Lates News

CITIC Securities pointed out that financial data shows that in the third quarter, the asset allocation of banks was mainly supported by government bonds, and the total social financing remained stable. Credit demand still needs to be boosted, as both household and corporate loan demand are weak and waiting for the effects of consumption and new real estate policies to take place. The structure of bank liabilities changed significantly in the third quarter, with a decrease in household and corporate deposits and a significant increase in non-bank deposits, reflecting a trend towards diversification of investment channels, increasing the difficulty of bank liability management. In terms of interest rates, the interest rate on new corporate loans issued in August decreased by about 10 basis points compared to the second quarter, while the interest rate on personal housing loans remained relatively stable. It is expected that there is still a small downward space for asset yield rate, but savings cost reduction will help stabilize interest rate spread expectations. The mid-year reports of banks show that profits have stabilized and repair is slightly better than expected. Specifically, expectations of interest rate spread stability, contribution of investment income to revenue, stable asset quality, and noticeable improvement in single-quarter profitability all give expectations for an increase in annual profit growth. At the market level, the stable fundamental pattern solidifies investor confidence in sector allocation and looks forward to continuing absolute return market trends. In terms of individual stock selection, due to the bottoming out of the bank sector in terms of performance, stock selection has shifted towards alpha strategies, with a focus on banks with high and stable ROE, optimistic valuation space, and strong stability in sub-industries.