In the context of fluctuations in the equity market and the net breaking of many financial products, the cash dividends of bank shares are particularly considerable. The total amount of dividends to be paid by the 20 listed banks that have announced the dividend plan is 488.36 billion yuan, an increase of 55.78 billion yuan over last year, and the dividend ratio of most banks is higher than 30%. Bank stocks themselves are also favored by public funds because of their low valuation and stable fundamentals.
bank dividend
Due to the substantial growth of performance, bank shares rose. According to the annual report, in 2021, the Industrial And Commercial Bank Of China Limited(601398) cash dividend exceeded 100 billion yuan for the first time, reaching 104534 billion yuan. Followed by China Construction Bank Corporation(601939) with 91 billion yuan, followed by Agricultural Bank Of China Limited(601288) , Bank Of China Limited(601988) with 72.4 billion yuan and 65.1 billion yuan respectively.
Statistics show that the total amount of dividends to be distributed by the 20 listed banks that have announced the dividend plan is 488.36 billion yuan, an increase of 55.78 billion yuan over last year, and the dividend proportion of most banks is higher than 30%.
Among the joint-stock banks, China Merchants Bank Co.Ltd(600036) ‘s dividend amount topped the list, and the cash dividend amount reached 38.385 billion yuan in 2021 Industrial Bank Co.Ltd(601166) , China Citic Bank Corporation Limited(601998) , China Everbright Bank Company Limited Co.Ltd(601818) paid dividends of 21.501 billion yuan, 14.778 billion yuan and 10.86 billion yuan respectively.
“Among the 23 listed banks that have disclosed the annual report of 2021, 13 have basically the same cash dividend ratio as that in 2020, and one has significantly increased the cash dividend ratio.” Huatai Securities Co.Ltd(601688) in the research report, it is pointed out that the capital adequacy ratio and core tier 1 capital adequacy ratio of listed banks at the end of 2021 increased by 0.39 percentage points and 0.12 percentage points respectively compared with that at the end of September. The continuous improvement of profits and the full use of capital instruments are the main driving factors. The net profit of listed banks generally rebounded, but under the triple pressure of macroeconomic downturn, most national banks basically kept the proportion of cash dividends unchanged, and some urban commercial banks reduced the proportion of dividends and strengthened the supplement of endogenous capital to improve their risk response ability.
Previously, many bank leaders also mentioned the considerable income of bank stock dividends. Compared with other assets, the dividend yield is stable and even exceeds that of financial products. At the performance conference, Liu Jin, President of Bank Of China Limited(601988) said that the annual average price of Bank Of China Limited(601988) A shares in 2021 was 2.81 yuan, with a dividend of 0.221 yuan per share. Based on this calculation, the dividend yield was 7.86%, an increase of 2.08 percentage points over 2020.
Industrial And Commercial Bank Of China Limited(601398) Board Secretary Xueqing said at the performance conference that corresponding to the share price at the end of 2021, the dividend rate of ICBC’s A-Shares was 6.33% and that of H shares was 8.15%.
“The above dividend rate is a good choice for personal wealth managers and individual customers as part of the asset portfolio. If you choose financial products, fund fixed investment and other investment tools, it would be good to achieve this level of return.” Liu Jin said.
At present, the valuation of China Securities bank index Pb (price to book ratio) is only 0.60 times, which is the lowest in history; PE (price earnings ratio) valuation is only 5.3 times, which is also at a historical low, with a prominent safety margin. In horizontal and vertical comparison, the valuation of the banking sector is low and has a certain allocation value.
China Merchants Securities Co.Ltd(600999) research report believes that when the total amount of dividends remains unchanged, the lower the market value of the company, the higher the dividend rate. Therefore, stocks with high dividend yield often have the advantage of relatively undervalued value. “It can be found that most stocks with low dividend wave are concentrated in industries benefiting from ‘steady growth’ such as banks, which will further strengthen the allocation value of low dividend wave factor in the ‘steady growth’ environment.”
fund increased bank shares
Since the beginning of this year, the market performance has been poor. In the first quarter, the fund significantly increased its positions in bank stocks. With low valuation and low fundamental risk, it has become the first choice for public funds to seek safe allocation.
Zhongtai Securities Co.Ltd(600918) research report shows that in the first quarter, the proportion of fund positions in bank stocks increased by 1 percentage point to 4.02% month on month, ranking first in the industry. “The proportion of bank stocks held by the fund was 4.02%, up 1 percentage point from the end of last year, and the proportion of positions is still lower than the median level of 4.36% and the average level of 4.57% since 2017. The increase of bank holdings ranks first among 28 industries, with pharmaceutical, biological and chemical industries ranking second to third.”
The reason is that on the one hand, the market fluctuates greatly due to the change of sector style, and banks are favored by funds as a defensive sector. On the other hand, the market’s pessimistic expectations for the banking sector have been corrected due to the overweight of loose policy. However, within the banking sector, the preference of different stocks is seriously differentiated, and large banks in China are greatly increased by funds.
“Among the large state-owned banks, the number of heavy fund positions increased significantly year-on-year. Among them, the growth rate of Bank Of Communications Co.Ltd(601328) and Bank Of China Limited(601988) was much higher than that of the other four banks, mainly due to the small base of position number, and the position number of the other four banks increased rapidly year-on-year. Mainly because infrastructure investment is the core driving factor of this steady growth, the credit supply of state-owned banks is relatively faster.” According to the Research Report of Shengang securities.
However, China Merchants Bank Co.Ltd(600036) , Bank Of Ningbo Co.Ltd(002142) , Industrial Bank Co.Ltd(601166) , Ping An Bank Co.Ltd(000001) and Bank Of Chengdu Co.Ltd(601838) , accounting for 73% of the total market value of banks with positions, account for the heaviest proportion of the fund’s shares.
The market believes that the key to the bank stock market lies in the market’s expectation of economic recovery, in which the trend of real estate accounts for the top priority. Since the beginning of the year, many cities have significantly relaxed the regulation of real estate, and the real estate industry is expected to improve, alleviating the concern about non-performing loans of banks.
