CITIC Securities: The decline in net interest margin of the banking industry in 2026 narrowed to about 4 basis points.

Guosen Securities research report stated that, combined with the recent statements of the Central Economic Work Conference and the People's Bank of China, it is expected that the overall interest rate policy in 2026 will be mild, with a predicted 10 basis points decrease in policy rates possibly occurring 1 to 2 times. For bank pricing, the concentration of long-term fixed deposits on the liability side will help control costs; on the asset side, the adjustment frequency of the Loan Prime Rate (LPR) will decrease, coupled with a slowdown in the decline of terminal interest rates, making the decline in yields controllable. It is anticipated that the decline in net interest margins for the banking industry in 2026 will narrow to around 4 basis points, the first time since 2022 that the annual decline in margins has been in the low single-digit range. As a result, listed banks may see their annual operating income and net profit attributable to shareholders improve by around 3.3% and 2.8% respectively, laying a solid foundation for stable returns in the sector.