Bank Stocks Drop Over 5% in Two Weeks – A Buying Opportunity?

China's A-share banking sector saw a rally fade on July 28.

The Wind Banking Index (881155.WI) rose nearly 1% intraday, with Qilu Bank surging over 4% and Qingdao Bank up 3% before paring gains. By close, the index edged up 0.06%, while Qilu Bank, Qingdao Bank, Ningbo Bank, and Hangzhou Bank gained over 1%.

Notably, 2024 annual dividends for A-share banks concluded today. Chengdu Bank, the last to distribute, paid out CNY3.78 billion. In total, 42 listed banks disbursed CNY632.5 billion in 2024 dividends.

While annual payouts ended, mid-2025 dividends are upcoming. Hangzhou Bank and Changshu Bank plan interim dividends. Changjiang Securities notes regional banks typically pay mid-year after earnings (August-September being a key window), while large banks wait until year-end.

Despite the broader bull market, banking stocks have retreated. From July 11-28, the sector fell over 5% even as major indices hit yearly highs.

"Rising risk appetite has pressured bank stocks," said Wu Zewei, researcher at Sushang Bank.

With the bull run ongoing, investors eye banking sector strategies. Wu advises: "The sector's 0.61x P/B ratio signals undervaluation. We expect upside and recommend accumulating quality banks at lows."