CICC: Mainland residents' "deposit migration" and "deleveraging" coexist; gives China Merchants Bank and two other banks an "Outperform" rating.

CICC released a research report stating that in the first half of 2026, mainland residents' "deposit migration" and "deleveraging" coexisted. Residents' deposits increased by a net RMB 7.6 trillion, a year-on-year decrease of RMB 3.2 trillion, the largest decline in nearly a decade. The firm assigned an "Outperform" rating to China Merchants Bank (03968), China Construction Bank Corporation (00939), and Bank Of China (03988), with target prices of HKD 60.49, HKD 9.69, and HKD 6.42, respectively. The firm believes that residents' risk appetite improved significantly compared with the same period last year, but remained basically stable compared with the second half of 2025 and did not continue to rise steeply. On the wealth management institution side, brokerages and third-party platforms served clients' high-risk-appetite investment needs more, achieving AUM and revenue growth with greater elasticity. The firm pointed out that in the first half of the year, large wealth management revenue for sample banks, brokerages, and platform institutions grew by 7.6%, 48.7%, and 42.4% year on year, respectively. After excluding the impact of one-off gains related to legacy wealth management products, the firm estimates that banks' year-on-year growth rate was 16.6%, down slightly by 2.6 percentage points from the second half of last year, still maintaining double-digit growth. At the end of the first half, sample banks' retail AUM grew 10.2% year on year, and wealth AUM grew 17% year on year. Wealth products accounted for 57% of the increase in retail AUM, up 33 percentage points year on year. The firm estimates that the average comprehensive fee rate on wealth management client assets for three sample banks in the first half was 0.24%, up about 3 basis points both year on year and from the second half of 2025. On the client base side, the number of private banking clients grew 15.2% year on year, faster than the 2.7% growth in sample banks' retail clients. The growth rates of brokerage client numbers and assets under custody were also faster than those of banks. The firm also said that AI has become a capability-building direction commonly advanced by wealth management institutions.