Chinese banks see stabilising margins as resilient economy offsets property risks: experts
Steady growth and stabilising China-US ties support banks, with PBOC expected to keep rates steady, according to economists
Mainland lenders’ net interest margins (NIM) remained flat in the first quarter of 2026, reflecting stabilisation after six consecutive years of decline to an average of 1.4 per cent in 2025, according to Ernst & Young (EY).
Of 25 listed banks that reported results, 11 posted year-on-year increases in NIM and three were stable, according to Benny Cheung, EY Greater China financial services China South markets leader. He said many institutions had yet to release their full first-quarter reports.
Cindy Keung, an economist at OCBC Hong Kong, said the likelihood of the People’s Bank of China (PBOC) cutting interest rates in the near term was low, given expectations of continued resilience in the mainland economy.
“Despite uncertainties [in external demand], we see that China holds an ‘edge’ in the overall situation,” Keung told the South China Morning Post at an event on Friday. “Furthermore, the lack of expectation for rate cuts is a positive for banks.”