Ge Long Hui·2025-05-16 08:36Core Viewpoint - The accumulation of OCI (Other Comprehensive Income) floating profits in banks has been largely consumed, primarily due to passive consumption from a weak bond market rather than active selling by banks. The pressure on net interest margins is mainly observed in large banks, and with the alleviation of the "lack of liabilities" issue in Q2, a clearer bottom for net interest margins is expected [1][15]. Group 1: OCI Floating Profit Consumption - Most banks have consumed over half of their OCI floating profit accumulation, with some banks even turning to floating losses. Among the six major banks, one has consumed about half of its floating profit accumulation, while others have consumed around one-third. In total, 25 out of 33 listed banks have consumed more than half of their OCI floating profits, with 7 turning to floating losses [2][5]. - The low performance of bond market investment returns has significantly dragged down the revenue performance of listed banks. In Q1, non-interest income reduced the revenue growth of joint-stock banks and city commercial banks by 3.81 percentage points and 6.42 percentage points, respectively, while the contribution to rural commercial banks dropped from 7.30 percentage points to 4.52 percentage points [2][5]. Group 2: Net Interest Margin Pressure - The pressure on net interest margins and the resistance to recovery are primarily seen in large banks, which have passively shifted to interbank certificates of deposit and interbank fixed deposits due to a "lack of liabilities" in Q1. The average net interest margin for large banks narrowed by 0.10 percentage points to a low of 1.39% in Q1 [15]. - The alleviation of the "lack of liabilities" pressure and the stabilization of interbank deposit scale and prices are expected to lead to a significant easing of net interest margin narrowing pressure for large banks in Q2, reflecting the effectiveness of previous measures to reduce funding costs [15]. Group 3: Retail Loan Risks - Risks in retail loans remain, with no consistent trend of alleviation observed. Banks with a higher proportion of retail loans face greater difficulty in reducing non-performing loan rates compared to their peers, and the speed of provision consumption is faster [9]. - An analysis of three state-owned banks with retail loan ratios exceeding 50% shows a divergence in the direction and magnitude of changes in provision coverage ratios, the proportion of loans under scrutiny, and non-performing loan rates [9].