What changed in the two tools supporting capital markets?

  • The central bank, the National Financial Regulatory Administration and the China Securities Regulatory Commission proposed conducting swap facility operations for securities, fund and insurance companies at appropriate times, expanding the number of participating institutions, moderately lowering swap fees, and optimizing collateral and operational arrangements. The central bank plans to conduct an operation on 3 November, with applications exceeding 100 billion yuan.
  • The relending facility for share buybacks and stake increases has shifted from a temporary arrangement to a long-term institutional arrangement, with its interest rate reduced from 1.25% to 1%. Financial institutions will add a reasonable spread to the relending rate and increase lending.
  • The China Securities Regulatory Commission said it would make every effort to stabilize the market and expectations. Chen Fu of GF Securities believes that, given low sector valuations and portfolio allocation levels, brokerages could benefit if market risk appetite recovers.

Why did brokerages decline in the third quarter despite growth over the first three quarters?

  • In the first three quarters of 2026, brokerage industry revenue rose 19% year on year, net profit attributable to shareholders rose 24%, and weighted average annualized return on equity was 8.3%, up 0.8 percentage points year on year.
  • In the third quarter alone, industry revenue fell 20% year on year and 37% quarter on quarter, while net profit attributable to shareholders fell 17% year on year and 43% quarter on quarter; investment income was the main drag. Market volatility therefore remains an important variable in assessing the sector’s potential for recovery.

What pressures does China Life’s new business face despite its profit improvement?

  • In the first three quarters of 2026, China Life’s net profit attributable to shareholders was 89.43 billion yuan, down 46.7% year on year. It posted a third-quarter loss of 45.059 billion yuan, mainly due to stock market volatility and a high base in the same period last year.
  • After excluding the effects of short-term fluctuations in publicly traded equities and other items, net profit attributable to shareholders for the first three quarters was 94.22 billion yuan, up 15.8% year on year, faster than the 12.7% growth recorded in the first half. On this basis, Li Jian of Huatai Securities is optimistic about the stability of the company’s core profit and solvency.
  • Growth on the liabilities side slowed markedly: value of new business rose 13.1% year on year in the first three quarters, below the first half’s 33.7%. Huatai Securities estimates that it fell by more than 20% year on year in the third quarter, mainly due to last year’s high base and regulation of bancassurance expenses.
  • New policy premiums fell 35.5% year on year in the third quarter, while first-year premiums for long-term insurance fell 47% to 21.5 billion yuan. First-year premiums for long-term insurance through the individual insurance and bancassurance channels fell 41% and 55%, respectively. By the end of the third quarter, the number of individual insurance agents had risen to 616 thousand, increasing each quarter during the year.