EY·2025-05-13 04:10Investment Rating - The report indicates a mixed outlook for the banking sector, with a focus on the performance of different types of banks, highlighting a decline in net profits for A-share listed banks in Q1 2025 compared to the same period in 2024 [3][20]. Core Insights - The net profit of 42 A-share listed banks decreased by 1.09% year-on-year in Q1 2025, with large banks showing a decline of 1.90% and national joint-stock banks declining by 1.98%. In contrast, city commercial banks and rural commercial banks reported growth in net profits of 5.35% and 4.21%, respectively [3][8]. - Total assets of the listed banks reached RMB 31,402.47 billion at the end of Q1 2025, reflecting a growth of 3.94% compared to the end of 2024. This growth was driven by city commercial banks and rural commercial banks, which saw increases of 6.53% and 4.48%, respectively [13][14]. - The loan-to-asset ratio slightly increased to 56.34% in Q1 2025, up from 56.07% at the end of 2024, indicating a stable lending environment [18]. Summary by Sections Net Profit Trends - In Q1 2025, net profits for large banks fell by 1.90%, while national joint-stock banks saw a decline of 1.98%. City commercial banks and rural commercial banks, however, experienced growth in net profits [3][4][8]. Revenue Trends - Total operating income for the 42 listed banks was RMB 1,447.37 billion in Q1 2025, down 1.72% year-on-year. Large banks and national joint-stock banks reported declines of 1.51% and 3.91%, while city commercial banks and rural commercial banks saw increases of 2.96% and 0.21%, respectively [8][9]. Asset Growth - Total assets for the listed banks reached RMB 31,402.47 billion, marking a 3.94% increase from the end of 2024. This growth was led by city commercial banks and rural commercial banks [13][14]. Loan Performance - The loan-to-asset ratio increased to 56.34% in Q1 2025, indicating a stable lending environment across the banking sector [18]. Non-Performing Loans - Non-performing loans increased by RMB 82.12 billion to RMB 2,243.57 billion in Q1 2025, with a slight decrease in the average non-performing loan ratio to 1.23% [20][30]. Provision Coverage - The average provision coverage ratio decreased to 237.99% in Q1 2025, down 1.98 percentage points from the end of 2024, indicating a potential concern regarding the banks' ability to cover non-performing loans [24][26].