On October 12, shrugging off market volatility, banking stocks climbed steadily. Bank ETF Huabao (512800) opened higher and moved up, with its underlying index surging 2.27%, refreshing its high for the year. All 42 A-share banking stocks closed higher, with Chongqing Rural Commercial Bank and Bank of Chongqing rising nearly 5%, while China Merchants Bank, Agricultural Bank of China, China Construction Bank, and China CITIC Bank led the gains. Industrial and Commercial Bank of China, China Construction Bank, Bank of China, China CITIC Bank, and Bank of Hangzhou all hit record highs together. Combining sector news and various viewpoints, the strong performance of banks appears to be the result of multiple catalysts resonating together: fundamentals, dividend value, policy, and capital flows.
First, stabilizing and improving fundamentals provide a solid foundation for bank valuation recovery. Interim reports show that more than 80% of the 42 listed A-share banks achieved positive growth in both revenue and net profit, marking a notable broadening of earnings recovery. The industry's overall net interest margin saw its first rise in four years, with nearly half of banks seeing their net interest margins bottom out and recover.
Second, the fourth quarter will see a concentrated rollout of interim dividends from banks. So far, 21 listed banks have disclosed their 2026 interim dividend plans, with total proposed payouts exceeding 260 billion yuan. The cash dividend ratio of the six major banks was uniformly raised from 30% to 31%, exceeding market expectations. In an environment of declining risk-free interest rates, banks' "quasi-fixed-income" allocation value stands out.
On the policy front, favorable measures including mortgage interest subsidies, a cut in the relending rate for pledged supplementary lending, and the expansion of structural relending have been introduced intensively, supporting credit expansion and bringing marginal improvement to banks' operating environment. Long-term capital continues to increase its allocation, also catalyzing the sector. Semi-annual report data shows that insurance funds appeared among the top ten shareholders or top ten tradable shareholders of all six state-owned major banks, with China Construction Bank, Bank of China, Industrial and Commercial Bank of China, and Postal Savings Bank of China receiving substantial increases from insurance capital in the second quarter. Guosen Securities pointed out that under a low interest rate environment, high-dividend banks possess long-term allocation value. In terms of win rate, stabilizing profits solidify the foundation for dividends, and low interest rates highlight dividend value; in terms of odds, the core focus is on macroeconomic policy expectations. If policy drives upward earnings revisions, a "Davis double play" could emerge. For core holdings, priority should be given to banks with stable dividends, solid asset quality, and attractive dividend yields.
Riding the Trend, Balancing Offense and Defense! Bank ETF Huabao (512800) passively tracks the CSI Bank Index, with constituent stocks encompassing all 42 listed A-share banks. Its top ten weighted stocks gather large-cap leaders such as China Merchants Bank, Agricultural Bank of China, and Bank of Communications, and also cover growth-oriented joint-stock banks and urban and rural commercial banks such as Industrial Bank, Bank of Jiangsu, and Shanghai Pudong Development Bank, making it an efficient investment tool for tracking the overall performance of the banking sector. Off-market investors may consider the feeder fund (Class A: 240019; Class C: 006697).
Data source: Shanghai and Shenzhen stock exchanges, etc. Institutional viewpoint source: Guosen Securities 261012 "Banking Sector Fourth Quarter Investment Strategy: Dividends as the Base, Positioning for Earnings Upgrade Expectations." ETF fee-related notes: When investors subscribe to or redeem fund shares, the subscription and redemption agent may charge a commission of no more than 0.5%, which includes related fees charged by the stock exchange and registration institution. Feeder fund fee-related notes: The subscription fee (front-end) for Huabao CSI Bank ETF Feeder Fund (Class A) is 1,000 yuan per transaction when the subscription amount is 2 million yuan (inclusive) or more, 0.6% when the amount is 1 million yuan (inclusive) to 2 million yuan, and 1% when below 1 million yuan; the redemption fee is 1.5% when held for fewer than 7 days, 0.5% when held for 7 days (inclusive) to 180 days, 0.25% when held for 180 days (inclusive) to 1 year, and 0% when held for 1 year (inclusive) or more; no sales service fee is charged. Huabao CSI Bank ETF Feeder Fund (Class C) does not charge a subscription fee; the redemption fee is 1.5% when held for fewer than 7 days, 0.5% when held for 7 days (inclusive) to 30 days, and 0% when held for 30 days (inclusive) or more; the sales service fee is 0.2%. Risk disclosure: Bank ETF Huabao (512800) passively tracks the CSI Bank Index. The index base date is December 31, 2004, and it was launched on July 15, 2013. The CSI Bank Index's returns over the past five complete fiscal years were: 2025, 6.79%; 2024, 34.71%; 2023, -7.27%; 2022, -8.78%; 2021, -4.41%; volatility over the past five complete fiscal years was: 2025, 14.03%; 2024, 19.34%; 2023, 13.41%; 2022, 18.56%; 2021, 18.63%. The constituent stocks of the index are adjusted from time to time according to the index compilation rules, and past performance does not predict future performance. The index constituent stocks mentioned in this article are for display purposes only. Individual stock descriptions do not constitute investment advice in any form, nor do they represent the holdings or trading activities of any fund under the manager. The risk rating of this fund as assessed by the fund manager is R3-Medium Risk, suitable for investors with a balanced profile (C3) and above. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors must be responsible for any investment decisions they make independently. In addition, any views, analyses, and forecasts in this article do not constitute investment advice in any form to readers, nor shall they bear any responsibility for direct or indirect losses caused by the use of the content herein. Fund investment involves risks, past performance of a fund does not represent its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Fund investment requires caution. MACD golden cross signals have formed, and these stocks are performing well!
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