The proportion of A-share capital is less than 10%. On May 26, the A-share price of China Construction Bank (CCB) continued to set new historical highs. At the close, CCB rose 1.68%, with its share price reaching 10.31 yuan and a total market capitalization of approximately 2.05 trillion yuan. Since late May, accelerated sector rotation has once again attracted capital favor to previously sluggish bank stocks, but performance within the sector remains divergent. As of Tuesday's close, only three bank stocks have seen price increases this month: Chongqing Bank (9.43%), China Construction Bank (3.62%), and Bank of China (2.78%). During the same period, China CITIC Bank, Bank of Nanjing, and Xiamen Bank were at the bottom with declines exceeding 8%. Looking at a longer timeframe, CCB is the only major state-owned bank with a year-to-date increase exceeding 10%. Other top performers are all regional city and rural commercial banks, while all joint-stock banks have declined. From an institutional perspective, this divergence reflects a reassessment of dimensions such as dividend yield, performance, and valuation against the backdrop of rising market risk appetite. Is it CCB's turn? CCB's recent stock performance easily brings to mind Agricultural Bank of China's performance last year. Looking back, CCB's current rally quietly began as early as early March this year, with its share price oscillating upwards from a low of 8.52 yuan to above 10 yuan, frequently setting new highs. During Tuesday's session, the bank's share price once touched a high of 10.36 yuan. In this context, the market inevitably focuses on the market capitalization competition among the major banks. However, industry insiders have previously pointed out that due to significant differences in the share capital distribution of A-shares and H-shares among major banks, comparisons along this dimension have limited reference value. As of Tuesday's close, Industrial and Commercial Bank of China (ICBC) maintained its position as the "king of market capitalization" with a total market cap of 2.45 trillion yuan. Agricultural Bank of China ranked second with 2.20 trillion yuan, and China Construction Bank followed in third place among major banks with 2.05 trillion yuan. However, compared to the beginning of the year, only CCB and Bank of China among the major banks have recorded share price increases. In this context, CCB has also become the state-owned major bank with the largest market capitalization increase this year, exceeding 180 billion yuan. During the same period, the total market capitalization of ICBC and Agricultural Bank of China shrank by approximately 182.4 billion yuan and 408.1 billion yuan, respectively. But upon closer examination, CCB's main market capitalization increment comes from its H-shares. Wind data shows that CCB's H-shares account for nearly 92% of its total share capital, while A-shares account for only about 8%. Among the other five major banks, Agricultural Bank of China has the highest A-share proportion, exceeding 91%; Postal Savings Bank of China's A-share proportion is above 83%; ICBC and Bank of China have A-share proportions around 76% and 74%, respectively; Bank of Communications' A-share proportion exceeds 60%. In terms of H-share performance, Bank of China, CCB, Bank of Communications, and ICBC have all achieved double-digit share price increases this year. Among them, Bank of China's H-shares rose 16.59%, and CCB's H-shares rose 13.52%. Analyzed this way, as one of only two state-owned major banks to achieve A-share price increases this year, only about 21.8 billion yuan of CCB's over 180 billion yuan market cap increment comes from A-shares. In contrast, of Bank of China's over 85 billion yuan market cap increment, about 42.9 billion yuan comes from A-share market cap increase, accounting for over half. Calculated based on the latest closing price on the 26th, CCB's A-share market capitalization is only 218.4 billion yuan, the smallest among major banks. Agricultural Bank of China remains the "A-share market cap king" with an A-share market cap around 2.05 trillion yuan, shrinking by about 402.2 billion yuan since the beginning of the year. During the same period, ICBC's A-share market cap is 1.94 trillion yuan, shrinking by 202.2 billion yuan since the beginning of the year; the A-share market caps of Bank of China, Postal Savings Bank of China, and Bank of Communications are 1.41 trillion yuan, 500.2 billion yuan, and 352.1 billion yuan, respectively. Against the backdrop of divergent A-share and H-share performance, the "cost-effectiveness" of major banks' A-shares and H-shares has also changed. Currently, CCB's A-share premium rate (35.5%) ranks first among major banks, nearly 2 percentage points higher than at the beginning of the year. Among other major banks, except for Postal Savings Bank of China whose A-share premium rate is basically flat compared to the beginning of the year, the A-share premium rates of the other four major banks have declined significantly. Among them, Bank of Communications' A-share premium rate has dropped from over 24% at the beginning of the year to below 6%. From a fundamental perspective, the first-quarter financial reports of major banks all released strong recovery signals. In terms of revenue, CCB and Agricultural Bank of China were the first to return to double-digit growth in Q1 revenue, with increases of 11.15% and 10.49%, respectively. In terms of profitability, the net profit attributable to parent company owners of the five major banks grew by over 3%, with Agricultural Bank of China, Bank of China, and CCB leading with growth rates of 4.52%, 4.17%, and 3.53%, respectively. What factors are driving this? Apart from CCB's outstanding performance as a state-owned major bank, another prominent feature of bank stocks this year is structural differentiation—several regional banks have shone brightly against the trend, while joint-stock banks have been universally sluggish. Year-to-date, the CSI Bank Index has cumulatively declined 7.63%, while the broader market rose 4.45%, and popular sectors like semiconductors and hardware equipment rose nearly 60% and 46%, respectively. Among bank stocks, 12 have seen overall share price increases. Apart from CCB and Bank of China, the rest are regional banks. Among them, Bank of Qingdao leads far ahead with a 25.45% increase, while Bank of Chengdu and Bank of Ningbo rose 14.52% and 10.11%, respectively. In comparison, all joint-stock banks have declined year-to-date. Among them, Shanghai Pudong Development Bank has fallen the hardest, down over 25% since the beginning of the year, ranking last among the 42 listed banks; China Industrial Bank has also fallen nearly 13% this year. Last year, they rose 22.42% and 12.75%, respectively. China Minsheng Bank, China Everbright Bank, and China Merchants Bank have all fallen over 8% this year. After the previous sustained correction, signs of recovery in the banking sector have strengthened since late May. Among the nine banks that recorded gains, three are state-owned major banks: CCB, Bank of China, and Postal Savings Bank of China; three are joint-stock banks: Shanghai Pudong Development Bank, China Industrial Bank, and Huaxia Bank; and the remaining three are regional banks: Chongqing Bank, Qilu Bank, and Bank of Changsha. "Market style influences the relative returns of bank stocks, but with the fundamental recovery channel, industry valuation improvement is anticipated. The sector possesses strong certainty for absolute return space," a recent CITIC Securities report pointed out. This year, concerns such as weak credit demand, whether net interest margins can stabilize, and whether high dividends will continue have interfered with market choices. Central bank data shows that after July last year, RMB-denominated new loans once again experienced a single-month negative growth in April this year. A Guolian Minsheng Securities report, based on calculations from listed bank data, estimates that under the perspective of RMB credit balance reaching 271.9 trillion yuan by the end of 2025, the total industry loan maturity amount in 2026 is expected to be 104.1 trillion yuan, 9.1 trillion yuan more than the previous year. "As the stock of loans grows larger, the monthly or even daily maturity amount also increases, so it's not surprising that it exceeds new loan issuance. Therefore, it is normal to see negative credit growth in certain months or several months in the future," said Wang Xianshuang, Chief Banking Analyst at Guolian Minsheng Securities. The aforementioned report shows that among the 42 A-share listed banks, regional banks face significantly greater loan pressure. It is estimated that the loan maturity scale of some city and rural commercial banks in 2026 will exceed 60% of their loan balance at the beginning of the year. In this context, light-capital transformation and diversifying income sources have become key to industry development. Xu Xuming, Partner in Charge of High-Growth Markets for Financial Services in Greater China at EY, stated that currently, the overall proportion of non-interest income in bank revenue remains relatively low, and light-capital transformation still faces significant pressure. Different banks face greater tests in developing differentiated strategies. From a dividend perspective, the market is currently concerned about whether the banking industry will further increase its dividend payout ratio. On the other hand, there is concern about the constraint on dividends from the pressure of endogenous capital supplementation against the backdrop of profit pressure and structural deterioration of asset quality. A CICC report judges that in the future, state-owned major banks and high-quality small and medium-sized banks with solid provision levels are expected to achieve steady growth in dividends and profits, possessing high-dividend investment value. Based on the latest closing prices, the median dividend yield of A-share listed banks is currently above 4.4%, with 13 banks having dividend yields exceeding 5%, still offering an advantage over bank deposit rates and the annualized returns of general wealth management products. During the same period, the median price-to-book ratio of various banks is less than 0.55%. (Note: The calculation method for total market capitalization in the text is: A-share closing price * total A-shares + B-share closing price * total B-shares * RMB exchange rate + H-share closing price * total H-shares * RMB exchange rate + overseas listed share closing price * total overseas listed shares * RMB exchange rate; the calculation method for A-share market capitalization is: A-share closing price × total A-share capital.)
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