HTSC·2026-02-13 08:38Investment Rating - The industry rating is "Overweight" [8] Core Insights - The banking sector's profit growth is showing marginal improvement, with net interest margins stabilizing and asset quality remaining robust [5][3] - Major banks are leading the industry in asset expansion, with total assets growing by 9.0% year-on-year as of the end of Q4 2025 [2] - The net profit of commercial banks increased by 2.33% year-on-year in Q4 2025, driven by stable net interest margins and declining credit costs [3] - The non-performing loan ratio for commercial banks improved to 1.50%, indicating a healthy asset quality [4] Summary by Sections Asset Expansion - As of Q4 2025, major banks and joint-stock banks saw a marginal increase in total asset growth rates, while city and rural commercial banks experienced a slowdown [2] - The balance of inclusive small and micro loans increased by 11.0% year-on-year, although the growth rate has slowed [2] Profit Growth - The net profit growth of commercial banks improved by 2.3 percentage points compared to Q3 2025, with significant rebounds in city and rural commercial banks [3] - The annualized ROE and ROA for commercial banks were 7.78% and 0.60%, respectively, reflecting a slight decline year-on-year [2] Asset Quality - The non-performing loan ratio decreased by 2 basis points from the end of September 2025, with major banks showing a decline in non-performing loan ratios [4] - The provision coverage ratio for commercial banks was 205%, indicating a reasonable risk compensation ability [4] Investment Opportunities - The report recommends focusing on structural opportunities within the banking sector, highlighting specific banks such as Ningbo, Nanjing, and Chongqing Rural Commercial Bank for their strong performance and dividend yield [5][9]