"Major Banks" CMB International: The operating environment for domestic banks is improving, urging attention to structural opportunities in joint-stock banks

Jiaoyin International published a research report stating that as the endogenous growth momentum of market entities gradually recovers, the operating environment of domestic banks is improving. Joint-stock banks represented by China Merchants Bank (03968.HK) and CITIC Bank (00998.HK) are expected to maintain stable operating performance in 2025. The report mentioned that China Merchants Bank, as a benchmark bank for retail business, is currently seeing an improvement in the risk appetite of its mid-to-high-end customer base, with overall revenue and net profit core indicators showing improvement. Meanwhile, CITIC Bank, as a traditional corporate bank, is experiencing a stable recovery in net profit growth.

The report indicated that 2026 is the starting year of the 14th Five-Year Plan, and further fiscal and monetary policy efforts are expected to drive credit demand from enterprises, improve investment and consumption expectations from individuals, and assist in the stable development of bank operations. At the same time, a stable net interest margin and low non-performing loan ratio will also support the growth of the banking industry.

The report suggests focusing on structural opportunities in joint-stock banks with stable fundamentals and relatively high dividends as long-term capital continues to enter the market