CITIC Construction Investment: Listed banks' revenue to improve and performance to remain stable by 2025, with a focus on quality fundamentals and high dividend-paying stocks.

China CITIC Securities’ banking industry 2025 annual report overview notes that in 2025, both the revenue and profits of listed banks achieved slight positive growth, and the overall trend is improving. The continued narrowing of the decline in the net interest margin (NIM) plus the recovery in non-interest income has brought the core revenue of listed banks back into positive growth territory. Loan demand shows no improvement, and the scale growth rate remains steady. With cost optimization on the liability side, the NIM in the fourth quarter has marginally stabilized. As wealth management gradually recovers, non-interest income growth accelerates; amid volatility in the bond market, other non-interest income maintains growth in the high single digits. Asset quality meets expectations. The bad debt formation rate increased quarter-on-quarter, with ongoing exposure to corporate real estate risks, and no turning point is seen in risks in retail and small and micro enterprises. Looking ahead to 2026, as the decline in the NIM narrows and other non-interest income is not materially dragged down, revenue is expected to continue improving, and profits can maintain stable growth. With the banking industry’s actual operations and expectations further consolidated at the bottom, the sector’s defensive and risk-hedging attributes are strong, so it is mainly positioned to hedge the market. Within the sector, positions may be rotated frequently based on short-term fundamentals and dividend yield valuation comparisons. It is recommended to balance high-quality picks with excellent fundamentals and solid dividend yields. (People’s Financial News)