According to the Zhitong Finance APP, Zhongtai Securities released a research report stating that when the market is strong, bank stocks are weak in the short term; however, during periods of economic stagnation, high-dividend bank stocks will continue to be attractive, and the stability and sustainability of bank stocks are still favored. There are two investment lines to focus on for bank stocks: first, city and rural commercial banks with regional advantages and strong certainty, including regions such as Jiangsu, Shanghai, Chengdu-Chongqing, Shandong, and Fujian. Second, the logic of high dividends and stability, with a focus on recommending large banks and joint-stock banks.
The main points of Zhongtai Securities are as follows:
Changes in bank stock holdings in 3Q25: In the third quarter, funds overall flowed out of the banking sector, with significant outflows from northbound funds. The outflow scale of passive/active/northbound funds in 3Q25 was 33.03 billion/30.52 billion/59.96 billion yuan, accounting for 1.43%/1.32%/2.60% of the trading volume in the third quarter, respectively.
Active funds: Due to changes in market risk appetite, funds flowed out of the sector in the third quarter, combined with a high base in the second quarter, the market value proportion of bank holdings in active funds decreased by 3.74 percentage points to 2.04%; changes in positions were the main contributing factor; the contribution of the banking sector's decline was -0.61%, and the contribution of position changes was -3.13%. At the end of 3Q25, the market value of bank holdings in active funds was 30.71 billion yuan (compared to 73.61 billion yuan in 2Q25). 1) The proportion of bank stock holdings in total active fund holdings: the top five are China Merchants Bank (0.47%), Ningbo Bank (0.27%), Chengdu Bank (0.19%), Hangzhou Bank (0.16%), and Jiangsu Bank (0.14%). 2) Changes in bank stock holdings: the top five are Changsha (+0.01%), Qingdao (+0.00%), QLB (-0.01%), Xiamen (-0.01%), and Minsheng Bank (-0.02%). 3) The scale of increases and decreases in active funds' holdings of bank stocks: Changsha, Minsheng, QLB, and Ruifeng received net inflows from active funds, with inflows of 278 million, 218 million, 80 million, and 17 million yuan, respectively.
Passive funds: Although the market value scale of bank stock holdings and their proportion of the circulating market value of the banking sector declined quarter-on-quarter, they remain at relatively high levels. 1) The scale of ETF funds and the proportion of bank stocks: At the end of the third quarter, passive funds held a total market value of bank stocks of 195.353 billion yuan, which, although down 14.47% from the end of the second quarter, is still the second highest since 2020. The total market value of bank stock holdings accounted for 6.73% of the free-floating market value of listed banks, down 0.37 percentage points from the end of 2Q25. 2) The scale of increases and decreases in passive funds' holdings of bank stocks: In 3Q25, most banks experienced capital outflows, with a total net outflow of 33.03 billion yuan from the banking sector, with only Agricultural Bank of China, Nanjing Bank, and QLB receiving inflows of 1.069 billion, 409 million, and 117 million yuan, respectively.
Northbound funds: Overall reduction in the banking sector. 1) At the end of 3Q25, northbound funds held a total market value of bank stocks of 173.687 billion yuan, a decrease of 31.66% from the end of 2Q25, with the total market value of bank stock holdings accounting for 5.98% of the free-floating market value of listed banks, down 1.92 percentage points from the end of the previous quarter. 2) In terms of the increase and decrease of northbound funds in bank stocks, there was an overall net outflow from the banking sector in the third quarter, with a reduction scale of 59.96 billion yuan; from the perspective of individual stocks, the net inflows in 3Q25 were for Ningbo Bank, Minsheng Bank, Chengdu Bank, and Jiangyin Bank, with inflows of 894 million, 204 million, 182 million, and 77 million yuan, respectively
State-owned funds (such as Huijin, Zhijin, and social security funds): The market value of holdings has slightly declined but remains at a relatively high level. 1) In Q3 2025, the total market value of state-owned funds' holdings in bank stocks was CNY 4.5 trillion, a decrease of 2.9% from Q2 2025, but still the second highest since 2023; the market value of bank holdings accounted for 79.3% of the total holdings (top ten holdings). 2) Excluding state-owned banks, the top three banks held by state-owned institutional funds are China Merchants Bank, Pudong Development Bank, and Industrial Bank, accounting for 0.37%, 0.25%, and 0.22% of the total market value of holdings, respectively. 3) The holding ratio of Agricultural Bank has increased by 2.6 percentage points, and Xiamen Bank has entered the list of major holdings for the first time.
Investment recommendations: 1. The operating model and investment logic of bank stocks have shifted from &#34;pro-cyclical&#34; to &#34;weak-cyclical&#34;: when the market is strong, bank stocks tend to be weak in the short term; however, during periods of economic stagnation, the high dividends of bank stocks will continue to be attractive, and we remain optimistic about the stability and sustainability of bank stocks; two stock selection logics. 2. Two investment mainlines for bank stocks: one is city commercial banks with regional advantages and strong certainty, including regions such as Jiangsu, Shanghai, Chengdu-Chongqing, Shandong, and Fujian. The second is the logic of high dividend stability, with a focus on recommending large banks and joint-stock banks.
Risk warning: Economic downturn exceeds expectations, and the publicly available information used in the research report may have risks of information lag or untimely updates

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Zhongtai Securities released a research report, continuing to be optimistic about the stability and sustainability of bank stocks, focusing on two investment themes: first, urban and rural commercial banks with obvious regional advantages; second, large banks and joint-stock banks with high dividends. Although bank stocks are weak in the short term when the market is strong, high dividends will be attractive during periods of economic stagnation. In the third quarter, funds flowed out of the banking sector, and the market value proportion of active fund holdings decreased, mainly due to changes in market risk appetite

Zhongtai Securities: Continue to be optimistic about the stability and sustainability of bank stocks, focusing on two investment main lines