Core Viewpoint - Agricultural Bank of China reported a revenue of 725.3 billion with a year-on-year growth of 2.1% and a net profit of 291 billion, reflecting a growth of 3.2% year-on-year, indicating stable growth in revenue and leading profit growth among state-owned banks [4][5]. Revenue and Profit Growth - The bank's revenue, pre-provision profit, and net profit growth rates for 2025 were 2.1%, 0.1%, and 3.2% respectively, showing a gradual improvement since Q2 2025 [5] - The net interest income and non-interest income growth rates were -1.9% and 19.9%, respectively, with the negative growth in net interest income narrowing and non-interest income maintaining double-digit growth [5]. Asset and Loan Growth - By the end of 2025, the bank's interest-earning assets and loan growth rates were 12.7% and 9%, respectively, indicating accelerated scale expansion and steady credit growth [6]. - Financial investments and interbank assets grew by 18.2% and 16.9%, respectively, contributing significantly to asset scale expansion [6]. Deposit Growth - The bank's interest-bearing liabilities and deposit growth rates were 13.9% and 7.9%, respectively, showing steady deposit growth [7]. - The growth rates for bonds payable and interbank liabilities were 21.9% and 38.1%, indicating strong active liability absorption [7]. Interest Margin Trends - The bank's net interest margin (NIM) was 1.28%, showing a slight decline of 2 basis points from Q1-Q3 2025 and a decrease of 14 basis points from 2024, but with signs of stabilization at the beginning of the year [8]. Non-Interest Income Performance - Non-interest income reached 155.7 billion, growing by 19.9% year-on-year, accounting for 21.5% of total revenue, reflecting a strong performance in fee income [9]. Asset Quality and Risk Management - The non-performing loan (NPL) ratio remained low at 1.27%, stable compared to Q3 and down 3 basis points from the beginning of the year, indicating robust asset quality [10]. - The bank's risk compensation ability is considered stable, with a focus on maintaining asset quality [10]. Capital Adequacy - The bank's core tier 1, tier 1, and total capital adequacy ratios were 11.08%, 12.97%, and 17.93%, respectively, with a significant capital reserve due to the issuance of perpetual bonds and subordinated debt [11].

Report Industry Investment Rating - The report does not mention the industry investment rating [1] Core Viewpoints - Multiple regulatory indicators form the "fence" for banks' allocation behavior, and banks' "choices" within these fences determine their asset allocation structure [1][3][24] Summary by Relevant Catalog 1. Fence Within: How Regulatory Constraints Determine Banks' Bond Market Choices - **"Ballast Stone" Status of Bank Allocation in the Bond Market**: As the main bond allocators in the bond market, commercial banks' "ballast stone" status is rooted in three logics: scale dominance, counter - cyclical characteristics, and stability under regulatory constraints. As of the end of February 2026, commercial banks' bond allocation in the inter - bank market was 82.16 trillion yuan, ranking first among various institutions, mainly investing in interest - rate bonds. Their counter - cyclical allocation provides a buffer for the market, and regulatory constraints make them natural buyers of interest - rate bonds [2][17][18] - **Commercial Bank Regulation: Macro - Prudential + Micro - Constraints**: Understanding banks' bond allocation behavior requires understanding their regulatory constraints, including the Macro - Prudential Assessment System (MPA), interest - rate risk indicators (ΔEVE/NII), liquidity risk indicators (LCR/NSFR), and capital adequacy ratio. These indicators form the "fence" for banks' allocation behavior [3][24] 2. Central Bank MPA: From Broad Credit to Bond Allocation - **Overview of MPA Indicator System**: MPA reshapes banks' bond - allocation behavior in three dimensions: total amount, structure, and timing. In terms of total amount, the broad - credit growth constraint makes bond investment a "regulatory item" after loan issuance. Structurally, capital - adequacy pressure forces banks' self - operated funds to concentrate on interest - rate bonds with zero risk - weight. Temporally, liquidity assessment indicators create a rigid "quarter - end effect". Under these constraints, banks' self - operated bond - allocation behavior shows characteristics of "quota restricted by credit, concentration on interest - rate bonds, and rhythm restricted by quarter - ends" [4][29] - **Three Transmission Paths of MPA on Banks' Bond Allocation**: - **Broad - Credit Growth Constraint → Limited Bond Allocation Quota**: The upper limit of broad - credit growth locks the growth rate of bond investment, squeezing out bond allocation when loan growth is fast, especially at quarter - ends [32][33] - **Capital - Adequacy Constraint → Decreased Risk Appetite + Increased Supply of Capital Instruments**: To meet capital - adequacy requirements, banks issue secondary - capital bonds and perpetual bonds and increase the allocation of low - capital - occupancy interest - rate bonds while reducing high - capital - occupancy credit bonds. In a period of strict capital regulation, the spread between interest - rate bonds and credit bonds tends to widen [34] - **Liquidity Indicator Constraint → Quarter - End Fund Pulse + Solidified Maturity Preference**: LCR assessment tightens the quarter - end capital market and releases concentrated demand for interest - rate bonds. NSFR constraint restricts banks from lending to non - bank institutions at quarter - ends, inhibits excessive maturity mismatch, and solidifies banks' preference for short - term bonds or long - term interest - rate bonds [35] 3. Triple Constraints of the Banking Risk Supervision System under the Financial Regulatory System - **Capital - Adequacy Constraint: Risk Weights Guide Allocation**: Capital - adequacy ratio is the core regulatory indicator. Risk weights determine the capital occupancy of bonds, and banks prefer bonds with lower risk weights. The investment priority of bond types is: treasury bonds, policy - financial bonds > local - government bonds > general - credit bonds, commercial - financial bonds > secondary - capital bonds > perpetual bonds. When capital adequacy is under pressure, banks compress high - weight assets, and the regulatory rating affects business qualifications and asset structure. Capital - supplement pressure increases the supply of capital instruments [37][44][45] - **Liquidity Risk Indicators: LCR and NSFR's "Rigid Demand" for High - Liquidity Assets**: The core goal of liquidity - risk supervision is to guide banks to match the maturity structure of assets and liabilities. LCR and NSFR are the two pillars. Different bonds have different conversion rates in HQLA and RSF coefficients, which affect banks' bond - type preferences. The comprehensive impact includes a significant quarter - end effect, solidified maturity preference, and structural differentiation [47][51][57] - **Interest - Rate Risk Supervision Indicators: How ΔEVE and ΔNII Constrain Allocation Maturity**: ΔEVE measures the maximum loss of the net present value of banks' assets and liabilities under different interest - rate shocks, and ΔNII measures the impact of interest - rate changes on net interest income. These two indicators jointly restrict large domestic banks' long - bond allocation. Banks tend to "buy short and sell long" to control bond maturity [58][59][60]

Investment Rating - The report assigns an "Accumulate-A/Accumulate-H" rating to the company, with a current price of 19.76 CNY/10.86 HKD and a fair value of 21.93 CNY/12.05 HKD [8]. Core Insights - The company has achieved steady growth in operating performance, with a total revenue of 1.388 billion CNY in 2025, reflecting a year-on-year increase of 2.45%. The net profit attributable to shareholders reached 486 million CNY, up 6.18% year-on-year, with an EPS of 0.80 CNY, marking a 6.67% increase [8]. - The company's capital adequacy ratio has strengthened, and structural expansion of performance expectations is anticipated. The client equity scale of the futures company has reached a new high, exceeding 2 trillion CNY, with a year-on-year growth of 30% [8]. - The H-share listing is expected to enhance the flexibility of overseas margin expansion, with relevant indicators projected at 166% and 240% for 2024 and 2025, respectively [8]. - Other business segments are also expanding positively, with risk management and wealth management businesses showing steady growth [8]. Financial Summary - **Revenue Forecast**: - 2024A: 1,354 million CNY - 2025A: 1,388 million CNY - 2026E: 1,686 million CNY - 2027E: 1,889 million CNY - 2028E: 2,313 million CNY - Growth Rates: -78.3%, 2.5%, 21.5%, 12.1%, 22.4% [2][11] - **Net Profit Forecast**: - 2024A: 458 million CNY - 2025A: 486 million CNY - 2026E: 715 million CNY - 2027E: 876 million CNY - 2028E: 1,188 million CNY - Growth Rates: 14.0%, 6.2%, 47.1%, 22.4%, 35.6% [2][11] - **EPS Forecast**: - 2024A: 0.75 CNY - 2025A: 0.80 CNY - 2026E: 1.00 CNY - 2027E: 1.22 CNY - 2028E: 1.66 CNY [2][11] - **P/E Ratio**: - 2024A: 15.87 - 2025A: 24.36 - 2026E: 19.82 - 2027E: 16.19 - 2028E: 11.94 [2][11] - **ROE**: - 2024A: 11.1% - 2025A: 8.7% - 2026E: 11.6% - 2027E: 12.7% - 2028E: 15.0% [2][11]

Core Viewpoint - The core viewpoint of the article is that China Merchants Bank (CMB) emphasizes maintaining stability and reducing volatility in risk assets, with a target growth rate of around 9% to 10% for risk assets in 2025, while also being adaptable to external environmental changes [1][2]. Risk Asset Growth Factors - The growth of risk assets in 2025 is influenced by several factors: - The transition to new capital regulations in 2024 will create a noticeable capital saving effect, establishing a lower baseline, which is a one-time factor [1][3]. - As retail loans face pressure, the proportion of corporate loans increases, which have a higher risk weight, thereby raising the growth rate of risk assets [3]. - CMB plans to leverage its strong capital position to support low-risk off-balance-sheet businesses, such as bill discounting and letter of credit negotiation, which can generate good returns while consuming risk assets [3][4]. - Increased efforts in bond investments will also contribute to a rise in market risk assets [4]. Capital Adequacy Ratio Insights - The decline in capital adequacy ratio last year was primarily due to one-time factors, including a 25 billion yuan mid-term dividend increase, which reduced capital [4][5]. - Market fluctuations also impacted the capital adequacy ratio through the volatility of CMB's bond OCI accounts [4]. - As the capital adequacy ratio base increases and profit growth pressures mount, maintaining continuous capital improvement becomes more challenging [5]. - CMB aims to balance capital, risk, profitability, and business development to achieve relative stability, focusing on the relationship between capital, ROE, and dividends [5].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company achieved an operating income of 838.3 billion, a year-on-year increase of 2%, and a net profit attributable to shareholders of 368.6 billion, up 0.7% year-on-year. The weighted average return on equity (ROE) was 9.45%, a decrease of 0.43 percentage points year-on-year [3][4] Financial Performance - The company's revenue, pre-provision operating profit (PPOP), and net profit attributable to shareholders for 2025 showed year-on-year growth rates of 2%, 2%, and 0.7%, respectively, with improvements in profit growth observed since Q2 2025 [4] - Net interest income decreased by 0.4% year-on-year, while non-interest income grew by 10.2%, contributing positively to overall revenue [4][7] - The company’s total interest-earning assets and loans grew by 9.9% and 7.5% year-on-year, respectively, with a loan increment of 2.13 trillion, which was 151.9 billion less than the previous year [5] Asset Quality - The non-performing loan (NPL) ratio was 1.31%, down 2 basis points from Q3, with a stable provision coverage ratio [9] - The company reported a provision coverage ratio of 213.6% at the end of 2025, reflecting a slight decrease from the previous quarter [9][10] Capital Adequacy - The core tier one capital ratio was 13.57% at the end of 2025, with expectations for further strengthening of capital through special government bond issuance [10][29] Earnings Forecast and Valuation - The report slightly adjusted the earnings per share (EPS) forecast for 2026-2027 to 1.05 and 1.08 yuan, respectively, and introduced a new EPS forecast for 2028 at 1.12 yuan. The current stock price corresponds to price-to-book (PB) ratios of 0.64, 0.60, and 0.56 for 2026, 2027, and 2028, respectively [11][12]

Investment Rating - The report maintains an "Accumulate/Buy" rating for the company [7] Core Views - The company reported a net profit attributable to shareholders of RMB 5.654 billion for 2025, representing a year-on-year increase of 10.5%, which aligns with previous expectations [1] - The company plans to distribute a cash dividend of RMB 0.46 per share, resulting in a dividend payout ratio of 30% and a dividend yield of 4.21% [1] - The company is experiencing a high expansion momentum, with total assets, loans, and deposits growing by 20.7%, 20.7%, and 19.3% respectively by the end of 2025 [2] - The net interest margin for 2025 is reported at 1.39%, showing a slight increase of 4 basis points year-on-year, primarily due to optimized high-interest liabilities [2] - Non-interest income has decreased by 24.2% year-on-year, significantly impacted by a decline in intermediary business income [3] - The overall non-performing loan (NPL) ratio remains stable at 1.14%, with a provision coverage ratio of 246% [4] - The company has a target price of RMB 12.48 and HKD 9.91 for 2026, with a projected price-to-book (PB) ratio of 0.73 for A shares and 0.51 for H shares [5] Summary by Sections Financial Performance - The company achieved a revenue of RMB 15.113 billion in 2025, with a year-on-year growth rate of 10.48% [11] - The net profit attributable to shareholders is projected to reach RMB 6.225 billion in 2026, reflecting a growth rate of 10.09% [11] - The non-performing loan ratio is expected to remain stable at 1.14% through 2028 [11] Capital Adequacy - The capital adequacy ratio and core tier 1 capital adequacy ratio were reported at 12.55% and 8.53% respectively by the end of 2025 [3] - The company has a convertible bond worth RMB 11.6 billion that could enhance its capital adequacy ratio by 1.75 percentage points if successfully converted [3] Market Position - The company is positioned favorably compared to its peers, with a higher dividend yield of 6.32% for A shares compared to an average of 5% for other Chinese H-share banks [5] - The report suggests that the company's H shares are more attractive in terms of dividend yield compared to comparable companies [5]

Investment Rating - The report maintains an "Accumulate/Buy" rating for the company [7] Core Views - The company reported a net profit attributable to shareholders of RMB 5.654 billion for 2025, representing a year-on-year increase of 10.5%, which aligns with previous expectations [1] - The company plans to distribute a cash dividend of RMB 0.46 per share, resulting in a dividend payout ratio of 30% and a dividend yield of 4.21% [1] - The company is experiencing a high expansion momentum, with total assets, loans, and deposits growing by 20.7%, 20.7%, and 19.3% respectively by the end of 2025 [2] - The net interest margin for 2025 is reported at 1.39%, showing a slight increase of 4 basis points year-on-year, primarily due to optimized high-interest liabilities [2] - Non-interest income has decreased by 24.2% year-on-year, significantly impacted by a decline in intermediary business income [3] - The overall non-performing loan (NPL) ratio remains stable at 1.14%, with a provision coverage ratio of 246% [4] - The company has a target price of RMB 12.48 and HKD 9.91 for 2026, with a projected price-to-book (PB) ratio of 0.73 for A shares and 0.51 for H shares [5] Summary by Sections Financial Performance - The company’s operating income for 2025 is RMB 15.113 billion, reflecting a growth rate of 10.48% [11] - The projected net profit for 2026 is RMB 6.225 billion, with a year-on-year growth of 10.09% [11] - The non-performing loan ratio is expected to remain stable at 1.14% through 2028 [11] Capital Adequacy - The capital adequacy ratio and core tier 1 capital adequacy ratio are reported at 12.55% and 8.53% respectively by the end of 2025 [3] - The company has 11.6 billion in convertible bonds that could enhance the capital adequacy ratio by 1.75% if successfully converted [3] Market Position - The company’s A/H shares are compared favorably against peers, with a higher dividend yield of 6.32% compared to the average of 5% for Chinese H-share banks [5] - The report suggests that the company’s shares are undervalued relative to comparable banks, with a target PB ratio of 0.73 for A shares and 0.51 for H shares [5]

Financial Data and Key Metrics Changes - In Q4 2025, Banco Macro's net income totaled ARS 100 billion, with a fiscal year total of ARS 290.7 billion, recovering from a loss in the previous quarter but 26% lower than Q4 2024 [4][5] - Excluding ARS 82.9 billion of non-recurring expenses in Q4 2025, net income would have been ARS 183 billion, with accumulated ROE and ROA at 6.6% and 1.8% respectively [5][6] - The accumulated annualized return on average equity and average assets were 5.1% and 1.4% respectively for Q4 2025 [4] Business Line Data and Key Metrics Changes - In Q4 2025, net interest income reached ARS 836.5 billion, a 13% increase from Q3 2025 and 19% higher year-on-year [7][8] - Provision for loan losses totaled ARS 169.3 billion in Q4 2025, a 1% decrease from Q3 2025 but a 243% increase year-on-year [7] - Other operating income in Q4 2025 was ARS 73.3 billion, a 3% decrease from Q3 2025 but a 13% increase year-on-year [13] Market Data and Key Metrics Changes - Total financing reached ARS 10.71 trillion, increasing 2% quarter-on-quarter and 40% year-on-year [19] - Total deposits increased 8% quarter-on-quarter to ARS 13.7 trillion, with private sector deposits increasing 11% [20][21] - Banco Macro's market share of private sector loans as of December 2025 was 8.3%, up 30 basis points from December 2024 [19] Company Strategy and Development Direction - The bank aims to optimize its capital base and has reduced its branch network by 75 branches, down to 444 from 519 [16] - The bank is focusing on maintaining a tight monetary policy and fiscal surplus while pushing for labor and tax reforms to improve economic competitiveness [45][46] - The acquisition of 50% of Personal Pay is part of a strategy to develop a Banking as a Service model, leveraging Telecom's customer base [73][75] Management's Comments on Operating Environment and Future Outlook - Management expects a real loan growth of 20% and deposit growth of 6% in 2026, adjusting for macroeconomic changes [28][29] - The cost of risk is projected to decrease to 5.2% in 2026, with NPLs expected to trend down to mid to low threes [91][100] - The bank is prepared to finance projects in energy and mining sectors, leveraging its strong capital base [92][99] Other Important Information - The effective tax rate for fiscal year 2025 was 43.1%, significantly higher than the previous year [18] - The bank's liquidity remains strong, with a liquid assets to deposit ratio of 73% [22] Q&A Session Summary Question: Update on guidance after the election - Management indicated a potential modification to guidance, expecting real loan growth of 20% and deposit growth of 6% in 2026 due to changes in GDP growth and inflation expectations [28][29] Question: Nature of security gains - Management attributed the strong security gains in Q4 to a reversal of trends from previous volatility, with declining interest rates positively impacting local securities [30] Question: Asset quality indicators - Management noted a reduction in the speed of deterioration in consumer asset quality and expects a stable outlook for the first half of 2026 [38][39] Question: Political landscape and reforms - Management highlighted the government's agenda focusing on labor and tax reforms, which are expected to improve economic conditions [42][46] Question: NPL trends and loan growth - Management confirmed expectations for NPLs to trend down in 2026, with a focus on maintaining market share in loans and deposits [91][72]

Core Insights - The Cambodian banking sector demonstrated resilience and a strong capital base despite challenges such as external uncertainties, slowing credit growth, and border tensions [1] - The overall capital adequacy ratio and liquidity of the banking sector remain significantly above regulatory requirements, with profitability showing signs of recovery [1] Group 1: Banking Sector Performance - The non-performing loan (NPL) rate increased from 7.4% in 2024 to 8.9% in 2025, influenced by a decline in asset quality due to a weak real estate and construction sector [1] - The net NPL rate, after accounting for provisions, stands at 2.9%, indicating that risks are generally manageable [2] - The allowance coverage ratio reached 67.5%, reflecting strong risk resilience among financial institutions [2] Group 2: Capital and Liquidity - Capital adequacy ratios (CAR) for deposit-taking banks and financial institutions are at 21.9%, while non-deposit institutions have a CAR of 31.4%, both exceeding the statutory minimum of 15% [2] - The liquidity coverage ratio (LCR) is maintained at a high level of 177.3%, well above the 100% regulatory standard, ensuring sufficient short-term liquidity [2] Group 3: Credit Growth and Economic Context - Customer loans in the banking sector increased by 4.1% year-on-year, totaling $63 billion, while customer deposits rose by 14.7%, amounting to $65.7 billion [3] - The credit growth rate has significantly slowed, with a mere 3% increase in 2023, marking the lowest growth rate in the past 20 years [3] - The loan-to-GDP ratio has surpassed 170%, making Cambodia the country with the highest private debt ratio in the region [3]

Core Viewpoint - The company maintains a strong capital adequacy ratio, with a focus on serving rural areas, small and medium-sized enterprises, and urban residents while ensuring steady growth and operational efficiency [1] Capital Adequacy - As of September 30, 2025, the company's core Tier 1 capital adequacy ratio is 11.06%, Tier 1 capital adequacy ratio is 12.32%, and total capital adequacy ratio is 13.49% [1] Business Strategy - The company is committed to serving the "three rural issues" (agriculture, rural areas, and farmers), small and medium-sized enterprises, and urban residents, while also focusing on risk prevention in key areas [1] - The company aims to strengthen its internal capital accumulation through operational performance and explore diversified capital replenishment channels, including the issuance of capital supplement bonds [1]