Forecast of the 2026 interim report of banks listed by Zhongtai Securities: Interest income supports revenue resilience and profit performance is expected to be stable
The Zhitong Finance App learned that Zhongtai Securities released a research report saying that the bank's definitive performance for the whole year will bring steady returns for bank stocks in 2026, which is related to market style in the short term; the economic development model will continue (strong policy strength), strong public business and residents' continued low risk appetite will drive interest spreads to bottom up, revenue growth will continue to be a highlight, and performance certainty is strong. Bank stocks have two main investment lines: one is an urban agricultural commercial bank with regional advantages and strong certainty. The regions include Jiangsu, Shanghai, Chengyu, Shandong, and Fujian; the second is the logic of high dividends and stability.
The main views of Zhongtai Securities are as follows:
Core view: 1. Strong revenue resilience: Stable interest spreads support excellent interest income performance. Handling fees and other non-interest expectations are still positive support, and revenue resilience is strong. 2. Net profit performance is expected to be stable: retail risk exposure has subsided, and the overall asset quality of public support is steady; revenue resilience supports listed banks to make up for apology with abundance, and the net profit growth rate is expected to be stable.
There is strong certainty about improvement: interest spreads are gradually stabilizing, and interest income is recovering with strong certainty; wealth management support fees have maintained a positive increase; other non-interest income on a low base is expected to provide a positive contribution to revenue. 2. Profits have also improved, but the release is expected to be conservative: overall revenue is picking up, but retail risks are expected to continue to be exposed, and listed banks are expected to make up for it with profit.
Total credit volume and structure: Credit is expected to have an impact in June, but the magnitude is weaker than in previous years, and may continue to increase less year-on-year; some provinces will continue to have a high level of prosperity. (1) Credit recovery in May: The RMB loan balance in May increased by 520 billion yuan compared to the end of April, a year-on-year decrease of 100 billion yuan. Only short-term corporate loans and notes increased compared to the April balance, while all other balances declined. Enterprise side: Corporate loans continued to decrease year-on-year due to multiple factors such as entity financing demand still weak, bond substitution, and the successive maturing of some support loans during the pandemic, and can only rely on bill impulses. Residents' side: There is little desire to increase leverage. Housing companies' sales picked up in May, but it is expected that early repayments will continue + provident fund loans will replace demand for commercial loans. The increase in short-term loans and medium- to long-term loans has declined compared to last year. (2) Credit outlook for June: Social Finance's credit growth is expected to increase by 2 trillion dollars in June. The cumulative growth rate will drop slightly to 5.39% from 5.5% in May. It is expected that the impulse will still mainly depend on the enterprise side, while the residential side continues to weaken. (3) Regional credit differentiation: 1H26 is expected to continue the characteristics of regional differentiation. As of the end of May 2026, the major economic provinces that maintained a credit growth rate of 7% or more were Jiangsu (9.4%), Sichuan (9.2%), Shandong (7.9%), and Zhejiang (7.2%).
Interest spread forecast: Interest spreads are expected to be basically stable in the second quarter. Interest spreads for the next quarter are expected to be affected by seasonal weakening of deposit repricing, and there is slight downward pressure from month to month. (1) Q1 interest spread review: 1Q26 single quarter annualized net interest spread increased month-on-month: 1Q26 single-quarter annualized net interest spread 1.38%, up 2 bps month-on-month, and achieved a correction (VS 4q25 fell 1 bp month-on-month). The net interest spreads of major banks, stock banks, urban commercial banks, and agricultural commercial banks are +2 bps, +0 bps, +1 bp, and +3 bps, respectively. (2) Follow-up interest spread outlook: Banks may invest at a higher pace than in previous years, and choose high-yield credit centralized Q1 investment to ensure annual interest income. Current demand is still weak, and the share of low-yield credit may continue to rise, making it difficult to expect interest spreads to continue to rise in the coming quarters. If there are no new monetary policies in the second half of the year, the cumulative decline in Q2-Q4 is 3.9 bps. If the LPR is lowered by 15 bp in the second half of the year, it is expected that Q2-q4 will cumulatively decline by 4.8 bp.
Interest income: The net interest income of 1H26 listed banks is expected to be +8.1% year-on-year, and urban commercial banks can still maintain growth of more than 10%. The net interest income of listed banks for the whole year is expected to be 6.4%, which is an important support for the full year's revenue, which is a significant improvement over previous years. Handling fees: The main revenue stream will maintain steady growth, and will not greatly disrupt the quarterly revenue of listed banks. 1H26 fees are expected to be +4.5% YoY (1Q26 +5.8% YoY). 1. Steady growth in premium income: The cumulative premium income from January to May 2026 was 3.19 trillion yuan, a record high, +4.3% year over year, and higher than the same period last year (+3.8% year-on-year growth in January-May 2025). Large-scale fixed deposit maturation compounded residents' risk appetite was lower, and premium income contributed to a steady increase in handling fees. 2. The size of public funds returned to steady growth: After experiencing a month-on-month decline in March, the size of public funds across the country returned to steady growth in April and May. 3. Steady growth in the scale of financial management: After the impact of the March returns ended, the scale of financial management increased sharply sequentially in April, and continued to grow steadily in May. The estimated scale has already exceeded the scale at the end of last year.
Other non-interest: It is not expected to cause significant disturbances in revenue, and is expected to maintain a slight positive growth rate. 1H26 is estimated at +4.2% YoY (vs. 1Q26 +10.2% YoY). 1. Bond market view: Last year's other non-interest income in the second quarter was high. There may be slight pressure in Q2 this year, but the bond market center is expected to decline steadily and slightly in the second half of the year. The risk of a sharp pullback is manageable, with mainly double support. First, the K-type fragmentation of the domestic economy is still a contradiction of insufficient domestic demand, and monetary policy is difficult to shift to tightening; second, there is still a shortage of assets: in the short term, AI-related financing is still dominated by equity, and demand for credit and bond financing is still low, making it difficult to transform the credit expansion mechanism into high-intensity credit demand. 2. Q1 listed banks were not strong enough to redeem profits and had reserves to cope with subsequent shocks: the bond market disrupted in the first quarter of last year, and the fair value of industry bonds generally fluctuated and lost. This year, interest rates fluctuated downward and turned into floating profits, which clearly drove revenue. As a result, the industry was generally not strong enough to implement floating profits (1Q25 fair value net profit and loss accounted for -3% of revenue, accounting for a total of 8.8% of revenue; 1Q26 fair value accounted for +2.7%, and investment income accounted for 7.8% of revenue; 1Q26 fair value accounted for +2.7%, compared to return on investment accounting for 10% of revenue).
1H26 net profit forecast: retail risk exposure has subsided, and observations are continuing; revenue resilience supports listed banks to make up for apologies. 1. Retail risks continue to be exposed: the retail defect rate will continue to rise to 1.36% in 2025, up 9 bps from 1h25. Non-performing retail sales accounted for 38.9% of the total bad sales ratio. 2. The increase in the retail defect rate and non-performing amount has all slowed down. Observe the increase in the non-performing rate in the past four and a half years, and there was a slight slowdown in the second half of 2025, which was 11, 11, 12, and 9 bps, respectively. Looking at the net increase in non-performing loans over the past four and a half years, which are 548, 880, 840, and 49.8 billion dollars, the net increase in non-performing loans in all four categories has declined. 3. Continued public support: The non-performing public sector rate continued to drop to 1.21%, supporting the overall manageable credit costs of listed banks. In summary, the 1H26, 1-3Q26, and 2026 revenue is expected to fall slightly from 1Q26, but still maintain single-digit growth, +7.1%, 6.2%, and 5.3% year over year; net profit is expected to remain relatively stable, and listed banks are expected to still make up for apologies with profits. 1H26, 1-3Q26, and 2026 are +3.2%, +3.1%, and +3% year-on-year respectively.
1. Deterministic bank performance for the whole year will bring steady returns in bank stocks in 2026. The short term is related to the market style; the economic development model will continue (strong policy strength), strong public business and residents' continued low risk appetite will drive interest spreads to bottom up, and the revenue growth rate will continue to be a highlight, and performance certainty is strong. 2. Bank stocks have two main investment lines: First, urban agricultural commercial banks with regional advantages and strong certainty. Regions include Jiangsu, Shanghai, Cheng-Chongqing, Shandong and Fujian. The focus is on recommending regional banks such as Bank of Jiangsu, Qilu Bank, Yunong Commercial Bank, Bank of Ningbo, Bank of Hangzhou, Bank of Shanghai, Nanjing, Chengdu, Shanghai-Nong, etc. Second, the logic of high dividends is prudent. The focus is on recommending large banks: the six major banks (such as Agricultural Bank, CCB, and ICBC); as well as stock banks such as CMB, Societe Generale, and CITIC.
Risk warning: The economic downturn exceeded expectations; research information was not updated in a timely manner; policy implementation fell short of expectations.