As the "dividend big player" in the A-share market, the six major state-owned banks have also put dividends on the agenda.

As of July 17, Bank of China has completed the distribution of cash dividends for its A-share shareholders for 2023, which means that the 2023 A-share cash dividends of the six major state-owned banks have been fully distributed and all cash "red envelopes" have been received.

According to statistics, the six banks distributed a total of approximately CNY 245.402 billion in cash dividends for their A-share shareholders in 2023, slightly higher than the CNY 240.485 billion in 2022.

It is worth noting that since the release of the new "Nine Articles of the State" policy, several A-share listed banks have announced plans to distribute interim dividends. Industry insiders pointed out that the total amount of dividends for listed banks is still growing, with good performance as the support basis. In addition, large-scale dividends can improve shareholders' return on investment, enhance investor confidence and satisfaction.

The six state-owned banks distribute CNY 245.4 billion in dividends.

As usual, the six major state-owned banks have been the main force in distributing dividends among listed companies, with the six banks distributing a total of approximately CNY 245.402 billion in cash dividends for their A-share shareholders in 2023.

In terms of absolute dividend amount, ICBC and China Construction Bank's total dividend payments exceeded CNY 100 billion, with ICBC's dividend totaling CNY 109.203 billion and China Construction Bank's dividend totaling CNY 100.004 billion.

In addition, the banks are ranked from the highest to the lowest based on the dividend amount, namely Agricultural Bank, Bank of China, Bank of Communications, and Postal Savings Bank of China, with dividend amounts of CNY 80.811 billion, CNY 69.593 billion, CNY 27.849 billion, and CNY 25.881 billion, respectively.

Except for Bank of Communications, the total dividends of other banks have increased compared with last year.

In terms of dividend ratio, the six major banks' cash dividends in 2023 all exceeded 30%, with China Construction Bank having the highest ratio of 30.06%, followed by Bank of Communications at 30.03%.

China Merchants Securities pointed out that listed banks have been returning their shareholders in cash for many years and the strength of their cash dividends is in line with the growth rate of their performance. This reflects the determination of listed banks to fulfill their obligation to provide reasonable returns to shareholders while continuously improving the effectiveness of serving the real economy and maintaining stable performance growth.

Sector defense attributes highlighted.

Since the beginning of this year, the bank sector has been on the rise, and it has recently shown strong momentum, with the stock prices of the four state-owned major banks reaching historic highs.

Industry insiders generally believe that the bank sector will continue its good trend in the near future, with the macro and policy environment facing the bank sector gradually warming up under the influence of multiple positive factors, including the accelerated release of real estate-related stimulus policies, the accelerated improvement of deposit cost improvement, and the marginal improvement of asset quality expectations.

In addition, the national financial sector has been emphasizing high-quality development. For banks, this means allocating financial resources to national major strategies, key areas, and weak links, adjusting the credit structure of banks, and bringing opportunities for banks' transformation and development.

At the same time, institutional investors have already been positioned in the current rally of bank stocks.

As of the end of the first quarter, the market value of bank stocks held by publicly offered mutual funds amounted to CNY 108.7 billion, with a quarter-on-quarter growth rate of 28.03%. At the end of the first quarter, the banking sector accounted for 4.29% of A-share assets held by publicly offered mutual funds, surpassing 4% for the first time since 2023.

Brokerage analysts generally maintain an optimistic attitude toward the future trend of bank stocks.

CITIC Securities pointed out that the recent rally of the bank sector continues, with funds continuously favoring state-owned major banks, and the industry index has hit a new high for the year, with the market paying close attention to the subsequent trend. In the second quarter, banking business confidence is expected to stabilize, the expansion strategy will be cautious, the trend of interest spreads will meet expectations, and the credit risk pattern will remain stable. Bank stocks are currently undergoing an increase in the portfolio allocation logic of financial product risk-reward ratios, and the valuation repair logic under the dividend framework is continuing.

Huachuang Securities also believes that the current low interest rate environment provides a double bullish for bank stock investment, ensuring the stability of dividends and attracting sustained inflows of medium and long-term funds. In order to maintain a dividend yield of 4% or more, the overall valuation of bank stocks is expected to increase by 23% to 54%. This indicates that the bank sector is currently in a valuation trough and has huge potential for upside. Although the bank industry will still face certain pressures in 2024, under the guidance of good macro policies, the industry is gradually returning to a "new stable state" and moving towards a high-quality development track.