Listed banks make large dividend payouts, with high yields highlighting long-term investment value

As of April 2, 22 A-share listed banks have disclosed their 2025 profit-distribution plans, of which the six state-owned major banks’ total dividends for the full year are expected to exceed 420 billion yuan. Industry insiders believe that regular cash dividends can increase investors’ actual returns and enhance their sense of gain; at the same time, they help drive the sector’s valuations to return to a reasonable range, continuously attracting medium- and long-term funds for allocation.

Dividends from the six major banks for the whole year may exceed 420 billion yuan

Judging from the dividend announcements that have already been released, the six major banks still remain the “main force” in dividend distribution. The six major banks’ 2025 full-year final-stage dividends are planned to total 222.767 billion yuan. Specifically, the dividend scale of the six major banks remains stable. Industrial and Commercial Bank of China ranks first with a planned final-stage dividend total of more than 60 billion yuan. China Construction Bank, Agricultural Bank of China, and Bank of China have planned final-stage dividend totals of 53.079 billion yuan, 45.498 billion yuan, and 37.667 billion yuan, respectively. Postal Savings Bank of China and Bank of Communications also both have planned final-stage dividend totals exceeding 10 billion yuan. From the total cash dividends for the full year, the six major banks plan to pay a combined cash dividend of 427.4 billion yuan in 2025, which is 6.8 billion yuan more than in 2024. This brings it back up to the 420 billion yuan threshold level again. The dividend payout ratio remains at around 30%, continuing the dividend style of a high payout and steady returns.

For joint-stock banks, China Merchants Bank takes the lead: its planned 2025 final-stage dividend total is 25.296 billion yuan, and its planned total dividend for the full year is more than 50 billion yuan. China CITIC Bank and Industrial Bank both plan total dividends for the full year of more than 20 billion yuan, with final-stage dividend totals of 107.40 million yuan and 106.03 million yuan, respectively. For city commercial banks, among the banks that have published dividend proposals so far, apart from Zhengzhou Bank clearly stating that it will not distribute dividends, the other banks show high willingness to distribute dividends.

According to Wind statistics, using the April 2 A-share closing price as the benchmark for calculation, 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%.

Continuously optimizing the dividend mechanism

Behind the impressive dividend data is listed banks’ emphasis on returning value to investors. Management teams of multiple banks stated at earnings release conferences that they will continue to optimize the dividend mechanism, keep dividend levels stable, and make improving shareholder returns one of the core long-term operating goals.

Industrial and Commercial Bank of China President Liu Jun said that the bank’s capital planning and dividend arrangements will be adjusted dynamically according to market conditions. The bank will closely observe changes in capital markets and respond to investors’ needs and voices.

“People have mentioned whether we can make corresponding upward adjustments in terms of the dividend payout ratio. As an industry benchmark, ICBC will definitely do what the market needs and think what the market thinks. If our adjustments bring about healthy, sustainable, and continuous positive development in the market, then ICBC will surely play a leading and exemplary role.” Liu Jun emphasized.

Industrial Bank Chairman Lü Jiajin said that Industrial Bank’s full-year dividend payout ratio for 2025 has been raised to 31%, which is also the bank’s 16th consecutive year of increasing the proportion of dividends. “We attach great importance to investors’ returns and market value management. 2026 is the first year of the ‘15th Five-Year Plan’ period. We need to do a solid job with our operating fundamentals and our ‘basic plate.’ This is the foundation for us to carry out dividend payments and improve valuation,” Lü Jiajin said.

Zeng Gang, Chief Expert of the Shanghai Finance and Development Laboratory, believes that regular cash dividends can improve investors’ actual returns and enhance their sense of gain. Banks’ active dividend payments help guide funds to concentrate on high-quality banks, and reflect the capital market’s value discovery and resource-allocation functions.

Expected valuation trends to diverge

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

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

Bank of Communications President Zhang Baojiang said: “In the future, we will, as always, do a good job in operations and management, continuously improve our value-creation capability, and provide investors with more robust performance and continuously stable dividend returns.”

From the perspective of fundamentals, many banks’ decline in net interest margin has narrowed, and credit costs have remained steady with signs of easing. China Construction Bank President Zhang Yi said that in 2025, the decline in the bank’s net interest margin narrowed by 2 basis points compared with the previous year. The deposit interest payment rate was 1.32%, down 33 basis points year over year, reaching a historical low level, effectively strengthening 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 a trend of stabilizing.

Multiple industry insiders told the reporter that listed banks’ regular dividend payments are not only a reflection of their financial strength, but also an important indication that China’s capital market is becoming more mature, with listed banks paying greater attention to returning value to investors. From historical data, bank dividends provide clear support for bank stock prices, helping push sector valuations back toward a reasonable range, and also attracting funds such as insurance capital that are sensitive to dividends to continue increasing their holdings of bank stocks.

Guotai Junan Securities Co., Ltd. expects that in 2026, the valuation of individual stocks in the banking sector will shift from convergence to divergence. Individual stocks with advantages such as strong capability to obtain credit demand on the asset side, large room for cost improvement on the liability side, the establishment of a turning point in asset quality, and active market value management will bring significant excess returns.