2026年第二季度中国银行业绩前瞻：季度业绩韧性延续

Johnny Xie, CPAResearch Analyst+852-220-36141 Resilient operating performance supports dividend yield lay The MSCI China Bank Index has rallied 10% since its recent bottom in early July,driven by a market-wide rotation into high-dividend-yield stocks. We expect thisdefensiverotation to persist as overall market trading breadth improves.Underpinning this trend is a resilient 2Q26 performance across our coverage banks.We expect net profit growth to improve to 4% YoY in 2Q26 (up from 3% YoY in 1Q26),supported by stabilized NIMs and strong fee income momentum, particularly fromwealth management product (WMP) sales and trading income. Consequently, weforecast aggregate revenue and PPOP growth of 5% YoY and 6% YoY, respectively,for 2Q26—representing a slight moderation from 1Q26 due to a higher base effectfrom the same period last year. Anticipate resilient NII growth, with NIM pressure easing in 2Q26. For banks under our coverage, we anticipate a 7% YoY increase in NII, whichtranslates to a flat performance QoQ. We project a mild 3bps NIM contraction(compared to the 4bps QoQ expansion seen in 1Q26), driven by the gradually fadingbenefits of deposit repricing and a moderate decline in new loan yields. This comesdespite our expectation that loan growth will slightly decelerate to 7% YoY(1%QoQ)off the high base of 1Q26. According to the PBOC, the banking system's weighted average interest rates fornew corporate loans and mortgages were lowered by 2bps and 1bps to 3.04% and3.05%in 2Q26,respectively,driven primarily by sustained loan repricing.Meanwhile, new term deposit costs dropped faster, falling 3bps to 12.8% in 2Q26.As the benefits of deposit repricing gradually fade, concerns over NIM compressionpressure are likely to re-emerge in 2H26, a trend evidenced by the recent re-launching of 3- and 5-year CDs. Non-interest income growth supported by WMP sales and bond trading We expect fee income to grow by 3% YoY, supported by the sustained migration of deposits into mutual funds and wealth management products amid strong capitalmarket activities. However, trading income is expected to moderate to 1% YoY fromthe high base of 2Q25. This includes moderate fair value gains from bonds—drivenby an approximate 8bps slide in 10YR government bond yields during the quarter— 15 August 2026BanksChina banks as well as additional investment gains from subsidiaries. Steady PPOP growth supports provisioning buffers We expect revenue and PPOP growth of 5% YoY and 6% YoY in 2Q26, respectively,marking a deceleration from the 11% growth recorded in 1Q26 due to a higher basein 2Q25. We anticipate overall asset quality to remain stable, with NPL ratios largelyflat. Steady PPOP growth of 6% YoY will allow banks to take the opportunity to beefup their allowance buffers. However, we note a divergence between corporate andretail asset quality; credit costs for consumer finance and credit cards are likely tostay at a higher run rate. Furthermore, credit costs could face moderate headwindsin 3Q26 amid decelerating macroeconomic activity. Stock implications For 2Q26, we anticipate state-owned banks to outperform smaller banks in general.We expect BOC and ABC to lead the pack, driven by higher %YoY profit growth. Thisoutperformance will likely stem from stronger non-interest income for ABC, androbust cross-border fee income alongside strong export momentum for BOC. On a 12-month horizon, we prefer state-owned banks with robust corporatebanking businesses. These institutions are well-positioned to capture relativelystronger corporate credit demand and rising fiscal spending, despite overall weakcredit conditions. Conversely, we remain less favorable toward retail-driven banksdue to sustained pressure from the contraction of household balance sheets andelevated credit risks within the consumer loan and credit card segments.As such,CCB-H and BOC-H remain our top picks. 15 August 2026BanksChina banks China Banks - 2Q26 earnings preview snapshot 15 August 2026BanksChina banks Figure 3: Summary of China bank valuations and ratings 15 August 2026BanksChina banks For a defensive dividend-yield play, we prefer H-share banks We prefer H-share banks for their higher dividend yields, more attractive valuations,and the potential to benefit from fund inflows as overseas investors reverse theirunderweight positions. Additionally, we expect H-share banks to capture netinflows during capital rotation from overseas and Chinese onshore markets for theirdefensive play. The dividend yield for the CSI 300 Bank Index stands at 5.0%, leaving its spread overChina's 10-year government bond yield at an elevated 3.4%—well above thehistorical average of 1.6%. This wide spread remains highly attractive to investors,particularly domestic long-only funds, amid declining yields on other domesticassets. 15 August 2026BanksChina banks 15 August 2026BanksChina banks Key operating trends for the banking system 15 August 2026BanksChina banks Valuation ban