Summary of 4Q25 Results for Chinese Banks Industry Overview - The report focuses on the Chinese banking sector, highlighting the performance of major banks such as CCB (China Construction Bank), BOC (Bank of China), CITIC, Industrial Bank, and PAB (Ping An Bank) in 4Q25 and their outlook for 2026 [1][2][9]. Key Points Revenue and Profit Growth - Signs of stabilizing Net Interest Margin (NIM) and healthy fee income growth were observed in 4Q25, with expectations for above-peer revenue and profit growth in 2026 for CCB, BOC, CITIC, Industrial Bank, and PAB [1][2]. - Revenue growth improved to 2.2% YoY in 4Q25 from 0.6% YoY in 3Q25, with BOC leading at 9.2% YoY growth, followed by Industrial Bank and CITIC at 7.7% and 6.9% respectively [17][23]. NIM and Non-Interest Income - NIM pressure moderated in 4Q25, with banks reporting sequential rebounds. Most banks expect milder NIM pressure in 2026, supporting positive Net Interest Income (NII) growth [2][14]. - Fee income growth accelerated to 8.6% YoY in 4Q25, up from 4.8% YoY in 3Q25, driven by strong retail Asset Under Management (AUM) growth and active capital markets [3][15]. Credit Quality and Costs - Non-Performing Loan (NPL) ratios remained stable for most banks, with proactive write-offs and improving corporate NPL ratios offsetting retail credit quality pressures [4]. - Citic Bank showed a notable decline in NPL ratios, while PSBC and ICBC experienced increases. Expectations for credit costs to rebound for PSBC and ICBC could impact profits despite better revenue growth [4][19]. Earnings and Dividend Outlook - CCB, BOC, CITIC, and Industrial Bank are positioned to achieve healthy earnings with below-peer Risk-Weighted Asset (RWA) growth, allowing for potential future dividend payouts [5]. - The average dividend payout ratio for major banks is projected to remain stable, with slight declines noted for some banks [12]. Management Guidance and Future Outlook - Management from various banks provided guidance for 2026, with CITIC Bank targeting over 3% revenue growth and PAB expecting a return to growth in its retail business [20]. - Banks are cautious about the 2026 outlook, with expectations for income primarily from trading rather than a drop in bond yields [18]. Additional Insights - The report indicates that banks with strong retail AUM growth will continue to see healthy fee income growth in 2026, with several banks confident in their non-interest income growth prospects [3][15]. - Investment income varied significantly in 4Q25, with banks generally cautious about the outlook for 2026 [18]. Conclusion - The Chinese banking sector shows signs of recovery with improving revenue growth, stable credit quality, and a positive outlook for 2026. Key players like CCB, BOC, CITIC, Industrial Bank, and PAB are expected to lead in revenue and profit growth, supported by stable NIM and healthy fee income. However, caution remains regarding credit costs and overall market conditions.

Investment Rating - The report maintains a "Recommended" rating for the company [1]. Core Insights - The company achieved an operating income of 658.31 billion yuan in 2025, representing a year-on-year growth of 4.48%, and a net profit attributable to shareholders of 243.02 billion yuan, with a year-on-year increase of 2.18%, outperforming peers [5]. - The contribution of overseas business to the group's profit reached 27.99%, indicating a continued strengthening of global advantages [5]. - The net interest income was 440.71 billion yuan, slightly down by 1.83% year-on-year, with a net interest margin of 1.26%, a decrease of 14 basis points [5]. - Non-interest income grew by 20.12% year-on-year, accounting for 33.06% of total revenue, driven by a recovery in capital markets and growth in commission income [5]. - The non-performing loan ratio stood at 1.23%, a slight decrease from the beginning of the year, with a provision coverage ratio of 200.37% [5]. Financial Performance Summary - **Revenue and Profit Growth**: The company reported a revenue of 658.31 billion yuan and a net profit of 243.02 billion yuan for 2025, with respective growth rates of 4.48% and 2.18% [30]. - **Interest Income and Margin**: The net interest income was 440.71 billion yuan, with a net interest margin of 1.26% [31]. - **Loan and Deposit Growth**: Total loans reached 23.45 trillion yuan, growing by 8.61% year-on-year, while total deposits increased to 26.18 trillion yuan, up by 8.18% [5]. - **Non-Interest Income**: Non-interest income accounted for 33.06% of total revenue, with significant contributions from wealth management and other services [5]. - **Asset Quality**: The non-performing loan ratio was 1.23%, with a provision coverage ratio of 200.37%, indicating strong risk management [31]. Capital and Valuation Metrics - The core Tier 1 capital adequacy ratio improved to 12.53%, up by 0.71 percentage points from the beginning of the year [5]. - The report forecasts BVPS (Book Value Per Share) for 2026, 2027, and 2028 to be 8.87 yuan, 9.40 yuan, and 9.94 yuan respectively, with corresponding PB (Price to Book) ratios of 0.66X, 0.62X, and 0.59X [5][30].

第 1 頁 共 13 頁 v 1.2.1 | | | | 3. 股份分類 | 優先股 | 股份類別 | 其他類別 (請註明) | 於香港聯交所上市 (註1) | 否 | | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 360033 | 說明 | 境內優先股第三期 | | | | 2. 股份分類 | 普通股 | 股份類別 | A | | 於香港聯交所上市 (註1) | | 否 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 601988 | 說明 | | A股（於上海證券交易所上市） | | | | | | | | 法定/註冊股份數目 | | | 面值 | | 法定/註冊股本 | | | 上月底結存 | | | 238,590,135,419 | RMB | | 1 RMB | | 238,590,135,419 | | 增加 / 減少 (-) | | | 0 | | | RMB | | 0 | | 本月底結存 | | | 238,590,135,419 ...

Core Viewpoint - Goldman Sachs has raised the average pre-provision profit and post-tax net profit forecasts for China Bank (03988.HK) for 2026 to 2028 by 0.6% and 0.4% respectively, reflecting the performance in the fourth quarter of last year and management guidance [1] Group 1: Price Target Adjustments - The target price for China Bank's H-shares has been increased from HKD 4.95 to HKD 5.35 [1] - The target price for China Bank's A-shares has been raised from RMB 6.54 to RMB 6.69 [1] - The overall rating for both A and H shares remains "Buy" [1] Group 2: Market Position and Analyst Attention - China Bank has a market capitalization of HKD 408.91 billion, ranking 5th in the banking industry [1] - There has been low analyst attention on this stock, with no ratings given by investment banks in the past 90 days [1]

Core Viewpoint - Goldman Sachs reported that Bank of China exceeded expectations in its fourth-quarter performance, with pre-provision profit and net profit after tax growing by 8% and 5% year-on-year, respectively, surpassing the bank's forecasts by 8% and 3% [1] Group 1 - The management indicated that the improvement in asset yield stability and the reduction in financing costs due to deposit repricing are beneficial [1] - It is expected that the narrowing of net interest margin will significantly slow down by 2026, with net interest income likely to achieve positive growth [1] Group 2 - Goldman Sachs raised its average pre-provision profit and net profit after tax forecasts for Bank of China for 2026 to 2028 by 0.6% and 0.4%, respectively [1] - The target price for Bank of China H-shares was increased from HKD 4.95 to HKD 5.35, and the target price for A-shares was raised from CNY 6.54 to CNY 6.69, maintaining a "Buy" rating [1]

Core Viewpoint - Goldman Sachs has raised the average pre-provision profit and post-tax net profit forecasts for Bank of China (03988) for 2026 to 2028 by 0.6% and 0.4% respectively, reflecting the performance in Q4 of last year and management guidance [1] Group 1: Financial Performance - Bank of China's Q4 performance exceeded expectations, with pre-provision profit and post-tax net profit growing by 8% and 5% year-on-year, surpassing Goldman Sachs' predictions by 8% and 3% respectively [1] - The management indicated that the stabilization of asset yield and the reduction in deposit repricing costs are expected to significantly slow the narrowing of net interest margin in 2026, with net interest income anticipated to achieve positive growth [1] Group 2: Target Price Adjustments - The target price for Bank of China’s H-shares has been raised from HKD 4.95 to HKD 5.35, while the target price for A-shares has increased from RMB 6.54 to RMB 6.69 [1] - Both A-shares and H-shares maintain a "Buy" rating [1] Group 3: Market Impact - The adjustment of the asset-liability structure is expected to neutralize the impact of the Federal Reserve's interest rate cuts on the net interest margin, indicating no negative effects [1]

Group 1 - The People's Bank of China issued a warning and imposed a fine of 387,000 yuan on the Bank of China, Fangchenggang Branch for violations of financial statistics regulations, account management regulations, credit management regulations, and failure to conduct customer due diligence as required [1][2]

Core Viewpoint - China Bank has shown a consistent increase in the number of performance salary clawbacks and the total amount reclaimed over the past three years, indicating a proactive approach to risk management and accountability in its compensation structure [1][7]. Group 1: Performance Salary Clawbacks - In 2025, China Bank executed clawbacks for 4,630 individuals, totaling 47.18 million yuan, marking an increase from 2,469 individuals and 32.50 million yuan in 2024, and 2,059 individuals and 22.75 million yuan in 2023 [1][3]. - Over the three-year period, the bank has cumulatively reclaimed performance salaries from 9,158 individuals, amounting to 102.43 million yuan [1][3]. Group 2: Employee Composition - As of the end of 2025, China Bank employed a total of 313,746 individuals, with 287,855 in domestic institutions and 25,891 in Hong Kong, Macau, Taiwan, and other regions [2][8]. - The bank's workforce increased by 989 individuals year-on-year, reflecting a growth rate of 0.32%, with the highest growth rate in nearly a decade observed in 2024 at 1.9% [2][8]. Group 3: Compensation Structure - China Bank's compensation distribution follows the principle of "salary based on position, pay based on performance," with employee salaries comprising basic pay, performance pay, and benefits [3][9]. - In 2025, the bank's total business and management expenses reached 183.27 billion yuan, with employee expenses accounting for 115.83 billion yuan, an increase of 2.41% from the previous year [3][10]. Group 4: Employee Costs Breakdown - The breakdown of employee expenses includes: - Salaries, bonuses, allowances, and subsidies: 77.86 billion yuan - Employee welfare: 5.67 billion yuan - Retirement benefits: 0.02 billion yuan - Social insurance costs, including medical and pension insurance, totaling 136.72 billion yuan [5][6][10]. - The average employee cost for 2025 is calculated at 369,200 yuan, reflecting a year-on-year increase of 1.82% [10].

今日，中国银行上海市分行在国家外汇管理局上海市分局指导下，依托跨境金融服务平台，率先为辖内 多家企业落地境内运费外汇支付便利化应用场景业务。这是该行持续深化金融科技应用，以数字化手段 破解传统境内运费外汇支付难题，优化贸易营商环境的又一生动实践。 多年来，中行上海市分行主动参与跨境金融服务平台创新应用场景试点推广，先后落地出口应收账款融 资、出口信保保单融资、新型离岸国际贸易业务背景核验等多个创新应用场景业务。下一步，将坚 守"金融为民"初心，以跨境金融服务平台为重要载体，不断优化服务模式、提升服务质效，为加快推进 上海国际金融中心建设、推动经济高质量发展和高水平对外开放贡献中行力量。 传统境内运费外汇支付存在流程繁琐、单证审核耗时较久等痛点，尤其影响货运代理等高频付汇企业的 资金周转效率。此次上线的境内运费外汇支付便利化应用场景，与税务局共享发票数据，为银企双方搭 建真实可信的海运费发票快速核验通道，有效防范重复付汇、超额付汇等风险。"这个应用场景支持批 量付汇业务办理，有效解决了境内运费外汇支付'流程繁、审核慢'的问题。通过科技赋能与数据共享， 以及丰富的航贸区块链场景应用，我行将为企业提供更加安全、便捷 ...

Core Insights - China Bank reported a stable performance in 2025 with operating income of 659.9 billion yuan, a year-on-year increase of 4.28%, and net profit after tax of 257.9 billion yuan, up 2.06% [1] - The cost-to-income ratio improved by 0.93 percentage points to 27.84%, indicating enhanced efficiency [1] - Non-interest income reached 219.2 billion yuan, growing by 19.2%, with its contribution exceeding 33%, marking a historical high [1] Non-Interest Income Growth - The significant increase in non-interest income reflects the bank's ability to transition towards a lighter operational model, driven by three main engines [2] - Wealth management capabilities were enhanced, with over 7,500 investment products available, leading to a 15% growth in personal investment assets and a 26.67% increase in agency fees [2] - The bank expanded its global custody capabilities, with a 21% growth in managed assets, contributing to a 7.74% rise in related fees [2] Comprehensive Financial Services - The bank improved its payment and settlement services, achieving double-digit growth in corporate clients and accounts, with international settlement volume increasing by 9.56% [3] - Domestic settlement fees grew by 7.2%, reinforcing the bank's competitive edge in international settlements [3] Credit Allocation and Support for the Real Economy - By the end of 2025, the bank's domestic RMB loans increased by 1.81 trillion yuan, a growth of 9.90%, with strategic emerging industry loans rising by 30.59% [4] - Green loan balances exceeded 4.96 trillion yuan, growing by 27.83%, accounting for over 20% of total loans [4] - The bank launched an action plan to support the AI industry, collaborating with 4,460 core enterprises and establishing a credit balance of 545.6 billion yuan [4] Technological Empowerment - The bank completed a significant system upgrade, enhancing its business responsiveness and operational capabilities [7] - AI technologies were integrated across various business scenarios, with over 400 intelligent assistants deployed [7] - The bank's technology loan balance surpassed 4.8 trillion yuan, representing over one-third of corporate loans, leading the industry [8] Globalization and International Development - The bank's overseas assets and pre-tax profit contributions reached 22.18% and 27.99%, respectively, indicating a shift from scale expansion to value creation [10] - The bank processed over 4.45 trillion USD in international settlements, with a 9.56% year-on-year increase, and cross-border RMB settlements reached 17.70 trillion yuan, up 9.43% [10] - The bank established itself as a leading global custodian, covering over 100 countries and maintaining the largest custody scale among Chinese banks [11]