ZHESHANG SECURITIES·2025-07-21 10:08Investment Rating - The industry investment rating is "Positive" (maintained) [8] Core Viewpoints - As of Q2 2025, institutional holdings in bank stocks have increased, primarily driven by passive investments, with limited growth in active public fund holdings. The overall chip structure remains healthy, with shares of state-owned banks and city commercial banks favored due to their low valuations or strong fundamentals [1][2] - The report suggests a continued positive outlook for the banking sector, emphasizing a long-term bullish trend rather than a mid-cycle correction. It recommends focusing on state-owned banks in 2024 and improving banks in economically developed regions in 2025, while also highlighting value-oriented banks with state-owned enterprise backgrounds in the Hong Kong market [5][6] Summary by Sections Overall Holdings - By the end of Q2 2025, the proportion of bank stocks held by public funds and northbound funds increased by 8.5% compared to Q1 2025, with a 0.7 percentage point rise in the proportion of free-floating shares. The main contributors to this increase were passive funds, while active public funds showed limited growth [1] - The holdings of small and medium-sized banks increased, with state-owned banks, joint-stock banks, city commercial banks, and rural commercial banks seeing respective increases of 0.1, 1.2, 1.0, and 0.6 percentage points in their institutional holdings [1] Individual Bank Performance - The banks with the largest increases in institutional holdings include Minsheng, CITIC, Ping An, Chongqing, and Yunnan Agricultural Bank, with respective increases in the proportion of free-floating shares of 3.2, 2.9, 2.7, 2.6, and 2.6 percentage points [2] Northbound Funds - Northbound funds maintained stable holdings, with a 2.3% increase in the number of shares held by the end of Q2 2025. The proportion of holdings in state-owned banks and joint-stock banks increased, while rural commercial banks experienced a notable outflow [3] Passive Public Funds - Passive holdings continued to rise, with a 39.0% increase in the number of bank stocks held by index funds by the end of Q2 2025, driven by index expansions and weight adjustments [4] Active Public Funds - Active public fund holdings increased by 6.3%, with a slight rise in the proportion of free-floating shares. However, the overall growth was below expectations, with significant increases in holdings of low-valuation or fundamentally strong joint-stock banks and city commercial banks [5]