As of the close on August 20, Bank of Jiangsu hit a record high of 12.10 yuan per share. This year, the share price trends of banking stocks on the A-share market have shown significant divergence, with several city commercial banks delivering notably strong performances. According to Wind data, as of the August 20 close, the index for large state-owned banks (Shenwan) fell 1.86% year-to-date; the joint-stock bank index (Shenwan) dropped 9.99%; the rural commercial bank index (Shenwan) declined 3.51%; while the city commercial bank index (Shenwan) rose 7.51%.

By the close on August 20, among the top ten banking stocks with the highest cumulative gains this year, seven were city commercial banks. Among them, four listed banks posted cumulative gains exceeding 20%: Bank of Qingdao, Bank of Ningbo, Bank of Jiangsu, and Bank of Chengdu. In addition, Qilu Bank, Bank of Hangzhou, and Chongqing Rural Commercial Bank each recorded cumulative gains of more than 10%. In contrast, most listed joint-stock banks showed weaker performance, with only China CITIC Bank, Hua Xia Bank, Ping An Bank, and China Zheshang Bank posting gains, while the rest declined.

Liu Youhua, research director at Shenzhen Qianhai PaiPaiwang Fund Sales Co., Ltd., said in an interview that, on one hand, different banks are at different stages of earnings recovery. In the first half of this year, city commercial banks led the industry in net profit growth, while some joint-stock banks saw pressure on net profits, and these fundamental differences were directly reflected in share price performance. "On the other hand, long-term capital such as insurance funds has continued to flow into the banking sector, but these funds are not buying blindly; they are precisely targeting high-dividend state-owned large banks and high-quality regional city commercial banks with strong growth potential. Furthermore, regional economic conditions and asset quality determine valuations. High-quality city commercial banks in economically active regions such as the Yangtze River Delta and Chengdu-Chongqing area have attracted capital inflows thanks to flexible asset-liability management, robust credit expansion momentum, and relatively stable asset quality."

According to key regulatory indicators for the banking industry in the second quarter of 2026 released by the National Financial Regulatory Administration, in the first half of this year, net profits for large commercial banks, joint-stock commercial banks, city commercial banks, and rural commercial banks were 643.6 billion yuan, 259.1 billion yuan, 190 billion yuan, and 123.2 billion yuan, respectively. Compared with the same period in 2025, growth rates were 1.58%, -3.43%, 7.41%, and -12.56%, respectively.

The standout share price performance of some city commercial banks is supported by solid earnings. Recently, Bank of Nanjing, Bank of Jiangsu, and Bank of Ningbo released their 2026 semi-annual reports, all showing year-on-year growth in both operating revenue and net profit attributable to shareholders. Specifically, Bank of Nanjing achieved operating revenue of 31.596 billion yuan, up 10.94% year-on-year, with net profit attributable to shareholders reaching 13.65 billion yuan, up 8.17%. Bank of Jiangsu recorded operating revenue and net profit attributable to shareholders of 48.952 billion yuan and 21.876 billion yuan, up 9.11% and 8.09% year-on-year, respectively. Bank of Ningbo posted double-digit growth in both metrics, with operating revenue up 11.54% to 41.45 billion yuan and net profit attributable to shareholders up 12.12% to 16.562 billion yuan. These three city commercial banks maintained steady asset scale growth while keeping asset quality stable, with non-performing loan ratios all below 1% as of the end of June.

Yang Delong, chief economist and fund manager at Qianhai Open Source Fund, believes that the overall price-to-book ratio of the banking sector remains at historically low levels, leaving significant room for valuation recovery among quality targets. Liu Youhua added that from a fundamental perspective, the profit recovery trend for commercial banks has been established in the first half of this year. Thanks to the maturity and repricing of high-yield time deposits and effective liability cost reduction, the net interest margin of commercial banks rebounded quarter-on-quarter in Q2. Additionally, with dividend yields in the banking sector significantly exceeding long-term government bond yields, banks remain a core allocation choice for long-term capital in the current market environment.