Orient Securities·2025-06-11 15:42Investment Rating - The report maintains a "Positive" outlook for the banking industry in China as of June 11, 2025 [4] Core Insights - The banking sector is experiencing a transition from a surplus of deposits to a structural shortage, with significant differentiation between state-owned banks and smaller banks [8][27] - Recent adjustments in deposit rates are expected to stabilize the deposit base of large banks, despite ongoing deposit disintermediation [36][45] - The report highlights three main investment themes: convertible bonds with rebound potential, high-dividend stocks, and banks with long-term liabilities and capital advantages [40] Summary by Sections 1. Review of Deposit Growth: From Surplus to Shortage - Since 2009, deposit growth has lagged behind loan growth, indicating a shift in liquidity conditions from surplus to structural shortage [12][14] - The transition is attributed to changes in monetary policy and the rise of wealth management products, which have contributed to deposit disintermediation [19][22] 2. New Characteristics of Deposit Growth in 2025: From Industry-wide to Structural Shortage - The overall deposit gap in the banking sector has shown signs of improvement, but state-owned banks continue to face significant deposit shortages [27][28] - In Q1 2025, the deposit growth rate for large banks was only 71%, down from an average of 80% since 2019, indicating a potential arbitrage chain where entities take low-interest loans from large banks and deposit them in smaller banks for higher interest [32][34] 3. New Round of Deposit Rate Adjustments and Stability of Large Banks' Liabilities - The report expresses cautious optimism regarding the current round of deposit disintermediation, noting that past adjustments have had diminishing impacts over time [36][38] - Large banks are expected to maintain deposit stability due to regulatory constraints and the rapid adjustment of deposit rates by smaller banks [45] 4. Investment Recommendations - The report identifies three key investment lines: 1. Convertible bonds with rebound potential, specifically targeting Hangzhou Bank and Nanjing Bank [40] 2. High-dividend stocks, with a focus on CITIC Bank, Industrial Bank, and Jiangsu Bank [40] 3. Banks with long-term liabilities and capital advantages, such as Chongqing Rural Commercial Bank [40]