Bank Stocks Crash Over 5%, Can They Recover?

A stock market trend continued to rise, and bank stocks followed suit. As of July 28th, the Wind Bank Index (881155.WI) had risen nearly 1% that morning, with Zhejiang Bank and Qingdao Bank reaching highs over 4%. Several banks, including Ningbo Bank, Qingdao Bank, Hangzhou Bank, and Changshu Bank, saw their stock prices rise by more than 3%. However, as of July 11th-28th, the bank stocks experienced a significant adjustment. Despite the A-share market's overall upward trend, the bank sector saw a drop of over 5% during this period. According to Su Commercial Bank's research team, "The recent decline in bank stocks is due to an increase in market risk aversion. From a valuation perspective, the Shanghai Composite Index's price-to-earnings ratio has dropped to around 0.6 times, indicating that bank stocks are still undervalued." As the mid-period dividend payment approached, some banks had already announced their dividend payments. For example, Qingdao Bank and Ningbo Bank both distributed dividends in July. In terms of individual stock performance, as of July 28th, most bank stocks were down, with only two exceptions: Ningbo Bank and Agricultural Bank, which saw slight gains. The Shanghai Commercial Bank's research report noted that if the stock price continues to fall, the value of bank stocks will be even more attractive. "From a dividend yield perspective, since earnings growth is stable and dividends are rising, the adjusted configuration attractiveness will be even higher." As of July 26th, several shareholders had increased their stakes in Shanghai Bank and Guangda Bank. The article also discussed the performance of four listed banks: Ningbo Bank, Zhejiang Bank, Hangzhou Bank, and Changshu Bank. According to their half-year reports, these banks saw significant increases in operating income and net profit.