Goldman Sachs: Raises Bank of China's target price to HKD 5.35, management expects a significant slowdown in the decline of net interest margin this year
Goldman Sachs released a research report stating that it has raised the average pre-provision profit and after-tax net profit forecasts for Bank of China for 2026 to 2028 by 0.6% and 0.4% respectively, to reflect the performance in the fourth quarter of last year and management guidance. The target price for Bank of China H shares has been raised from HKD 4.95 to HKD 5.35; the target price for Bank of China A shares has increased from RMB 6.54 to RMB 6.69; both AH shares maintain a "Buy" rating. Bank of China's fourth-quarter performance last year exceeded expectations, with pre-provision profit and after-tax net profit growing by 8% and 5% year-on-year, which is 8% and 3% higher than the bank's forecast. Management stated during the earnings call that benefiting from the stabilization of asset yield and the reduction of financing costs due to deposit repricing, they expect the narrowing of net interest margin in 2026 to significantly slow down, and net interest income is expected to achieve positive growth. Through adjusting the asset-liability structure, the impact of the Federal Reserve's interest rate cuts is expected to be neutral and will not negatively affect the net interest margin
According to the Zhitong Finance APP, Goldman Sachs released a research report stating that it has raised the average pre-provision profit and after-tax net profit forecasts for Bank of China (03988) for 2026 to 2028 by 0.6% and 0.4% respectively, reflecting the performance in the fourth quarter of last year and management guidance. The target price for Bank of China H-shares has been raised from HKD 4.95 to HKD 5.35; the target price for Bank of China A-shares (601988.SH) has increased from RMB 6.54 to RMB 6.69; both A and H shares maintain a "Buy" rating.
Bank of China's fourth-quarter performance last year exceeded expectations, with pre-provision profit and after-tax net profit growing by 8% and 5% year-on-year, which is 8% and 3% higher than the bank's forecast. Management stated at the earnings conference that benefiting from the stabilization of asset yield and the reduction of financing costs due to deposit repricing, they expect the narrowing of net interest margin to significantly slow down in 2026, with net interest income expected to achieve positive growth. Through adjusting the asset-liability structure, the impact of the Federal Reserve's interest rate cuts is expected to be neutral and will not negatively affect the net interest margin
