AP, April 29 (reporter Zou Juntao) After a number of city commercial banks mentioned the medium-term dividend in succession, the state-owned big banks made a final decision tonight.
On the evening of April 29, bank for economic construction 、 agricultural bank 、 Industrial and Commercial Bank of China 、 Bank of China At the same time, the resolution announcement of the Board of Directors was released, saying that the arrangement for the distribution of interim profits in 2024 was reviewed and approved.
It is worth noting that the four major state-owned banks all said that the total interim cash dividends in 2024 accounted for no more than 30% of the after tax profits attributable to the Bank's shareholders realized by the Group in the current period.
More importantly, the four major banks have made it clear that they will consider the distributed medium-term cash dividends when formulating the profit distribution plan for 2024. ICBC also clearly stated that "when formulating the profit distribution plan for 2024, it will deduct the amount of medium-term profit distribution that has been distributed."
The reporter from the Associated Press of Finance noted that since the introduction of the new "National Nine Rules" on the capital market on April 12, Bank of Shanghai 、 Bank of Suzhou 、 Lanzhou Bank The boards of directors of several listed banks have successively passed the medium-term dividend plans for 2024.
However, before the statements of the four major banks, the relevant proposals at the city commercial bank level did not clarify the relationship between the medium-term dividend and the annual dividend.
On April 29, a number of insiders interviewed by the Associated Press of Finance and Economics said that listed banks have successively added medium-term dividend plans, which is intended to respond to the previous requirements of the new "National Ninth Article" on strengthening dividend distribution.
The above interviewees also said frankly that in recent years, banks have continued to yield profits to the real economy, narrowing the net interest margin and other factors have squeezed some profit margins, and there are challenges for banks to continue to increase dividends. Many interviewees said that increasing the dividend frequency does not mean that the dividend ratio and dividend scale will be improved.
Several banks will pay dividends in the medium term, which is known in the industry as responding to the new "National Nine Rules"
The reporter from the Associated Press of Finance noted that at present, many banks have formulated medium-term dividend plans. Before the four state-owned big banks, some urban commercial banks have taken the lead in announcing that they will pay dividends in the medium term.
On the evening of April 26, the 22nd meeting of the 5th Board of Directors of Bank of Lanzhou announced that it is planned to make interim dividend in the half year of 2024 within the limit of net profit attributable to common shareholders of the parent company in the current consolidated statements. On the evening of the same day, the resolution of the 15th meeting of the 5th Board of Directors of Bank of Suzhou was announced, and the proposal to request the General Meeting of Shareholders to authorize the Board of Directors to decide on the 2024 medium-term profit distribution plan was reviewed and passed.
Earlier, on the evening of April 25, the 33rd Session of the 6th Board of Directors of the Bank of Shanghai announced its decision to approve the 2024 interim profit distribution. Bank of Shanghai said that the distribution conditions should meet the requirements that the net profit attributable to the common shareholders of the parent company in the current consolidated statements is positive, the capital adequacy ratio at all levels should not be lower than the regulatory standards and the company's capital management planning objectives, or the capital adequacy ratio at all levels should not be lower than the regulatory standards and the company's capital management planning objectives after the expected implementation of cash dividends.
The above mentioned banks said in their announcements that the formulation of the 2024 medium-term profit distribution plan is intended to further clarify investors' expectations and enhance their sense of gain. It is worth noting that the above related proposals still need to be submitted to the General Meeting of Shareholders for deliberation.
On April 29, a researcher of a joint-stock bank told the Associated Press of Finance and Economics that a number of listed banks had recently proposed medium-term dividend plans, which formally constituted "multiple dividend payouts in a year", and actively implemented the policies and measures of strengthening dividend payouts under the "National Ninth Article". A bank analyst at a securities firm in southwest China told the Associated Press of Finance that the bank's move was in response to the new "National Nine Rules".
Will it increase dividends? Industry insiders: there is limited space for banks to improve dividend ratio
However, "in the context of the decline in the overall profit growth of banks, there are certain challenges to the feasibility of banks to increase dividends." Yu Fenghui, an economist and new financial expert who has worked in large state-owned banks for 40 years, told the Associated Press of Finance that in recent years, banks have supported the development of the real economy by reducing loan interest rates, reducing or exempting fees, etc, This has compressed the profit space of banks to a certain extent.
The reporter from the Associated Press of Finance noted that in January this year, the State Administration of Financial Supervision announced that the net profit of commercial banks in 2023 would be 2.38 trillion yuan, up 3.24% year on year. The former CBRC announced in the previous year that in 2022, commercial banks will achieve a cumulative net profit of 2.3 trillion yuan, up 5.4% year on year.
Yu Fenghui said that in this case, to increase dividends, banks need to find new profit growth points or optimize the cost structure on the basis of ensuring the steady development of core businesses and effective risk control. In addition, regulators have strict requirements on the capital adequacy ratio of banks. When deciding on dividend distribution strategies, banks must balance the relationship between shareholders' interests, regulatory requirements and long-term development.
An analyst of a securities firm bank in southwest China also told the Associated Press of Finance that at present, the upper limit of the dividend rate of the banking industry is basically around 30%, and there is limited room for further improvement, while the bank itself still has pressure on asset replenishment. She pointed out that the core capital of banks can only be supplemented by endogenous profit retention under the condition of limited external supplement channels.
Many interviewees believe that the increase of dividend frequency is not equal to the increase of dividend proportion or dividend scale. The aforementioned analyst of a brokerage bank in southwest China pointed out that "the total dividend rate (may) remain unchanged only after the frequency changes twice". A relevant person of a listed city business firm also told the Associated Press of Finance that "the feeling is that it is a question of cutting the 'cake' with one knife or two knives".
In fact, the reporter from the Associated Press of Finance also noticed that the four major banks clearly stated in their 2024 medium-term dividend plans announced tonight that the profit distribution plan at the end of 2024 will consider or deduct the amount of medium-term profit distribution that has been distributed.
Medium term dividend is just a gimmick? The interviewee said that it still had a positive impact
Yu Fenghui pointed out that if the dividend ratio remains unchanged, the actual effect of multiple dividends is more reflected in the distribution frequency of cash flow than in the significant increase of the total amount. He believes that this approach can easily be interpreted as a "gimmick" greater than the actual benefits.
An analyst of a securities firm bank in southwest China said that if the dividend ratio and dividend scale were unchanged and only the dividend frequency was increased, it would only mean that investors could get part of the dividend in advance.
However, Yu Fenghui also believes that the increase in dividend frequency of listed banks is undoubtedly a positive signal from the perspective of the market and investors. On the one hand, more frequent dividends can improve the efficiency of capital use, which increases the attractiveness of investment for investors seeking stable cash flow returns. On the other hand, this approach can also enhance the market's confidence in the profitability and financial health of banks, because it means that banks have enough profits and cash flows to support multiple distributions.
In addition, "the multiple dividend mechanism in a year also helps banks to better manage their capital structure and adjust in time to respond to market changes." Yu Fenghui pointed out that, in the long run, banks should consider all factors comprehensively when considering adjusting dividend policies to ensure the rationality and long-term profitability of dividend policies. Investors also need to pay more attention to the sustainability of dividends, the total amount and the matching degree with the profitability of banks, rather than just the increase in the number of times.
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