Bank of China International favors China Construction Bank (00939) and China Merchants Bank (03968) in the industry.
The Zhitong Finance App learned that Bank of China International released a research report saying that it maintains an “increase in holdings” rating for the domestic banking sector, believing that the industry's profits increased slightly throughout the year, mainly benefiting from the expansion in scale and stable asset quality, while the extent to which net interest spreads will narrow in the next three quarters will slow down, and China Construction Bank (00939) and China Merchants Bank (03968) are preferred in the industry.
The bank pointed out that profits of commercial banks in the mainland declined slightly in the first quarter, and the industry needed to continue to provide financial support to the real economy. As a result, net interest spreads narrowed more than expected. Although profits fell slightly, asset quality was maintained. Among the main domestic bank AH shares covered by the bank, net profit for the first quarter fell 1.28% year on year, up 3.37% from the same period last year. Operating profit before provision fell 2.51% year on year, and fell 3.35% from the same period last year.