CITIC Securities: The volatility of bank stocks has increased, but the fundamental situation of the sector remains stable.

According to a research report from Citic Securities, in the third quarter of 2025, the capital market continued to strengthen, with a clear increase in market risk appetite, driving the market style mainly towards technology growth. As of the end of the third quarter of 2025, the Citic Bank Stock Index fell by 8.7% from the end of the second quarter, while the Wind All-A Index rose by 19.5% during the same period. Both the relative and absolute returns of the banking sector weakened significantly, with the proportion of banking stocks in actively managed funds' top holdings decreasing by 2.41 percentage points to 1.49% compared to the end of the previous quarter, reaching a new low since the fourth quarter of 2023. In terms of sector investment, the short-term market liquidity game sentiment remains strong, with increased volatility in banking stocks. However, the fundamental situation of the sector remains stable, and the potential improvement in valuation and cost-effectiveness may bring opportunities for absolute return fund allocation.