Investment Rating - The investment rating for CITIC Bank is "Buy" [5] Core Views - CITIC Bank's Q1 2025 report indicates accelerated asset expansion but a decline in net interest margin, with other non-interest income dragging down overall performance [1][2] - Revenue for Q1 2025 decreased by 3.7% year-on-year, while net profit attributable to shareholders grew by 1.7%, reflecting a slowdown compared to 2024 [2][5] - The bank's total assets increased by 8.7% year-on-year, with loans growing by 5.1% and bond investments by 9.4% [2][3] Summary by Sections Revenue Overview - CITIC Bank's Q1 2025 revenue decreased by 3.7% year-on-year, with a 7.5 percentage point decline in growth rate compared to 2024 [2] - The main drivers for revenue were asset expansion and provisioning support, while net interest margin decline and trading income volatility were significant detractors [2] - Non-interest income saw a 26.6% year-on-year decline, marking a 46.3 percentage point slowdown compared to the end of 2024 [2] Interest Margin - The net interest margin for Q1 2025 was 1.61%, down 10 basis points from the previous quarter, with asset yield decreasing by 25 basis points to 3.31% [3] - The cost of liabilities decreased by 15 basis points to 1.74%, primarily due to adjustments in deposit rates [3] Asset Quality - The non-performing loan ratio remained stable at 1.16% at the end of Q1 2025, while the attention loan ratio increased slightly to 1.68% [4] - The bank's provisioning coverage ratio was 207%, down 2.3 percentage points from the end of 2024 [4] Profit Forecast and Valuation - The forecast for net profit attributable to shareholders for 2025-2027 is expected to grow by 0.6%, 3.0%, and 4.9% respectively, with a target price of 9.31 CNY per share, indicating a potential upside of 29% from the current price [5]

Core Viewpoint - Nanjing Bank's performance in Q1 2025 exceeded expectations in terms of growth rate, revenue structure, and asset quality, with core revenue experiencing rapid growth and continued improvement in asset quality [1]. Financial Overview - In Q1 2025, Nanjing Bank's revenue grew by 6.5% year-on-year, while profit increased by 7.1%, with both growth rates declining by 4.8 percentage points and 2 percentage points compared to 2024 [2]. - The non-performing loan (NPL) ratio at the end of Q1 2025 was 0.83%, remaining stable compared to the end of 2024, while the provision coverage ratio was 324%, down by 12 percentage points from the end of 2024 [2]. Core Revenue Growth - Nanjing Bank's revenue and profit growth in Q1 2025 were both above 5%, driven by significant improvements in net interest income and non-interest income [3][4]. - Net interest income increased by 17.8% year-on-year in Q1 2025, with a 13 percentage point improvement compared to 2024, supported by growth in earning assets and stable interest margins [4]. - Non-interest income also saw a high growth of 18% year-on-year, primarily due to strong performance in wealth management and distribution services [4]. Interest Margin Improvement - The interest margin for Q1 2025 increased by 6 basis points from Q4 2024 to 1.41%, attributed to faster growth in earning assets compared to interest-bearing liabilities [5]. - Earning assets grew by 19.4% year-on-year, while interest-bearing liabilities increased by 16.4% [5]. Asset Quality Improvement - The static indicators showed that the NPL ratio remained at 0.83% at the end of Q1 2025, with a slight decrease in the attention ratio to 1.15% [6]. - The dynamic indicators indicated an improvement in the NPL generation rate, with a year-on-year decrease from 1.49% in 2023 to 1.46% in 2024 [6]. - The corporate NPL ratio increased, particularly in the real estate sector, while retail NPLs improved due to significant write-offs [6]. Profit Forecast and Valuation - Nanjing Bank's net profit is projected to grow by 8.09%, 7.03%, and 6.80% from 2025 to 2027, with corresponding book values per share of 15.70, 17.12, and 18.63 yuan [7]. - The current price corresponds to a price-to-book (PB) ratio of 0.67, 0.61, and 0.56 for 2025-2027, with a target price of 14.26 yuan per share, indicating a potential upside of 37% [7].

Investment Rating - The report maintains an "Outperform" rating for the banking sector, indicating a positive outlook compared to the broader market [1]. Core Insights - The report highlights that the net profit of listed banks is expected to grow by 1.8% year-on-year for 2024, with a notable increase in growth rate compared to the first three quarters [4][10]. - Revenue decline is narrowing, with a projected revenue growth rate of -0.6% for 2024, an improvement from -1.6% in the previous quarters [11][14]. - The report emphasizes the importance of domestic economic recovery and the impact of recent growth-stabilizing policies on banking performance [14]. Summary by Sections 1. Profitability Breakdown - The net interest income for listed banks is expected to decline by 2.3% in 2024, an improvement from a 3.2% decline in the first three quarters [11][12]. - Non-interest income, particularly from investment gains, is projected to increase by 28% due to falling bond yields, partially offsetting revenue pressures [11][12]. - The report notes that the cost-to-income ratio has increased to 32.8%, reflecting a 0.5 percentage point rise year-on-year [7]. 2. Operational Analysis - Asset growth for listed banks has decreased to 7.2%, with loan growth at 7.7%, indicating stable overall growth despite a slight decline [22][23]. - The annualized net interest margin is projected to decrease to 1.43%, primarily due to asset pricing pressures [24]. - The report indicates that the quality of assets remains stable, with non-performing loan ratios showing slight fluctuations but overall stability [7][22]. 3. Dividend and Investment Recommendations - The report highlights a stable dividend payout ratio, with 9 banks increasing their dividend rates compared to the previous year [7]. - Investment recommendations focus on "pro-cyclical and high dividend" strategies, with an average dividend yield of 4.3% for the sector, which remains attractive compared to risk-free rates [7][8]. - Specific banks recommended for investment include Chengdu Bank, Suzhou Bank, and Ningbo Bank, which are expected to benefit from regional economic recovery [8][14].