CITIC Securities: The operating trend of the quality of retail business is crucial for the change in the asset quality of banks.

CITIC Securities pointed out that, based on the latest situation, the overall quality of listed banks is stable and provisions continue to shrink slightly, with individual trends continuing to diverge. From a breakdown perspective, the overall quality of bank assets on the public side is improving, but there is volatility in the quality of assets in construction and wholesale retail sectors; non-performing loan generation rates in retail loans are rising, and non-performing loans in operating loans are significantly increasing. In response, while the industry as a whole has stabilized provisioning, regional banks are particularly prominent in their efforts under regional economic differentiation. Looking ahead, the quality trend of retail business operations is a key factor in the change of bank asset quality, and forward-looking indicators reflect that the non-performing loan generation rate in retail credit may continue the trend from the previous year, while the quality of operating loans still deserves close attention.