JPM released a preview report on China's banking sector results for the second quarter, expecting listed Chinese banks to begin announcing their 2Q26 results in late August. The broker expects revenue of major state-owned banks to grow about 6% YoY in the second quarter, while profit is forecast to rise about 3% YoY, outperforming joint-stock commercial banks, whose revenue and profit are both expected to increase 1% YoY. At the stock level, the broker is positive on ABC (01288.HK) +0.040 (+0.713%) Short selling $122.75M; Ratio 37.595% , BANK OF CHINA (03988.HK) -0.030 (-0.588%) Short selling $201.06M; Ratio 25.024% , ICBC (01398.HK) -0.060 (-0.872%) Short selling $187.21M; Ratio 21.468% , CCB (00939.HK) +0.030 (+0.366%) Short selling $335.00M; Ratio 18.818% and BANKCOMM (03328.HK) +0.020 (+0.290%) Short selling $72.83M; Ratio 42.726% ahead of results announcements.

JPM noted that the sector's net interest income in the second quarter is expected to record positive growth, while NIM is forecast to narrow slightly by 1 bps QoQ, mainly due to deterioration in loan mix and fading benefits from deposit repricing. On a YoY basis, second-quarter NIM is expected to remain flat. Regarding fee income, the YoY growth rate is expected to slow from 5% in the first quarter to 3% in the second quarter. Wealth management-related fees are expected to remain strong, but weak retail sales will pressure bank card fees. Fee income at CCB (00939.HK) +0.030 (+0.366%) Short selling $335.00M; Ratio 18.818% and PU DEV BANK (600000.SH) 0.000 (0.000%) may record negative YoY growth in the second quarter, while PSBC (01658.HK) +0.020 (+0.417%) Short selling $42.16M; Ratio 35.528% is expected to deliver the fastest fee income growth among major state-owned banks. In addition, pressure on retail asset quality is expected to persist, with new non-performing loan formation remaining at a high level. Industry-wide impairment provisions are forecast to rise 10% YoY.

The broker added that the five major state-owned banks, namely ABC, BANK OF CHINA, BANKCOMM, CCB and ICBC, are expected to deliver stronger revenue and profit growth than the industry average, mainly benefiting from stable net interest income, stable QoQ NIM and mid- to high-single-digit business volume growth YoY. Among the major state-owned banks, due to the higher base of non-fee income at CCB, ICBC and BANKCOMM, the broker believes ABC and BANK OF CHINA have greater upside potential in revenue and profit. In contrast, profit growth at CM BANK (03968.HK) +0.700 (+1.512%) Short selling $66.57M; Ratio 20.520% and CITIC BANK (00998.HK) +0.070 (+1.009%) Short selling $7.58M; Ratio 7.349% in the second quarter is expected to remain flat compared with the first quarter. PSBC may see slower profit growth than state-owned peers due to higher credit costs, while weaker earnings growth at MINSHENG BANK (01988.HK) -0.050 (-1.441%) Short selling $18.15M; Ratio 29.457% , CEB BANK (06818.HK) -0.040 (-1.329%) Short selling $6.87M; Ratio 9.655% , INDUSTRIAL BANK (601166.SH) +0.050 (+0.283%) and HUAXIA BANK (600015.SH) +0.030 (+0.434%) could disappoint the market. (ad/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-07-16 16:25.) (A Shares quote is delayed for at least 15 mins.)