Finance Association, November 11 (Reporter Peng Kefeng) Has the value of bank stocks been discovered by more asset management institutions?

Last Friday, when the market focused heavily on the Ministry of Finance's debt conversion policy, on the evening of November 8, China CITIC Financial Asset Management Co., Ltd. quietly issued an announcement on the “Proposal to Further Promote Investment Allocation.”

In the announcement, CITIC Financial Assets clearly stated that in order to maximize shareholders' benefits, it will spend about 50.3 billion yuan in an investment package, of which 30 billion will be directly used to purchase shares in institutions such as Bank of China and Everbright Bank. A Financial Services Association reporter noticed that judging from the information disclosed in the CITIC Financial Assets announcement, CITIC Financial Assets is already a shareholder of Bank of China and Everbright Bank, and this “further purchase” can be seen as an act of increasing shareholders' holdings.

A banking analyst at a brokerage firm told the Financial Federation reporter that it is inevitable that funds from institutions such as CITIC Financial Assets will buy bank shares. As a huge amount of institutional capital, due to various considerations such as risk control and return on capital, it is likely that “high dividends” will be preferred over subject stocks. Meanwhile, in a situation where recent policies continue to unleash benefits for bank stocks (for example, the Ministry of Finance will spend money to supplement the core tier 1 capital of the six major banks), the investment value of bank stocks, especially leading institutions, is still obvious.

CITIC Financial Assets says it will buy shares in Bank of China and Everbright Bank

On the evening of November 8, CITIC Financial Assets published an announcement on its official website. In the announcement, CITIC Financial Assets stated that in recent years, the company has seized market opportunities and carried out a series of investment allocations, which have achieved positive results. In order to maximize shareholders' benefits, the Company plans to increase investment efforts on the basis of early investment.

CITIC Financial Assets also revealed the three major investment targets and an asset service trust investment (i.e. four transactions). The first is to purchase a further 4.88% of CITIC shares for approximately RMB 11.266 billion by signing a share transfer agreement. The second is the further purchase of Bank of China shares for no more than RMB 26 billion. The third is the further purchase of Everbright Bank shares for no more than RMB 4 billion.

In addition, CITIC Financial Assets will also entrust CITIC Trust (as a trustee), CITIC Securities (as an advisor), CITIC Construction Investment (as an advisor), and China CITIC Bank (as a custodian) to establish a single asset service trust of no more than RMB 20 billion to invest. The main thing worth mentioning is that CITIC Financial Assets said that the plans for the above four transactions are interdependent, interrelated, and mutually supported, and jointly formed an overall arrangement.

CITIC Financial Assets finally stated that the above three transactions are to be implemented within 12 months from the date the single asset service trust plan is officially approved by the Extraordinary General Meeting of Shareholders. If not completed within this period, the company will carry out separate corporate governance procedures as needed at that time.

A CITIC Financial Services reporter noticed that at CITIC Financial Asset's 2024 interim results briefing, Chairman Liu Zhengjun said that judging from the overall performance, the transformation of CITIC Financial Assets's main business has pressed the fast forward button to further enhance the “four major business capabilities” of mergers and acquisitions, mergers and acquisitions, equity investment, and special bond investment.

Furthermore, according to the latest data from Dongfangcai.com, CITIC Financial Assets ranked fourth among the top ten shareholders of Everbright Bank, with a shareholding ratio of 7.08%. Among the top ten shareholders of the Bank of China, there are no CITIC financial assets. However, according to this announcement, as of the date of this announcement, CITIC Financial Assets held 3.57% of the Bank of China's shares; CITIC Financial Assets held 7.08% of Everbright Bank's shares (consistent with the latest data from Oriental Wealth). This means that this transaction can be seen as an act of increasing the bank's holdings by the majority shareholders.

Bank stocks rose more than 30% during the year, and funds from various institutions such as social security have poured in

Since this year, despite the overall fluctuation and rise in the stock market, with quite a few ups and downs in the middle, judging from the overall situation, the banking sector was still one of the sectors with the best performance in the capital market during the year.

According to Wind data, since this year, the banking sector has increased by about 31.21%, and about 10 listed banks have increased by more than 40%. Even Big Macs like the Big Five state-owned banks have set new historical stock price records over and over again since this year. However, judging from the three-quarter reports disclosed by listed companies, bank stock holdings in social security funds, public funds, and insurance funds have all increased markedly.

In terms of performance, according to Wind data, 42 listed banks achieved a total operating income of 4.28 trillion yuan, and net profit to mother maintained a slight increase of 1.43% over the previous year to 1.66 trillion yuan. Among them, the operating income of 29 companies continued to grow, accounting for nearly 70%, with most showing single-digit growth; 35 companies achieved positive net profit growth, accounting for more than 80%. Among them, the net profit growth rate of 10 listed banks reached double digits, and SPD Bank achieved net profit to mother of 35.223 billion yuan, an increase of 25.86% over the previous year, leading the way.

On November 11, Dongxing Securities's Lin Jinlu, Tian Xinyu and others released a research report stating that the sharp narrowing of net interest spreads in the past two years is a major negative factor affecting bank profits, and is also an important factor affecting fundamental expectations. Under the statement that monetary policy is mainly hampering net interest spreads, subsequent policies will guide the consolidation of the linkage between deposit and loan market pricing mechanisms; with the gradual implementation of countercyclical adjustment policies, economic recovery and physical demand are expected to gradually recover. It is expected that bank net interest spreads will stabilize, and the probability of stabilizing next year will increase.

At the same time, the implementation of fiscal policies is expected to ease pressure on the quality of assets related to local financing platforms and real estate, and improve banks' asset quality expectations. Net interest spreads are expected to stabilize+improvements in asset quality are expected to gradually improve bank profit expectations. Bank stocks are in a relatively comfortable allocation stage where shortfalls have been exhausted, valuations are still low, dividend yields are high, and stable.