Glonghui, January 4 | Citibank released a report saying that the Bank of China will continue to face pressure on net interest spreads this year. The net interest spreads of some small banks may be below sustainable levels, and there is an urgent need to slow down loan growth to preserve capital. Therefore, it is believed that the domestic banking industry will continue to integrate. Among domestic banks covered by the bank, large state-owned banks and small banks with differentiated business models are better positioned to gain market share, while potential losers include joint stock commercial banks (JSB) for enterprises, regional banks targeting local government financing instruments (LGFV), and unlisted small banks that lack differences from large banks. The bank recommended adopting a barbell strategy (Barbell strategy): buying large state-owned domestic banks, mainly because of high interest rates and low valuations, providing a downside barrier under volatile market conditions; buying high-quality regional banks to balance risk, mainly because these banks have differentiated business models and limited exposure to domestic housing and local government financing. The bank's first choice is CCB and Changshu Bank. The bank will cover BOC's profit forecast for 2023-2025 by 1% to 3% to reflect pressure on net interest spreads, slowing loan growth, and lower banking insurance premium rates. It is estimated that in 2023, 2024 and 2025, average profit will increase by 2.2%, 2.3%, and 3.4%, respectively, and reduce the target price of BOC H shares by an average of 4%.