Zhongtai Securities: 1-3Q26 Banking Sector Performance Improves Marginally, Stable Asset Quality Highlights High-Dividend Advantage

Zhongtai Securities released a research report stating that 1-3Q26 banking sector performance remained steady, with revenue up 8.1% YoY and net profit up 3.8% YoY, both growth rates edging upward marginally. The marginal improvement in performance was mainly driven by stable net interest margins and improvement in other non-interest income. Asset quality was also broadly stable, with divergence within the sector and some individual banks stepping up exposure and disposal of non-performing loans. The firm believes that banks' medium- to long-term ROE is relatively certain, with stable dividends and attractive dividend yields, making the certainty of earning returns from ROE and dividends high. In the short term, there is a seesaw effect with technology, while medium- to long-term pricing returns to ROE and dividends. On individual stocks, the report focuses on recommending large banks with funding cost advantages and high-quality regional city and rural commercial banks.