China Minsheng Bank 4Q25 post-results NDR: 2026 NIM looks stable, while asset-quality pressure remains the key watchpoint

Overview

This report summarizes the key points from Goldman Sachs' investor relations team group meeting with China Minsheng Bank. The core information comes from management's explanation of the company's 2025 operating performance and 2026 outlook, focusing on NIM, loan growth, fee income, investment income, asset quality, credit cost, operating efficiency, and capital pressure. The overall tone is that the operating side is stabilizing, but risks still warrant caution, especially real estate, retail loans, and the credit card portfolio.

Core views

First, 2026 NIM is expected to remain stable versus 2025's 1.4%; after the 4Q25 low point, 1Q26 should improve meaningfully, and deposit repricing remains a supporting factor. Second, loan growth is set to be moderate, at low-to-mid single digits, with corporate loans as the main driver, while retail loans remain weak. Third, non-interest income is diverging: fee income is expected to deliver stable positive growth, equity investment income is constrained by the high base, and bond investment income remains uncertain for the full year. Fourth, asset quality remains the main pressure point: real estate risk will persist in the near term, and retail asset quality remains under pressure, but mortgage risk is relatively low and operating-loan NPL formation has already improved. Fifth, credit cost in 2026 is expected to be stable and slightly higher, while the NPL ratio and coverage ratio are expected to remain stable.

Analysis framework

The report adopts a post-results NDR note format, using management guidance from the company's investor relations team to break down the income side, asset side, risk side, and capital side one by one. The focus is not valuation modeling or rating calls, but distilling 2026 operating guidance, key financial trends, and risk signals that need continued validation.

Methodology notes

• Meeting NotesNDR takeaways

  Post-results management communication

  By using management's statements in the post-results non-deal roadshow, the report organizes qualitative and quantitative guidance on NIM, loans, non-interest income, asset quality, and capital conditions.

• Risk AnalysisAsset-quality stratified monitoring

  Separate risk sources by real estate, mortgages, operating loans, consumer loans, and credit cards

  The report splits bank asset-quality pressure into different portfolios to distinguish the higher-risk real estate and credit card books, the relatively resilient mortgage book, and the operating-loan book that has shown signs of improvement.

• Earnings AnalysisNIM and non-interest income decomposition

  Combined analysis of interest income, deposit costs, fee income, and investment income

  By observing loan yields, deposit costs, fee reductions, and the base effects of equity and bond investment income, the report assesses the sustainability of 2026 revenue growth.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China Minsheng Banking Corporation 1988.HK/600016.SS

  Core company in the report; Goldman Sachs labels it Not Covered

  Strengths

  2026 NIM is expected to be stable; corporate loans are the main growth driver; deposit costs still have room to decline; fee income is expected to keep growing positively; capital pressure is limited.

  Weaknesses

  Retail demand is weak; equity investment income is constrained by the 2025 high base; real estate and retail asset quality remain under pressure; credit cost is expected to edge up.

  Comparison

  Compared with 2025, 2026 revenue depends more on stable NIM, corporate loan growth, and fee recovery, while the repeatability of high investment-income growth is weaker.

  Risks

  Persistent real estate risk, deteriorating credit card asset quality, unsustained improvement in operating loans, slower-than-expected decline in deposit costs, and volatility in bond investment income.

• Chinese banking sector

  Industry backdrop; the report title places it under China Banks

  Strengths

  Deposit repricing may continue to support bank NIM; in some banks, corporate loans may remain the main credit-growth driver.

  Weaknesses

  Retail credit demand is weak, and asset-quality pressure related to real estate remains a common industry challenge.

  Comparison

  China Minsheng Bank's operating outlook reflects the sector's shift from balance-sheet expansion toward earnings quality and risk control.

  Risks

  Weak macro demand, real estate risk exposure, fee-reduction policies, and capital-market volatility affecting investment income.

Key data

• 2025 NIM1.4%The company expects 2026 NIM to remain stable versus 2025, with upside possible if the external environment turns more favorable.
• 2025 NIM YoY change+1bpAlthough 4Q25 declined sequentially because of one-off factors, full-year NIM still improved by 1bp YoY.
• 2025 deposit cost changeDown 40bps YoYRepricing of high-cost time deposits has provided a significant support to NIM.
• High-cost time deposit repricing volumeOver Rmb 400bn/yearDeposit costs are still expected to have room to fall in 2026, but the pace of decline may slow.
• 2026 loan growth targetLow-to-mid single digitsCorporate loans are expected to be the main growth driver, while retail loans remain weak.
• Bill financing changeRmb 200bn reduced to Rmb 100bnLow-yield bill financing was reduced in 2025; the current size is viewed as appropriate, leaving limited room for further cuts in 2026.
• Equity investment sizeRmb 20bnThe 2025 rise in investment income was driven by unrealized gains on equity investments, a sharp improvement from unrealized losses in 2024; because of the high base, a large YoY increase is not expected in 2026.
• Annualized new NPL formation rate for new customers since 20220.26%The company said its risk appetite changed materially starting in 2020, and asset quality for new customers since 2022 has been good.
• Mortgage portfolio sizeOver Rmb 500bnMore than Rmb 200bn of this came from 2024-2025 originations, and the risk is relatively low.
• Average operating-loan sizeRmb 1.5mnThe bank focuses on loans to small and medium-sized enterprises with genuine operating needs and emphasizes the first source of repayment.
• Consumer-loan portfolio sizeRmb 70-80bnThe portfolio is relatively small and has limited impact on overall asset quality.
• Credit card portfolio sizeOver Rmb 400bnThe book is large, so the bank takes a cautious stance and closely monitors asset quality.
• 2026 credit costStable to slightly higherThe company expects both the NPL ratio and the coverage ratio to remain stable.
• Disclosure priceA-share Rmb3.78; H-share HK$3.67This comes from company-specific regulatory disclosure; the report does not provide a target price.

Impact & implications

For investors, the key validation points for China Minsheng Bank in 2026 are whether revenue stability and asset-quality pressure can improve at the same time. Stable NIM, lower deposit costs, and positive fee income support earnings, but real estate risk resolution, retail NPL pressure, and credit card volatility may limit valuation re-rating. Because the report is labeled Not Covered and has no target price, it is better used as a material for monitoring operating trends and risks rather than as a direct rating basis.

Risks

• Short-term asset-quality pressure in the real estate sector is likely to continue, and the bank plans to increase write-offs to accelerate risk resolution.
• Retail asset quality remains under pressure, especially the credit card book, which exceeds Rmb 400bn and requires ongoing monitoring.
• Although operating-loan NPL formation has improved from the 3Q25 peak, the durability of that improvement still needs to be verified.
• Equity investment income in 2026 may find it hard to post a significant YoY increase because of the 2025 high base.
• Bond investment income should improve in 1Q26 due to the low base, but full-year performance remains uncertain.
• There is still room for deposit costs to decline, but the pace may slow, which could limit the degree of NIM recovery.
• Credit cost is expected to be stable to slightly higher; if asset quality worsens, earnings could come under pressure.

What to watch

• Whether NIM continues to improve from the 4Q25 low point in 1Q26 and beyond.
• The actual contribution of more than Rmb 400bn of annual high-cost time deposit repricing to deposit-cost declines.
• Whether 2026 loan growth reaches the low-to-mid single-digit target and whether corporate loans can continue to drive growth.
• Whether retail loan demand recovers and whether operating-loan NPL formation stays below the 3Q25 peak.
• Changes in exposure to real estate-risk customers, write-off intensity, and NPL formation.
• Changes in credit card asset quality, especially the NPL and delinquency indicators.
• Whether fee income continues to grow steadily in positive territory and the actual impact of the third phase of fee reductions.
• The full-year performance of bond investment income and the YoY trend in equity investment income after the high 2025 base.
• Whether 2026 credit cost, NPL ratio, and coverage ratio remain stable as management expects.