Morgan Stanley: Bank of Ningbo (002142) 1Q26: Revenue, PPOP and Profit Return to Double-Digit Growth; Maintain Top Pick
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Bank of Ningbo (002142.SZ) delivered a strong operational rebound in Q1 2026, with revenue and net profit returning to double-digit growth of 10.2% and 10.3% year-on-year, respectively. This acceleration was driven by robust net interest income and a significant recovery in fee income. Net interest income grew 14.4%, supported by a 5 basis point sequential expansion in the net interest margin to 1.73%.
The bank sustained loan growth that significantly outpaced industry peers. Total loans expanded 9.4% sequentially in Q1, compared to the industry average of 3.2%. Corporate loans surged 16.6% sequentially, while bill discounting contracted. Net fee income experienced a dramatic 81.7% year-on-year rebound, primarily fueled by solid momentum across wealth and asset management operations.
Asset quality metrics remained stable and well-provisioned. The non-performing loan ratio was unchanged at 0.76%. The provision coverage ratio stood at a highly robust 369.4%, providing a substantial buffer. Retail expansion continued effectively, with retail AUM growing 13.1% and private banking AUM increasing 16.4% in 2025.
Morgan Stanley views the current valuation as highly attractive at 0.87 times the 2026E price-to-book ratio, adequately reflecting the bank's capacity for sustained double-digit loan and profit expansion. The firm maintains an Overweight rating and reaffirms Bank of Ningbo as a Top Pick, establishing a target price of RMB 45.00, representing 39% upside from RMB 32.30.