Financial Services Association, May 31 (Reporter Gao Ping) With the Postbank's latest announcement that the board of directors will review and pass the mid-term dividend bill, banks planning to pay mid-term dividends have added another case. Up to now, the six major banks of ICBC, Agricultural Bank, Bank of China, CCB, CCB, CCB, and Postbank have all officially announced plans to pay mid-term dividends. According to incomplete statistics, there are already more than 10 banks, including major banks, urban agricultural commercial banks, etc., that plan to pay dividends in the medium term.

Industry insiders said that major state-owned banks are leading the banking sector to promote mid-term dividends. It is expected that more banks will follow the new “National Nine Rules” initiative, and that in the future, there may be more small and medium-sized banks that will push for the implementation of mid-term dividends while considering actual conditions. Bank stocks have long been a benchmark sector for high dividends, and implementing mid-term dividends will further enhance the value of high dividend dividends.

Postbank Joins Proposed Mid-Term Dividend Camp and Expands Again

In the middle of the night of May 30, the board resolution announcement issued by the Postbank showed that the board of directors deliberated and passed the “Proposal on Arrangements Related to the 2024 Mid-Term Profit Distribution of the Postal Savings Bank of China”. The Postbank said that under the condition that profits can be distributed for the 2024 semi-year period, it plans to implement the 2024 interim dividend. The total interim dividend accounts for no more than 30% of the net profit attributable to bank shareholders under the 2024 semi-annual consolidated statement. Meanwhile, the board of directors of the Postbank agreed to submit the bill to the shareholders' meeting for consideration.

So far, all six major banks have announced their intention to pay mid-term dividends. Similar to most other major banks, the Postbank also stated in the announcement that when formulating the 2024 profit distribution plan, it will consider the amount of mid-term profit distribution already distributed. According to the announcement issued earlier, the Agricultural Bank, the Bank of China, and China Construction Bank have all stated that when formulating the 2024 profit distribution plan in the future, they will take into account the factors of the interim profit distribution amount already distributed.

ICBC, on the other hand, clearly stated that “when the 2024 profit distribution plan is subsequently formulated, the amount of interim profit distribution already distributed will be deducted.” The Bank of Communications said that in the future, a specific mid-term dividend plan will be formulated in accordance with the provisions of the “Regulations” and the net profit level for the 2024 semi-year.

Statistics from some research reports show that over 10 A-share listed banks, including major state-owned banks, have announced plans to implement mid-term dividends. A Financial Services Association reporter found that up to now, in addition to major state-owned banks, there are also a number of urban agricultural commercial banks that have medium-term dividend plans. For example, the Bank of Shanghai, Bank of Suzhou, Bank of Lanzhou, Bank of Nanjing, Bank of Jiangsu, Zijin Bank, and Shanghai Agricultural Commercial Bank have also revealed plans to pay mid-term dividends.

Ma Xiangyun, a researcher at Changjiang Securities, determined that in the future, more small and medium-sized banks may follow suit and push for the implementation of mid-term dividends. Earlier, a number of banks also responded about whether they have medium-term dividend plans. For example, at Huaxia Bank's 2023 performance briefing, regarding whether there is a mid-term dividend plan, the bank's chairman Li Minji said that it will actively study and implement regulatory requirements and do a good job of dividend distribution.

Industry: High-frequency dividend returns bring high liquidity value and more deterministic cash flow

The new “National Nine Rules” strengthen the supervision of cash dividends of listed companies and enhance the stability, sustainability, and predictability of dividends. A number of listed banks responded positively and are planning to pay mid-term dividends. According to the announcement of major state-owned banks, industry insiders have determined that most banks' 2024 mid-term dividends and 2024 dividends combined to account for the profit ratio will remain similar to 2023.

“Some investors believe that if the total dividend ratio does not change, the medium-term dividend is of limited significance.” Ma Xiangyun believes that in reality, it is of great significance. From the perspective of the liquidity of investment returns, even if the annual dividend amount does not change, more frequent dividend returns will bring high liquidity value and more deterministic cash flow. Medium-term dividends also help investors to hold dividend-type bank stocks more stably and for a long time, supporting the continued rise in stock prices.

Ma Xiangyun further said that in the past, under the annual dividend model, the interval period was long, and some of the funds might tend to be bought before the equity registration date, dividends were paid later, and the stock price was gradually “filled in” before the stock price was gradually “filled in.” High-frequency dividends are also very attractive to individual investors. In the Hong Kong stock market, HSBC's quarterly dividends have long been regarded as a stable savings and financial management tool for local investors. I am clearly optimistic about the revaluation of bank stock dividends. Furthermore, we are concerned that some banks' mid-term dividends may exceed expectations. For example, the total dividend ratio for mid-2024 to 2024 will increase.

Zhou Maohua, financial market analyst at Everbright Bank, said in an interview with a reporter from the Financial Association that listed companies return shareholders with real money on the basis of steady and sustainable management; listed companies' dividends are also an important reflection of the good profits and steady financial situation of listed companies, which helps enhance the company's market image value and investment appeal. At the same time, active dividends from listed companies and investors' optimistic expectations for the company's development prospects will promote a virtuous cycle of relationships between companies and shareholders, help cultivate and expand the long-term value investment concept of the market, and promote high-quality development of the capital market.

“For listed companies, while actively returning shareholders' investments, they also need to comprehensively consider the company's profits, cash flow, investment in R&D and business development, etc., to balance shareholders' dividends with their own sustainable development.” Zhou Maohua added.