Core Viewpoint - Commercial banks are actively enhancing their "green finance" initiatives to support the achievement of the "dual carbon" goals, focusing on both the growth and quality of green financial products and services [2][3][5]. Group 1: Green Credit Growth - Major commercial banks have maintained a high growth rate in green credit, with an increase of over 10% in the first half of the year, surpassing the average loan growth rate [3]. - As of June, the total green loan balance of six major state-owned banks reached 23.8 trillion yuan, with Industrial and Commercial Bank of China (ICBC) leading at over 6 trillion yuan and a growth rate of 16.4% [3]. - Other banks, including Agricultural Bank of China and China Construction Bank, also reported significant growth in green loans, with balances of 5.72 trillion yuan and growth rates of 14.6% and 14.88%, respectively [3]. Group 2: Green Bond Market - The green bond market is experiencing rapid growth, with 477 green bonds issued in 2024, totaling 681.43 billion yuan [5]. - Major banks are increasing their participation in the green bond market, with ICBC issuing a global multi-currency "carbon neutrality" themed green bond [6]. - China Bank led the underwriting of green bonds, with a total issuance of 2.11 trillion yuan domestically and 14.9 billion USD internationally [6]. Group 3: Product Innovation and Diversification - The demand for diverse financing solutions has led to an increase in the variety of green financial products, including green loans, bonds, and funds [5][7]. - Banks are focusing on innovative products such as floating-rate green bonds and carbon finance services, including carbon emission rights collateralized loans [6][7]. - Future developments may include the introduction of carbon derivatives and the establishment of green industry investment funds targeting renewable energy and resource recycling [7].

Group 1 - The core point of the article highlights the recent stock transfer of Zhongshen Jianye (02503) from Beta International Securities to Bank of China (Hong Kong), with a market value of HKD 145 million, accounting for 9.80% of the total shares [1] - Zhongshen Jianye operates as a general contractor or subcontractor, responsible for overall coordination and management of construction projects, providing various construction services including building engineering, municipal public works, foundation engineering, and specialized contracting [1] - The company reported a significant decline in its mid-year performance for 2025, with revenues of HKD 201 million, a decrease of 46.9% year-on-year, and a loss attributable to shareholders of HKD 11.81 million, compared to a profit of HKD 335,000 in the same period last year [1] Group 2 - The decrease in revenue is primarily attributed to a reduction in construction project activities during the reporting period [1]

Core Insights - On September 5, shareholders of Zhongshen Jianye (02503) transferred shares from Beta International Securities to Bank of China (Hong Kong), with a transfer value of HKD 145 million, accounting for 9.80% of the total shares [1] Company Performance - Zhongshen Jianye, acting as a general contractor or subcontractor, is involved in overall project coordination and management, providing various construction services including construction engineering, municipal public works, foundation engineering, and specialized contracting [1] - The company reported a revenue of HKD 201 million for the first half of 2025, representing a year-on-year decrease of 46.9% [1] - The company recorded a loss attributable to shareholders of HKD 11.81 million, compared to a profit of HKD 335,000 in the same period last year [1] - The decline in revenue is primarily attributed to a reduction in construction project activities during the reporting period [1]

Core Viewpoint - The article discusses the current state of personal housing loans in China, highlighting the significant role of major banks in this sector and the rising non-performing loan (NPL) rates due to a sluggish real estate market [2][3][4]. Group 1: Personal Housing Loan Balances - As of June 2025, the total personal housing loan balance in China reached 37.74 trillion yuan, with the top eight banks accounting for 73.17% of this total [2]. - The major banks' personal housing loan balances as of June 2025 are as follows: Industrial and Commercial Bank of China (ICBC) at 6.05 trillion yuan, China Construction Bank (CCB) at 6.15 trillion yuan, and Agricultural Bank of China (ABC) at 4.93 trillion yuan [3][4]. Group 2: Non-Performing Loan Rates - The NPL rate for personal housing loans at ICBC increased to 0.86% by June 2025, up from 0.73% at the end of 2024, marking a significant rise over the past five years [4][5]. - Other major banks also reported NPL rates exceeding 0.7%, indicating a widespread issue across the banking sector [5]. Group 3: Measures to Address NPLs - In response to rising NPLs, banks have increasingly turned to the securitization of personal housing loans as a means to manage these assets [8][11]. - The number of securitization projects has grown from 6 in 2020 to 29 in 2024, with 19 projects already completed in the first half of 2025 [8][13]. - The total amount of personal housing NPLs disposed of through securitization reached 70.11 billion yuan in 2024, with 49.59 billion yuan disposed of in the first half of 2025 [11][14]. Group 4: Impact on Housing Market - The increase in securitization and the corresponding rise in the number of disposed loans suggest that banks may become significant sellers of housing, potentially impacting housing prices negatively [16][26]. - The number of housing units associated with disposed NPLs reached 83,779 in the first half of 2025, indicating a substantial volume of properties being sold off [16][26].

Core Viewpoint - The implementation of the personal consumption loan interest subsidy policy starting September 1 has prompted several major banks to prepare for its execution, aiming to attract consumers through simplified processes and enhanced customer experience [1][2]. Group 1: Policy Implementation - Major state-owned banks, including ICBC, ABC, BOC, CCB, and PSBC, have released FAQs regarding the personal consumption loan interest subsidy, addressing consumer concerns [1]. - The cumulative interest subsidy cap for each borrower during the policy period is set at 3,000 yuan, with a maximum subsidy of 1,000 yuan for individual loans under 50,000 yuan [1]. Group 2: Automatic Recognition of Transactions - Banks like CCB and TCB have stated that loan funds will be disbursed to the borrower's selected debit card/account, with automatic recognition of transactions including POS payments, QR code payments, and online transactions [2]. - For transactions not automatically recognized, customers can submit proof of consumption for manual review to receive the subsidy [2]. Group 3: Existing Loans and Compliance - Borrowers with personal consumption loans issued before September 1, 2025, can still enjoy the subsidy if they use the funds for consumption during the policy period without needing to refinance [3]. - Banks have emphasized strict compliance measures against fraudulent activities related to loan applications and subsidy claims, with penalties for violations [3]. Group 4: Economic Impact - Analysts from CITIC Securities believe that the interest subsidy will positively impact consumer spending by reducing interest burdens and leveraging fiscal funds to enhance consumption loan leverage [3].

1. Report Industry Investment Rating - Currently, the report has a phased and clear bullish view on the bond market [1]. 2. Core Viewpoints of the Report - The revenue growth rate of the entire A-share market and the return on 10-year Treasury bonds are relatively consistent, and the economy may have stabilized at a low level in the first half of 2025, but there is still downward pressure [1][4]. - The loan growth rate continues to decline, the proportion of loans on the asset side of banks tends to decrease, and the financial investment proportion of large banks has increased since early 2023 [1]. - The cost rate of interest-bearing liabilities of listed banks has declined quarter by quarter, and it is expected to further decline in the next few years [1]. - The decline in bank liability costs will support the bond yield to oscillate downward, and it is recommended to increase the allocation of government bonds [1]. 3. Summary by Relevant Catalogues 3.1 From the Semi-annual Report of the Entire A-share Market to See the Economic and Bank Operating Pressures - **From the Performance of the Entire A-share Market to See the Economy** - The revenue growth rate of the entire A-share market can reflect the nominal GDP growth rate to a certain extent, and it is more consistent with the return on 10-year Treasury bonds than the nominal GDP growth rate [5][6]. - In the first half of 2025, the revenue growth rate of the entire A-share market was 0.0%, and the net profit growth rate attributable to the parent was 2.4%. The growth rate of the entire A-share market excluding finance, petroleum, and petrochemicals was under pressure, reflecting the large pressure on real - economy growth [4][10]. - **From the Performance of the Bank Sector to See the Economy** - The performance of the banking industry is closely related to the economy. In the past two years, the performance growth of the banking industry has been significantly under pressure, and the net interest margin of commercial banks has continued to decline [13][16]. - As of the second quarter of 2025, the net interest margin of commercial banks was 1.42%, a record low, and the average net interest margin of various types of listed banks has also decreased significantly [16][18]. - **From the Liabilities of the Entire A-share Market to See the Financing Demand** - Since the first quarter of 2024, the long - term borrowing of the entire A - share market (excluding finance, petroleum, and petrochemicals) has stagnated, reflecting the weak financing demand of market - oriented enterprises [20]. - The social financing growth rate generally leads the nominal GDP growth rate by 1 - 2 quarters, and the social financing growth rate may decline in the next few months [23]. 3.2 What Changes Have Occurred in the Bank's Assets and Liabilities? - **The Loan Growth Rates of Large and Small and Medium - Sized Banks Have Both Declined** - As of the end of July 2025, the balance of RMB loans of financial institutions was 268.5 trillion yuan, with a year - on - year growth rate of 6.9%, the lowest level since the beginning of 2011 [25]. - The growth rate of personal housing loans is under pressure of negative growth, and the loan growth rates of large and small and medium - sized banks have both declined. The proportion of loans of listed banks has tended to decline since the second quarter of 2024 [25][29]. - **The Proportion of Deposits on the Liability Side of Large Banks Has Decreased, and the Proportion of Deposits of Small and Medium - Sized Banks Has Remained Stable** - Since early 2023, the proportion of deposits of the six major banks has decreased from 81.4% in the first quarter of 2023 to 76.0% in the second quarter of 2025, while the average proportion of deposits of listed joint - stock banks has increased [25]. - The large - scale banks' corporate deposit growth has slowed down, and the large - scale banks' dependence on non - bank inter - bank deposits has increased [39][45]. 3.3 Which Banks Had More Financial Investment Growth in the First Half of 2025? - Since early 2023, the proportion of financial investment of large banks has rebounded. As of the end of June 2025, the overall financial investment of A - share listed banks reached 97.4 trillion yuan, accounting for 30.3% of assets [51]. - In the first half of 2025, ICBC and CCB had more financial investment growth, while a small number of joint - stock banks' financial investment decreased. The financial investment increments of large banks, joint - stock banks, and city and rural commercial banks were all significant [55][59]. - As of the end of July 2025, the year - on - year growth rate of the bond investment of the four major banks reached 21.2%, the highest since 2017, and that of small and medium - sized banks was 18.3% [60]. 3.4 How Much Has the Cost of Interest - Bearing Liabilities of Banks Decreased? - In 2025, the decline of the current deposit ratio has slowed down. Since early 2018, the current deposit ratio has dropped significantly, and it is expected to further decline in the future, but the decline rate may slow down [61]. - Since the beginning of 2024, the deposit interest - payment rate has decreased significantly. The overall deposit interest - payment rate of A - share listed banks in the first half of 2025 was 1.65%, a year - on - year decrease of 32BP [65]. - The cost rate of interest - bearing liabilities has declined quarter by quarter. It is expected to further decline in the next few years, and may drop below 1.65% in the fourth quarter of 2025 [67]. 3.5 Investment Suggestions - It is expected that the liability cost of commercial banks will decline year by year in the next five years, which will support the bond yield to oscillate downward, and the return on 10 - year Treasury bonds will follow the decline of bank interest - bearing liabilities [69]. - In the low - interest - rate era, it is recommended to reduce the return expectation of bond investment, and commercial bank self - operation should increase the allocation of government bonds [72][73].

Investment Rating - The report maintains an "Increase" rating for the banking sector, indicating a positive outlook for the industry [1]. Core Insights - In the first half of 2025, the contribution of financial asset disposal gains from AC and OCI accounts to revenue reached 5.2%, an increase of 2.9 percentage points compared to 2024 [1][2]. - The investment income growth rate for 42 listed banks was 23.6%, with AC, OCI, and TPL gains showing year-on-year growth rates of 134.7%, 79.0%, and -8.4% respectively [1]. - The report highlights that the increase in disposal gains does not necessarily indicate a significant increase in asset disposal scale, as market conditions and strategies vary among banks [2]. Financial Asset Disposal Gains - The contribution of AC and OCI financial asset disposal gains to revenue was 5.2%, up 2.9 percentage points from 2024, with AC asset disposal gains contributing 2.6% [2]. - Among different types of banks, rural commercial banks had the highest contribution from AC and OCI disposal gains, reaching 11.0%, an increase of 6.2 percentage points from 2024 [2]. - Specific banks such as Jiangyin Bank, Sunong Bank, and Zijin Bank had high disposal gain ratios relative to their revenue, at 28.9%, 26.7%, and 22.7% respectively [2]. OCI Floating Profit Situation - The overall OCI floating profit decreased compared to the end of the previous year, accounting for 12.6% of the estimated profit for 2025 [3]. - Major state-owned banks like CCB and ABC reported significant OCI floating profits, with balances exceeding 30 billion [3]. - The average contribution of OCI floating profits to profits for city and rural commercial banks was notably high, with Ningbo Bank's ratio reaching 35% [3][6]. Sector Trends - The banking sector is expected to benefit from expansionary policies aimed at stabilizing the economy, with a focus on real estate and consumer spending [7]. - The report suggests a focus on banks with improving fundamentals, such as Ningbo Bank, and those with dividend strategies like Jiangsu Bank and Chengdu Bank [7]. - Attention is also drawn to banks with potential convertible bond conversion expectations, including Shanghai Bank and Industrial Bank [7].

Core Points - The personal consumption loan interest subsidy policy was officially implemented on September 1, 2023, allowing residents to enjoy interest subsidies on loans used for consumption until August 31, 2026 [1] - Major banks are actively promoting this policy through their mobile banking apps and have established "subsidy zones" for customers [1] Group 1: Implementation Details - The subsidy applies to personal consumption loans from six major state-owned banks, twelve national joint-stock commercial banks, and five other lending institutions, specifically for loans that can be identified as used for consumption [1] - Agricultural Bank of China clarified that loans issued between September 1, 2025, and August 31, 2026, can qualify for the subsidy if used for consumption, and borrowers do not need to refinance existing loans [2] Group 2: Transaction Recognition - Transactions eligible for automatic recognition include POS transactions, QR code payments, online payments, and transfers to corresponding business accounts [3] - For transactions not automatically recognized, customers can upload receipts to the bank's app for manual recognition starting September 6, 2023 [3] Group 3: Service Agreement and Channels - Customers can sign the subsidy service agreement through the mobile banking app upon loan approval, regardless of when the loan was signed [4] - Postal Savings Bank allows customers to process subsidy applications through its app and branches, emphasizing that no third parties will be involved in the process [5] Group 4: Fees and Compliance - China Bank confirmed that no fees will be charged for processing the personal consumption loan subsidy [6] - Industrial and Commercial Bank of China stated that it will strictly adhere to market principles and legal regulations, prohibiting fraudulent activities to obtain subsidies, with serious consequences for violators [8]

Core Viewpoint - The banking industry is facing ongoing pressure on net interest margins, but there are positive signals indicating potential stabilization through proactive asset-liability management and structural optimization [2][3]. Summary by Sections Net Interest Margin Trends - Among 42 A-share listed banks, 38 experienced a decline in net interest margin in the first half of 2025 compared to 2024, with only 3 showing improvement [3]. - Major state-owned banks reported net interest margins as follows: ICBC at 1.30% (down 13 basis points), CCB at 1.40% (down 14 basis points), ABC at 1.32% (down 13 basis points), BOC at 1.26% (down 18 basis points), PSBC at 1.70% (down 21 basis points), and CMB at 1.21% (down 8 basis points) [3]. - The decline in net interest margins is attributed to factors such as the continuous decrease in LPR rates, adjustments in existing mortgage rates, and the Fed's rate cuts, leading to asset yields declining faster than liability costs [3]. Future Outlook for Net Interest Margins - Bank executives anticipate that net interest margins may stabilize in the second half of 2025, despite ongoing downward pressure [5][6]. - ICBC's vice president noted that while net interest margins are expected to decline, the rate of decline is projected to slow down, supported by effective asset-liability management strategies [5]. - Agricultural Bank of China's president indicated that as deposits mature and interest rates adjust, the cost of liabilities is expected to decrease, potentially stabilizing net interest margins [6]. Strategies for Stabilizing Net Interest Margins - Banks are focusing on optimizing their business structures and enhancing pricing strategies to stabilize net interest margins [8]. - Huaxia Bank plans to improve asset quality and manage liabilities more effectively to support net interest margin stability [8]. - China Merchants Bank emphasizes the importance of external factors and plans to enhance asset-liability management to maintain reasonable net interest margins [8]. Proactive Management Initiatives - Banks are adopting a comprehensive approach to improve net interest margins, including optimizing asset-liability structures and enhancing customer engagement [9]. - The focus is on balancing various business lines and improving the efficiency of fund management to mitigate the impact of declining interest rates [9].

Group 1 - The event in Sydney on September 4, 2023, focused on the internationalization of the Renminbi (RMB) and was attended by over 100 representatives from the financial and business sectors of China and Australia [1] - The President of the Bank of China Sydney Branch, Li Mang, emphasized that the internationalization of the RMB reflects global confidence in China's long-term development and highlighted the deepening financial cooperation between China and Australia [3] - The Deputy Consul General of China in Sydney, Wang Chunsheng, noted the steady progress of RMB internationalization and its increasing use in cross-border transactions, urging the Bank of China Sydney Branch to seize cooperation opportunities [5] Group 2 - Liang Heng, Director and General Manager of the Central Government Securities Depository and Clearing Co., Ltd., stated that more Australian financial institutions are participating in RMB clearing and settlement, which injects new momentum into RMB internationalization [7] - A representative from the Shanghai RMB Trading Business Headquarters of the Bank of China provided insights on the RMB bond market and investment opportunities, fostering discussions on RMB internationalization and high-quality trade development [10] - The event celebrated the 40th anniversary of the Bank of China's operations in Australia, themed "Forty Years of Partnership, Building New Opportunities for the RMB," marking a significant step in promoting RMB internationalization and financial openness [10]