Lyon: The expected decrease in net interest margin of banks will narrow significantly within the year, with target prices generally being raised.

Lyon released a research report stating that the downward trend in revenue of the Chinese banking industry since 2023 is now a thing of the past. Based on positive signs in net interest margin and wealth management fee income in the fourth quarter of last year, the bank expects a significant narrowing of net interest margin decline this year, with stabilization expected from the second half of the year. With the recovery of fee income, it should support the pre-provision profit of the Chinese banking industry to return to normal low to mid-single-digit growth. The bank believes that moderate revenue growth and stable dividend payments will become the new normal for the industry, raising the target price of Bank of China from 3.9 Hong Kong dollars to 6.7 Hong Kong dollars, China Construction Bank from 10.4 Hong Kong dollars to 10.9 Hong Kong dollars, Bank of Communications from 9.2 Hong Kong dollars to 9.3 Hong Kong dollars, Industrial and Commercial Bank of China from 5.2 Hong Kong dollars to 7.5 Hong Kong dollars, and maintaining the target price for China Merchants Bank at 70 Hong Kong dollars, all with an "outperform" rating. The bank's top picks are China Merchants Bank, Bank of China, and China Construction Bank.