Citigroup: Citi's revenue in the fourth quarter of last year increased by 2.1% year-on-year. Preferred options are BANK OF CHINA (03988) and Bank Of Ningbo (002142.SZ).

Citibank released a research report stating that it expects the fourth quarter revenue of domestic banks in 2025 to increase by 2.1% year-on-year, mainly benefiting from stable fee income and a steady net interest margin, partially offsetting the impact of slowing loan growth. Against the backdrop of stable asset quality, the bank expects domestic banks to release provisions to support profit growth. Among the domestic banks, Citibank expects CQRC BANK (03618) to outperform expectations in the fourth quarter, while China Everbright Bank (06818) and Jiangsu Changshu Rural Commercial Bank (601128.SH) are expected to perform below expectations. The report indicates that domestic bank loans in January saw strong growth, mainly driven by corporate loans. Pressure on net interest margins is expected to ease in 2026, and revenue growth in the banking industry for the 2026 fiscal year is expected to improve slightly compared to the 2025 fiscal year, mainly due to a stabilizing net interest margin and strong fee income. With the yield on China's ten-year government bonds peaking, the spread between dividend yields and ten-year government bond yields will widen, attracting investors seeking returns from southern capital. The bank's top picks are BANK OF CHINA (03988) and Bank of Ningbo (002142.SZ).