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瑞银:预计2025年银行业息差继续承压 短期内国有大行表现更佳

UBS Group: Expects the banking industry's interest margins to continue to face pressure in 2025, with state-owned banks performing better in the short term.

Zhitong Finance ·  Jan 13 22:59

The UBS Group research team expressed the view that the Banks will face challenges in 2025, such as further declines in interest rates and a decrease in ROE.

According to the Zhito Finance APP, at the 25th UBS Group Greater China Seminar, the UBS Group research team expressed that the Banking Industry will face challenges such as further declines in interest rates and falling ROE in 2025. At the same time, the bank indicated that opportunities may arise from challenges, predicting that a low interest rate environment will speed up the recovery of Real Estate, reducing the impact on banks; while the rate of disposal of local debts is increasing, the asset structure of the banks is gradually being optimized. In terms of investment, UBS Group believes that state-owned banks are a good choice amidst significant short-term market uncertainty, while joint-stock banks depend on economic growth performance, with their stock prices affected by Consumer spending and real estate sales. As high dividend stocks with stable performance, the entire Banking Sector still holds certain attractiveness in a low interest rate environment.

According to the UBS Group macro team, the central bank may lower interest rates by 30-40 basis points in 2025, and further reduce rates by 20-30 basis points in 2026, while also further implementing support policies for the Real Estate sector. Looking ahead to 2025, the monetary policy may continue to be accommodative, and the bank expects a new round of interest rate cuts to be accompanied by a further reduction in deposit rates, with banks' interest spreads likely to continue to narrow.

As of the third quarter of 2024, the Banking Industry's interest margin has dropped to 1.53%, and UBS Group believes that due to the continued decline in interest rates, there is a significant downturn in the income of the asset side. With the possibility of a continued decline in the central policy interest rate, the Banking Industry's interest margin is still under pressure in a low interest rate environment. However, the bank also indicated that the increased efforts to localize debt are optimizing the banks' asset structure, and the impact of debt resolution on the banks is generally positive. Meanwhile, adjustments in the Real Estate market will take some time, but the worst impacts of the downturn in the Real Estate Industry on banks have already passed.

The UBS Group team believes that in terms of investment strategy, there are still significant differences in fundamental performance among different banks. From the perspective of bank types, state-owned banks are a safer choice during times of high market uncertainty, while joint-stock banks are high-elasticity stocks dependent on economic growth.

Yan Meizhi, head of UBS Group Investment Bank Greater China Financial Industry Research, stated that the stocks of large state-owned banks are similar to the high-yield bonds of the central government, possessing counter-cyclical characteristics, performing relatively steadily during downturns, and outperforming the market in the past three years. In a low interest rate environment, high-yield stocks still have appeal. In the Hong Kong stock market, the dividend yield of state-owned large banks is around 6-7%, while the A-shares offer a 4-5% dividend yield. Some investors expressed that a dividend yield of over 200 basis points above the ten-year government bond yield is acceptable.

Compared to large state-owned banks, joint-stock banks are more reliant on economic growth performance. Affected by several fee reduction measures, the intermediary business income of joint-stock banks focusing on retail, capital markets, and wealth management has significantly decreased in 2024. "Entering 2025, as the base effect weakens, the anticipated future decline in intermediary income is relatively limited; if Consumer spending and Real Estate sales can rebound, joint-stock banks are expected to have better stock price performance.

In addition, from the perspective of urban commercial banks, dividends are attractive while also considering profit growth. Currently, the average dividend yield for A-share listed urban rural commercial banks is about 5%, with some exceeding 6%, making them appealing compared to the relatively low Fixed Income market yields. UBS Group expects that the asset and profit growth rate of urban rural commercial banks will slightly slow year-on-year by 2025; however, some urban rural commercial banks are expected to achieve double-digit growth. Substantial growth combined with a high ROE will help maintain a certain valuation premium.

The translation is provided by third-party software.


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