Open Securities: The trend of "wealth management" for deposits is accelerating, and the advantages of comprehensive service-oriented banks are expanding.

Open Source Securities released a research report stating that with the decrease in deposit interest rates and the recovery of the capital market, the "wealth management" process of deposits in August has accelerated. Due to the overall low risk appetite of residents, there is a higher probability that residents' deposits will flow into low-risk wealth management, funds, and fixed income products after maturity. The next stage of deposit and loan business may gradually concentrate on large comprehensive or small specialized banks, focusing on the advantages of state-owned large banks and resource-endowed banks. Currently, the banking sector still has a strong appeal for stable dividend funds, with insurance long-term funds, public offering funds, index funds, and fixed income products continuing to drive stable funds. The main viewpoints of Open Source Securities are as follows: Liabilities: Acceleration of deposit "wealth management," but residents' time deposits may not yet shift to the stock market on a large scale With the decrease in deposit interest rates and the recovery of the capital market, the "wealth management" process of deposits in August has accelerated. The reduction in residents' savings deposits corresponds to the growth of non-bank deposits, with major banks' savings deposits increasing by 169.5 billion yuan in August, and fixed-term deposits only increasing by 159.7 billion yuan, weaker than seasonal trends in previous years, while non-bank deposits continued to grow by 591.9 billion yuan in a single month. Due to the overall low risk appetite of residents, there is a higher probability that residents' deposits will flow into low-risk wealth management, funds, and fixed income products after maturity. From an institutional perspective, major banks continue to attract deposits from small banks, matching their growth rates of deposits and loans. In August, small and medium-sized banks experienced a significant contraction in unit deposits, with time deposits increasing by 54.2 billion yuan year-on-year and margin deposits by 17.08 billion yuan year-on-year, reflecting a shift to capital market recovery and other high-yielding short-term wealth management products. Enterprises may transfer these highly interest-sensitive deposits to pursue higher returns. Assets: Credit pace is slow, pricing may be constrained by rigid bottom line requirements under anti-inner-circle demands In August, major banks' assets still show a characteristic of "weakening credit attributes, strengthening capital attributes." Firstly, the credit pace is steady but slow, with major banks supporting credit growth through bill discounting. Secondly, the momentum of bond purchases remains strong, with a year-on-year increase in bond investments by major banks of 19.5% in August. In the next stage, under anti-inner-circle demands, credit pricing may be constrained by a rigid bottom line to smooth the quarterly injection pace. It is expected that there will be a small increase in short-term enterprise loans in September, but the use of bills may tighten. Small and medium-sized banks have struggled with credit growth, which may be due to poor demand and proactive adjustments to reduce low-priced loans or reduce exposure to high-risk customers. Next stage of bank asset-liability management: Bond interest rates may enter an acceptable range, and the central bank may soon restart bond purchases (1) The average cost of debt for listed banks in the first half of 2025 has declined to 1.68%, and the effective improvement in cost has alleviated the problem of banks' assets being carried negatively. This bank estimates that after the repricing of high-interest fixed deposits at the end of the first half of 2025, the cost of debt may drop to within 1.6%. Based on this assessment, even with the adjustment of the value-added tax for new securities, there is still a certain interest rate spread on the 10-year government bond yield, indicating optimism for the recovery of banks' proprietary investment demand; (2) With the advancement of deposit "wealth management," the stability of the bank system's liabilities has decreased, objectively requiring a more abundant supply of long-term basic currency. Also, fiscal bond issuances require cooperation from the central bank to regulate bond interest rates and maintain appropriate financing costs. Secondly, banks are under pressure from duration restrictions, and banks that handle government debts face greater interest rate risk indicators, prompting potential expansion in transactions of government bonds or suitable extension to slightly longer-term varieties (such as 3-5 years). Investment recommendations: under the trend of anti-inner-circle assets and deposit wealth management, the advantages of comprehensive service banks are expanding In the next stage, deposit and loan businesses may gradually concentrate on large comprehensive or small specialized banks, with a focus on the advantages of state-owned large banks and resource-endowed banks expanding. Currently, the banking sector still has a strong appeal for stable dividend funds, with insurance long-term funds, public offering funds, index funds, and fixed income products continuing to drive stable funds. In terms of cost-effectiveness, H-shares are still leading A-shares. Recommendations include focusing on clues: (1) Capital attributes - underweight heavyweight stocks, benefiting companies like China Merchants Bank and Industrial Bank; (2) Stable dividends and diffusion logic, benefiting companies like Agricultural Bank of China, CITIC Bank, and Bank of Beijing; (3) Companies with strong profit certainty and customer base advantages, benefiting companies like Bank of Jiangsu and Bank of Hangzhou. Risk warning: economic slowdown, policy implementation falling short of expectations, deposit disintermediation creating pressure gaps, significant interest rate adjustments weakening dividend logic, etc.