Chinese bank stocks are expected to climb in the second half of the year, drawing interest from investors seeking dividends. JPMorgan Chase & Co. anticipates that the sector will profit from stabilising net interest margins and increasing fee income. Katherine Lei, an analyst at JPMorgan, estimates that mainland-listed A-shares could rise by as much as 15 per cent, while Hong Kong-listed H-shares may increase by up to 8 per cent.
Lei projects an average dividend yield of approximately 4.3 per cent this year for mainland-listed bank stocks covered by JPMorgan. According to Lei, ample liquidity and a weak macroeconomic environment will likely encourage asset allocation toward yield stocks. “We remain positive on the China banks sector,” she noted in her report.
The analyst added that revenue and profit growth should progressively improve in the second half, spurred by improved net interest margins and a moderate recovery in fee income. The report also stated, “We believe that the rate cut cycle is nearing its end, with one or two more additional rate cuts in the second half or 2026.”
Several stocks received upgrades in Lei’s note, including Bank of Communications’ A and H shares, which were upgraded from neutral to overweight, and Ping An Bank, which was upgraded from underweight to neutral.
