Maintaining a High Dividend Rate in the Long Term and Actively Responding to Multiple Dividend Distributions: "Cash Dividends" of 420 Billion Yuan from the Six Major Banks Foster Confidence

Source: Securities Daily

Reported by Tian Peng

On the evening of March 28, Industrial and Commercial Bank of China Limited, Agricultural Bank of China Limited, and China Construction Bank Corporation released their 2024 annual reports. So far, the 2024 annual "report cards" of the six major banks have all been unveiled. According to the annual reports, the six major banks distributed a total of 420 billion yuan of dividends in 2024. Their "corporate value and return enhancement" plans also target future dividend plans, strengthen shareholder returns, and give priority to cash dividends. Professionals in the market believe that this reflects the sincerity of the six major state-owned banks to the capital market and injects confidence into the market.

A 30% Dividend Ratio in the Long Term

In 2024, the six major state-owned banks achieved a total operating revenue of 3.52 trillion yuan and a net profit attributable to the parent company of 1.4 trillion yuan. They planned to distribute year-end dividends of over 215.8 billion yuan in 2024. Together with interim dividends, the annual total amount would exceed 420 billion yuan, and the cash dividend ratio was no less than 30%. In addition, the dividend distribution of the six major state-owned banks has exhibited several highlights: First, these banks are keen on "multiple dividend distributions a year". In 2024, they distributed dividends multiple times. The interim dividends alone exceeded 204.8 billion yuan, of which 51.1 billion yuan was contributed by the Industrial and Commercial Bank of China Limited. Second, the dividend ratio has been stabilized at 30% in the long term. For example, the dividend ratio of Agricultural Bank of China Limited has always been no less than 30% since its listing. Third, the total dividend amount is considerable. Industrial and Commercial Bank of China Limited, Agricultural Bank of China Limited, Bank of China Limited, and China Construction Bank Corporation have distributed a total of more than 4.4 trillion yuan of dividends since their listing. Industrial and Commercial Bank of China Limited has distributed dividends of more than 1.4 trillion yuan in total. The stable high dividend ratio has formed a positive cycle with the profitability and asset quality of the six major banks, becoming the "ballast stone" of value investment.

Continuous Predictability Enhancement in the Future

The six major banks also demonstrate a "long-term perspective" for shareholder returns in their "corporate value and return enhancement" plans. On the one hand, they emphasize the "priority" of cash dividends. Industrial and Commercial Bank of China Limited, Agricultural Bank of China Limited, and Bank of China Limited have all made it clear that cash dividends are prioritized when there is profit available for distribution. According to the Bank of China Limited, it will take into account various factors to reasonably determine the frequency and level of dividend distribution and improve the stability, timeliness, and predictability of dividends. On the other hand, the frequency of dividend distribution is widely mentioned. Agricultural Bank of China Limited has revealed that in the future, it will actively implement mid-term profit distribution and enhance investors' sense of gain by increasing the frequency of dividend distribution and paying dividends before the Spring Festival. Furthermore, Bank of Communications Co., Ltd. has also stated that it will distribute dividends multiple times a year in due course. Analysts have pointed out that a clear dividend plan can enhance investors' confidence in the continuity and stability of dividends, thereby highlighting the investment value of the banking industry.

The above information is provided for reference purposes only and does not constitute investment advice.