Frequent institutional surveys: Small and medium-sized listed banks are "hotly" welcomed at the beginning of the year

At the start of the new year, some small- and medium-sized listed banks have welcomed a large number of financial institution visits. According to Wind data, in the first month of the year, at least 11 A-share listed banks received 373 institutional visits, totaling 49 research sessions. During this “initial assessment” phase, topics such as the future direction of net interest margins and asset quality have become key concerns for institutional investors.

Institutions Concentrate on Visiting Listed Banks

On February 4th, Zhangjiagang Rural Commercial Bank publicly released an investor relations activity record showing that on February 3rd, it received a targeted research visit from Southern Fund, discussing the bank’s corporate loan allocations and capital replenishment plans. Notably, within less than a week, the bank had already hosted five institutional visits. On January 30th, China Post Asset Management, Huatai Securities, and two other institutions conducted research, focusing on credit issuance and liability optimization.

On January 8th, Ningbo Bank hosted a targeted research event at its headquarters. Eight institutions, including China Merchants Trust, Cinda Asia, and ICBC Credit Suisse, participated, engaging in in-depth discussions on topics such as the bank’s loan growth rate, industry competitive advantages, and refinancing. Since January, Ningbo Bank has been visited three times by institutional investors, including funds, insurance companies, and securities firms, totaling 15 institutions. The research content mainly focused on whether the bank can maintain loan growth, refinancing prospects, and endogenous growth.

Additionally, according to research information, Guotai Fund recently conducted a visit to Qingdao Rural Commercial Bank. The focus was on marine industries, with efforts to identify high-quality private marine enterprises, launching specialized products like “Marine High-Tech Loans” and “Port Supply Chain Finance,” improving the “Three Specializations and Three Excellence” service guarantee mechanism, and creating the “Golden Sails Blue Sea” brand. Ruifeng Bank released an investor relations activity record on January 6th, indicating that on December 24th, 2025, the bank was visited by 12 institutions, including insurance companies, fund companies, and securities firms.

In fact, the recent enthusiasm for institutional research on banks remains high. Especially since the beginning of the year, by January 31st, 11 A-share listed banks had received 373 institutional visits, totaling 49 research sessions. These include Zhangjiagang Rural Commercial Bank, Suzhou Bank, Qilu Bank, and Shanghai Rural Commercial Bank, all city or rural commercial banks. The main focus of these visits has been on credit issuance during peak marketing seasons, net interest margins, asset quality trends, and bond investment strategies.

Data shows that Shanghai Bank has attracted the most institutional attention. Its activity record released on January 28th indicates that since January 12th, the bank has hosted nine rounds of on-site or online visits from 75 institutions. Participants include securities firms like Zheshang Securities and Yangtze Securities, bank wealth management companies such as Hangzhou Bank Wealth Management and Ningbo Bank Wealth Management, as well as multiple insurance, fund, and foreign-invested institutions. Additionally, Shanghai Rural Commercial Bank, Hangzhou Bank, Suzhou Bank, and Qilu Bank each received over 30 visits.

Regarding this, Lou Feipeng, researcher at China Postal Savings Bank, stated that the recent concentrated visits to listed banks mainly stem from the marginal improvement in the fundamentals of the banking sector and the rising expectations for valuation recovery. Since Q2 last year, many banks have continued to improve their asset quality indicators, providing fundamental support for research. Meanwhile, bank stocks are currently undervalued, and low valuations combined with stable dividend yields attract funds seeking steady returns.

Senior researcher Su Xiaorui from Suxi Zhiyan believes that the recent increase in institutional visits to listed banks is driven by multiple factors. “First, the banking sector’s fundamentals, especially key indicators like net interest margins, are stabilizing and improving; second, investment value is gradually becoming more apparent, with some high-quality banks showing loan growth and net profit outperforming the industry, with growth potential being released; third, the overall valuation of the banking sector is low, and compared to other sectors, the certainty level is relatively high. Institutions are evaluating banks’ ability to manage interest margins through research to optimize asset allocation,” Su explained.

Focus on Credit Issuance and Net Interest Margins

Currently, during the peak marketing season of the year, institutional research generally focuses on the credit issuance during this period. Several banks have revealed that credit issuance during the peak season is better than the same period in 2025. Based on various research findings, corporate loans continue to support annual credit deployment, with key areas including manufacturing, infrastructure, and the “Five Major Articles” of finance, as well as “Two Heavy” and “Two New” sectors.

Nanjing Bank’s management responded to institutional research by stating that the bank actively deploys marketing efforts during the peak season, maintaining a steady start for corporate loans, with deployment pace in line with expectations, and overall lending better than last year, laying a solid foundation for annual growth. Hangzhou Bank also reported that its “2026 Opening Victory” for corporate loan deployment is generally good, with an increase compared to the same period last year, and the yield on asset deployment remaining stable from Q4 2025.

The management of Shanghai Rural Commercial Bank stated that in 2026, the bank’s corporate loan focus will be on major municipal projects, urban renewal and village reconstruction projects, and key regional infrastructure projects. The bank is also actively promoting green and low-carbon transformation, such as energy-saving renovations in parks, as well as manufacturing transformation and modern service industry upgrades.

Kingdee Securities’ chief analyst of the financial sector, Wang Yifeng, estimates that in January, new RMB loans were around 5 trillion yuan, with a growth rate of about 6.2%. Structurally, corporate loans remain the main driver, while retail lending still faces seasonal pressure. Under the background of still-recovering financing demand, banks tend to seize the window before interest rate cuts, releasing reserve projects early to achieve “early deployment and early returns,” mainly focusing on infrastructure, manufacturing, and other sectors.

Regarding future interest margin prospects, Shanghai Bank responded during research that in 2026, the Loan Prime Rate (LPR) still has room to decline, and the re-pricing effect of existing assets will continue to be released, leading to a continued decline in the yield of interest-earning assets. Deposit costs are expected to decrease with the LPR, but considering market competition, the pricing of new deposits may decline less than that of new loans, so net interest margins are expected to continue a slight downward trend.

Several banks revealed during research that net interest margins have shown signs of stabilization. In the first half of this year, some banks successfully alleviated margin compression by adjusting liability pricing structures and reducing high-cost deposits. Zijin Bank disclosed that it optimized deposit sources and maturity structures, controlling the scale of structural deposits and large certificates of deposit, and accelerated the shift of medium- and long-term deposits to short-term deposits. Zhangjiagang Rural Commercial Bank also stated that it has been adjusting deposit structures, actively controlling and reducing long-term fixed deposits and structured deposits, guiding deposit interest rates to gradually decline.

Bank Sector Accelerates Valuation Adjustment

“Institutions focus on net interest margins, asset quality, and other indicators mainly to analyze performance certainty and valuation re-evaluation logic,” Lou Feipeng said. He believes that stabilization of net interest margins and asset quality improvements will drive sector valuation recovery, with city and rural commercial banks’ performance resilience being particularly noteworthy. Underpinned by regional economic support and credit expansion capacity, along with stable dividend policies, high-quality city and rural commercial banks are expected to become long-term investment targets.

“Recently, many banks have seen continuous improvement in asset quality indicators, with non-performing loan ratios gradually decreasing and reserve coverage ratios remaining adequate. These positive changes encourage institutions to conduct more in-depth research,” said a securities analyst. The enthusiasm for research on listed banks essentially reflects recognition of their investment value. “Currently, the banking sector’s price-to-earnings ratios are generally between 5 and 8 times, at historically low levels, and dividend yields mostly remain above 4%, making them very attractive for funds seeking steady income,” the analyst added. The valuation recovery potential of the banking sector is widely viewed positively by institutions.

Since 2025, bank stocks have performed strongly, demonstrating significant valuation recovery and high dividend appeal. This strong performance is mainly driven by their high dividend yields, macro policy support, and sector valuation recovery. From a fundamental perspective, although the first quarter saw net interest margins narrow further to 1.43%, some banks’ margins have stabilized.

Experts interviewed believe that current bank price-to-book ratios remain relatively low, with room for valuation uplift. Additionally, increased institutional holdings have boosted market confidence in bank stocks, helping stabilize prices. Despite pressure on net interest margins, banks’ overall profitability remains growth-oriented, supported by policies and economic recovery expectations that also underpin future credit demand and interest income growth.

CITIC Securities pointed out that the investment value of banks in 2026 will stem from the reassessment of systemic risks and the revaluation of net assets. Moreover, within the framework of broad RMB asset allocation, the stable return characteristics of bank equities will also lead to a reassessment of core equity asset values.

(Article source: Economic Information Daily)