Chinese banking stocks rose collectively. As of press time, CQRC BANK (03618) gained 4.15% to HK$6.03; ABC (01288) rose 3.27% to HK$5.37; PSBC (01658) increased 2.86% to HK$5.75; CCB (00939) climbed 2.25% to HK$7.72.

On the news front, listed banks showed notable performance recovery in the first half of the year. Analysis indicates that listed banks' overall operating revenue and net profit attributable to shareholders grew from -1.7% and -1.2% year-on-year in Q1 to 1.0% and 0.8% respectively in H1, both turning from negative to positive growth.

Management teams of multiple listed banks addressed net interest margin issues during their 2025 interim results presentations. Industry insiders expect that net interest margins will continue to face some downward pressure, but the decline rate will gradually narrow. Anti-involution measures in the banking industry should help alleviate downward pressure on banks' asset returns.

China Galaxy Securities stated that the "asset shortage" phenomenon is expected to persist in the low interest rate environment, with insurance companies having long-term allocation needs for stable high-yield assets. The current banking sector dividend yield of approximately 4% remains among the industry's highest, with H-shares showing even more significant dividend yields. Given banks' stable dividends, low valuations, and relatively small performance volatility, they are expected to continue attracting insurance fund inflows.

Additionally, considering that small and medium-sized insurance companies will implement new accounting standards starting January 2026, incremental funding for the banking sector is expected to expand further.