China Banks: China Minsheng Bank (1988.HK / 600016.SS, Not Covered): 4Q25 Post-Result NDR Takeaways
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Goldman Sachs summarized key takeaways from a non-deal roadshow for China Minsheng Bank (1988.HK / 600016.SS, Not Covered) following its 4Q25 results. The bank's net interest margin (NIM) is expected to remain stable at approximately 1.4% in 2026, with potential upside if macroeconomic conditions prove favorable. First-quarter 2026 NIM should show significant improvement compared to the 4Q25 trough. Deposit costs declined by 40 basis points year-over-year in 2025, and further decreases are anticipated, though the pace may moderate.
Loan growth targets for 2026 are modest, projected at low-to-mid single digits, driven primarily by corporate lending. Fee income is expected to maintain steady positive growth, as the impact from the third phase of fee reductions remains limited. Investment income faces headwinds from high base effects, though bond investment performance should be favorable in 1Q26.
Regarding asset quality, real estate exposure continues to face short-term pressure, prompting the bank to increase write-offs. Retail asset quality remains stressed, though mortgage quality is relatively stable. Business loan non-performing loan (NPL) formation has improved since its 3Q25 peak. However, the credit card portfolio, exceeding Rmb400 billion, requires close monitoring. Credit costs are projected to increase slightly while remaining broadly stable. The dividend payout ratio is maintained at approximately 30%. Overall, operations remain steady, though retail credit risk warrants ongoing observation.