CHINAFUND｜All Six Major State-Owned Banks Released "Corporate Value and Return Enhancement" Action Plan

Translated from CHINAFUND

On the evening of March 28, 2025, the Industrial and Commercial Bank of China, Agricultural Bank of China, and China Construction Bank disclosed the "Corporate Value and Return Enhancement" Action Plan. Up to now, all six major banks have issued their "Corporate Value and Return Enhancement" action plans.

The action plan of the six major banks mainly have four highlights.

First is focusing on stable operation and improving the quality and efficiency of serving the real economy. To live up to the new requirements for financial work in the new era and on the new journey, the six banks have been thoroughly implementing the new development concept, closely following the main task of high-quality development, adhering to the general tone of seeking progress while maintaining stability, and focusing on main business, steady operation, risk prevention and control, so as to firmly fulfill their economic, political and social responsibilities as state-owned banks to serve the real economy. For example, the Agricultural Bank of China takes green development and sustainability as its general strategy. Its action plan highlights integrating sustainable development into strategy and business management to create outstanding advantages and long-term value in this area. The Postal Savings Bank of China highlights its mission of being a benchmark for inclusive finance in the process of promoting common prosperity.

Second is optimizing the governance system to strengthen responsibility. The six banks strictly follow the overall leadership of the Communist Party of China and are committed to the path of financial development with Chinese characteristics. They make continued efforts to improve corporate governance and enhance governance efficiency. The six banks continue to develop the system of Board of Directors. Specifically, they strive to diversify the member structure of the Board of Directors; strengthen the directors’ supervision over senior management; and build capital strength to ensure reasonable capital structure and stabilize the level of capital adequacy ratio. The six banks put the interests of investors in a more prominent position, refine and implement relevant requirements for independent directors and shareholder return through corporate governance, and bring long-term value to investors. For example, the China Construction Bank continues to optimize its systems and mechanisms, seek better balance between quantity, price and risks, and strive to improve asset quality, liability quality, capital quality and efficiency, income quality, and cost quality and efficiency.

Third is improving cash dividend plan to enhance investors' sense of gain. The six banks have always attached great importance to shareholder return. In their "Corporate Value and Return Enhancement" action plans, "cash dividend" is a key word. For example, the Bank of China stated that since its listing in 2006, it has distributed cash dividends of more than 900 billion yuan cumulatively. It will continue to use cash dividends as the main profit distribution method to improve the stability, timeliness and predictability of dividends and enhance investors' sense of gain. The profits distributed by the Bank of Communications in cash each year for the next three years (2025-2027) will not be less than 30% of the net profit attributable to shareholders in that year.

Fourth is adopting an investor-centered approach to continuously improve the quality and efficiency of information disclosure. Many large banks expressed their willingness to adopt an active, frank and open attitude, adhere to the principle of "being concise, clear and easy to understand", and maintain close communication with investors through various forms around investor needs and market hot spots, including but not limited to holding performance conferences, receiving investors and analysts for visits and research, participating in investor strategy meetings, domestic and overseas roadshows, company open days, and so on, to fully, timely and completely demonstrate the company's business characteristics and development advantages. These banks also promote business performance in vivid ways, such as "one-picture overview" and "short video clips" to better communicate investment value. The Industrial and Commercial Bank of China uses a long picture with texts for performance disclosure to more vividly show its performance highlights and enhance investors, news media and the public's understanding of it. The Industrial and Commercial Bank of China stated that it will further expand the depth and breadth of information disclosure, and timely convey the progress in transformative projects, such as intelligent risk control, modernization and digitization, diversified structure, and ecology-based foundation.

It is reported that on March 22, 2024, Shanghai Stock Exchange (SSE) issued the Public Initiative to SSE-listed Companies to Launch Special Action of "Corporate Value and Return Enhancement" to all SSE-listed companies to continuously promote the high-quality development of listed companies and enhance the ability of capital markets to serve the real economy.

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