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<Research>UBS: CN Apr New RMB Loans, TSF Both Miss; Top Picks BANK OF CHINA/ CCB/ ICBC/ CITIC BANK
Recommend 11 Positive 16 Negative 15 |
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Credit data remained weak in April, again falling short of consensus, UBS said in its report. New RMB loans and Total Social Financing (TSF) both came in below consensus, with RMB loans recording a net contraction. Total new RMB loans amounted to - RMB10 billion, down RMB290 billion YoY and far below the market expectation of RMB468 billion. The weakness was broad-based, reflecting net contractions in household and corporate loans across tenors, partly due to seasonality. Banks increased bill financing to a record RMB1.2 trillion, but this was still insufficient to offset the overall loan contraction. Dragged by weak RMB loans, new TSF also missed the market expectation of RMB1.4 trillion, coming in at RMB624.5 billion. UBS upheld a constructive view on Chinese banks, believing that 2026 could mark an inflection point for NIM, NII, revenue and PPOP, as deposit repricing lowers funding costs and turns overall revenue growth positive. Although net profit growth may lag in the near term due to higher provisions, the broker viewed asset quality risks are becoming increasingly manageable. The broker therefore favored large banks with strong defensiveness and high dividend yields. Its top picks were BANK OF CHINA (03988.HK), CCB (00939.HK), ICBC (01398.HK) and CITIC BANK (00998.HK), with TPs of HKD5.9, HKD10.2, HKD7.79 and HKD9.3 respectively, all being rated Buy. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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