Core Viewpoint - The performance of the five major city commercial banks listed in the A-share market in the Yangtze River Delta region shows significant differentiation in growth rates, business structures, and asset quality as of the third quarter of 2025. Asset Scale - As of September 30, 2025, Jiangsu Bank leads with total assets of 4.93 trillion yuan, a year-on-year growth of 27.8% [2] - Ningbo Bank's total assets surpassed 3.5 trillion yuan for the first time, ranking second among city commercial banks [2] - Shanghai Bank continues to lag with a year-on-year asset growth of only 2% [2][13] Revenue and Profit - All five banks achieved year-on-year growth in both revenue and net profit in the first three quarters of 2025 [3] - Jiangsu Bank (67.18 billion yuan), Ningbo Bank (54.98 billion yuan), and Nanjing Bank (41.95 billion yuan) ranked in the top three for revenue [3][4] - Jiangsu Bank's net profit reached 31.9 billion yuan, leading the group with an 8.9% increase [4][5] Interest Income - Nanjing Bank reported a remarkable 28.5% year-on-year increase in net interest income, reaching 25.21 billion yuan [6][7] - Jiangsu Bank and Ningbo Bank also showed strong growth in net interest income, with increases of 19.6% and 11.8%, respectively [8] Non-Interest Income - In the first three quarters of 2025, Ningbo Bank's fee and commission income grew by 29.3% to 4.85 billion yuan, surpassing Jiangsu Bank [9] - Shanghai Bank experienced a decline in non-interest income, with a 6.9% drop [9] Financial Investment Performance - Shanghai Bank's investment income increased by 58.5% to 16.78 billion yuan, the highest among the five banks, with investment income accounting for 40.77% of its revenue [10][11] - All banks faced losses in fair value changes, with Shanghai Bank reporting the highest loss of 3.26 billion yuan [10] Asset Quality - As of September 30, 2025, the non-performing loan ratio for Jiangsu Bank, Ningbo Bank, and Nanjing Bank remained stable between 0.76% and 0.84% [14][15] - Jiangsu Bank's non-performing loan ratio decreased by 0.05 percentage points compared to the end of the previous year [14] Capital Adequacy - Jiangsu Bank's core Tier 1 capital adequacy ratio fell to 8.61%, the lowest among the five banks, and is less than one percentage point above the regulatory line [16] - Shanghai Bank maintained the highest core Tier 1 capital adequacy ratio at 10.52%, showing a slight increase [16]

Core Insights - The recent disclosure evaluation results for listed banks in China for the 2024-2025 period show that all listed banks received ratings of B or above, with 22 banks rated A, indicating a strong performance in information disclosure [1] Summary by Category Overall Ratings - All listed banks achieved a rating of B or higher, with 22 banks rated A, reflecting consistent performance compared to the previous year [1] - Only six banks experienced rating changes, with five banks improving their ratings and one bank, Shanghai Bank, experiencing a downgrade [1] Banks with Rating Changes - The following banks improved their ratings: - Zhangjiagang Bank - Hangzhou Bank - Huaxia Bank - Everbright Bank - Zhejiang Commercial Bank [1] - Shanghai Bank was the only bank to see a downgrade in its rating [1] Detailed Ratings - A selection of banks and their ratings includes: - Ping An Bank: A - Ningbo Bank: A - Agricultural Bank of China: A - Industrial and Commercial Bank of China: A - Shanghai Bank: B (downgraded) [2]

Investment Rating - The report indicates a cautious outlook on the credit growth rate, suggesting a shift towards quality improvement, with expectations for a recovery in corporate loan increments by 2026 [5][9]. Core Insights - Credit growth is expected to slow significantly starting in 2024, but the decline in growth rate is anticipated to moderate by 2026, with corporate loans likely to see a year-on-year increase [7][9]. - The relationship between credit growth and economic growth is weakening, emphasizing the need to optimize credit structure and reduce idle financial resources [9]. - The report highlights that the banking sector's total asset growth will outpace loan growth in 2025, driven by government bond supply and fiscal policies [9]. Summary by Sections Credit Growth Forecast - New RMB loans are projected at 21.3 trillion, 23.6 trillion, and 18.9 trillion yuan for 2022, 2023, and 2024 respectively, with a further estimate of 14.7 trillion yuan for the first three quarters of 2025 [9]. - For 2026, new loans are expected to be between 17.2 trillion and 17.7 trillion yuan, corresponding to a growth rate of 6.3% to 6.5% [9]. Loan Composition - In 2023, the total RMB loans are expected to reach 237.59 trillion yuan, with a year-on-year growth rate of 10.6% [8]. - Retail loans are projected to grow from 80.10 trillion yuan in 2023 to 82.84 trillion yuan in 2024, reflecting a growth rate decline from 5.7% to 3.4% [8]. - Corporate loans are anticipated to increase from 157.07 trillion yuan in 2023 to 171.01 trillion yuan in 2024, with a growth rate of 12.7% [8]. Regional Performance - Regions such as Jiangsu, Zhejiang, Sichuan, and Shandong are expected to continue outperforming the national average in loan growth due to strong economic performance and support from new policy financial tools [12]. Banking Sector Dynamics - The report notes that state-owned banks are expected to maintain a competitive edge due to lower funding costs and capital injections from the Ministry of Finance [12]. - The net interest margin is in a downward trend, but the rate of decline is expected to slow starting in 2025, with some smaller banks potentially stabilizing their margins by 2026 [13][17]. Asset Quality - As of Q2 2025, the non-performing loan (NPL) ratio for listed banks is reported at 1.25%, indicating a stable asset quality despite pressures on retail credit [37]. - The report emphasizes that while retail loan NPLs have increased since 2021, corporate loan clearances have improved significantly, providing a buffer against retail risks [37].

Core Insights - The performance of A-share listed banks in the third quarter of 2025 shows significant differentiation among small and medium-sized banks, with city commercial banks leading, rural commercial banks in the middle, and joint-stock banks under pressure [1] Group 1: City Commercial Banks - City commercial banks have demonstrated outstanding performance, with 14 out of 17 banks reporting year-on-year revenue growth and 16 reporting net profit growth [2] - Chongqing Bank reported the highest performance, achieving revenue of 11.74 billion yuan, a year-on-year increase of 10.4%, and a net profit of 4.879 billion yuan, up 10.19% [2] - Other banks like Qingdao Bank, Nanjing Bank, and Ningbo Bank also showed steady growth, with Qingdao Bank's revenue at 11.013 billion yuan (5.03% increase) and net profit at 3.992 billion yuan (15.54% increase) [2] Group 2: Rural Commercial Banks - Most rural commercial banks also reported increases in both revenue and net profit, but the growth rates were relatively moderate, with most banks showing single-digit growth [3] - A few rural banks achieved double-digit growth, contrasting with the performance of city commercial banks [3] Group 3: Joint-Stock Banks - Joint-stock banks faced a decline in both revenue and net profit, although the rate of decline has narrowed compared to the first half of the year, indicating signs of stabilization [3] - For instance, Ping An Bank reported revenue of 100.668 billion yuan, down 9.8%, and net profit of 38.339 billion yuan, down 3.5%, with declines narrowing by 0.2 and 0.4 percentage points respectively [3] Group 4: Asset Quality - The overall asset quality of small and medium-sized banks has improved, with non-performing loan ratios remaining low [4] - Specific banks like Wuxi Rural Commercial Bank and Nanjing Bank maintained non-performing loan ratios of 0.78% and 0.83% respectively, while Chongqing Bank's ratio decreased to 1.14% [4] - Factors contributing to the improvement in asset quality include enhanced risk management, focused regional market strategies, and effective macroeconomic policies [4]

Economic News - The Chinese Ministry of Commerce announced that recent negotiations between China and the US resulted in a consensus, including the US's cancellation of the 10% "fentanyl tariff" on Chinese goods and a one-year suspension of its 301 investigation measures against China's maritime, logistics, and shipbuilding industries [1] - Several leading lithium iron phosphate cathode material manufacturers, including Jiangxi Shenghua New Materials Co., Ltd. and Hunan Youneng New Energy Battery Materials Co., Ltd., have announced plans for capacity expansion [1] - The manufacturing Purchasing Managers' Index (PMI) for October is reported at 49.0%, a decrease of 0.8 percentage points from the previous month, indicating a decline in manufacturing activity [1] - The China Iron and Steel Association reported that key steel enterprises had a total operating income of 4.56 trillion yuan in the first three quarters, a year-on-year decrease of 2.36%, while total profits increased by 1.9 times to 96 billion yuan [1] Company Insights - Kefu Medical has launched its first respiratory mask and plans to introduce multiple new masks and next-generation ventilators next year, enhancing its smart respiratory ecosystem [4] - Zhenyu Technology signed a strategic cooperation agreement to invest 2.11 billion yuan in precision component manufacturing and humanoid robot modules in Ninghai County from 2025 to 2030 [4] - Huayu Pharmaceutical's subsidiary received approval for the market launch of injectable paclitaxel (albumin-bound) in Portugal and the UK [4] - Qiaoyin Co., Ltd. won a bid for a sanitation integration project in Lai County, with a contract value of approximately 204.98 million yuan per year for 25 years [4] - Pro Pharmaceutical's subsidiary received a drug registration certificate for L-carnitine injection, with a projected market size of 1.03 million units and sales of 9.65 billion yuan in 2024 [4] Daily Research Report - Qiaqia Food (002557.SZ) reported a total revenue of 4.501 billion yuan for the first three quarters of 2025, a year-on-year decrease of 5.38%, with net profit down 73.17% to 168 million yuan [5] - The sunflower seed segment, traditionally a revenue driver, faced challenges due to poor quality and increased competition, leading to significant revenue declines [6] - The nut segment showed resilience, maintaining a revenue share of around 20%, supported by seasonal sales during the Mid-Autumn Festival and National Day [6] - New product launches, including high-end sunflower seeds and low-calorie konjac products, are in the early promotion stage and are expected to contribute to future growth [7] - The company is experiencing increased pressure on raw material costs, with a sales gross margin of 21.94% and a net profit margin of 3.76%, both showing a significant decline year-on-year [7] Investment Forecast and Ratings - Due to ongoing cost pressures and competitive challenges, the profit forecast for Qiaqia Food has been revised downwards, with expected net profits of 459 million, 732 million, and 824 million yuan for 2025-2027, reflecting a year-on-year decline of 45.94% in 2025 [8] - Ningbo Bank (002142.SZ) reported a revenue of 54.98 billion yuan and a net profit of 22.45 billion yuan for the first three quarters of 2025, both showing an 8.3% year-on-year increase [10] - The bank's net interest income grew by 11.8% year-on-year, benefiting from a narrowing decline in net interest margins and strong growth in loan and bond investments [11] - The asset quality remains stable, with a non-performing loan ratio of 0.76% and a provision coverage ratio of 375.9%, indicating effective risk management [13] - The bank is expected to maintain a strong growth trajectory in revenue and profit, with projected net profit growth rates of 8.6%, 9.5%, and 10.0% for 2025-2027 [12]

Core Viewpoint - The apparent stability of bank non-performing loan (NPL) ratios conceals deeper structural changes, indicating that the era of "soft landing" achieved through provisioning adjustments and risk rotation is nearing its end [2][8] Group 1: Banking Performance - China Construction Bank reported a 1.44% year-on-year increase in operating income to 560.281 billion yuan for the first three quarters of 2025, with net profit rising by 0.52% to 258.446 billion yuan [3] - The bank's asset quality remains robust, with a non-performing loan ratio of 1.32%, down 0.02 percentage points from the end of the previous year, and a provisioning coverage ratio of 235.05%, up 1.45 percentage points [3] - Other major banks, such as China Bank and Postal Savings Bank, also show varying levels of asset quality, with China Bank's NPL ratio at 1.24% and Postal Savings Bank's NPL ratio at 0.94% [4] Group 2: Risk Assessment - Some joint-stock banks are experiencing thinner provisioning buffers, with Everbright Bank's NPL ratio at 1.26% and a provisioning coverage ratio of 168.92%, nearing regulatory warning lines [5] - In contrast, certain regional banks demonstrate stronger risk resilience, such as Chengdu Bank with an NPL ratio of only 0.68% and a provisioning coverage ratio of 433.08% [6] - The focus of risk has shifted from corporate to retail, with banks like China Merchants Bank reporting an increase in attention loans, indicating rising concerns in personal lending sectors [7] Group 3: Future Outlook - The banking industry is expected to face a genuine stress test as excess provisioning space narrows and retail risks continue to emerge, marking a transition from scale expansion to quality prioritization [2][8] - The ability to balance risk clearance and sustainable profits will determine the future restructuring of the industry [8]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company reported a revenue of 54.976 billion yuan for the first three quarters of 2025, representing an 8.32% year-over-year increase, and a net profit attributable to shareholders of 22.445 billion yuan, up 8.39% year-over-year [1] - As of the end of September, total assets reached 3.58 trillion yuan, a 16.65% increase year-over-year, with a non-performing loan (NPL) ratio of 0.76% (unchanged quarter-over-quarter) and a provision coverage ratio of 375.92% (up 1.76 percentage points quarter-over-quarter) [1] - The net interest margin (NIM) for Q2 was 1.76%, down 5.32 basis points year-over-year [1] Summary by Sections Company Overview - The company has shown strong performance in the first three quarters of 2025, with significant growth in both revenue and net profit [1] - Total assets have increased significantly, indicating robust growth and stability [1] Loan and Investment Performance - Corporate loans and financial investments have grown rapidly, while personal loan growth remains constrained by demand [1] - The company has maintained a competitive advantage in corporate lending, with new loan issuance significantly higher than in previous years [1] - Financial investments have accelerated, reflecting a strategic shift towards government bonds amid weaker credit demand [1] Interest Margin and Income - The NIM has continued to narrow due to repricing effects, but deposit repricing has alleviated some pressure [1] - The company has seen a significant improvement in intermediary business income, driven by a strong performance in wealth and asset management [1] Asset Quality and Risk Management - The overall NPL ratio remains low at 0.76%, with a slight increase in the proportion of loans under watch [1] - The company has adopted a prudent approach to impairment provisioning, reflecting a cautious stance in a challenging credit environment [1] Earnings Forecast and Valuation - The company has adjusted its earnings forecast, expecting revenues of 72.084 billion yuan, 78.368 billion yuan, and 87.376 billion yuan for 2025, 2026, and 2027 respectively [6] - The projected net profit for the same years is 29.536 billion yuan, 32.468 billion yuan, and 35.976 billion yuan [6] - The price-to-book (PB) ratio is expected to decrease to 0.79, 0.70, and 0.62 over the next three years, indicating potential undervaluation [8]

Core Viewpoint - Ningbo Bank is a leading city commercial bank in China, known for its diversified financial services and strong risk control system, with high investment value [1] Group 1: Business Performance - As of Q3 2025, Ningbo Bank reported operating revenue of 54.976 billion yuan, ranking second in the industry, while the first-ranked Jiangsu Bank had revenue of 67.183 billion yuan [2] - The net profit for the same period was 22.578 billion yuan, also placing it second in the industry, with Jiangsu Bank leading at 31.895 billion yuan [2] Group 2: Financial Ratios - The asset-liability ratio for Ningbo Bank in Q3 2025 was 92.90%, higher than the previous year's 92.72% and above the industry average of 92.63% [3] - The gross profit margin was 44.96%, down from 46.61% year-on-year and below the industry average of 45.51% [3] Group 3: Executive Compensation - Chairman Lu Huayu has maintained a salary of 2.75 million yuan for two consecutive years [4] Group 4: Shareholder Information - As of September 30, 2025, the number of A-share shareholders increased by 15.44% to 118,400, while the average number of circulating A-shares held per shareholder decreased by 13.38% to 55,700 [5] - The top ten circulating shareholders include Hong Kong Central Clearing Limited, which increased its holdings by 32.053 million shares to 281 million shares [5] Group 5: Growth Highlights - Ningbo Bank's net interest income grew by 11.8% year-on-year, driven by strong scale growth and stable interest margins [5][6] - Net fee income saw a significant increase of 29.3%, benefiting from a recovery in the capital market [5][6] - The non-performing loan generation rate has improved, with the non-performing loan ratio stabilizing at 0.76% by the end of Q3 [5][6]

Core Insights - Morgan Stanley reports that despite a decline in investment income, most mainland banks have shown improvement in net interest income and healthy growth in fee income for Q3 2025 [1][2] - State-owned banks are experiencing ongoing net interest margin pressure, but many banks expect this pressure to ease further [2][3] - The asset quality of banks remains stable, with a majority reporting a steady non-performing loan ratio [3] Group 1: Financial Performance - Most state-owned banks reported higher profit growth in Q3 2025 compared to the first half of the year, supported by stable asset quality [1] - Net interest margin for many banks has rebounded due to lower funding costs and more prudent loan growth and pricing [1][2] - Ningbo Bank reported the highest net interest income growth among covered banks, benefiting from increased market share and lower margin pressure [1] Group 2: Fee Income Growth - Average fee income growth for covered banks rebounded from 1.4% in Q2 2025 to 11.1% in Q3 2025, driven by a recovery in capital market activities and strong insurance sales [2] - Ningbo Bank led with a 94% year-on-year growth in fee income, while Agricultural Bank maintained a 23.6% growth [2] Group 3: Asset Quality and Credit Costs - The average non-performing loan ratio for covered banks remained stable at 1.15%, with credit costs declining for most banks [3] - State-owned banks slightly reduced credit costs to support profit growth, while the non-performing loan coverage ratio remained high at 263% [3] - Overall, banks continue to show a trend of profit rebound, with state-owned banks accelerating profit growth in Q3 2025 due to further declines in credit costs [3]

Core Insights - The city commercial bank sector experienced a rise of 1.06% on October 31, with Guiyang Bank leading the gains [1] - The Shanghai Composite Index closed at 3954.79, down 0.81%, while the Shenzhen Component Index closed at 13378.21, down 1.14% [1] Stock Performance - Guiyang Bank (601997) closed at 6.08, up 3.23% with a trading volume of 1.05 million shares and a transaction value of 638 million [1] - Qilu Bank (601665) closed at 6.05, up 2.89% with a trading volume of 1.23 million shares and a transaction value of 745 million [1] - Nanjing Bank (601009) closed at 11.31, up 2.26% with a trading volume of 766,400 shares and a transaction value of 859 million [1] - Other notable banks include Changsha Bank (601577) at 9.57, up 2.24%, and Ningbo Bank (002142) at 28.34, also up 2.24% [1] Capital Flow - The city commercial bank sector saw a net inflow of 296 million from institutional investors, while retail investors experienced a net outflow of 146 million and 150 million respectively [2] - The capital flow data indicates that Nanjing Bank had a net inflow of 12.9 million from institutional investors, but a net outflow of 59.7 million from speculative funds and 69 million from retail investors [3] - Ningbo Bank recorded a net inflow of 91.9 million from institutional investors, with outflows from both speculative and retail investors [3]