Core Viewpoint - The forum emphasizes the importance of enhancing Sino-European asset management cooperation amidst a complex international economic landscape, aiming to establish a resilient and forward-looking cross-border investment cooperation system [1][2]. Group 1: Current Economic Environment - The international political and economic environment is complex, with weakening global economic growth, yet China's economy demonstrates strong resilience and potential for long-term stability [2]. - Frequent high-level interactions between China and Europe have deepened financial cooperation, with the People's Bank of China signing currency swap agreements with several European central banks, laying a solid foundation for asset management openness [2]. Group 2: Shanghai's Financial Market Development - Shanghai's financial market is increasingly open, with the RMB gaining global attention as an investment and reserve currency, attracting European sovereign institutions and asset managers to the Chinese stock and bond markets [3]. - In the first half of 2025, Shanghai's GDP reached 2.6 trillion yuan, growing by 5.1%, with the financial sector contributing 250 billion yuan, an 8.8% increase, highlighting the city's economic strength and its role as an international financial center [3]. Group 3: Policy and Institutional Support - Shanghai is promoting the aggregation of financial institutions and enhancing financial service functions, currently hosting over one-third of foreign banks and nearly half of foreign insurance institutions in China [4]. - The Shanghai Stock Exchange has signed a cooperation memorandum with the Swiss Exchange to advance cross-border openness, while the city continues to optimize cross-border financial services and improve the internationalization of financial institutions [4]. Group 4: Global Investment Trends - International institutions are increasingly allocating assets to China, with market liquidity, low interest rates, and trends towards technological competition and de-dollarization driving this interest [6]. - As of June, foreign investments in stocks, bonds, deposits, and loans have seen synchronized growth, with net inflows exceeding 60% of the total for 2024 [6]. Group 5: Sector Performance and Opportunities - From 2022 to 2024, energy and financial sectors have shown resilience, while 2025 is expected to highlight sectors related to artificial intelligence, pharmaceuticals, and materials, attracting European investors [8]. - China is leading in innovative drug development, with clinical-stage innovations accounting for 50% of global totals, and companies like BYD dominating the electric vehicle and autonomous driving sectors [8]. Group 6: Sino-European Financial Cooperation - The cooperation between China and Europe is characterized by accelerated infrastructure connectivity and deepening policy communication, with the use of RMB in bilateral cooperation becoming increasingly diverse [10]. - The London Stock Exchange is implementing financial market reforms to enhance its competitiveness, while also developing more RMB-denominated financial instruments to meet the growing demand in Sino-European markets [11]. Group 7: Future Outlook - China Bank aims to leverage its global operations to strengthen connections between Chinese and European financial markets, focusing on green finance, technological empowerment, product innovation, and risk management [15]. - The signing of a strategic cooperation memorandum between the Shanghai Asset Management Association and the German Investment Fund Association marks a significant step in Sino-European asset management collaboration [15].

Core Viewpoint - Goldman Sachs reports that the A-shares and H-shares of Chinese banks have recorded absolute returns of 12% and 21% year-to-date, respectively, driven by improvements in the banks' fundamentals rather than a shift in investor preference for dividend returns [1] Group 1: Industry Outlook - The outlook for the mainland banking sector remains cautiously optimistic, with a focus on banks that can reduce the impact of bond investments on earnings and capital volatility while maintaining credit growth and adequate provisioning and capital [1] - The large state-owned banks and China Merchants Bank (600036) (03968) are expected to achieve a more sustainable recovery in net interest margins compared to their peers, indicating greater potential for shareholder returns [1] Group 2: Financial Projections - Goldman Sachs has slightly adjusted its forecasts for the banks' pre-provision operating profit and net profit for 2025 to 2027, reflecting improved prospects for fee income growth, weakened credit demand, declining investment income contributions, and increased provisions [1] - The target price for covered H-shares of Chinese banks has been reduced by 1% to 9%, with a preference for China Merchants Bank, which receives a "Buy" rating, and its target price adjusted from HKD 53.34 to HKD 52.98 [1] - "Buy" ratings are also given to Postal Savings Bank (601658) (01658), Bank of China (601988) (03988), and China Construction Bank (601939) (00939) H-shares [1]

Group 1 - Goldman Sachs reported that the A-shares and H-shares of Chinese banks have recorded absolute returns of 12% and 21% year-to-date, respectively, driven by improvements in the banks' fundamentals rather than a shift in investor preference for dividend returns [1] - The outlook for the third quarter remains cautiously optimistic, with a focus on banks that can reduce the impact of bond investments on earnings and capital volatility while maintaining credit growth and adequate provisioning [1] - Goldman Sachs has slightly adjusted its forecasts for the banks' pre-provision operating profit and net profit for 2025 to 2027, reflecting improved prospects for fee income growth, weakened credit demand, declining investment income contributions, and increased provisions [1] Group 2 - Target prices for covered H-shares of Chinese banks have been lowered by 1% to 9%, with a preference for China Merchants Bank, which has been given a "Buy" rating, along with Postal Savings Bank, Bank of China, and China Construction Bank H-shares also receiving "Buy" ratings [1]

Core Insights - The article discusses the trend of banks merging multiple apps to streamline operations amid rising competition and high customer acquisition costs, with Bank of China (BOC) announcing the shutdown of its "Bountiful Life" app and migrating its functions to the main "Bank of China" app, marking the end of a 12-year service [1][4] - The credit card apps have historically served dual purposes: connecting online and offline channels for customer acquisition and creating digital profiles for targeted financial services, but the profitability of standalone credit card apps is declining [2][10] Industry Trends - Several banks, including Shanghai Rural Commercial Bank and Beijing Rural Commercial Bank, have closed their credit card apps, shifting functionalities to their main banking apps due to the shrinking credit card business and the need for cost efficiency [4][16] - The credit card business is facing significant challenges, including a drop in loan volumes and increased competition from other financial services, leading to a focus on customer retention rather than acquisition [10][13] User Engagement - User engagement with banking apps is declining, with average daily usage time dropping from 4.93 minutes to 2.70 minutes, indicating a saturation in mobile banking app traffic and a need for improved user experience [9][6] - The competition for user attention is intensifying, with lifestyle apps from companies like Meituan and Douyin entering the market, making it harder for credit card apps to attract new users [15][19] Financial Performance - Data shows that major banks are experiencing a decline in credit card loan volumes, with Bank of China reporting a 13.89% decrease year-over-year, highlighting the overall downturn in the credit card sector [5][16] - The credit card market is transitioning from a growth phase to a more mature stage, with banks needing to adapt their strategies to meet the evolving demands of younger consumers who prefer integrated financial services [17][19] Strategic Recommendations - Banks are encouraged to enhance the synergy between online and offline channels and focus on creating differentiated digital paths that align with their unique characteristics, rather than pursuing a one-size-fits-all approach [23][24] - Implementing advanced data analytics and AI-driven models could help banks better understand customer needs and improve service delivery, ultimately enhancing user experience and operational efficiency [21][22]

Summary of Conference Call on Chinese Banks Industry Overview - The conference call focuses on the Chinese banking sector, particularly the performance and outlook of A/H-share listed banks, with a specific emphasis on China Merchants Bank (CMB) [1][2]. Key Points and Arguments Market Performance - A/H-share listed bank stocks have recorded market-cap-weighted absolute returns of 12%/21% year-to-date, attributed to improving fundamentals rather than sector allocation demand [1]. - The stabilization of asset quality and a narrowing decline in Net Interest Margins (NIMs) are significant factors driving this performance [1]. NIM and Loan Demand - The decline in NIM has narrowed in 3Q25, with expectations for continued narrowing into 1H26 due to ongoing deposit re-pricing [5]. - The large state-owned enterprises (SOE) banks and CMB are expected to have a sustainable NIM recovery, providing greater potential for shareholder returns [2]. - Loan demand is anticipated to weaken due to the "anti-involution" trend in the industrial sector, which will slow corporate loan demand [5][18]. Investment Income - Investment income is likely to be a negative contributor to bank revenue in 3Q25, particularly affecting small and medium-sized banks (SMBs) [5][27]. - The average year-over-year growth of bond investment income for covered banks is forecasted to be -7% in 3Q25 [36]. Fee Income - Fee income is expected to improve despite weak consumer credit demand, driven by growth in sales of financial products through banking channels [39]. - The sustained decline in deposit costs is creating opportunities for growth in wealth management products, insurance, and funds [40]. Asset Quality - Overall asset quality in the Chinese banking industry has not shown significant deterioration, with banks increasing provisions to bolster risk-resistance reserves [45]. - The NPL (Non-Performing Loan) coverage ratio has been on an upward trend, indicating that provisions are greater than new NPLs [45]. Additional Important Insights - CMB is favored for investment with a 12-month target price of Rmb54.24/HK$52.98, representing potential upside of 31%/10% [2]. - The average NIM for covered banks is expected to stabilize at 1.32% in 2026, largely unchanged from previous forecasts [17]. - The average loan growth forecast for covered banks in 2025 and 2026 is 9%, adjusted down from previous estimates [24]. Conclusion - The Chinese banking sector is navigating challenges such as narrowing NIMs and weakening loan demand, but there are positive indicators in fee income growth and asset quality stability. CMB stands out as a strong investment opportunity amidst these dynamics.

Summary of China Banks 3Q25 Earnings Preview Industry Overview - **Industry**: Chinese Banking Sector - **Earnings Preview**: 3Q25 expected earnings growth of +3.0% year-on-year (y-y) driven by improved net interest margin (NIM) and strong fee income, despite muted loan growth and weak trading gains [1][8] Key Points Revenue and Earnings Growth - **Revenue Growth**: Anticipated at +1.4% y-y for covered banks in 3Q25, supported by smaller NIM compression and decent fee income [1] - **Earnings Growth**: All large banks expected to return to positive y-y earnings growth in 9M25 due to modest trading gains and realized bond disposal gains in 3Q25 [1][8] Loan Growth - **Loan Growth Rate**: Forecasted at +7.8% y-y for covered banks in 3Q25, a deceleration from +8.1% y-y in 2Q25, attributed to banks utilizing 70%-90% of loan quotas in 1H25 [2] - **Credit Demand**: Remains weak, primarily driven by government-related demand [2] Net Interest Margin (NIM) - **NIM Pressure**: Expected to moderate with a decline of -3 basis points (bps) quarter-on-quarter (q-q) in 3Q25, compared to -5 bps q-q in 2Q25 [3] Trading Gains - **Trading Gains**: Anticipated to slow q-q, with large banks expected to report more resilient trading gains compared to smaller banks due to accumulated unrealized gains and diversified sources of trading gains [4] Fee Income - **Fee Income Growth**: Expected to increase by +5.3% y-y in 3Q25, driven by strong wealth management-related fee income [5] Asset Quality and Provisions - **Asset Quality**: Expected to remain stable, with improving corporate non-performing loan (NPL) ratios, although retail NPL ratios are rising [8] - **Provision Release**: Covered banks likely to release provisions, supporting earnings growth in 3Q25 [8] Market Outlook - **4Q25 Expectations**: Anticipated outperformance of China banks due to sector rotation towards defensive sectors amid geopolitical risks and potential softening of treasury bond yields [9] - **Investment Recommendations**: Top picks include ICBC-H, CCB-H, and BOC-H due to attractive valuations and higher dividend yields [1][9] Additional Insights - **Deposit Growth**: Slowed due to anti-involution efforts and migration to capital markets, with large banks losing market share in corporate deposits to smaller banks [2] - **Dividend Yield**: Expected to regain traction as risk-off sentiment increases, making China banks more attractive to yield-seeking investors [9] This summary encapsulates the key insights and projections for the Chinese banking sector as outlined in the earnings preview for 3Q25, highlighting both opportunities and challenges within the industry.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Banking Sector - **Performance**: Both H and A-share China banks underperformed the broader market indices, with the MSCI China Banks Index down by 4.1% in the past month compared to a 2.5% decline in the MSCI China Index [2][8][12]. Core Insights and Arguments - **Credit Growth**: New RMB loans in September totaled RMB 1.29 trillion, missing expectations of RMB 1.39 trillion and down RMB 300 billion year-over-year. This decline was attributed to a reduction in short-term household loans and discounted bills as banks aimed to protect their net interest margins (NIM) [3][5]. - **Total Social Financing (TSF)**: New TSF reached RMB 3.53 trillion, slightly exceeding expectations but down RMB 230 billion year-over-year. The increase was driven by off-balance sheet financing, which recorded RMB 358 billion [3][5]. - **Household Deposits**: There was a net increase of RMB 2.96 trillion in household deposits in September, while non-bank financial institutions (NBFI) experienced an outflow of RMB 1.06 trillion, indicating a shift in deposit behavior likely due to seasonal effects [3][5]. - **Market Sentiment**: The banking sector has seen a notable shift with approximately RMB 1 trillion in household deposit outflows in July-August, but September numbers suggest a reversal, likely due to banks competing for deposits at quarter-end [4][5]. Investment Outlook - **Defensive Stocks**: There is a constructive outlook on defensive, high-yield China bank stocks, especially in light of recent geopolitical uncertainties and tariff risks. The dividend yield for H-share large banks has improved to 5.5%-6% following a ~10% pullback over the past three months [5][6]. - **Preferred Stocks**: Recommended stocks include CITIC-H, CCB-H, BOC-H, and ICBC-H, which are viewed as strong defensive plays [5][6]. Additional Important Insights - **Sector Performance**: The banking sector's performance has been lagging compared to other Asian peers, indicating potential undervaluation and investment opportunities [12][14]. - **Valuation Metrics**: The report includes a valuation table showing various banks' ratings, prices, target prices, implied upside, and dividend yields, highlighting the potential for recovery in the sector [15][6]. - **Economic Indicators**: The report discusses macroeconomic indicators such as M2 and M1 growth rates, which have shown slight deceleration, indicating broader economic trends that could impact banking operations [3][5][16]. This summary encapsulates the key points from the conference call, focusing on the performance and outlook of the China banking sector, along with specific insights into credit growth, market sentiment, and investment recommendations.

Core Viewpoint - Multiple banks are initiating the cleanup of long-term inactive accounts, which include both personal and corporate accounts, to mitigate risks associated with money laundering and fraud, as well as to optimize resource management [2][3][4]. Group 1: Reasons for Cleanup - Long-term inactive accounts are susceptible to misuse by criminals for activities such as money laundering and telecom fraud, necessitating their removal to reduce gray areas [3]. - These accounts consume system resources and increase data storage and maintenance costs, thus cleaning them can enhance backend management and service response efficiency [3]. - Regulatory requirements mandate banks to perform customer identity verification and manage accounts that cannot be verified or have been inactive for long periods, aligning with anti-money laundering and account real-name management efforts [3]. Group 2: Consumer Risks - Long-term inactive accounts can incur management fees and annual fees, leading to gradual depletion of small balances if not monitored [4]. - Inactive accounts may be exploited by criminals, posing legal risks and credit vulnerabilities for consumers [5]. Group 3: Standards for Inactive Accounts - Different banks have varying criteria for defining "long-term inactive accounts," with examples including: - Industrial Bank defines it as accounts with a balance of 10 yuan or less and no transactions for over 365 days [6]. - New Feng Rural Commercial Bank considers accounts inactive if there have been no transactions for over three years and the balance is zero [6]. - Bank of China (Hainan branch) identifies accounts with no transactions in three years and a balance of 10 yuan or less as inactive [6]. - Jiuquan Rural Commercial Bank sets the threshold at two years of inactivity with a balance of 100 yuan or less [6]. Group 4: Variability in Standards - The differences in standards among banks stem from their autonomy in execution and varying risk preferences, with larger banks often adopting more cautious approaches compared to smaller banks [7]. - Some banks are extending the cleanup to corporate accounts and online channels, indicating a broader scope of the initiative [7]. Group 5: Regulatory Evolution - The current cleanup initiative reflects a shift from focusing on physical cards to managing account behaviors, indicating a deeper regulatory approach to account lifecycle management [8][9]. - The emphasis has transitioned from merely addressing card redundancy to ensuring the authenticity, activity, and traceability of accounts, highlighting an upgrade in regulatory requirements [9].

Core Points - The 2025 Beijing Marathon has announced a supplementary draw for athletes who did not secure a spot in the initial lottery due to some winners failing to complete payment on time [1] - Athletes who were not selected in the first round can check their draw status from October 19, 2025, 10:00 AM to October 21, 2025, 11:59 PM [1] - Successful applicants must complete their payment by October 21, 2025, 11:59 PM, or they will forfeit their entry [1] Payment and Status Check Methods - Method 1: Check draw results via the official Beijing Marathon English website by logging into the personal account [11] - Method 2: Use the BOC Compass APP to check draw results by logging into the personal account [15] - Method 3: Use the Marathon APP to view draw status in the "My Registration" section [6] - Method 4: Use the Digital Heart APP to check draw status in the "My Orders" section [8]

Group 1: Industry Investment Rating - No industry investment rating is provided in the report. Group 2: Core Viewpoint - The report presents a weekly data tracking of secondary capital bonds from October 13, 2025, to October 17, 2025, covering primary market issuance, secondary market trading, and valuation deviation of individual bonds [1]. Group 3: Summary Based on Related Catalogs Primary Market Issuance - One new secondary capital bond was issued in the inter - bank and exchange markets this week, with an issuance scale of 4.5 billion yuan, a maturity of 10 years. The issuer is a local state - owned enterprise in Jiangsu Province with a subject rating of AAAspc [1][6]. Secondary Market Trading - **Trading Volume**: The total weekly trading volume of secondary capital bonds was approximately 166.8 billion yuan, an increase of 122.3 billion yuan compared to last week. The top three bonds in terms of trading volume were 25 ICBC Secondary Capital Bond 02BC (6.075 billion yuan), 25 BOC Secondary Capital Bond 01BC (5.131 billion yuan), and 25 CCB Secondary Capital Bond 01BC (5.024 billion yuan) [2]. - **Regional Trading Volume**: The top three regions in terms of trading volume were Beijing, Shanghai, and Guangdong, with trading volumes of approximately 129 billion yuan, 12.3 billion yuan, and 6.8 billion yuan respectively [2]. - **Yield to Maturity**: As of October 17, the yield - to - maturity changes of 5Y secondary capital bonds with ratings of AAA -, AA +, and AA compared to last week were - 7.98BP, - 7.12BP, and - 7.12BP respectively; for 7Y bonds, the changes were - 9.74BP for all three ratings; for 10Y bonds, the changes were - 9.29BP, - 8.58BP, and - 8.58BP respectively [2][11]. Valuation Deviation of Top 30 Individual Bonds - **Overall Situation**: The overall valuation deviation of the weekly average trading price of secondary capital bonds was not significant this week. The proportion of discount trading was greater than that of premium trading, and the discount range was larger than the premium range [3]. - **Discount Bonds**: The top three bonds with the highest discount rates were 20 Fuxin Bank Secondary 01 (- 15.2060%), 17 Yanbian Rural Commercial Secondary 02 (- 2.5373%), and 22 Chengdu Rural Commercial Secondary 01 (- 0.7800%). The majority of ChinaBond implied ratings were AAA -, AA +, and A +, and the bonds were mainly distributed in Beijing, Guangdong, and Shanghai [3][13]. - **Premium Bonds**: The top three bonds with the highest premium rates were 22 Chouzhou Commercial Bank Secondary Capital Bond 01 (0.2822%), 21 Jinshang Bank Secondary 01 (0.2143%), and 21 Huishang Bank Secondary 01 (0.1652%). The majority of ChinaBond implied ratings were AAA -, AA, and AA +, and the bonds were mainly distributed in Beijing, Guangdong, and Shanghai [3][14].