The Institutional Risk Analyst

In Q1 2026, the top seven banks continued to see asset returns decline, but funding costs fell even more. Net interest margin (NIM) decreased from the prior quarter to 3.31 percent, but loan growth driven by AI nonbank lending continued, rising 7.1 percent from the same quarter in 2025.

Most of the market’s attention currently is focused on two related risk hot spots: Asia and Technology. In the case of the former the great deflation in China is gathering speed thanks to Beijing's spending and President Donald Trump’s asymmetrical trade war. As illustrated by the massive liquidation of HNA, the implosion of Uncle Xi’s paper tiger continues apace.