Listed banks make large-scale dividends, high yields highlight long-term investment value

Shi Shiyu China Securities Journal

As of April 2, 22 A-share listed banks have disclosed their 2025 profit distribution plans. Among them, the six largest state-owned banks are expected to distribute more than RMB 420 billion in dividends in total for the full year. Industry insiders believe that regular cash dividends can increase investors’ actual returns, enhance investors’ sense of gain; at the same time, it helps drive the sector’s valuation back into a reasonable range and continuously attracts mid- to long-term funds to allocate to the sector.

The six largest banks’ full-year dividends may exceed RMB 420 billion

Judging from the dividend announcements that have already been disclosed, the six largest banks remain the “mainstays” of dividend payments. The six largest banks plan to distribute a total of RMB 222.77B in 2025 final-period dividends. Specifically, the dividend scale of the six banks remains stable. Industrial and Commercial Bank of China ranks first with a proposed final-period dividend total of over RMB 60 billion. China Construction Bank, Agricultural Bank of China, and Bank of China plan final-period dividend totals of RMB 53.08B, RMB 45.5B, and RMB 37.67B, respectively. Postal Savings Bank of China and Bank of Communications also both have final-period dividend totals of over RMB 10 billion. In terms of full-year cash dividends, the six largest banks plan cash dividends totaling RMB 427.4 billion in 2025, an increase of RMB 6.8 billion versus 2024. It once again crosses the RMB 420 billion threshold. The dividend payout ratio remains at around 30%, still continuing the dividend style of a high payout ratio and steady returns.

For joint-stock banks, China Merchants Bank takes the top spot, with a proposed final-period dividend total of RMB 25.3B in 2025 and a proposed full-year dividend total of over RMB 50 billion. China CITIC Bank and Industrial Bank both plan full-year dividend totals of over RMB 20 billion, with proposed final-period dividend totals of RMB 10.74 billion and RMB 10.6B, respectively. Among city commercial banks, for those that have published dividend proposals so far, except for Zhengzhou Bank, which has clearly stated it will not pay dividends, other banks show high enthusiasm for dividend payments.

According to Wind statistics, using the closing price of A-shares on April 2 as the benchmark for estimation, the average dividend yield of the 22 A-share listed banks that have disclosed their 2025 annual reports is 4.3%, and 6 banks have dividend yields above 5%.

Continually optimizing the dividend distribution mechanism

Behind the eye-catching dividend data is the listed banks’ emphasis on returning value to investors. At many earnings conference calls, management has stated that they will continue to optimize the dividend distribution mechanism, maintain a stable dividend level, and make improving shareholder returns one of the core long-term business objectives.

ICBC President Liu Jun stated that the bank’s capital planning and dividend arrangements will be adjusted dynamically based on market conditions. The bank will closely observe changes in the capital market to respond to investors’ needs and concerns.

“People mentioned whether ‘we can make corresponding upward adjustments in the dividend payout ratio.’ As a market bellwether, ICBC will definitely respond to what the market needs and think what the market thinks. If our adjustments bring about healthy, sustainable improvement in the market, then ICBC will definitely play a demonstration and leading role.” Liu Jun emphasized.

Industrial Bank Chairman Lü Jiajin said that Industrial Bank’s full-year dividend payout ratio in 2025 has been raised to 31%, which is also the bank’s 16th consecutive year of increasing its dividend distribution ratio. “We attach great importance to investor returns and market value management. 2026 is the first year of the ‘15th Five-Year Plan’ (‘Tenth Five-Year Plan’) period. We need to do a solid job of our business fundamentals—the basic base—this is the foundation for us to carry out dividend distribution and enhance valuation,” Lü Jiajin said.

Zeng Gang, chief expert at the Shanghai Finance and Development Laboratory, believes that regular cash dividends can improve investors’ actual returns and enhance investors’ sense of gain. Proactive dividend payments by banks help guide funds to concentrate on high-quality banks, reflecting the capital market’s value discovery and resource allocation functions.

Expected valuation trajectory to diverge

Sustained and stable high dividends reinforce the defensive attributes of bank stocks, and they also resonate with improvements in fundamentals, laying the foundation for the sector’s valuation repair.

Lü Jiajin said that Industrial Bank’s performance is currently stable, its dividend payout ratio is high, and investing in Industrial Bank offers both the dual value of earnings and defense.

Bank of Communications President Zhang Baojiang said: “In the future, we will do our business management as we always have—continuously improving our value creation capability—so as to deliver more solid performance and continuously stable dividend returns to a broad range of investors.”

From the perspective of fundamentals, many banks have narrowed the decline in net interest margin and credit costs are trending with stability and slight improvement. Zhang Yi, President of China Construction Bank, said that in 2025 the bank’s net interest margin decline was narrowed by 2 basis points compared with the previous year. The deposit interest cost ratio was 1.32%, down 33 basis points year on year, at a historical low level, effectively夯实 the foundation for net interest margin recovery. Liu Jun also said that in 2025 ICBC’s net interest margin was 1.28%, down 14 basis points from the previous year. The decline in net interest margin has narrowed quarter by quarter, showing signs of stabilizing.

Many industry insiders told this reporter that regular dividend distribution by listed banks is not only a reflection of their financial strength, but also an important indicator that China’s capital market is becoming more mature and that listed banks are paying more attention to returning value to investors. From historical data, bank dividends provide clear support to bank stock prices, driving sector valuation back toward a reasonable range, and also attracting dividend-sensitive funds such as insurance funds to continue increasing holdings of bank stocks.

Caitong Securities (China) Co., Ltd. (Guotai) expects that in 2026, individual stock valuations in the bank sector will shift from convergence to divergence. Individual stocks with advantages such as strong ability to obtain credit demand on the asset side, large room for cost improvement on the liability side, the confirmation of turning points in asset quality, and proactive market value management will bring significant excess returns.

(Editor: Qian Xiaorui)

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