Forecast of the three quarterly reports of banks listed by Zhongtai Securities: Interest income and other non-interest jointly support revenue resilience and profit performance is expected to be stable

The Zhitong Finance App learned that Zhongtai Securities released a research report saying that listed banks from 1 to 3Q26 are expected to have +7.4% year-on-year revenue, +3.1% year-on-year net profit, +7.4% year-on-year revenue, and +3.3% net profit. Interest spreads were basically stable, with net interest income of +7.9% year-on-year as the main support; average income was weak, handling fees were +0.8% year-on-year; other non-interest-bearing benefits from Changxin's floating profit and low base, +11.6% year-on-year. Credit declined year-on-year, and debt continued to be used in lieu of loans. Retail risks continue to be exposed, but the quality of public assets is stable, banks have made up for it with good money, and profits have remained stable.

Bank stocks have two main investment lines: the first is an urban agricultural commercial bank with regional advantages and strong certainty. Regions include Jiangsu, Shanghai, Chengyu, Shandong, and Fujian. The second is the logic of high dividends and prudent, focusing on recommending large banks; as well as some stock banks, etc.

The main views of Zhongtai Securities are as follows:

Core view: 1. Strong revenue resilience: Interest spreads are basically stable, and interest income is resilient; however, the mid-term earnings of Changxin were slightly under pressure. Small and medium banks benefited from the 3Q25 low base and the decline in the 3Q26 bond market, and the overall non-interest growth rate or marginal recovery of 3Q26 listed banks. Overall, revenue from 1-3Q26 is expected to be +7.4% year-on-year. 2. Net profit performance is expected to be stable: retail risk is expected to continue to be exposed, and the overall asset quality of public support is stable; revenue resilience supports listed banks to make up with a profit, and the net profit growth rate is expected to be stable. Net profit is expected to increase 3.1% year-on-year from 1-3Q26.

Total credit volume: Credit is expected to decrease year-on-year in September, and the cumulative growth rate of social finance credit will drop to 4.67%, continuing with debt in lieu of loans. (1) Credit recovery in August: The RMB loan balance in August increased by 60 billion yuan from the end of July, to 530 billion yuan; corporate loan balance: short-term loan balance decreased from the previous month and weakened year on year; medium- to long-term loan balance increased but not as much as in the same period last year; residential loan situation: The balance of short-term loans and medium- to long-term loans for residents decreased compared to the previous month, and both weakened year on year. Debt in lieu of loans continued: In August, corporate bond financing of 271.2 billion yuan was added, and additional stock financing was added, +137.4 billion yuan and +18.3 billion yuan, respectively. The overall interest rate environment was at a historically low level, while loans were limited by the lower limit of the self-regulatory mechanism, and some corporate financing structures switched to “debt-for-loan” to optimize the financing structure. (2) Credit outlook for September: The cumulative credit growth rate of Social Finance in September is expected to drop slightly from 4.9% in August to 4.67%. Although it is expected to be impactful at the end of the quarter, the increase will still be small year-on-year. It mainly depends on the corporate side, while the residential side continues to weaken. (3) Regional credit differentiation: The characteristics of regional differentiation are expected to continue in 3Q26. As of the end of August 2026, the major economic provinces that maintained a credit growth rate of 6.5% or more were Sichuan (8.7%), Jiangsu (8.6%), Shandong (7.2%), and Zhejiang (6.8%).

Interest spread forecast: Interest spreads are expected to be basically stable in the second quarter. Interest spreads for the next quarter are expected to be affected by seasonal weakening of deposit repricing, and there is slight downward pressure from month to month. (1) 2Q26 interest spread reinstatement: Listed banks' 2Q26 annualized net interest spread was 1.38% in a single quarter, flat month-on-month; among them, asset-side returns and debt-side interest rates declined by 6 bp and 7 bps, respectively, and the decline was basically the same as 1Q26. (2) Follow-up interest spread outlook: It is expected that the debt-side pricing scale may decline in the second half of the year. Interest spreads are expected to drop slightly by about 2 bp in the second half of the year, and the overall rate is still stable.

Interest income: The net interest income of listed banks from 1 to 3Q26 is expected to be +7.9% year-on-year, and urban commercial banks can still maintain growth of more than 10%. The net interest income of listed banks for the whole year is expected to be 7.7%, which is an important support for the full year's revenue, which is a significant improvement over previous years.

Handling fees: Poor consumption dragged down card transaction fees continued to weaken, and A-shares also fluctuated in the third quarter. Handling fees are expected to grow at a high rate. Handling fees from 1 to 3Q26 are expected to increase at a rate of +0.8% (+1.1% compared to 1H26). 1. Premium income has grown steadily: The cumulative premium income from January to August 2026 was 4.82 trillion yuan, a slight increase of 0.4% over the same period last year. Large-scale fixed deposit maturities combined with low risk appetite among residents. It is expected that insurance consignment sales will still provide a positive contribution to bank income. 2. The size of public funds fluctuated in the third quarter: The size of public funds across the country fluctuated with the stock market fluctuation in the third quarter, and the positive contribution to the revenue stream is expected to weaken. 3. Steady growth in the scale of financial management: Deposit relocation has helped the scale of financial management to grow rapidly, and is expected to continue to be a positive contribution.

Other non-interest: The growth rate is expected to improve compared to Q2. Thanks to investment in Changxin and the low base, it is estimated that 1-3Q26 is +11.6% YoY (vs 1H26 +7.5% YoY). 1. Equity investment surges: Changxin Technology was listed in the third quarter of 2026, and some banks (mainly large banks) had floating profits. According to Changxin's market capitalization of 3.6 trillion yuan, the arithmetic average share of bank investment income in 2025 was 11.3%. 2. The sharp rise in the bond market in the third quarter of last year formed other low non-interest bases: from 2025.6.30 to 2025.9.30, ten-year treasury bond yields rose 21 bp from 1.647% to 1.861%, and fair losses caused other low non-interest bases. From 2026.6.30 to 2026.9.24, the 10-year treasury bond yield fell 6 bp from 1.733% to 1.674%, with fluctuating profits during the quarter.

Net profit forecast: Retail risks continue to be exposed, and revenue resilience supports listed banks to make up for apologies. Retail risks continue to be exposed, banks maintain a certain level of calculation, and profit release is steady. 1. Retail risk continues to be exposed: 1H26 retail defect rate continues to rise to 1.52%, up 15 bps from 2025. Bad retail sales accounted for 41% of the total bad sales ratio. Revenue is resilient, supports banks to “make up for apologies”, and maintains a certain level of planning to prevent risks. 2. Continued public support: The non-performing public sector rate continued to drop to 1.14%, supporting the overall manageable credit costs of listed banks. In summary, the revenue of listed banks from 1-3Q26 and 2026 is expected to be +7.4% year-on-year, respectively; net profit is expected to remain relatively stable, and listed banks are expected to still make up for apology with a profit. 1-3Q26 and 2026 are +3.3% year-on-year respectively.

The bank's definitive performance for the whole year will bring steady returns for bank stocks in 2026. The short term is related to the market style; the economic development model will continue (strong policy strength), strong public business and residents' continued low risk appetite will drive interest spreads to bottom up, and the revenue growth rate will continue to be a highlight, and performance certainty is strong. Bank stocks have two main investment lines: the first is an urban agricultural commercial bank with regional advantages and strong certainty. Regions include Jiangsu, Shanghai, Chengyu, Shandong, and Fujian. The second is the logic of high dividends and prudent, focusing on recommending large banks; as well as some stock banks, etc.

Risk warning: The economic downturn exceeded expectations; research information was not updated in a timely manner; policy implementation fell short of expectations.