Core Viewpoint - The competition between Agricultural Bank of China (ABC) and Industrial and Commercial Bank of China (ICBC) for market capitalization has become a significant event in the banking industry, with ABC briefly surpassing ICBC to become the largest bank by market value [2][3][6]. Market Capitalization Dynamics - On September 4, 2023, ABC's total market capitalization (A+H) exceeded 2.55 trillion yuan, surpassing ICBC [3]. - As of September 11, 2023, ICBC regained its position as the market leader, increasing its lead to 18 billion yuan [4]. - By mid-2025, ICBC is projected to maintain its position as the largest bank by total assets at 52.32 trillion yuan, while ABC ranks second [5]. Historical Context - A decade ago, ABC's market capitalization was less than 70% of ICBC's, highlighting the significant growth of ABC in recent years [6]. - From 2015 to 2017, the rapid expansion of ICBC's market capitalization was driven by favorable policies and economic conditions, while ABC's growth lagged behind [11]. - The period from 2018 to 2019 saw fluctuations in the market capitalizations of the four major banks due to regulatory changes and economic uncertainties [12]. Recent Performance - In 2023, the banking sector began to recover, with ABC's market capitalization increasing by 25%, significantly outpacing ICBC and other peers [14]. - As of September 8, 2025, ABC's year-to-date growth approached 35% [15]. Financial Metrics Comparison - Between 2022 and mid-2025, ABC's asset scale grew by nearly 40%, the highest among the four major banks, while its net interest margin decreased by 0.58 percentage points [20][21]. - ABC's non-performing loan ratio improved by 0.09 percentage points, marking the best optimization among its peers [21]. Strategic Focus - ABC's focus on rural finance has provided a buffer against economic downturns, with nearly 49.1% of its revenue coming from county-level operations by 2024 [26]. - The bank's extensive network of 23,000 county-level branches positions it uniquely to capture growth in rural markets [26]. Economic Environment Impact - The resilience of county markets during economic downturns has benefited ABC, as local residents prioritize savings and exhibit strong repayment willingness [27]. - The emphasis on rural revitalization in national policy has further supported ABC's strategic positioning [29]. Competitive Landscape - While both ABC and ICBC target similar regions for credit deployment, their funding and profit sources differ significantly, with ABC focusing more on rural and less urbanized areas [31][32]. - ICBC's core operations are more concentrated in economically developed regions, which may expose it to greater risks during economic slowdowns [38]. Future Outlook - The narrowing gap in market capitalization between ABC and ICBC does not indicate a decline in ICBC's core business performance, as it continues to excel in key sectors [38]. - The potential for recovery in urban economies could provide ICBC with opportunities for performance and valuation rebound [41].

Core Viewpoint - Agricultural Bank of China has surpassed Industrial and Commercial Bank of China in terms of circulating market value, marking a significant milestone in its market performance [2][3][4]. Market Performance - On August 6, Agricultural Bank's stock closed at 6.62 CNY per share, achieving a circulating market value of 2.11 trillion CNY, surpassing ICBC for the first time [3]. - On August 7, Agricultural Bank's stock rose to 6.71 CNY per share, with a market value of 2.142 trillion CNY, while ICBC's market value stood at 2.114 trillion CNY [4]. - Despite the circulating market value lead, ICBC maintains a total market value of 2.794 trillion CNY compared to Agricultural Bank's 2.348 trillion CNY [3][4]. Financial Performance - Agricultural Bank reported a revenue of 186.67 billion CNY for Q1 2025, a year-on-year increase of 0.35%, and a net profit of 71.93 billion CNY, up 2.2% [5]. - The bank's non-performing loan ratio was 1.28%, a slight decrease from the beginning of the year, indicating strong asset quality [5][10]. Market Dynamics - Analysts attribute the rise in Agricultural Bank's market value to its higher circulating share ratio compared to other state-owned banks, allowing it to benefit more directly from market trends [4][6]. - The bank's strong dividend policy and stable performance have attracted long-term investors, contributing to its stock price increase [6][10]. Strategic Positioning - Agricultural Bank has a significant focus on rural finance, with a total of 10.58 trillion CNY in loans and advances in county areas, reflecting a growth of 7.37% [5][11]. - The bank's extensive network in rural areas positions it well to capitalize on the growth potential in the rural financial market, supported by national policies [11][12]. Capital Structure - The successful issuance of TLAC bonds totaling 500 billion CNY in August 2023 has enhanced Agricultural Bank's capital structure and risk resilience [12][13]. - The issuance of TLAC bonds reflects market confidence in the bank's operational prospects and supports its ongoing growth strategy [12].