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2026-11-02 14:35:25 Citi published a research report stating that BANK OF CHINA (03988.HK) reported a 11.6% YoY increase in pre-provision operating profit for the first nine months of 2026 to RMB341 billion, while profit rose 5.5% YoY to RMB187.5 billion, equivalent to 73% of the market's full-year 2026 forecast. Third-quarter pre-provision operating profit rose 15.6% YoY to RMB110.6 billion, outperforming the 12.3% YoY growth in the second quarter, mainly driven by improved cost efficiency, although trading income came under pressure. Third-quarter profit increased 6.4% YoY to RMB63.9 billion, with growth slower than pre-provision operating profit mainly due to a higher effective tax rate. The broker noted that positive factors included the third-quarter cost-to-income ratio declining 6.4 ppts YoY to 34.8%, with revenue rising 4.3% YoY and operating expenses falling 11.9% YoY. Fee income remained resilient, declining 2% YoY in the third quarter and accounting for 10.9% of revenue. In terms of asset quality, the non-performing loan ratio edged down 1 bp QoQ to 1.22%, while third-quarter credit cost was 0.45%. On the negative side, loan growth slowed, rising 1.3% QoQ and 7.1% YoY in the third quarter. NIM fell 1 bp QoQ to 1.27%, while third-quarter trading income dropped 30.5% YoY. Citi believed third-quarter earnings were broadly in line with expectations. Although the bank has the lowest holding ratio in CXMT (688825.SH) among major banks and therefore recorded the least mark-to-market gains from the rise in CXMT's share price, it still delivered a notable acceleration in pre-provision operating profit growth, supported by core businesses including NIM and fee income, which was viewed as a positive surprise. Looking ahead, Citi expected BANK OF CHINA to benefit from sustained momentum in China's exports and the US interest rate hiking cycle, given its stronger overseas and international business network. The broker maintained its Buy rating with a TP of HKD6.58. (ad/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |