Guan Cha Zhe Wang·2025-09-19 08:52Core Viewpoint - The A-share banking sector has shown a volatile performance, experiencing a "V-shaped rebound" after an initial decline, with the banking index down over 14% since July 11, while other indices have seen significant gains [1][3]. Group 1: Market Performance - On September 19, the banking index initially dropped nearly 1% but recovered to close up 0.28% by midday [1]. - The Industrial and Commercial Bank of China (ICBC) saw a drop of over 2%, marking its first breach of the six-month moving average in nearly a year [1]. - The banking sector has been in a downtrend since July, with the dividend sector also declining over 7% from its peak [3]. Group 2: Economic Factors - The decline in the banking sector is attributed to several factors, including the typical withdrawal of arbitrage funds post-dividend distribution and weaker-than-expected social financing and credit data in July and August [3]. - The 30-year treasury futures market shows a clear bearish trend, further diminishing the appeal of dividend assets [3]. - Analysts suggest that as market risk appetite increases, funds are shifting towards higher-risk equity assets, which suppress the performance of dividend stocks and treasury futures [3]. Group 3: Monetary Policy Impact - The Federal Reserve announced a 25 basis point rate cut on September 18, leading to expectations of further monetary easing in China, which may pressure banks' net interest margins [4]. - Some analysts view this as a positive development, as it could lead to a shift of funds from treasury and dividend assets to equity markets, creating structural opportunities [4]. - The banking sector is experiencing a divergence, with state-owned banks benefiting from stable high dividend yields, while regional banks face pressure from consumer loan interest rate policies [4]. Group 4: Risk and Performance Outlook - The non-performing loan ratio for commercial banks decreased to 1.49% in Q2, with an increase in the provision coverage ratio, although the scale of special mention loans has expanded, indicating potential risks [4]. - The net interest margin for ICBC was reported at 1.3% for the first half of the year, a year-on-year decrease of 12 basis points, with expectations of continued downward pressure in the second half [4]. - Long-term investment in dividend assets remains viable if the stable dividend yield exceeds 4%, despite the current high valuations of bank stocks [5].