Zheshang Bank (03968), Industrial and Commercial Bank of China (01398), and Minsheng Bank (01988) released minutes of their shareholders' meetings in the past few days, according to a research report released by J.P. Morgan. The bank believes that the interpretation of the entire industry is positive as the net interest margin tends to be stable, and the asset quality is also stable.

The report stated that the Industrial and Commercial Bank of China's shareholders meeting was the most positive because the management stated that the net interest margin may exceed the previous guidance, loan growth will be higher than the industry average, the non-performing loan formation rate of credit card loans is declining, the LTV of loans to real estate developers is only 42%, and the local government debt relief plan has increased the return on local government financing guaranteed loans, all of which have improved asset quality. The revelation of the China Merchants Bank shareholders meeting was more neutral because there was no new information or guidance. The revelation of the Minsheng Bank shareholders meeting was negative because the management was cautious about the net interest margin, and asset quality is unlikely to improve significantly from the current level.

According to JPMorgan, although the net interest margin of banks is stabilizing, the trends of each bank are different. If LPR is lowered again in the third quarter, the net interest margin for the fiscal year 2024 is expected to be lower than that of the first quarter by units of basis points. Comments from the above three banks indicate that the narrowing of the net interest margin of the Industrial and Commercial Bank of China may be the lowest, while that of Minsheng Bank may be the highest. The bank believes that Minsheng Bank will face greater pressure because of insufficient demand for small and medium-sized enterprise loans, while the bank is trying to optimize its asset-liability portfolio.