CITIC Securities: Listed banks' revenues are expected to improve and performance remain stable by 2025. Preferential targets with solid fundamentals and high dividends.

【CITIC Construction Investment: 2025-listed banks’ revenue outlook improves, performance stays stable with a focus on strong fundamentals + high dividends】A Caixin report on April 8 said that CITIC Construction Investment Securities’ 2025 annual report overview for the banking sector noted that in 2025, both revenue and profits of listed banks achieved slight positive growth, with an improving trend. As the decline in the net interest margin continues to narrow plus fee income gradually rebounds, core revenues of listed banks have returned to the positive-growth range. Credit demand has not shown improvement, and the scale growth rate has remained stable. With cost optimization on the funding side, the net interest margin was basically stable at the margin in the fourth quarter. With wealth management gradually recovering, fee income growth accelerated; amid volatility in the bond market, other non-interest income maintained growth in the high single digits. Asset quality met expectations; the non-performing loan formation rate increased month over month. Corporate real estate risk continued to be exposed, while risks in retail and small and micro segments showed no turning point. Looking ahead to 2026, as the decline in net interest margin narrows and other non-interest income does not become a major drag on earnings, revenue is expected to continue improving and profits can maintain stable growth. With the industry’s actual operations and the expected bottom being further consolidated, the sector has strong defensive and risk-hedging attributes, mainly to offset market volatility. Stocks within the sector may rotate frequently based on short-term fundamentals and dividend yield relative valuation. It is recommended to give balanced consideration to high-quality targets with excellent fundamentals and solid dividend yields.