On October 29, A-shares opened lower and drifted down, while banking stocks flexed their muscles again. Bank of Communications, ICBC, and China Construction Bank continued to hit record highs, and the combined A+H market capitalization of the four major banks — ICBC, Agricultural Bank of China, Bank of China, and China Construction Bank — surpassed the 10 trillion yuan mark during intraday trading, setting a new all-time record.
City and rural commercial banks showed notable elasticity. Bank Of Qingdao Co.,Ltd. (ASX: 002948) rarely surged more than 8%. Its third-quarter report showed that net profit attributable to shareholders rose 15.67%, with stable interest margins and continuously strengthened provisions. In addition, Bank of Chengdu, Qilu Bank, Bank of Nanjing, and Bank of Chongqing were among the top gainers.
Bank ETF Huabao (512800) moved unilaterally upward throughout the day, and its underlying index closed up 2% against the broader market, hitting a new stage high. Recently, the banking sector has shown strong momentum. Against the backdrop of unclear market stabilization signals, funds have firmly embraced banking assets with steady profits and high dividends.
So far, 12 listed banks have disclosed third-quarter reports, of which 10 achieved both revenue and net profit growth, accounting for over 80%. City and rural commercial banks generally demonstrated considerable profit growth momentum. Meanwhile, 21 listed banks that disclosed interim dividend plans for 2026 plan to distribute a total of over 260 billion yuan in cash. The six state-owned major banks unusually raised their interim dividend payout ratio to 31%, further strengthening their dividend attributes.
Currently, the sector's dividend yield is 4.66% (as of October 28, 2026, same below), exceeding the 10-year government bond yield by 304 basis points, and is expected to remain favored in a low-interest-rate environment. It is worth noting that despite having accumulated some gains, the banking sector's valuation remains at a relatively low level. All 42 listed banks in A-shares are trading below book value, and the sector's overall price-to-book ratio PB (LF) is only 0.71 times, below the median level of the 40.88th percentile since the index was launched.
In this regard, Huafu Securities believes that current bank stock valuations are not significantly overvalued compared to 2025. On one hand, the banking industry itself has relatively stable earnings growth attributes, driving the current bank index upward, and PB valuations are significantly lower than last year's high. On the other hand, dividend yields also have a comparative advantage over interest rates, and since August, bank stocks have only seen "structural gains," with overall valuations not high.
Looking ahead to the fourth quarter, threefold logic is expected to support the continued banking rally. Yangtze River Securities stated: First, the fourth quarter through early next year remains an important allocation window for dividend assets, and interim dividends are in progress. Second, mainstream banks' third-quarter results are stable and improving, with net interest margins stabilizing and full-year sustainability. Third, stable growth is highly certain, and the policy logic for maintaining banking system stability is solid.
Riding the trend, combining offense and defense! Bank ETF Huabao (512800) passively tracks the CSI Bank Index, with constituent stocks covering all 42 listed banks in A-shares. Its top ten weighted stocks gather large-cap leaders such as ICBC, Agricultural Bank of China, and Bank of Communications, and also cover growth-oriented joint-stock banks and city and rural commercial banks such as China Merchants Bank, Industrial Bank, and Bank of Jiangsu. It is an efficient investment tool for tracking the overall performance of the banking sector. Off-exchange investors can pay attention to the feeder fund (Class A: 240019; Class C: 006697).
Data source: Shanghai and Shenzhen Stock Exchanges, etc. Institutional views source: Huafu Securities 261025 "Are Bank Stocks Currently Overvalued?"; Yangtze River Securities 261025 "Dividend Bank Era Series Nineteen: Which Lagging Bank Stocks Have Room for Recovery?" ETF fee-related notes: When investors subscribe 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 stock exchanges and registration institutions. Feeder fund fee-related notes: Huabao CSI Bank ETF Feeder Fund (Class A) subscription fee (front-end) is 1,000 yuan per transaction for subscription amounts of 2 million yuan (inclusive) or more, 0.6% for 1 million yuan (inclusive) to 2 million yuan, and 1% for less than 1 million yuan; the redemption fee is 1.5% for holding periods of less than 7 days, 0.5% for 7 days (inclusive) to 180 days, 0.25% for 180 days (inclusive) to 1 year, and 0% 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% for holding periods of less than 7 days, 0.5% for 7 days (inclusive) to 30 days, and 0% 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, whose base date is December 31, 2004, and was published on July 15, 2013. The CSI Bank Index's returns over the past 5 full years were: 2025, 6.79%; 2024, 34.71%; 2023, -7.27%; 2022, -8.78%; 2021, -4.41%; volatility over the past 5 full years was: 2025, 14.03%; 2024, 19.34%; 2023, 13.41%; 2022, 18.56%; 2021, 18.63%. Index constituent composition is adjusted in due course 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 only, and individual stock descriptions do not constitute any form of investment advice, 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 balanced (C3) or above risk tolerance. 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 any form of investment advice to readers, nor shall they bear any direct or indirect liability for losses caused by the use of the content of this article. 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 fund performance. Fund investment requires caution. MACD golden cross signals have formed, and these stocks are rising well!
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