Core Viewpoint - The banking sector has entered a stage of high-quality development, with a focus on high dividend investments and stable growth in profits and revenues expected through 2026 [2][3][4]. Group 1: Banking Sector Performance - The expected revenue growth for listed banks in 2026 and 2027 is +2.5% and +3.6% respectively, while net profit growth is projected at +1.9% and +2.6% [2]. - Factors contributing to improved revenue and profit growth include narrowing net interest margin pressure, quality-focused credit issuance, and stabilization of fee income growth after several years of reductions [2][4]. - The net non-performing loan generation rate is expected to stabilize or slightly decline, with retail and corporate sectors showing different trends in risk exposure [4][25]. Group 2: Credit and Financing Trends - The demand for credit is expected to slow slightly by 2026, with a shift in the structure of new social financing reflecting changes in customer needs and regulatory impacts [3][4]. - The government and state-owned enterprises are becoming significant contributors to leverage, influencing the structure of new social financing and the banks' balance sheets [3]. Group 3: Market Dynamics and Regulatory Environment - The banking industry is experiencing a reduction in the number of licenses, indicating accelerated supply-side reforms and improved competitive dynamics [4][22]. - Regulatory policies are evolving, with a focus on enhancing the quality of service rather than merely increasing customer numbers, particularly in inclusive finance [3][4]. Group 4: Financial Metrics and Projections - The net interest margin is projected to narrow by 6 basis points in 2026, with a balanced structure of volume and price being crucial for achieving high-quality financial metrics [4][16]. - The total assets of banks are expected to grow at a rate of 7.8% YoY, with net profit growth rates showing a gradual increase from 12.6% to 2.6% over the forecast period [12][16].

Core Viewpoint - The banking industry is expected to maintain stable performance through 2026, with revenue and profit growth remaining steady due to narrowing net interest margin pressure and slowing credit growth driven by weak demand and insufficient risk compensation [2][3]. Group 1: Industry Performance - Revenue and profit for listed banks are projected to remain stable year-on-year, primarily due to a further narrowing of net interest margin, which is expected to decrease by 12 basis points in 2025 and remain within 10 basis points in 2026 [3]. - As of September, the year-on-year growth rate of credit balance is 6.6%, while the social financing balance growth rate is 8.7%, both of which are influenced by fiscal policy [3]. - Fee income growth is expected to stabilize and recover after several years of fee reductions and high base pressure [3]. - Small and micro enterprises, along with retail customer exposures, continue to be the main sources of non-performing loans, while corporate business exposures show stable or improving trends in net non-performing loan generation rates [3][5]. Group 2: Strategic Adjustments - The banking sector is undergoing a transformation towards high-quality development, driven by macroeconomic changes, industrial structure adjustments, technological applications, and regulatory cycles [6]. - Banks are optimizing their operational strategies to focus on high-quality development, utilizing technology and big data to enhance strategic execution efficiency [6]. - There is a shift in focus towards acquiring and managing target customer groups, with operational results observable through indicators such as funding costs and funding structure [6]. Group 3: Investment Perspective - The banking sector has entered a phase of high-quality development, with only a few listed banks achieving double-digit growth, making high-dividend investments a primary strategy [3][6]. - The financial indicators related to high dividends require a focus on high-quality development to sustain performance [3].