ZHESHANG SECURITIES·2026-01-11 15:27Investment Rating - The industry investment rating is "Positive" [3][17] Core Insights - Interest income is expected to return to positive growth, supported by an improvement in net interest margins in Q4 2025, which will offset other non-interest impacts [1] - For the full year 2025, listed banks are projected to see a net profit growth rate of 1.8% and revenue growth of 1.2%, both showing a quarter-on-quarter improvement [1] - Quality city commercial banks are expected to lead the sector, with revenue and profit growth rates projected between 5-10% for 2025 [1] Summary by Relevant Sections Industry Outlook - The overall outlook for 2025 indicates an improvement in net profit and revenue growth for listed banks, primarily due to the alleviation of margin pressures and increased provisions [1] - The asset scale of listed banks is expected to grow by 9.0% year-on-year, reflecting a slowdown compared to previous quarters due to weak credit demand [1] Key Drivers - Margin Stabilization: Q4 2025 is expected to see a 2 basis point improvement in net interest margin to 1.32%, driven by a larger decline in funding costs compared to asset yields [1] - Non-Interest Income: Non-interest income is projected to grow by 3.2% year-on-year, a decrease from earlier quarters, with a slight positive trend in commission income [1] - Credit Quality: The credit cost ratio is expected to decline to 0.67%, indicating a stable improvement in non-performing loans, particularly in retail lending [1] Investment Recommendations - The report suggests that banks with new growth drivers are likely to see significant value recovery, recommending major state-owned banks and select city commercial banks as key investment targets [1][2]