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in recent days, the dividend style remains popular in the market.

on september 23, the banking sector was once again in the green. among the 42 listed banks, 41 recorded gains, and only nanjing bank fell slightly by 0.58%. wind data showed that as of the close of the day, the shenwan banking industry index had closed up for 4 of the last 6 trading days, and had risen by 4.74% from the low point in early september to date. the cumulative increase this year has reached 13.03%, still ranking first among the 31 industries of shenwan.

from a fundamental perspective, the operating results of listed banks recently disclosed in the first half of the year show that the overall revenue of a-share banks has decreased year-on-year, the net interest margin has continued to decline, and the operating performance has been under certain pressure. however, in terms of regional bank types, most listed banks located in jiangsu, zhejiang and shanghai still maintain positive year-on-year growth in revenue or net profit. in addition, several banks have recently announced their 2024 interim dividend plans. according to incomplete statistics from securities china reporters, the 11 banks that have disclosed interim dividends have a total dividend amount of approximately 218.12 billion yuan.

many small and medium-sized banks have seen the largest increases

following a sharp adjustment in bank stocks in early september, the banking sector has seen an overall rebound for several days in recent days.

on september 23, the overall performance of listed banks was positive, with a total of 41 stocks rising, including hua xia bank up 3.88% and ningbo bank up 3.38%, ranking first and second among the 42 a-share banks. in addition, 10 stocks including bank of chongqing, bank of chengdu, bank of beijing, bank of qingdao, bank of changsha, china citic bank and bank of shanghai all rose by more than 2%.

different from the previous banking sector, which was mainly led by large state-owned banks, small and medium-sized banks were at the forefront of the rising stocks on september 23, and most of them were city commercial banks in economically developed regions, while joint-stock banks only occupied a minority of the rising echelon. another feature is that the price-to-book ratios of the banks that rose on that day were generally low in the entire banking sector, and the price-to-book ratios of most stocks were less than 0.5 times.

among the state-owned banks that have repeatedly hit record highs in share prices, agricultural bank of china rose 1.76% that day, ranking first among the six major banks. the other banks rose between 0.88% and 1.52%.

in terms of capital flows, wind data shows that the main net inflow of shenwan banking sector was 2.37 billion yuan, second only to the computer sector and ranking second among shenwan's 31 industries. in terms of secondary industry classification, the net inflow of joint-stock banks was 980 million yuan, higher than that of state-owned banks.

looking at the cumulative increase of individual stocks, despite several consecutive days of sharp declines in early september, as of september 23, the cumulative increase of many stocks this year still exceeded 30%, including nanjing bank (46.4%), pudong development bank (35.15%) and agricultural bank of china (33.87%), with corresponding price-to-book ratios of 0.73 times, 0.41 times and 0.65 times respectively.

11 banks distributed interim dividends of 218.12 billion yuan

as a defensive investment target with stable dividends, the advantage of the bank sector's higher dividend rate than other industries has become one of the reasons why it has been highly sought after by market funds this year. according to wind data statistics, as of the close of september 23, there were 30 listed banks with dividend rates of more than 5%, of which 11 institutions, including ping an bank, xiamen bank, bank of shanghai, bank of chengdu, china zheshang bank, industrial bank, china minsheng bank, and bank of beijing, had dividend rates of more than 6%.

according to previous announcements, the 41 listed banks that implemented a-share dividends in 2023 have a total dividend amount of more than 610 billion yuan, while the total dividends of the six major state-owned banks have reached 245.4 billion yuan. in addition, a number of banks have announced the implementation of the 2024 mid-term dividend plan this year.

according to incomplete statistics from securities china, at least 20 listed banks have indicated or disclosed that they will formulate mid-term dividend plans. among them, 11 banks have confirmed and announced mid-term dividend plans, with a total dividend amount of about 218.12 billion yuan.

specifically, the state-owned banks ranked at the top in terms of mid-term dividends, with the five major banks paying a total of about 190 billion yuan in dividends. among them, icbc paid the largest amount of 51.109 billion yuan. in addition, ccb paid 49.252 billion yuan, abc paid 40.738 billion yuan, boc paid 35.562 billion yuan, and boc paid 13.516 billion yuan.

in terms of dividends per share, nanjing bank ranked first with a cash dividend of 0.3587 yuan per share, followed by ping an bank and shanghai rural commercial bank, with cash dividends of 0.246 yuan and 0.239 yuan per share respectively.

in addition to the banks that have announced specific mid-term dividend plans, many banks including postal savings bank of china, chongqing rural commercial bank, zijin bank, lanzhou bank, hangzhou bank, jiangsu bank, suzhou bank, qilu bank, shanghai bank, china everbright bank and qingdao bank have clearly stated in their semi-annual reports, relevant announcements or performance briefings that they will implement mid-term dividends in 2024, but the specific dividend ratio or amount has not yet been announced.

fundamentals under pressure, interest rate spread drags down revenue

although bank stocks have achieved a significant increase this year, from a fundamental perspective, the slowdown in performance growth caused by the continued narrowing of net interest margin is also a common phenomenon in the industry, and the banking industry is still facing the pressure of "defending interest rate margin."

recently, the interim results of 2024 disclosed by listed banks showed that the total operating income of 42 listed banks in the first half of the year was 2.89 trillion yuan, a year-on-year decrease of 2%; the total net profit attributable to the parent company was 1.09 trillion yuan, a year-on-year increase of 0.4%. by bank type, the operating income of state-owned banks and joint-stock banks decreased by 3% and 3.1% year-on-year respectively, while the revenue of city commercial banks and rural commercial banks increased by 4.8% and 3.4% year-on-year respectively.

it is worth mentioning that the banks with high growth in operating income are mainly small and medium-sized banks in economically developed regions, such as ruifeng bank, changshu bank, and qingdao bank, whose year-on-year revenue growth rate exceeded 10%. in terms of net profit growth, the net profit attributable to the parent company of hangzhou bank, changshu bank, and qilu bank increased by 20.1%, 19.6%, and 17.0% year-on-year, respectively, maintaining their leading position in the industry.

the net interest margin data at the end of the first half of the year released by the state financial supervision and administration bureau showed that as of the end of the second quarter of this year, the net interest margin of commercial banks was 1.54%, the same as at the end of the previous quarter. in terms of institutional types, the net interest margin of joint-stock banks at the end of june increased slightly by 0.01 percentage points from the end of march to 1.63%. city commercial banks and rural commercial banks remained unchanged from the previous month, at 1.45% and 1.72%, respectively. the net interest margin of state-owned banks and foreign banks further narrowed to 1.46%; while the interest margin of private banks narrowed the most, reaching 11bp (basis points). however, in absolute terms, the average interest margin of private banks is still the highest among all types of banks, at 4.21%.

wang jian's team at guosen securities believes that due to the downward trend of lpr, the adjustment of existing mortgage rates, and the relative rigidity of deposit costs, the net interest margin of banks has continued to decline, dragging down the growth rate of revenue and net profit, which is the biggest source of pressure on banks at present. however, the team predicts that the overall performance of the industry may usher in a turning point in 2025, mainly benefiting from the narrowing decline in net interest margin.

ma kunpeng's team at citic securities believes that, at present, the downward pressure on asset-side interest rates still exists, but the deposit interest rate has been lowered several times, and the positive effect of prohibiting manual interest payments in the second quarter has emerged. the liability costs of listed banks have generally been optimized, driving the decline in interest rate spreads to gradually stabilize. in addition, the team believes that the current cost control on the liability side should still be the core means for listed banks to alleviate the downward pressure on the asset side and stabilize the decline in interest rate spreads. if the lpr continues to decline in the future, the deposit interest rate is expected to fall further.