September has kicked off with a heated rally in the banking sector. Shares of Bank of China, China Construction Bank, ICBC, China CITIC Bank, Bank of Chengdu, Bank of Jiangsu, and Bank of Qingdao all surged to record intraday highs simultaneously. Meanwhile, Postal Savings Bank of China, Jiangyin Bank, Bank of Xi'an, and China Minsheng Bank led the gains. The benchmark index tracked by the Bank ETF Huabao (512800) climbed another 1.88% after rising 1.67% the previous day, reaching its highest level in over seven months since January 14, 2026.
The interim reports from listed banks have sent a positive signal, with the net interest margin recording its first quarter-on-quarter positive growth in over four years, driving a continued recovery in earnings growth. Among them, the six major state-owned banks collectively generated operating revenue of 2,004.987 billion yuan in the first half of the year, with net profit attributable to shareholders totaling 712.598 billion yuan, an increase of nearly 30.1 billion yuan year-on-year.
Another highlight from the interim reports is that the major state-owned banks have uniformly increased their dividend payout ratios by 1 percentage point to 31%, marking the first such increase since 2015 and carrying strong symbolic significance. Data shows that the six major banks plan to distribute interim dividends totaling approximately 220.989 billion yuan, an increase of 16.332 billion yuan, or 7.98%, from the previous year.
Moreover, policy tailwinds are expected to generate new growth momentum for banks. The Ministry of Housing and Urban-Rural Development and four other ministries recently rolled out a series of new real estate policies, including extending the maximum term for personal housing loans to 40 years, accompanied by new rules on lending procedures, repayment methods, and risk controls. CITIC Securities believes these policies will help adapt the real estate credit system to the transformation of high-quality development in the sector, anticipating incremental room for banks' real estate loan growth and a highly certain improvement in asset quality.
Regarding the logic behind the banking sector's rally, Feng Chencheng, fund manager of the Bank ETF Huabao (512800), noted that in the short term, low-valuation stocks stand to benefit from the dividend increase logic. Currently, the PB valuations of leading rural commercial banks are around 0.8 to 0.9 times, and given ROE levels close to 15%, there appears to be further room for valuation recovery. Major state-owned banks, on the other hand, benefit from their quasi-bond allocation attributes.
Looking ahead, Feng expects the banking sector's revenue to continue improving in the second half of the year. Additionally, with the substantial alleviation of selling pressure on bank stocks and the market's risk appetite converging alongside style rebalancing, the banking sector is well-positioned to outperform the broader market.
Riding the momentum with both offensive and defensive capabilities! The Bank ETF Huabao (512800) and its feeder funds (Class A: 240019; Class C: 006697) passively track the CSI Bank Index, which includes all 42 listed banks on the A-share market. Its top ten heavyweight stocks feature major large-cap leaders such as China Merchants Bank, Agricultural Bank of China, and Bank of Communications, while also covering growth-oriented joint-stock banks, city commercial banks, and rural commercial banks like Industrial Bank, Bank of Jiangsu, and Shanghai Pudong Development Bank, making it an efficient investment tool for tracking the overall banking sector.
Data sources: Shanghai and Shenzhen stock exchanges, among others. Institutional viewpoint source: CITIC Securities, August 26, 2026, "Banks | Revaluation of Large Banks from a Global Perspective."
ETF fee disclosure: When investors subscribe for or redeem fund shares, the agency handling such transactions may charge a commission of up to 0.5%, which includes fees collected by the stock exchanges and registration institutions. Feeder fund fee disclosure: For the Huabao CSI Bank ETF Feeder Fund (Class A), the subscription fee (front-end) is 1,000 yuan per transaction for amounts of 2 million yuan (inclusive) and above, 0.6% for amounts between 1 million yuan (inclusive) and 2 million yuan, and 1% for amounts below 1 million yuan. The redemption fee is 1.5% for holding periods of less than 7 days, 0.5% for holding periods of 7 days (inclusive) to 180 days, 0.25% for holding periods of 180 days (inclusive) to 1 year, and 0% for holding periods of 1 year (inclusive) or more. No sales service fee is charged for Class A shares. For the Huabao CSI Bank ETF Feeder Fund (Class C), no subscription fee is charged, and the redemption fee is 1.5% for holding periods of less than 7 days, 0.5% for holding periods of 7 days (inclusive) to 30 days, and 0% for holding periods of 30 days (inclusive) or more. The sales service fee is 0.2%.
Risk disclosure: The Bank ETF Huabao (512800) passively tracks the CSI Bank Index. The index's base date is December 31, 2004, and it was released on July 15, 2013. The CSI Bank Index's returns over the past five full years were: 6.79% in 2025, 34.71% in 2024, -7.27% in 2023, -8.78% in 2022, and -4.41% in 2021. Its volatility over the past five full years was 14.03% in 2025, 19.34% in 2024, 13.41% in 2023, 18.56% in 2022, and 18.63% in 2021. The index constituents are adjusted periodically according to its compilation rules, and past performance does not indicate future results. The index constituents mentioned in this article are for illustration purposes only, and any description of individual stocks does not constitute any form of investment advice, nor does it represent the holdings or trading activities of any fund under the manager's umbrella. The fund manager assesses the risk level of this fund as R3-medium risk, suitable for balanced (C3) and above investors. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expressions) is for reference only, and investors must be responsible for any investment decisions they make independently. Furthermore, any views, analyses, and forecasts in this article do not constitute any form of investment advice to readers, and no liability is assumed for any direct or indirect losses arising from the use of the content herein. Fund investment carries risks. A fund's past performance does not represent its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Investors should invest in funds with caution.
Comments