CMB seen as top winner in China’s wealth reallocation, CGSI says

CGSI expects the bank to benefit from stronger demand for wealth management and bancassurance products. 

CGS International Holdings Limited (CGSI) expected China Merchants Bank (CMB) to benefit the most from the rise in stronger wealth management and bancassurance products. 

This comes as the household deposit mix falls amidst decreasing depository rates in 2026, the investment house said in its forecast for Hong Kong and China banks.

The steady rise of the mix of time deposits of households since January 2017 at 60.3%, even as deposit rates trended lower at 1.30% in May 2025 compared to 2.75% in April 2022 was a paradox, CGSI said.

“We think this reflected high risk aversion among depositors that caused them to view time deposits more attractive even as their yield fell,” it said.  

CGSI said that household risk aversion seems to be slowly changing, with 2025’s 0.8% point rise year on year (YoY) in the household time deposit mix to 73.4% of total household deposits, the slowest rise YoY since 2017.

“This thus presents significant opportunities to those who can monetise the profitable opportunities arising from this shift in household wealth allocation, it said.

The firm expected China Construction Bank’s (CCB) fiscal year 2026 (FY26) price-to-earnings (P/E) ratio of 5.5x and its FY26 dividend yield of 5.6% and its large H-share free float as attractive to southbound investors.

It also expected Bank of China’s (BOC) FY26F P/E of 5.6x and its FY26 dividend yield of 5.8% as attractive to southbound investors.