Vanguard Securities: The single-quarter net profit growth rate of the banking industry continues to rise year-on-year, highlighting the increased investment value of high dividend stocks.

Guolian Securities released a research report stating that overall, the single-quarter net profit growth rate of commercial banks in the third quarter of 2025 continued to rise, with the decrease in provision levels, stabilizing net interest margins, and improvement in intermediate income being the main drivers. As of the end of the third quarter of 2025, the overall industry size growth rate remained stable, with large and city commercial banks' asset growth rates remaining relatively high year-on-year, and net interest margins holding steady compared to the previous quarter. There were slight fluctuations in industry asset quality data, mainly concentrated in small and medium-sized banks. The impact of floating losses from bond market fluctuations on revenue and changes in asset quality trends still need to be monitored. It is expected that the growth rate of bank performance will continue to improve, the stability of performance will further enhance, and the investment value of high dividend stocks will become more prominent. Guolian Securities' main points are as follows: Single-quarter net profit growth rate continues to rise As of the end of the third quarter of 2025, the cumulative net profit growth rate of commercial banks year-on-year was 0%, with state-owned large banks, joint-stock banks, city commercial banks, and rural commercial banks' net profit growth rates being 2.3%, -2.1%, 1.7%, and -7.3% respectively. The single-quarter net profit growth rate of commercial banks in the third quarter of 2025 was 2.4%, with state-owned large banks, joint-stock banks, city commercial banks, and rural commercial banks' single-quarter net profit growth rates being 4.4%, -2.4%, 9%, and -5.8% respectively. Stable net interest margins compared to the previous quarter The net interest margin for the third quarter of 2025 was 1.42%, remaining stable compared to the previous quarter. The net interest margins of state-owned large banks, joint-stock banks, city commercial banks, and rural commercial banks changed by 0BP, 1BP, 0BP, and 0BP to 1.31%, 1.56%, 1.37%, and 1.58% respectively. Overall industry size growth rate remains relatively stable, with high year-on-year asset growth rates for large and city commercial banks As of the end of the third quarter of 2025, the year-on-year growth rate of total assets of commercial banks was 8.8%, slightly fluctuating compared to 8.9% at the end of the second quarter of 2025. State-owned large banks and city commercial banks had relatively high year-on-year asset growth rates of 10% and 10.6% respectively, with changes of -0.4% and 0.4% compared to the previous quarter. In addition, due to local debt substitution and weak financing demand, industry loan growth rate was 6.6%, down 1% from 2024. Slight fluctuations in asset quality, with a decrease in provision coverage ratio compared to the previous quarter As of the end of the third quarter of 2025, the non-performing loan ratio and special mention loan ratio of commercial banks were 1.52% and 2.2% respectively, up by 3BP each compared to the previous quarter. The calculated single-quarter adjusted NPL formation ratio was 0.75%, up by 6BP. The provision coverage ratio was 207.15%, down by 4.82 percentage points compared to the previous quarter. The non-performing loan ratios of state-owned large banks, joint-stock banks, city commercial banks, and rural commercial banks were 1.22%, 1.22%, 1.84%, and 2.82% respectively, with changes of 1BP, 0BP, 8BP, and 5BP respectively compared to the previous quarter; the provision coverage ratios were 243.88%, 210.11%, 176.81%, and 160.21% respectively, with changes of -5.28%, -2.29%, -8.72%, and -1.66% compared to the previous quarter.