Investment Rating - The investment rating for the banking industry is "Positive" and is maintained [10] Core Insights - The A-share risk appetite has temporarily rebounded, with the banking index lagging behind, while H-shares of major banks have outperformed. The proportion of southbound holdings has increased, indicating a sustained interest in H-shares due to their undervaluation and high dividend characteristics [2][9] - The central bank's report for Q3 2025 indicates a negative growth rate for real estate loans, with a year-on-year decline of 0.1%. This marks the first negative growth in real estate development loans since Q2 2022, primarily driven by weak sales [6][7][39] - The performance of banks that have disclosed their Q3 results shows an upward trend in profit growth, with interest income rebounding. Chongqing Bank reported a surprising growth of over 10% in the first three quarters [8][49] Summary by Sections Banking Index Performance - The banking index rose by 1.3% this week, underperforming compared to the CSI 300 and ChiNext indices, which saw excess returns of -1.9% and -6.7% respectively. Agricultural Bank of China H-shares led the gains with a 7.9% increase, while the A/H share growth for Agricultural Bank reached 56.4% and 43.6% respectively [2][9][18] Loan Trends - The central bank's Q3 report shows that the proportion of corporate loans has increased, while industrial medium- and long-term loan growth has declined to 9.7%, down 1.5 percentage points from the previous quarter. Real estate loans have turned negative, with development loans down 1.3% year-on-year, reflecting weak sales [6][38][39] - Personal housing loans also saw a year-on-year decline of 0.3%, with a net decrease of 292.1 billion yuan in Q3, indicating ongoing weakness in the housing market [7][39] Bank Earnings Reports - As of October 24, banks such as Huaxia Bank, Ping An Bank, and Chongqing Bank have reported their Q3 earnings. Chongqing Bank's performance exceeded expectations with over 10% growth, while Huaxia and Ping An faced challenges due to non-interest income declines [8][49][51] Market Dynamics - The market dynamics indicate a recovery in trading volumes and turnover rates for bank stocks, with a notable increase in the turnover rate for joint-stock banks. The overall trading environment for bank stocks is expected to improve as previous funding pressures ease [29][30]

Core Viewpoint - The People's Bank of China reported a decrease in new RMB loans for the first three quarters of 2025, indicating a slowdown in credit growth and highlighting the ongoing challenges in the real estate sector and consumer lending [6]. Group 1: Corporate Loans - Corporate loans continue to act as a stabilizing force, with a year-on-year growth of 8.2% as of Q3, despite a slight decline from the previous quarter [7] - New corporate loans in Q3 amounted to 1.83 trillion RMB, accounting for 100% of all new loans, with significant contributions from manufacturing, technology, and green sectors [7] - The manufacturing sector maintains a high level of loan issuance, while technology loans continue to grow at double-digit rates, and green loans remain strong, particularly in infrastructure upgrades and clean energy [7] Group 2: Real Estate Loans - Real estate loans experienced a negative growth of 0.1% year-on-year, with a total balance of 52.8 trillion RMB as of Q3, reflecting a decline of 800 billion RMB in the first three quarters [8] - The Q3 single-quarter real estate loan reduction was 500 billion RMB, indicating increased early repayment pressures [8] - The outlook for the real estate market remains uncertain, with potential for further declines in mortgage loans unless supportive policies are implemented [8] Group 3: Household Loans - Household loans grew by 2.3% year-on-year as of Q3, with a total increase of 1.1 trillion RMB in the first three quarters, but a decline of 700 billion RMB in Q3 alone [9] - Business loans are a key driver of credit expansion for households, while non-housing consumer loans are under pressure [9] - The impact of fiscal incentives for consumer and business loans remains uncertain, with seasonal factors influencing retail loan issuance in September [9]