Zhong Guo Jing Ying Bao·2025-09-12 18:32Core Viewpoint - The competition among major state-owned banks in China has shifted, with Agricultural Bank of China surpassing Industrial and Commercial Bank of China in market capitalization, signaling a significant change in the competitive landscape of state-owned banks [1][2]. Market Capitalization Battle - Agricultural Bank of China reached a market value of 2.55 trillion yuan, overtaking Industrial and Commercial Bank of China, which has historically been the largest [1]. - The market capitalization rivalry has seen both banks alternating in leadership, with Industrial and Commercial Bank regaining its position by September 11 [2]. - Agricultural Bank's stock price surged from 2.7 yuan in November 2022 to 7.55 yuan by September 4, 2025, marking an increase of nearly 180% [3]. - As of early 2025, the market capitalization gap between Agricultural Bank and Industrial Bank was 450 billion yuan, with Agricultural Bank's stock rising by approximately 47% year-to-date, compared to 13% for Industrial Bank [3]. Financial Performance - As of June 2025, Agricultural Bank's total assets reached 46.86 trillion yuan, trailing only Industrial Bank's 52.32 trillion yuan [4]. - Agricultural Bank was the only major state-owned bank to report a net profit growth of 2.53% in the first half of 2025, while the other three banks experienced declines [4]. - The non-performing loan (NPL) ratio for Agricultural Bank was 1.28%, with a provision coverage ratio of 295%, indicating strong asset quality compared to its peers [4][5]. County-Level Strategy - Agricultural Bank's focus on county-level financial services has become a core competitive advantage, especially in a market with weak credit demand [6]. - The bank's county-level loan balance exceeded 10 trillion yuan, accounting for 40.9% of its domestic loans, with significant growth in loans for essential agricultural products and rural development [7][8]. - The average yield on county-level loans was 3.09%, with a low deposit interest rate of 1.35%, contributing to a favorable net interest margin [8]. Investment Logic - Agricultural Bank's asset quality and extensive network of county-level branches make it an attractive option for long-term investors, particularly insurance funds [9]. - Analysts suggest that while the banking sector faces challenges, a shift towards high-quality, sustainable growth is underway, emphasizing the importance of non-interest income and effective risk management [9][10]. - The recent rise in Agricultural Bank's market value reflects market expectations, supported by its strong fundamentals and asset quality [11].