Summary of Key Points
The six major state-owned banks (ICBC, CCB, ABC, BOC, BOCOM, and PSBC) have seen a recovery in performance in the first half of 2026, with both revenue and net profit increasing. The proportion of interim dividends has collectively risen from 30% in previous years to 31%, with a total proposed dividend of approximately 221 billion yuan, an increase of 16.3 billion yuan compared to last year. The increase in dividends is supported by improved performance, but the banks also need to balance shareholder returns with their own capital needs (such as lending and risk mitigation through capital reserves). Currently, the dividend yields of these bank stocks generally exceed 3.6%, and while stock prices have varied, the attractiveness of dividends remains strong.
1. Collective Increase in Dividend Ratio by 1%: How Much Will Each Bank Distribute?
This year, the interim dividend ratio for the six major banks has been raised from 30% to 31% for the first time, meaning that for every 100 yuan in profit, an additional 1 yuan will be distributed to shareholders.
- Total Amount: The total proposed dividend is 221 billion yuan, an increase of 16.3 billion yuan from last year.
- Details for Each Bank:
- ICBC will distribute the most (53.853 billion yuan), at 1.511 yuan per 10 shares.
- CCB will distribute 2.01 yuan per 10 shares (52.582 billion yuan).
- ABC will distribute 1.297 yuan per 10 shares (45.393 billion yuan).
- BOC will distribute 1.19 yuan per 10 shares (38.343 billion yuan).
- PSBC will distribute 1.33 yuan per 10 shares (15.973 billion yuan).
- BOCOM will distribute 1.68 yuan per 10 shares (14.845 billion yuan).
- Reason for the Increase: Bank executives stated that it is mainly in response to investors' demands. For example, ICBC mentioned addressing market concerns, while ABC stated the intention to share the benefits of development, and BOC used the 20th anniversary of its listing as an opportunity to increase dividends.
2. Improved Performance as the Basis for Higher Dividends: Both Revenue and Profit Increased in the First Half
The improved performance in the first half has provided the necessary support for the higher dividends:
- Revenue: Total revenue exceeded 2 trillion yuan, an increase of 171.9 billion yuan year-on-year. ABC and CCB saw double-digit growth (11.07% and 10.72% respectively), and ICBC also had a growth of over 9%.
- Net Profit: Total net profit was 712.6 billion yuan, an increase of 30.1 billion yuan year-on-year. BOC had the fastest growth rate (5.11%), followed by ABC (4.93%) and PSBC (4.62%), with ICBC also achieving a growth of 3.32%.
- Significant Signal: This is the first time in recent years that the major banks have presented a "clearly improved" semi-annual report, indicating that their profitability is improving, which gives them the confidence to distribute higher dividends.
3. Balancing Dividends and Development: Needing to Reward Shareholders While Also Keeping Funds for Business Operations
Banks cannot distribute all their profits, as they need to retain funds for lending and risk mitigation (known as "capital reserves"). Therefore, the decision to increase dividends is a "cautious one":
- Capital Pressure: The core capital adequacy ratios of the six major banks (which act as a safety cushion for the banks) have generally decreased, partly due to the expansion of credit.
- Balancing Measures:
1. Retaining Profits: For example, ABC retained 110.7 billion yuan in profits in the first half to support an increase in its capital adequacy ratio.
2. Issuing Bonds to Strengthen Capital: This year, the major banks have issued over 1.3 trillion yuan in capital bonds (such as perpetual bonds and secondary capital bonds) to replenish their capital. ICBC issued the most (400 billion yuan), followed by CCB (260 billion yuan) and BOC (220 billion yuan).
3. Dynamic Adjustment: ICBC stated that its dividend policy will be adjusted based on market conditions and the bank's own situation, aiming to satisfy shareholders while ensuring the bank's long-term development.
4. Dividend Yields Exceed 3.6%: Are They More Attractive Than Fixed Deposits? Varying Stock Prices
Investors are most concerned about the returns they can obtain from dividends:
- Dividend Yields: Based on the latest closing prices, the dividend yields of the six major banks all exceed 3.6%. BOCOM has the highest yield (4.57%), followed by PSBC (4.37%), which is significantly higher than the current one-year fixed deposit interest rates (ranging from about 1.5% to 2%). This is very attractive to conservative investors.
- Stock Price Trends: Most major bank stocks declined in the first half of the year, but there has been a mixed performance in the second half: ABC has risen by 17.54% (the highest increase for the year), BOC by over 10%; ICBC and BOCOM have had slight increases, while PSBC and ABC are still declining. However, even with declining stock prices, the high dividend yields can partially compensate for any losses.
Conclusion
The increase in dividends by the six major banks is a reward for their improved performance and reflects their commitment to investors. Despite facing capital pressures, they have balanced short-term returns with long-term development by retaining profits and issuing bonds. For ordinary investors, bank stocks with high dividend yields remain a stable choice, as the dividend income is much more attractive than fixed bank deposits.