CICC maintained its Outperform rating on Bank of China (03988.HK) after the lender posted an 8.4 percent year-over-year increase in first-quarter operating income, signaling a continued rebound in growth.
"The results show continued rebound in revenue and profit growth," CICC said in a research report, highlighting accelerating growth rates across key metrics compared to the previous year.
Bank of China’s net profit for the first quarter of 2026 grew 3.9 percent from a year earlier. Net interest income increased 7.8 percent, while net fee and commission income rose 5.6 percent, supported by wealth management business.
CICC kept its target price for the bank’s H-shares at HKD 6.4. The positive analysis follows a period of stabilizing net interest margins and faster asset expansion for one of China's largest state-owned lenders.
The bank’s performance in the first quarter marked a significant acceleration from the previous year. The 8.4 percent growth in operating income was four percentage points higher than the growth rate recorded in 2025. Pre-provision profit increased by seven percent, accelerating by 5.1 percentage points.
The growth was broad-based. A key driver was the 7.8 percent rise in net interest income, which itself was a 9.6 percentage point improvement from the end of last year. CICC attributed this to stabilizing net interest margins (NIM) and faster expansion of the bank's asset base. Other non-interest income also saw robust growth of 12.9 percent, which the report linked to gains from bond market investments.
CICC reiterated its confidence in the bank's trajectory, maintaining its target price for Bank of China's H-shares at HKD 6.4 and for its A-shares (601988.SH) at RMB 7.3. The firm's "Outperform" rating underscores a bullish view on the stock's potential.
The report noted that net fee and commission income grew by 5.6 percent year-over-year, bolstered by the bank's wealth management and other service-oriented businesses. This diversification of income streams appears to be a key factor in the bank's resilient performance. Short selling data as of May 4 showed a ratio of 29.42 percent, with a total value of $166.07 million.
The positive earnings report and CICC's reaffirmation of its rating may bolster investor confidence in the Chinese banking sector, which has faced headwinds from a slowing economy and challenges in the real estate market.
This article is for informational purposes only and does not constitute investment advice.
