UBS maintains a positive outlook on Chinese banks, anticipating that 2026 could be a turning point for net interest margin, net interest income, revenue, and pre-provision operating profit. Despite short-term net profit growth being hindered by higher provisions, UBS believes that asset quality risks are becoming more manageable. They favor large banks with strong defensive positions and high dividend yields, recommending stocks like BANK OF CHINA, CCB, ICBC, and CITIC BANK, all rated as 'Buy'.
