Guoxin Securities·2025-04-03 14:14Investment Rating - The report maintains an "Outperform the Market" rating for the banking industry [4][70]. Core Viewpoints - The overall performance of the banking sector shows improvement, with a slight increase in net profit despite revenue decline [11][69]. - Retail loan non-performing loans (NPLs) are expected to remain high in 2025, but a turning point is anticipated in 2026 [2][49]. - The net interest margin (NIM) is projected to narrow by approximately 12 basis points in 2025, with net interest income expected to stabilize near zero [55][69]. - The report suggests a cautious outlook for the banking sector due to external uncertainties, recommending high-dividend stocks in the short term, while favoring high-growth quality stocks for the year [70]. Summary by Sections Overall Review - In 2024, 23 listed banks reported a revenue decline of 0.6% year-on-year, while net profit increased by 1.8%, indicating a slight improvement in performance [11][69]. - The main factors affecting net profit growth include a 11.1% decline due to narrowing NIM and an 8.7% increase from scale expansion [14][69]. Asset Quality Outlook - The NPL generation rate for retail loans is expected to remain volatile at high levels in 2025, with a potential turning point in 2026 [2][49]. - The overall NPL ratio for the 23 listed banks was 1.25% at the end of 2024, showing a slight improvement [16][23]. Performance Outlook - The report predicts a revenue growth rate of approximately -1% and a net profit growth rate of about 1% for 2025, marking the end of the current performance downturn cycle [69][70]. - The NIM is expected to narrow by 12 basis points, while net interest income is projected to stabilize near zero [55][69]. Investment Recommendations - In the short term, high-dividend stocks such as China Merchants Bank and Jiangsu Bank are recommended due to the lack of clear positive changes in the macroeconomic environment [70]. - For the entire year, high-growth quality stocks like China Merchants Bank, Ningbo Bank, and Changshu Bank are favored [70].