Glonghui, December 15 | UBS published a research report predicting that next year's domestic bank revenue and pre-provision operating profit (PPOP) will increase by an average of 7.1% and 7.5% year-on-year, mainly driven by balance sheet expansion, but partly offset by a contraction in net profit spreads. The bank expects loans to grow at an average annual rate of 15% in fiscal year 2024. At the same time, net profit after tax is expected to increase by an average of 9.2% year-on-year due to revenue growth and sufficient provision coverage as a buffer. Considering lower interest rates on loans and the uncertainty about the real estate market and the overall macro environment, UBS said it will still hold a defensive view on the domestic banking industry next year, and is optimistic about local government financing platforms (LGFV) and banks with low real estate loan exposure, as well as domestic banks with a high proportion of retail loans and high provision coverage. At the same time, investors also expect investors to pay more attention to dividend returns next year. UBS upgraded the H share investment rating of Chongqing Agricultural Commercial Bank from “selling” to “neutral”. The target price was raised from HK$2.5 to HK$3.01. Additionally, it maintained Huishang Bank's “selling” rating. The target price was lowered from HK$2.3 to HK$2.03.