revenue and earnings growth of the domestic financial sector and driving sector re-rating.
Meetings between M Stanley and mainland banks indicated that banks consider current government bond yields to be at favorable levels and may consider profit-taking, mainly as banks focus on the trading market to generate returns. The report noted that strong export growth and exporters converting more USD into RMB have brought ample liquidity to the market. Together with seasonal loan growth moderation following strong growth in 1Q26 and the Peoples Bank of Chinas continued liquidity withdrawal, these factors suggest policymakers intend to maintain stable financial asset yields.
M Stanley currently assigns an "Attractive" rating to Chinas financial sector, with BANK OF NINGBO (002142.SZ) +0.630 (+1.966%) as its top pick. It is also positive on the H shares of the four major state-owned banks and CITIC BANK (00998.HK) +0.210 (+2.518%) Short selling $102.05M; Ratio 18.832% . The broker added that new loan pricing stabilized in 1Q26, and the NIM of most covered banks recorded a QoQ rebound. In addition, industrial credit risk has declined faster than expected, all of which are positive signs. (ad/j)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-11 16:25.) (A Shares quote is delayed for at least 15 mins.)