Core Viewpoint - The acceleration of the "wealth transformation" of deposits is observed due to declining deposit interest rates and a recovering capital market, with a significant shift of household deposits towards low-risk financial products [1][2] Group 1: Liability Side - The "wealth transformation" of deposits is accelerating, but there has not been a large-scale shift of household time deposits into the stock market [1] - In August, large banks experienced a decrease of CNY 169.5 billion in savings demand deposits, while time deposits only increased by CNY 159.7 billion, both weaker than seasonal trends [1] - Non-bank deposits continued to grow, with an increase of CNY 591.9 billion in August, reflecting a shift towards higher-yield short-term financial products [1] Group 2: Asset Side - The credit rhythm remains slow, with large banks showing a trend of "weaker credit attributes and stronger funding attributes" [2] - Large banks are supporting credit growth through bill discounting, while bond investments increased by 19.5% year-on-year in August [2] - Smaller banks are experiencing weak credit growth, potentially due to poor demand and a strategic shift to reduce low-priced loans or high-risk customer exposure [2] Group 3: Future Banking Assets and Liabilities - The average cost of liabilities for listed banks is expected to decline to 1.68% by H1 2025, alleviating the carry issue in asset allocation [3] - The wealth transformation of deposits is leading to decreased stability in bank liabilities, necessitating richer channels for medium- to long-term monetary supply [3] - The central bank may need to cooperate with fiscal bond issuance to manage bond yield levels and maintain suitable financing costs [3] Group 4: Investment Recommendations - The trend of asset anti-involution and wealth transformation of deposits is likely to favor large comprehensive or small specialized banks [4] - The banking sector continues to attract stable capital due to its strong dividend attributes, with various funds driving stable capital inflows [4] - Recommended stocks include those benefiting from low allocation of blue-chip stocks and stable dividends, such as China Merchants Bank and Agricultural Bank of China [4]