Bank of Ningbo (002142 CH): Buy: High loan growth with better mix; higher dividend payout in sight

研报英文原文证据摘录

Bank of Ningbo (002142 CH): Buy: High loan growth with better mix; higher dividend payout in sight

nger earnings growth, driven by the release of excess provisions (see page 4). P/NAV 0.9 0.9 0.8 0.7

ROE inc. gwill (%) 13.6 13.4 13.0 12.8

High loan growth should continue in 2026 and NIM is likely to stabilise q-o-q.

The bank issues loans to local central SOEs at higher-than-peers rates via providing 52-WEEK PRICE (CNY)

comprehensive financial services, thus optimising its asset mix. Coupled with its

proactive efforts to reduce liability costs, the bank's NIM should stabilise q-o-q in the 45.00

remaining three quarters of the year. We anticipate a 7bp decline in its NIM in 2026. 34.50

Besides, given aggressive expansion of its local central SOE business in Ningbo and 06/25 12/25 06/2624.00

operations outside Zhejiang, we expect its loans to grow 17% y-o-y in 2026, driving Target price: 42.90 High: 33.55 Low: 26.18 Current: 31.44

full-year net interest income to grow 9.7% y-o-y. Meanwhile, BoNB believes that its

asset quality has bottomed out and should not be a drag on profit growth. To investors’ Source: LSEG IBES, HSBC Qianhai Securities estimates

surprise, the new board of directors plans to gradually increase dividend payout ratio

as they view dividends as an effective way to reward major shareholders and long- Angel Sun* (Reg. No. S1700519080001)

Head of A-share Financials Research

term investors. However, given its relatively modest capital adequacy ratio and HSBC Qianhai Securities Limited

limited access to external financing, the bank needs to trade off between business angel.y.sun@hsbcqh.com.cn

+86 21 5066 2015

growth and higher dividend payout, which could lead to slower progress of dividend

payout increase (source: results briefing).