Core Insights - The report from Shenwan Hongyuan indicates that the revenue of listed banks in the first nine months of 2025 (9M25) grew by 0.8% year-on-year, while net profit attributable to shareholders increased by 1.5% year-on-year, driven by stable net interest income, recovery in non-interest income, and stable asset quality [1] - The report highlights that the credit growth is slowing but remains stable, with a focus on balancing volume and price among smaller banks, while demand has not significantly rebounded [1][2] - The overall asset quality risk is manageable, but there is increasing differentiation in asset quality across different business segments, particularly in small and micro businesses [3] Revenue and Profitability - In 9M25, listed banks' revenue increased by 0.8% year-on-year, and net profit attributable to shareholders rose by 1.5% year-on-year, with the first half of 2025 (1H25) showing lower growth rates of 1% and 0.8% respectively [1] - The net interest margin for listed banks remained stable at 1.5% in 3Q25, with a slight quarter-on-quarter increase of 3 basis points [2] - The average yield on interest-earning assets and the cost of interest-bearing liabilities decreased by 5 basis points and 9 basis points respectively in 3Q25 [2] Credit Growth and Asset Quality - The loan growth rate for listed banks decreased by 0.3 percentage points to 7.7% quarter-on-quarter in 3Q25, with state-owned banks maintaining a growth rate of approximately 8.5% [1] - The non-performing loan (NPL) ratio remained stable at 1.22% in 3Q25, with an annualized NPL generation rate of 0.61% [3] - There is a notable risk pressure in the small and micro business segment, with many banks reporting increased attention to asset quality indicators [3] Investment Recommendations - The banking sector's dividend yield has returned to a favorable range, indicating potential for value recovery, with a focus on leading banks and quality city commercial banks [4] - The report suggests looking at undervalued shareholding banks and quality city commercial banks that are expected to benefit from favorable policies and improved fundamentals [4] - Specific banks highlighted for potential investment include Industrial Bank, CITIC Bank, Chongqing Bank, Suzhou Bank, and Jiangsu Bank, with expectations of valuation recovery and growth opportunities [4]