Core Viewpoint - The recent cancellation of 5-year deposit products by several banks indicates a significant shift in the banking sector's strategy to manage deposit competition and reduce liability costs amid ongoing pressure on net interest margins [1][7]. Group 1: Cancellation of 5-Year Deposits - The Tongyu Mongolian Village Bank announced the cancellation of its 5-year fixed deposit product, becoming the first commercial bank to do so [2]. - Several other banks have also removed 5-year fixed deposit products from their offerings, including the Kun District Mongolian Village Bank, which stopped displaying the 5-year deposit rates [3]. - A total of seven banks have reportedly removed 5-year fixed deposits from their pages, with some also eliminating 3-year deposits [3]. Group 2: Market Trends and Implications - The disappearance of 5-year deposits is a response to the ongoing decline in net interest margins, which fell to 1.42% in Q2 2025, down 0.01 percentage points from Q1 [7]. - The People's Bank of China highlighted the need for banks to manage their liability costs effectively, as the disparity between declining loan rates and slower deposit rate reductions compresses net interest margins [7][9]. - Analysts suggest that banks are adjusting their deposit strategies in anticipation of further interest rate declines, leading to a reduction in long-term deposit offerings [8]. Group 3: Customer Behavior and Preferences - Customers are increasingly reluctant to invest in 5-year deposits due to lower interest rates compared to 3-year options, making the former less attractive [8]. - The trend of banks discontinuing long-term deposit products reflects a broader strategy to optimize their liability structures and manage costs effectively [8].

Group 1: Main Views - The content that needs attention in the main body of this monetary policy report is relatively limited, and the report emphasizes internal certainty and focuses more on domestic demand. The probability of an increase in the aggregate policy has increased [1]. - The column content is the focus of this report. Columns 1, 2, and 4 are logically related, aiming to stabilize market sentiment and reduce asset price fluctuations. Multiple perspectives for observing interest - rate comparisons are proposed, continuing the central bank's work direction in recent years [1]. - The stability of the net interest margin (banking system) is a prerequisite for the monetary policy to intensify and benefit the real economy, and the stability of liabilities needs to be considered. After the capital market expectations stabilize, there may be a new round of aggregate policy intensification accompanied by further adjustments to the deposit rates of large - scale banks, and interest rate cuts may occur [2]. - As the spread between the policy rate and the money market stabilizes and the interest - rate corridor compresses, the interest - rate market will gradually find its "anchor" [2]. Group 2: More Positive Tone Macroeconomic Outlook - The summary of the overseas situation in the third - quarter monetary policy report is weaker than that in the second - quarter report. The report points out that "global economic growth momentum is insufficient" in the third quarter, mainly due to the decline in GDP growth rates in the eurozone and the UK, and the decline in exports in the Asia - Pacific region despite the improvement in Japan's GDP. Geopolitical conflicts are emphasized as a potential risk to the stability of the political and financial system [3]. - Domestically, there are some structural improvements in investment, but the overall economic data has shown a weakening trend since the third quarter. The third - quarter report has a marginal change in the description of the aggregate policy, indicating that the foundation for the domestic economic recovery needs to be strengthened [3][4]. Next - Stage Monetary Policy Main Ideas - The monetary policy will continue to maintain a moderately loose environment, with almost no new content in this part. The description of the monetary policy in the third - quarter report has been reduced by a paragraph compared with previous reports, possibly because there is little change in the current monetary policy tone and implementation, and the aggregate policy may be announced after the year - end important meeting [4]. Group 3: Column In - Depth Reading Column 1: Scientific View of Aggregate Financial Indicators - Social financing scale and money supply are more comprehensive and reasonable than bank loans for observing financial aggregates. This column aims to manage expectations, urging the market to look at total financing data and smooth the impact of data on the market [10][11]. - The emphasis on aggregate financial data is reasonable because the economic growth engine has shifted. Advanced manufacturing and other industries are mainly supported by government financing, so focusing only on credit data may lead to a more pessimistic view of the economy [11]. - If credit improves significantly and continuously in the future, it may mean a transformation of the economic engine from structural industries to overall demand recovery. However, the growth of new social financing this year mainly relies on government bond financing, and the comparative advantage will disappear in 2026 [12]. Column 2: The Relationship between Base Money and Money - This column explains the difference between high - powered money and broad money and points out that the expansion of broad money mainly depends on the credit expansion of banks. It supplements Column 1 by emphasizing the importance of aggregate financial data such as money supply [16][17]. Column 4: Maintaining a Reasonable Interest - Rate Comparison Relationship - The column focuses on several aspects of interest - rate comparisons, including the linkage between policy rates and other rates, deposit and loan rates, the comparison effect of bank assets, term spreads, and credit risk [20]. - The stability of the net interest margin is a key factor for policy space. The trend of deposit - rate adjustment continues, and the actions of large - scale banks need to be monitored. Future deposit - rate adjustment analysis should consider the performance of the capital market [21]. - The central bank pays close attention to the shape of the treasury bond yield curve. When the term spread deviates significantly from the central level, the monetary policy may use structural means to guide market correction [22]. - Since the Lujiazui Forum in June 2024, the central bank has taken measures to strengthen the importance of policy rates and the smoothness of the interest - rate transmission mechanism. The spread between the policy rate and the market rate is becoming more stable, and the interest - rate market is gradually finding its "anchor" [22].

Core Viewpoint - The announcement by Inner Mongolia's Tuyuqi Mengyin Village Bank to cancel its five-year fixed deposit product starting November 5, 2025, marks a significant shift in the banking industry, reflecting ongoing pressure on net interest margins and prompting other banks to adjust their deposit rates and products accordingly [1][5][12]. Summary by Category Product Adjustments - Tuyuqi Mengyin Village Bank is the first commercial bank to explicitly announce the removal of the five-year fixed deposit product, alongside lowering interest rates for other deposit terms [1][5]. - The bank has reduced the interest rates for various deposit terms: three-month from 1.15% to 1.10%, six-month from 1.35% to 1.30%, one-year from 1.50% to 1.45%, two-year from 1.60% to 1.55%, and three-year from 1.95% to 1.85% [3][6]. - Similar actions have been observed in other banks, with some private banks reporting "sold out" or removal of mid to long-term deposit products [1][7]. Market Context - The adjustments in deposit products are a response to the persistent pressure on net interest margins faced by banks, particularly smaller banks that are more sensitive to funding costs [4][8]. - The overall trend shows that many banks are actively lowering deposit rates to manage their liabilities and improve their financial stability amid a challenging interest rate environment [7][9]. Implications for the Banking Sector - The cancellation of long-term deposit products and the reduction of interest rates are seen as proactive measures by banks to optimize their balance sheets and mitigate the impact of declining asset yields [11][12]. - This shift may lead to a "deposit migration" effect, where funds move from traditional bank deposits to capital markets, potentially increasing liquidity in stocks, bonds, and funds [12][13]. - Analysts suggest that the market is witnessing a more pronounced adjustment mechanism for deposit rates, indicating a trend towards stabilizing net interest margins in the banking sector [13].

Loan Distribution and Growth - As of September 2025, the company's loan and advance principal balance is CNY 2,604.71 billion, a growth of 6.15% compared to the beginning of the year [2] - New loans are primarily concentrated in the Lanzhou region, with key industries including manufacturing, technology enterprises, water conservancy construction, financial services, and wholesale retail [2] - Future support will focus on green credit, technology enterprises, new energy industries, and new infrastructure [2] Financial Investment Overview - The financial investment scale as of September 2025 is CNY 1,773.14 billion, with trading financial assets accounting for 21.53% (CNY 381.8 billion), debt investment financial assets at 47.62% (CNY 844.29 billion), and other debt investment financial assets at 30.85% (CNY 547.05 billion) [2] Net Interest Margin and Challenges - The net interest margin as of September 2025 is 1.38%, slightly below the average of A-share listed banks, primarily due to liability structure [3] - Measures to improve net interest margin include enhancing liability quality management and reducing high-cost deposits [3] - Short-term pressure on net interest margin is expected, but medium to long-term stabilization is anticipated [3] Middle Income and Support Strategies - The decline in middle income is largely due to regulatory impacts on self-operated wealth management fees and commissions, which account for about half of total middle income [3] - Future strategies will focus on expanding agency wealth management, credit card, and corporate business income to offset declines [3] Capital Adequacy and Support - The capital adequacy ratio as of September 2025 is 13.16%, an increase of 0.91 percentage points since the beginning of the year [3] - The company issued CNY 30 billion in secondary capital bonds in 2024 and CNY 50 billion in perpetual bonds in July 2025 to strengthen capital [3] Dividend Policy - The company emphasizes reasonable returns to investors, maintaining a consistent and stable profit distribution policy [3] - Since 2019, the cash dividend ratio has exceeded 30%, with cumulative cash dividends amounting to CNY 23.98 billion, representing 1.18 times the funds raised during the IPO, and a dividend yield of around 4% [3]

Core Insights - The total assets of 42 A-share listed banks exceeded 326 trillion yuan, with a year-on-year growth of 9.3%, indicating a steady but slightly declining growth rate [1][2] - Net interest margins show signs of stabilization, supported by improved liability costs, which provide a key support for profitability [1][4] - Asset quality remains solid, with non-performing loan ratios stable, although there is a divergence in asset quality between retail and corporate sectors [1][11] Asset Growth - The asset growth rate of listed banks has slowed compared to previous years, with a year-on-year increase of 9.3% as of Q3 2025, a decrease of 0.3 percentage points from the first half of the year [2][4] - The overall expansion of assets remains robust, with specific banks like Jiangsu Bank and Ningbo Bank showing significant growth rates of 27.76% and 16.65% respectively [3] Profitability and Revenue - The total operating income of listed banks exceeded 4.3 trillion yuan in the first three quarters, reflecting a year-on-year increase of 0.9%, with over 60% of banks reporting positive revenue growth [4] - The net profit attributable to shareholders surpassed 1.6 trillion yuan, marking a year-on-year growth of 1.5% [4] - Analysts indicate that stable net interest margins and reduced provisions are the main drivers of profit growth, while other non-interest income has weakened [5] Net Interest Margin - The net interest margin for listed banks increased by 0.3 basis points to 1.37% in Q3 2025, with asset yield decreasing by 7 basis points and liability cost decreasing by 8 basis points [6][8] - The performance of net interest margins varies among different types of banks, with joint-stock banks and city commercial banks showing better-than-expected rebounds [8][10] Asset Quality - The overall asset quality of listed banks remains stable, with non-performing loan ratios holding steady, although retail risks are showing volatility while corporate non-performing loans continue to improve [11][13] - The average provision coverage ratio for the 42 banks is 283.2%, with city commercial banks and rural commercial banks maintaining coverage ratios above 300% [13]

Investment Rating - The report maintains an "Overweight" rating for the company [1] Core Views - The company reported a revenue of 640.03 billion yuan for the first three quarters of 2025, reflecting a year-on-year increase of 2.17%, and a net profit attributable to shareholders of 269.91 billion yuan, up 0.33% year-on-year [4][5] - Total assets reached 52.81 trillion yuan, growing by 9.21% year-on-year, with total loans amounting to 30.45 trillion yuan, an increase of 8.39% year-on-year [4][5] - The non-performing loan (NPL) ratio remained stable at 1.33%, while the NPL coverage ratio was 217.21%, down 0.50 percentage points quarter-on-quarter [4][5] Summary by Sections Financial Performance - The company achieved a quarterly net interest margin of 1.24%, a decrease of 3 basis points quarter-on-quarter and 19 basis points year-on-year [5] - The interest income was impacted by a lower base from the previous year, leading to a decline in net interest income [8] Loan and Asset Quality - The growth in loans has slowed marginally due to demand factors, but the company outperformed the industry average in loan growth, showcasing its strong customer base [5][6] - The overall asset quality remains stable, with the NPL ratio holding steady and expectations for manageable individual loan pressures [6][8] Revenue Streams - Non-interest income has shown significant improvement, driven by a recovery in commission and fee income, alongside strong investment returns [5][8] - The company’s investment income and fair value changes have increased, reflecting a robust operational strategy [5][8] Future Outlook - The company is expected to maintain stable growth in revenue and profit, with projected revenues of 833.1 billion yuan, 841 billion yuan, and 882.7 billion yuan for 2025, 2026, and 2027 respectively [7][8] - The forecasted net profit for the same years is 367.6 billion yuan, 374 billion yuan, and 381.4 billion yuan, indicating a gradual increase [7][8]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Chinese Banking Sector (H-share banks) - **Period**: 3Q25 results and 9M25 performance Earnings Review - **Net Profit Growth**: Increased from +0.4% YoY in 1H25 to +0.5% in 9M25, with all big six state banks reporting positive YoY growth [1][11] - **Core Earnings Growth**: Slowed from +1.6% YoY in 1H to +0.8% by 9M25 [1] - **Performance Comparison**: H-share bank sector rose 19.9% YTD, underperforming MSCI China and HSI by 16ppt and 9ppt, respectively [1][11] - **Dividend Yield**: Sector's dividend yield at 5.3% is considered unattractive [1][11] - **Stock Recommendations**: Downgraded CCB-H/ABC-H from Buy to Neutral; upgraded BoComm-H from Underperform to Neutral; ICBC is the top pick among large banks [1][11] Loan Growth and Deposit Trends - **Loan Growth**: Average loan growth decelerated from 6.8%/6.9% YoY in FY24/1H25 to 6.3% in 9M25; big six state banks led with 7.5-10.0% YoY growth [2] - **Small Banks**: Experienced loan size contraction of 0.3-1.4% QoQ, raising concerns [2] - **Deposit Growth**: Seasonally low at 0.2% QoQ in 3Q, but YoY growth at 6.8% exceeded loan growth [2] Net Interest Margin (NIM) - **NIM Trends**: Average NIM edged down 1bp QoQ to 1.42% in 3Q; some banks reported NIM increases due to reduced funding costs [3] - **Future Outlook**: Potential stabilization of margins expected if no further policy rate cuts occur [3] Non-Interest Income - **Fee Income Growth**: Improved from +3.3% YoY in 1H to +4.8% in 9M25, attributed to a lower base and strong capital markets [4] - **Trading Gains**: Weakened from 29% YoY in 1H25 to 16% in 9M25, with some banks experiencing significant QoQ drops [4] Credit Quality and Provisions - **NPL Ratio**: Stable at 1.22% QoQ/YTD; average credit cost fell 5bp YoY to 67bp in 9M25 [5] - **Provisions**: Total provisions rose by +0.5% YoY in 9M, down from +3.5% in 1H [5] - **Coverage Ratios**: NPL and loan reserve coverage edged down QoQ to 232% and 2.75%, respectively [5] Valuation and Market Performance - **Valuation Metrics**: H-share banks currently trade at 0.55x P/B, 3.5x P/PPOP, and 6.0x P/E; dividend yield has declined from nearly 10% in Jan-2024 to 5.3% [11][21][23] - **Market Performance**: H-share banks underperformed the MSCI China index YTD; A-H share premium narrowed from 34% to 21% [31][11] Conclusion - The Chinese banking sector is showing mixed signals with modest profit growth and declining loan growth. While larger banks provide some stability, the overall market performance and valuation metrics suggest caution for investors. The focus remains on key players like ICBC, with recommendations adjusted based on recent performance.

Core Viewpoint - The performance of A-share listed joint-stock banks in the third quarter of 2025 shows a mixed picture, with seven banks experiencing a year-on-year decline in operating income and five banks reporting a drop in net profit. Only Shanghai Pudong Development Bank achieved growth in both metrics [1][2][3]. Group 1: Revenue Performance - Among the nine listed joint-stock banks, only Shanghai Pudong Development Bank and Minsheng Bank reported year-on-year revenue growth, with Minsheng Bank achieving the highest growth rate of 6.74% [2]. - China Merchants Bank led in revenue scale with 2,514.20 billion yuan, followed by Industrial Bank and CITIC Bank with 1,612.34 billion yuan and 1,565.98 billion yuan, respectively [2][3]. - Ping An Bank experienced the most significant revenue decline at -9.78%, while several other banks, including Everbright Bank and Huaxia Bank, also saw declines exceeding 6% [2][3]. Group 2: Net Profit Analysis - China Merchants Bank maintained the highest net profit at 1,137.72 billion yuan, with a slight increase of 0.52% year-on-year. Shanghai Pudong Development Bank saw a notable increase of 10.21% in net profit [3]. - The banks that reported a decline in net profit include Zhejiang Commercial Bank, which had the largest drop at -9.59%, along with Minsheng Bank, Ping An Bank, and others experiencing varying degrees of decline [3]. Group 3: Interest Income and Net Interest Margin - Interest income growth varied significantly, with China Merchants Bank leading at 1,600.42 billion yuan and a 1.74% increase. Shanghai Pudong Development Bank had the highest growth rate in interest income at 3.93% [5]. - The net interest margin faced pressure across the industry, with CITIC Bank experiencing the largest decline of 16 basis points. Only Minsheng Bank reported a slight increase of 2 basis points [5][6]. Group 4: Asset Quality and Provision Coverage - The asset quality of joint-stock banks showed resilience, with a mixed performance in non-performing loan (NPL) ratios. China Merchants Bank had the best NPL ratio at 0.94%, while several banks saw slight increases in their NPL ratios [8]. - Provision coverage ratios decreased for most banks, with China Merchants Bank still leading at 405.93%, despite a decline of 6.05 percentage points [9][10]. Group 5: Loan Structure - The loan structure indicates a shift towards corporate loans, with all five banks reporting growth in corporate loans, while personal loan growth was weak for several banks [11][12]. - China Merchants Bank led in personal loan balance with nearly 3.7 trillion yuan, while corporate loan growth was particularly strong for CITIC Bank, which saw a 10.45% increase [11][12].

Group 1 - DBS Group reported a strong performance for Q3 2025, with net profit reaching SGD 2.95 billion, exceeding market expectations of SGD 2.79 billion [1] - The group's pre-tax profit grew by 1% year-on-year to a record SGD 3.48 billion, while total revenue increased by 3% to SGD 5.93 billion, also a historical high [1] - Despite a narrowing net interest margin (NIM) from 2.05% in Q2 to 1.96%, net interest income (NII) remained healthy at SGD 3.58 billion due to strong deposit growth and proactive balance sheet hedging strategies [1] Group 2 - Wealth management emerged as the main driver of non-interest income growth, with total revenue for the segment increasing by 30% year-on-year to SGD 2.17 billion, accounting for 48% of total non-interest income [1] - As of the end of Q3, DBS Group's assets under management (AUM) rose to SGD 474 billion [1] - The group announced a dividend plan for Q3 2025, distributing a total of SGD 0.75 per share, including SGD 0.60 as ordinary dividend and SGD 0.15 as capital return [2] Group 3 - Looking ahead to 2026, DBS Group expects total revenue to remain around 2025 levels, with net profit anticipated to be slightly lower than in 2025, despite potential interest rate headwinds from the Federal Reserve [2] - Management forecasts mid-teens growth for the wealth management business [2] - OCBC maintained a "hold" rating on DBS Group, slightly raising the target price from SGD 54.00 to SGD 55.00 [2]

Investment Rating - The report maintains a "Buy" rating for Suzhou Bank [9]. Core Insights - Suzhou Bank's revenue for the first three quarters of 2025 increased by 2.0% year-on-year, with a net profit growth of 7.1%. The interest income in Q3 showed significant growth, driving the revenue increase [2][6]. - The bank's loan growth compared to the beginning of the year was 10.6%, contributing to the overall asset growth. By the end of Q3, the net interest margin improved by 1 basis point to 1.34%, although it decreased by 4 basis points compared to the beginning of the year [2][6]. - The non-performing loan ratio remained stable at 0.83% at the end of Q3, with a net non-performing loan generation rate decreasing to 0.66% [2][6]. - The bank's total assets are approaching 1 trillion yuan, with a stable recovery in interest margins and a continued decline in non-performing loan generation [2][6]. Summary by Sections Financial Performance - Revenue for the first three quarters of 2025 grew by 2.0% year-on-year, with Q3 showing a 2.5% increase. Net profit increased by 7.1%, with Q3 net profit growth at 9.4% [2][6]. - Q3 interest income rose by 8.9% year-on-year, with a quarterly increase of 23% driven by corporate lending [2][6]. - Non-interest income fell by 10.4% year-on-year, primarily due to declines in settlement, card, and wealth management income [2][6]. Asset Quality - The non-performing loan ratio was stable at 0.83% at the end of Q3, with a provision coverage ratio of 421%, down 17 percentage points from the previous quarter [6]. - The bank's proactive risk management has led to a decrease in the non-performing loan generation rate, which fell to 0.66% [2][6]. Growth and Strategy - The bank's total assets grew by 11.9% compared to the beginning of the year, with loans increasing by 10.6% [2][6]. - Corporate loans saw a significant increase of 16.7%, particularly in government-related sectors, while retail loans decreased by 5.6% [2][6]. - The bank's conservative risk appetite has led to a tightening of retail lending standards, contributing to improved asset quality [2][6]. Valuation and Dividends - The expected dividend payout ratio for mid-2025 is 32.4%, an increase of 5 percentage points from the previous year, with an expected dividend yield of 4.7% [2][6]. - The current price-to-book (PB) ratio is 0.74x, indicating potential value for investors [2][6].