CITIC Securities: It is expected that the fundamentals of the banking sector will remain stable in the third quarter, and the absolute return potential for the entire year will continue.

CITIC Securities' research report indicates that regulatory data for the second quarter shows optimistic net interest margin performance for listed banks, stable asset quality, continuous capital strengthening, and a stabilization and rebound in profit growth. The financial data for July reflects seasonal characteristics on one hand, while on the other hand, it mirrors the exacerbation of the K-shaped recovery in the real economy. From an investment perspective, the banking sector saw significant outflows of previously entered elastic funds in July and August due to market style influences, resulting in a pullback after the index rebound, while performance began to stabilize last week. Starting next week, we will enter the earnings season; the operating landscape for listed banks remains stable, with a slight recovery in profit growth. There isn't much potential for surprises in the fundamentals, and the implied performance of the sector is expected to maintain a low volatility pattern in the short term. Looking ahead to the third quarter, profit trends are expected to remain stable, and the long logic of macro narratives will continue to unfold, with the absolute return potential for the whole year likely to persist.