Heading into the last trading week of the Year of the Rabbit, the concept of high dividends remains the preferred choice in a safe-haven environment. In early trading on Monday (February 5), high-dividend heavyweight stocks were active against the market, and bank stocks were even more prominent. Among the 31 first-class industries in Shenwan, only the banking sector is red, and many ** are opening up.
Among them, China CITIC Bank once rose by more than 5%, Bank of Suzhou, Bank of China, China Construction Bank, Postal Savings Bank, Bank of Communications, Industrial and Commercial Bank of China, etc. followed suit. As of noon**, 21 of the 42 bank stocks were in the red, and China CITIC Bank rose 378%, Industrial and Commercial Bank of China rose 213%, Bank of Ningbo, Bank of Communications, Bank of China, China Construction Bank, Agricultural Bank of China, and China Merchants Bank all rose more than 1%. Among them, the share price of Agricultural Bank of China once again refreshed a record high.
On the same day, the three major A-share stock indexes fell continuously, all of which refreshed the lows of last Friday, among them, the Shanghai Composite Index fell more than 3% intraday and fell below 2,700 points again, hitting a new low in the year, the ChiNext Index and the Shenzhen Component Index once fell more than 4%, and more than 5,000 stocks in Shanghai and Shenzhen fell, and the 1,000-stock limit reappeared.
On the latest news, the central bank cut the deposit reserve ratio of financial institutions by 0 today5 percentage points, releasing about 1 trillion yuan of long-term funds. After this reduction, the weighted average reserve ratio of financial institutions is about 70%。According to the analysis of many institutions, the unexpected RRR cut will effectively alleviate the pressure on bank interest margins, expand the space for banks to support the real economy, and demonstrate the determination of the central bank to increase efforts to help the real economy rebound
Lin Yingqi, a banking analyst at CICC, said that the RRR cut aims to provide a more relaxed financial environment for banks to get off to a "good start" and ease the pressure on banks' liabilities, and is expected to increase banks' net interest margins by 1bp, contributing to revenue and profits9% (annualized).
However, market expectations for a rate cut in the first quarter are still rising. Industry insiders interviewed by the first financial reporter recently said that the MLF (medium-term lending facility) in the first quarter is likely to be lowered, and the range is expected to be 10BP, plus the adjustment of the deposit interest rate in the early stage, which is expected to promote the LPR (loan market ** interest rate) down. Regarding the pressure on banks' interest margins in the future, Lin Yingqi believes that there is still room for deposit rates to be lowered during the year, which can form a hedge against the downward trend of LPR.
In addition, the recent optimization of credit supervision by the regulatory authorities is also regarded as an important positive signal by the industry. On February 2, the State Administration of Financial Supervision and Administration issued the latest revision of the Measures for the Administration of Fixed Asset Loans, the Measures for the Administration of Working Capital Loans, the Measures for the Administration of Personal Loans, and the Guidelines for Project Financing Business, which made multi-dimensional optimizations to the purpose and object of relevant loans, the flexibility of entrusted payment, the term requirements, and risk management and control, and the new regulations came into effect on July 1.
Dai Zhifeng, director of the Zhongtai ** Research Institute, believes that the new regulations encourage financial institutions to establish a differentiated credit system, and the differentiation of banks' credit capabilities will increase. In addition, the monitoring ability of loan purposes and capital flow has been improved, which is conducive to the overall risk control of the banking industry. The differentiation of banks' risk control capabilities will also increase.
The CITIC ** research report also pointed out that the optimization of the management of relevant loan varieties has better complied with the new trend of credit business development and the new requirements of the real economy of financial services. The overall management of credit business under the new regulations is loose and tight, which not only helps to enhance the sense of access to financing for enterprises, but also curbs the misappropriation and idling of funds, and improves the efficiency of serving the real economy. With the combined effect of the bottom of bank performance and the bottom of valuation, the trend of bank stocks may change in tandem with the improvement of credit expectation margins.
Since entering 2024, the Shanghai Composite Index has fallen by nearly 10%, and banks have become an important option for safe-haven funds because of their low valuations and high dividends, and have become the "most resistant" sector. Year-to-date, the banking sector (Shenwan level) has risen by 63%, and the coal plate became the only two red plates. Since the beginning of this year, the CSI Bank Index has risen by 648%, and since December last year, it has risen by more than 8%, ranking high among all sectors.
However, market views remain divided on the next direction of bank stocks. "Historically, most of the excess return performance of bank stocks has occurred in the upward phase of economic prosperity, so the upward resilience of the sector still needs to focus on the improvement of economic expectations. However, it should be noted that bank stocks, as a high-dividend variety that can provide stable dividends, are also worthy of attention in the stage of continuous decline in risk-free interest rates. Ping An ** banking analyst Yuan Zheqi said.
As of the end of January, the dividend yield of the banking sector was 556%, which is a historical premium to the risk-free rate. As of February 5, the static PB of the sector was only 056 times, corresponding to an implied defect rate of more than 15%, and a high margin of safety. At present, 7 listed banks have disclosed their 2023 performance reports. Judging from comparable data, the non-performing ratio of all banks has decreased to varying degrees, the provision coverage ratio has improved as a whole, and the net profit attributable to the parent company has achieved positive year-on-year growth, but the pressure on revenue has intensified the differentiation of the industry, and the year-on-year revenue growth rate of Xiamen Bank, China CITIC Bank, and China Merchants Bank has been negative.
Some institutional sources told reporters that they should still be vigilant about the impact of the continuous exposure of the real estate industry and local debt risks. Next, the pressure on interest margins in the banking sector is still ongoing, revenue growth continues to be under pressure, and the importance of stable asset quality will be further highlighted. A number of industry insiders told reporters that the recent measures taken by the regulatory authorities to loosen the use of operating property loans, establish a real estate financing city coordination mechanism and quickly screen the "white list" of projects have played an important role in improving the asset quality of related fields.
From the perspective of institutional holdings, according to the statistics of Zhongtai**, the proportion of all ordinary ****, partial stock hybrid**, and flexible allocation ** bank stocks in the fourth quarter of last year was 199%, down 056 percentage points, the proportion of overall holdings is still lower than the historical average.