A-share listed banks have entered the peak period of cash dividends. On July 7th, according to statistics by Beijing Business Today, 35 banks have implemented their final profit distribution plans for 2024. Coupled with the mid-year dividends already implemented for 2024, the total annual dividends of banks have reached 509.234 billion yuan, among which about 70% of listed banks have an annual cash dividend ratio exceeding 20%. More than 11 banks have seen their dividend payout ratios exceed the 30% mark, demonstrating a stable and strong ability to return dividends to shareholders. In the current low-interest-rate environment, the dividend yield advantage of bank stocks has become increasingly prominent, attracting the attention of investors seeking stable returns. Analysts suggest that a comprehensive assessment of the fundamentals of banks should be conducted to avoid making investment decisions solely based on dividend yields.
State-owned major banks are the main force in dividend distribution
A-share listed banks have entered the peak period of cash dividends. On July 7th, Beijing Business Today reporters found through announcements that among the 42 listed banks, 35 have already announced their 2024 equity distribution implementation plans. Coupled with the already implemented mid-year dividends for 2024, Wind data shows that the total annual dividends of banks have reached 509.234 billion yuan. The profit distribution plans for 2024 of another seven banks have been approved by the shareholders’ meeting and are awaiting official implementation.
Based on the dividend payout date, as of now, in addition to the four major state-owned banks, namely China Construction Bank, Bank of China, Bank of Communications and Postal Savings Bank of China, a total of 26 banks, including four joint-stock banks such as Industrial Bank, Ping An Bank, Hua Xia Bank and Zheshang Bank, as well as 18 city and rural commercial banks, have implemented annual dividends, with a combined dividend payout amount of 303.547 billion yuan.
State-owned major banks remain the main force in dividend distribution, taking the lead in the dividend distribution list with an absolute advantage. The total dividends distributed by the two major state-owned banks, China Construction Bank and Bank of China, in 2024 both exceeded 70 billion yuan. Among them, the Construction Bank took the lead with a dividend amount of 100.754 billion yuan, a slight increase of 0.75% compared with the same period of the previous year. Bank of China followed closely behind, distributing dividends of 71.36 billion yuan, a year-on-year increase of 2.54%.
At the level of joint-stock banks, Industrial Bank distributed a total of 22.433 billion yuan in cash for the year, making it the largest “cash red envelope” bank among joint-stock banks to date, an increase of 3.83% compared with the same period of the previous year. The dividend distribution situations of the other several joint-stock banks vary. Ping An Bank, Hua Xia Bank and Zheshang Bank distributed 11.799 billion yuan, 6.446 billion yuan and 4.284 billion yuan in cash respectively.
City commercial banks and rural commercial banks have further enhanced the level of shareholder returns by increasing the frequency of dividends. As of now, more than half of the 18 urban and rural commercial banks have implemented “dual rounds” of dividends for the middle and end of 2024, driving a significant increase in the annual dividend amount. Bank of Shanghai distributed dividends of 3.978 billion yuan in the middle of the year and 3.125 billion yuan at the end of the year. Its total dividends for the year reached 7.103 billion yuan, topping the list of city and rural commercial banks. The dividend amounts of Nanjing Bank, Shanghai Rural Commercial Bank, Chongqing Rural Commercial Bank and others all exceeded 3 billion yuan.
In addition to the banks that have already implemented dividend distribution, the “cash red envelopes” that nine other banks, namely Industrial and Commercial Bank of China, China Merchants Bank, CITIC Bank, Bank of Jiangsu, China Minsheng Bank, Bank of Beijing, Bank of Xi ‘an, Bank of Zhengzhou and Qingdao Rural Commercial Bank, plan to distribute will be credited to their accounts successively within the next week.
It is worth noting that while the 2024 profit distribution plan is still in the implementation stage, many banks have already begun to lay out their mid-term dividend plans for 2025. Among them, Shanghai Rural Commercial Bank recently approved the proposal on the dividend arrangement for the first half of 2025 at its shareholders’ meeting. On June 30, Changshu Rural Commercial Bank held an extraordinary general meeting of shareholders and voted to pass the proposal “Requesting the Shareholders’ Meeting to Authorize the Board of Directors to Decide on the Interim Profit Distribution Plan for 2025”. According to the bank’s disclosure, this interim dividend arrangement aims to implement the policy orientation of the regulatory authorities to encourage listed companies to increase the level of cash dividends, increase the frequency of dividends, and optimize the dividend rhythm Further strengthen investor returns, enhance investors’ sense of gain and satisfaction, and boost their confidence in long-term holding.
The intensive dividend distribution by banks is essentially the result of the resonance between the industry fundamentals and policy guidance. Fu Yifu, a special researcher of Sushang Bank, analyzed that this phenomenon mainly sends out three positive signals: First, the fundamentals of the banking industry’s operation are stable, and profits are sufficient to support continuous dividends. Under the background of economic recovery, the risks of financial institutions are controllable. Second, as state-owned enterprises and industry leaders, banks actively respond to the regulatory orientation of “improving the quality of listed companies”, enabling long-term investors to obtain predictable cash flow returns and effectively enhancing the sense of gain from market participation. Thirdly, in the current interest rate environment, banks demonstrate their stable business performance to the public through dividends, giving investors confidence. Fu Yifu emphasized that under the dual drive of policy guidance and industry development, high frequency and high dividends may become the new normal in the banking industry.
