Core Viewpoint - The performance of listed banks in Q1-Q3 2025 slightly exceeded expectations, with revenue growth remaining stable and profit growth showing a slight increase [1][2] Performance Overview - Listed banks' revenue growth year-on-year is stable at 0.9%, while profit growth has increased to 1.6%. The weighted revenue and net profit attributable to shareholders increased by 0.9% and 1.6% respectively, with a slight slowdown in growth compared to H1 2025 [2][3] - Large banks showed a comprehensive performance turnaround, while the performance of small and medium-sized banks was mixed. Agricultural Bank, Bank of Communications, China Bank, and Industrial Bank performed better than expected, while China Construction Bank experienced a significant decline in quarterly interest margin [2][3] Driving Factors - Asset scale growth for listed banks in Q1-Q3 2025 was 9.3%, a slowdown of 0.3 percentage points compared to H1 2025. Loan growth decreased while financial investment growth increased [3] - The interest margin stabilized in Q3 2025, with a slight increase of 0.3 basis points to 1.37%. The asset yield decreased by 7 basis points to 2.81%, while the cost of liabilities decreased by 8 basis points to 1.56% [4] Non-Interest Income - Non-interest income for listed banks grew by 5.0% year-on-year, but the growth rate decreased by 2.0 percentage points compared to the previous quarter. Fee and commission income increased by 4.6% year-on-year, indicating some recovery in related business [5][6] - Bond trading income decreased by 0.6% year-on-year, with small and medium-sized banks experiencing a larger decline compared to state-owned banks [5][6] Asset Quality - The average non-performing loan (NPL) ratio remained stable at 1.23%, while the average attention rate increased by 2 basis points to 1.69%. The retail sector continues to face pressure, particularly in small and micro loans [7][8] - The number of banks announcing mid-term dividends has increased, with some banks raising their mid-term dividend rates compared to the previous year [9] Recommended Stocks - Recommended stocks include Shanghai Pudong Development Bank, Nanjing Bank, Shanghai Bank, Jiangsu Bank, Agricultural Bank, and Bank of Communications, with a focus on Qilu Bank and H-share large banks [9]

Core Viewpoint - The recent wave of cleaning dormant accounts in the banking sector is broader than before, involving various account types and driven by both regulatory requirements and internal motivations to enhance customer engagement and operational efficiency [2][9]. Group 1: Overview of Dormant Account Cleaning - Nanjing Bank announced a cleaning initiative targeting dormant accounts, including those of businesses with canceled registrations and non-verified personal accounts [1]. - Since October, over 30 banks have initiated similar cleaning announcements, with a focus on credit cards, electronic accounts, and corporate accounts [2]. - The National Financial Regulatory Administration has launched a year-long initiative to address dormant accounts, despite a general increase in the number of bank accounts and cards in recent years [2]. Group 2: Motivations Behind Cleaning Dormant Accounts - Banks are increasingly viewing the cleaning of dormant accounts as an opportunity to activate these accounts and enhance their value, rather than merely a regulatory obligation [3][9]. - The pressure from customer attrition and the need for effective performance assessments have led banks to adopt a more proactive approach to managing inactive accounts [10]. - The shift in key performance indicators (KPIs) from merely counting accounts to focusing on active and profitable customers reflects a broader trend in the banking industry [10]. Group 3: Impact on Retail Banking - The retail banking sector has faced challenges, with some banks reporting declines in personal loan balances and profitability in retail financial services [6]. - The cleaning of dormant accounts is seen as a way to improve the accuracy of data used in AI models for risk management and marketing, thereby enhancing overall operational effectiveness [12][13]. - The presence of a significant number of dormant accounts (up to one-third of total accounts) indicates both the potential for improvement and the challenges in executing these cleaning initiatives [14].

Core Viewpoint - The financial report of Changshu Bank for the first half of 2025 shows a mixed performance, with double-digit growth in revenue and net profit, but significant challenges in net interest income, investment reliance, and weak retail business [1][2][4]. Financial Performance - Changshu Bank achieved an operating income of 6.062 billion, a year-on-year increase of 10.10%, and a net profit of 1.969 billion, up 13.51% compared to the previous year [2][4]. - The growth rate of net profit has declined from 25.4% in 2022 to 13.51% in the first half of 2025, indicating a shift away from a high-growth phase [4]. - The bank's stock price has underperformed compared to the banking sector, with a 52.72% increase since 2024, lagging behind leading agricultural commercial banks [4]. Interest Income and Investment - Net interest income for the bank was 4.64 billion, with a minimal growth of 0.83%, significantly down from 13.75% in 2022 [4][6]. - Interest income decreased by 2.52% to 8.005 billion, while interest expenses fell by 6.8% to 3.366 billion, indicating a challenging interest margin environment [6]. - Investment income rose by 30.94% to 1.201 billion, marking a continuation of strong performance in the bond market [6]. Retail Business Challenges - Retail loans amounted to 1.363 trillion, accounting for 54.2% of total loans, but growth has slowed to just 1.01% compared to the end of 2024 [12][15]. - The yield on retail loans has decreased from 7.34% in 2021 to 6.59% in the first half of 2025, contributing to a decline in net interest income from retail loans [14]. - The non-performing loan (NPL) ratio for personal loans has increased to 1.02%, indicating rising credit risks in the retail segment [14][15]. Strategic Developments - Changshu Bank is pursuing a strategy of mergers and acquisitions, particularly through its investment management village bank license, to enhance growth [7][8]. - The bank's revenue from branches outside Changshu has been declining, with a drop from 28.5% growth in 2021 to just 2.62% in 2024 [9][11]. - Management expenses have risen significantly, from 3.169 billion in 2021 to 3.994 billion in 2024, indicating increased operational costs associated with expansion [11].