ZHONGTAI SECURITIES·2025-04-06 12:42Investment Rating - The report maintains an "Overweight" rating for the banking sector [2] Core Insights - The impact of "reciprocal tariffs" on China's banking industry is profound, leading to additional pressure on loan demand and net interest margins, while asset quality remains stable. The investment value of bank stocks is highlighted, particularly for large banks, China Merchants Bank, and quality city commercial banks [7][12][14] Summary by Sections 1. Impact Mechanism of "Reciprocal Tariffs" on Bank Stocks - The economic impact includes weakened external demand, pressuring the credit demand and asset quality of banks [12][14] - Policy measures may boost retail credit demand through increased monetary easing [12][14] - Investment sentiment shifts towards banks due to enhanced dividend value amidst rising risk aversion [12][14] 2. Credit Demand: Pressure Points and Support - Economic growth pressure leads to declining credit growth, with a potential credit increment shortfall of CNY 2.139 billion in 2025 [15][19] - Export-related customer demand is expected to decline, while consumption-related customers may receive support from policy measures [27][28] 3. Net Interest Margin: Pressure Points and Support - A decline in credit growth could lead to a 14 basis points drop in net interest margins [33] - Monetary policy adjustments, including potential rate cuts, may exert additional pressure on margins [33][34] - The long-term outlook suggests that net interest margins are nearing their bottom, estimated at 1.24% [39][46] 4. Asset Quality: Pressure Points and Support - The impact on asset quality is manageable, with export-related sectors facing direct effects from tariffs [48] - The real estate sector's pressure is expected to ease, while retail sector non-performing loans may improve under supportive policies [48] 5. Investment Recommendations - The report emphasizes the dividend characteristics of bank stocks, recommending a focus on large banks and quality city commercial banks [7][12][14]