＜Research＞BOCI Keeps Overweight Rating on CN Banks; Top Picks CCB (00939.HK), CM BANK (03968.HK)

　　BOCI noted in a report that commercial banks in China suffered a slight profit setback in 1Q24, with net interest margins (NIMs) narrowing more than expected as the sector needed to provide continued financial support to the real economy. Asset quality was maintained despite a slight drop in profit.

　　Major AH shares of mainland banks covered by BOCI saw their 1Q24 net profit fall by 1.28% YoY, compared with a 3.37% increase in 1Q23. Pre-provision operating profit dropped 2.51% YoY, compared to the 3.35% decline in 1Q23.

　　Related NewsCICC: CN Banks' 1Q Results Largely in Line, Mkt Shrs Rise

　　According to the report, the fundamentals of covered Chinese banks remained stable in 1Q24, with asset size, liabilities, loans and deposits growing by 3.26%, 3.23%, 4.03% and 2.99% respectively at the end of March. The non-performing loan ratio was 1.16% at the end of March, down 4 bps YoY, reflecting improved asset quality. The average NIM for 1Q24 was 1.67%, down 11 bps from 2023.

　　BOCI maintained its Overweight rating on the Chinese banking sector, believing that the industry's profit will grow slightly for the full year, mainly due to scale expansion and solid asset quality. The degree of NIM narrowing is also forecasted to slow down in the next three quarters.

　　The broker's top picks in the industry are CCB (00939.HK) +0.060 (+1.154%) Short selling $358.87M; Ratio 17.917% and CM BANK (03968.HK) +0.350 (+0.985%) Short selling $152.64M; Ratio 24.224% .

　　Related NewsBOCI Cuts CM BANK (03968.HK) TP to $45.44, 1Q24 Results Miss

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-05-08 16:25.)

　　AAStocks Financial News