Gold Inv Financial News | Zhongtai's Research Reports indicate that the correlation between Banks and Fiscal policy has further strengthened, with major banks' relations with central finance and local banks' relations with local finance being enhanced. Against the backdrop of risk prevention, the process of capital replenishment for banks is accelerating, and capital replenishment plans for four major banks have been implemented, estimating that this round of capital replenishment can at least support growth for the next five years. In the future, the capital replenishment process for small and medium-sized banks may also accelerate.
The Institutions continue to indicate that the customer base supported by national credit occupies a high proportion among the bank's customer base; in recent years, the bad loan ratio has decreased for corporate clients and increased for retail, with retail bad loans accounting for thirty percent, which is relatively low. (1) The customer base supported by national credit occupies a high proportion among the bank's customer base, supporting financing platforms for debt resolution, and state-owned enterprises have a stable safety margin. From the perspective of the loan structure of listed banks in 2024, those with a high proportion include government-related (32%), Real Estate (5% B-end + 20% C-end), real economy (manufacturing & wholesale and retail 15% + operating loans 8%), and consumption-related (credit cards 5% + consumer loans 4%), among which, the customer base supported by national credit has a high share and a stable safety margin. Under policy support, banks' risks will be steadily released, and the probability of concentrated risk explosions is low. (2) In recent years, the bad loan ratio has decreased for corporate clients and increased for retail, with retail bad loans accounting for thirty percent, which is relatively low. As of 2024, the bad loan ratios for corporate and retail are 1.35% and 1.15%, respectively, with bad loan amounts accounting for 65.5% and 34.5%.
The Institutions stated that the risks associated with the underlying assets of banks are cushioned, asset quality is stable, and the fundamentals have shifted from 'pro-cyclical' to 'weak cyclical'. The performance of the Sector and the stability of dividend yields are strong, capital replenishment channels have increased, and the investment landscape has also shifted from 'pro-cyclical' to 'weak cyclical'. After the 'equivalent tariffs', we continue to strongly recommend stocks in the banking Sector, remaining Bullish on the stability and continuity of banks.
