According to the profit distribution plan disclosed in the annual report of the six state-owned banks in 2021, the total amount of cash dividends launched by the six banks in 2021 was as high as 382193 billion yuan (common stock pre tax, the same below), a significant increase of 11.81% compared with 2020, and the amount of dividends reached a record high.
total dividends hit another record high
ICBC has paid out more than 100 billion yuan
As the “national team” of Finance and the “leader” of commercial banks, the six state-owned banks not only actively implement the national strategy and continuously improve the quality and efficiency of serving the real economy, but also play an exemplary role in leading value investment through long-term and stable dividends.
According to the profit distribution plan disclosed by the six major state-owned banks, the total cash dividends to be distributed by the above-mentioned banks in 2021 are up to 382193 billion yuan, a significant increase of 40.376 billion yuan or 11.81% compared with 341817 billion yuan in 2020.
From the specific dividend data disclosed by the six major state-owned banks, the dividend amount of the six major banks in 2021 increased to varying degrees compared with that in 2020. Among them, the cash dividend of Industrial And Commercial Bank Of China Limited(601398) 2021 exceeded the 100 billion yuan mark for the first time, reaching 104534 billion yuan.
In addition, the cash dividends of CCB, ABC, BOC, BOCOM and Postal Savings Bank Of China Co.Ltd(601658) 2021 increased to 91.004 billion yuan, 72.376 billion yuan, 65.060 billion yuan, 26.363 billion yuan and 22.856 billion yuan respectively. Among the six major state-owned banks, China Construction Bank Corporation(601939) , with the highest proportion of dividends per share, the bank plans to pay out 3.64 yuan per 10 shares in 2021.
The reporter noted that while the overall operation remained stable, the profit distribution plans of large state-owned banks in recent years have adopted the way of cash dividend, rather than giving bonus shares and converting capital reserve into share capital. The six major state-owned banks all gave back cash to shareholders, and the proportion of cash dividends was maintained at 30% or more. The strength of cash dividends basically kept pace with the growth rate of performance.
“As a large state-owned bank, it adheres to the annual profit distribution in the form of cash dividend, and still maintains a cash dividend ratio of 30% in 2021, which meets the requirements of relevant policies.” China Merchants Securities Co.Ltd(600999) (14.700, 0.23, 1.59%) Liao Zhiming, chief analyst of banking industry, said in an interview with the reporter of Securities Daily that the long-term stable cash dividend scheme launched by large state-owned banks over the years will give stable returns to all investors, especially small and medium-sized investors, and help investors establish the concept of value investment.
According to the reporter, the above-mentioned dividend plans of large state-owned banks still need to be approved by their respective shareholders’ meetings before they can take effect. According to the profit distribution time disclosed by the above listed banks, major state-owned banks will not start paying dividends until July. Among them, the A-share dividends of ICBC, BOCOM and Postal Savings Bank Of China Co.Ltd(601658) will be paid on July 12. The A-share dividends of ABC and BoC will be paid on July 15, while CCB said that its annual profit distribution will be based on the total share capital registered after the closing of the market on July 7.
3 banks’ dividend yield “breaking 7”
long term investment value highlights
While the total amount of dividends paid by the six major state-owned banks continued to increase in 2021, the large state-owned banks also performed well in the dividend rate, which is one of the important indicators to measure whether the enterprise has investment value.
Under the support of high dividends, calculated by the closing price at the end of last year, the dividend rate of half of the six state-owned banks has “broken 7”, of which the dividend rate of Bank of communications is as high as 7.70%, the dividend rates of Bank of China and Agricultural Bank of China are 7.25% and 7.03% respectively, and the lowest Postal Savings Bank Of China Co.Ltd(601658) dividend rate is 4.85%. According to the annual report of Bank Of China Limited(601988) financial management market (2021) issued by the banking financial management registration and custody center, the weighted average annualized rate of return of financial products was the highest of 3.97% and the lowest of 2.29% in each month of 2021. Puyi standard data also shows that the overall bank financial income in December 2021 was only 3.40%. It can be seen that the dividend yield of the six major state-owned banks has significantly outperformed the yield of leading bank products.
In the context of high dividend yield, senior executives of large state-owned banks are also full of confidence in the investment value of their banks. Tian Guoli, chairman of China Construction Bank, once said that the stocks of large state-owned banks are not suitable for short-term investment. In the long run, the dividend rate has exceeded that of bank financial products in the same period.
Bank of China President Liu Jin said at the industry performance press conference a few days ago that the current dividend rate of Bank of China is high, which is a good choice for personal wealth managers and individual customers as part of the asset portfolio. He suggested that investors and analysts should not only look at the stock price, but also look at the dividend, not only the growth and growth concerned in the capital market, but also the stability.
“The high dividend rate of large state-owned banks is due to its long-term and stable cash dividend policy on the one hand, and the factors of low stock price and low valuation of banks last year on the other hand, which are caused by dual factors.” Liao Zhiming said that at present, the dividend rate of large state-owned banks is significantly stronger than that of bank financial products, which not only creates considerable value returns for investors, but also allows investors to establish the concept of long-term investment value.
Although the dividend amount and dividend yield of the six major state-owned banks continued to increase, each bank also said in its annual report that while fully considering the return to shareholders, it also took into account the long-term interests of the bank, the overall interests of all shareholders and the sustainable development of the bank.
The reporter noted that in recent years, the six state-owned banks have rarely supplemented the external core Tier-1 capital, and the endogenous accumulation of capital generated by profit retention can be said to be the only way for the state-owned banks to supplement the core Tier-1 capital.
In this regard, Liao Zhiming believes that the core tier one capital supplement of large state-owned banks mainly depends on profit retention to maintain credit supply. Therefore, while maintaining the synchronous growth of dividends and performance, dividends should also be used scientifically, and full consideration should be given to enriching endogenous capital through profit retention to provide support for the long-term development of banks.
