Orient Securities released a research report stating that the banking sector in 2026 is expected to return to a fundamental narrative: the beginning of the 15th Five-Year Plan period, with policy financial tools supporting continued resilience in asset expansion; still within a deposit repricing cycle, supporting net interest margin stabilization and recovery; structural risk exposure still anticipates policy support. In 2026, the insurance industry will systematically implement IFRS 9, and the long-term guiding effects of new public fund assessment regulations are expected to emerge. The firm is optimistic about the absolute returns of the banking sector in 2026. The main views of Orient Securities are as follows:
It is estimated that new full-caliber credit in April will be 1.5 trillion yuan, a year-on-year decrease, with the credit balance growth rate falling to around 5.6%. Generally, April is a traditionally slow month for credit, with a sequential decrease in credit growth. Current real credit demand remains relatively weak, structural risks in key areas have not yet shown a turning point, and asset quality pressure objectively exists. Combined with factors such as a significant decline in bill rates at the end of the month, it is judged that credit growth in April may continue to show a year-on-year decrease. New credit scale is estimated to be around 1.5 trillion yuan, a year-on-year decrease of approximately 1.3 trillion yuan. Structurally, corporate bill financing may be relatively significant, while real loan growth is expected to be relatively weak.
On the retail side, real estate sales data release some positive signals, with the transaction area of commercial housing in 30 large and medium-sized cities turning positive (+3.4%), and transaction area of second-hand housing in 14 cities performing strongly. It is expected that mortgage loan issuance will improve to some extent, but a significant increase in the short term may still be difficult. Considering the ongoing impact of early mortgage repayments, it is expected that medium- and long-term household loans will continue their seasonal negative growth trend. Consumer sentiment in April remained relatively low, and the trend of non-performing individual loans continues. Short-term household loans such as consumer loans and business loans are expected to show negative growth, with the magnitude of negative growth estimated to be roughly flat year-on-year.
On the corporate side, the manufacturing PMI in April was 50.3%, maintaining expansion for the second consecutive month, with the production index also showing slight improvement. However, fixed asset investment growth remains weak. It is expected that medium- and long-term corporate loans will continue to show a year-on-year decrease, while short-term corporate loans will continue their seasonal negative growth. Considering the trend of bill rates, which significantly declined at the end of the month, bill financing still shows characteristics of volume growth. Corporate loan growth in April is estimated at 580 billion yuan, with real loans decreasing, mainly contributed by bills.
It is estimated that new social financing in April will be 1.2 trillion yuan, with little change compared to the same period last year, and the year-on-year growth rate of the social financing balance remaining around 7.9%. 1) Considering the growth of non-bank loans, it is estimated that RMB loans under the social financing caliber will show a slight negative growth of 200 billion yuan, a year-on-year decrease estimated to be close to 1 trillion yuan. 2) Net government bond financing is estimated at approximately 0.9 trillion yuan, a year-on-year decrease estimated at 700 billion yuan. According to Wind data, net financing of central government bonds and local government bonds in April was 539.4 billion yuan and 355.2 billion yuan, respectively. Government bond issuance in the second quarter may accelerate, marginally increasing its contribution to social financing. 3) It is estimated that direct corporate financing will increase by approximately 400 billion yuan year-on-year, while undiscounted acceptance bills will continue to show negative growth, with little year-on-year change.
It is estimated that deposits will show seasonal negative growth in April, with non-bank and fiscal deposits growing well. Referring to data from previous Aprils, the firm predicts seasonal negative growth in deposits in April, with a decrease of 500 billion yuan for the month, estimated to be a year-on-year decrease of 60 billion yuan. Household and corporate deposits are expected to decline, while non-bank deposits and fiscal deposits are expected to grow well. On one hand, further slowing credit growth has some impact on deposit creation. Additionally, the recovery in the equity market and the significant rebound in wealth management product scale have led to funds flowing back into non-bank deposits. At the same time, at the beginning of the quarter, fiscal revenues exceed expenditures, leading to a shift from general deposits to fiscal deposits.
Investment recommendations and targets: Currently focus on two investment themes: 1. State-owned large banks with stable fundamentals and good defensive value, relevant targets: Industrial and Commercial Bank of China, Agricultural Bank of China. 2. High-quality small and medium-sized banks with certain fundamentals, relevant targets: Chongqing Rural Commercial Bank, Bank of Hangzhou, Bank of Nanjing, Bank of Suzhou, Qilu Bank.
Risk warnings: Economic recovery falls short of expectations; risks in key areas such as real estate spread; liquidity environment tightens beyond expectations; changes in assumptions affect calculation results.