JPMorgan restores Overweight rating on ICBC A-shares: dividends provide support as rising provisions weigh on profit growth

What changed in the rating and price target?

Following a period of restriction, JPMorgan changed ICBC A-shares from Not Rated to Overweight and set a price target of 9.70 yuan for the end of December 2027; before the restriction period, the rating was also Overweight, with a price target of 9.50 yuan. The share price on 27 October 2026 was 8.62 yuan.
The bank believes ICBC’s earnings per share and dividends per share have been less volatile than the industry average over the past decade. Compared with peers, it faces lower downside risk from a tariff war and, should a capital injection occur, lower equity dilution risk than other state-owned banks.
The 9.70 yuan price target uses a dividend discount model, assuming a cost of equity of 10.7%, a normalized return on equity of 9.1% and long-term growth of 4.5%.

JPMorgan forecasts ICBC’s profit to grow by 3.9%, 4.3% and 4.5% respectively from 2026 through 2028, above the 0.7% growth in adjusted earnings per share in 2025.
The model forecasts net interest income growth of 8.9% year on year in 2026, compared with a decline of 0.4% in 2025; growth is forecast at 9.3% and 8.9% in 2027 and 2028, respectively. The forecast net interest margin is 1.3% throughout the same period, while net loans increase each year.
As revenue grows, provisions are also rising. The bank expects loan loss provisions to increase from approximately 149.6 billion yuan in 2025 to approximately 266.8 billion yuan in 2028; adjusted net profit is expected to rise from approximately 368.6 billion yuan to approximately 417.3 billion yuan over the same period, growing less than pre-provision profit.

JPMorgan sees dividends as a source of medium-term support and expects dividends per share to rise from 0.31 yuan in 2025 to 0.33 yuan in 2026 and 0.35 yuan in 2027, reaching 0.36 yuan in 2028.
The bank believes that if further asymmetric interest rate cuts occur, mortgages are repriced at lower rates or the proportion of new non-performing loans rises, ICBC can release provisions to offset some of the negative impact, thereby limiting downside to dividends per share.
This assessment remains subject to net interest margins and asset quality: JPMorgan notes that tighter-than-expected liquidity could depress the net interest margin, while slower-than-expected macroeconomic growth could increase asset quality risks. Its model also forecasts return on equity to decline from 9.0% in 2025 to 8.5% in 2028.