Up to 5.64%, with dividend yields all exceeding 3%! Buying bank stocks outperforms depositing in banks. 21 listed banks paid a total of 580 billion in dividends.

Source: Economic Times Weekly—Economic Times Online

Bank annual reports have entered a period of interim review; as of April 2, a total of 22 listed banks have released their annual reports. Judging from the distribution amount, 21 banks’ cumulative cash dividends for fiscal year 2025 exceeded CNY 580 billion, increasing by nearly CNY 10 billion compared with fiscal year 2024.

Since the second half of 2025, bank stocks have ended a one-way rally and entered a period of consolidation and adjustment. From the perspective of dividends, the current dividend yield of bank stocks has already “outperformed” low-risk products such as bank wealth management products and money market funds.

Data from Wind shows that, based on the closing stock price on April 2, the dividend yields of the aforementioned 21 banks are all above 3%. Among them, six nationwide joint-stock banks have dividend yields exceeding 5%.

Worth noting is that, since the second half of last year, public funds and insurance capital have shown different allocation routes for bank stocks. Judging from the recent annual reports released by public funds, in the second half of 2025, public funds reduced holdings by more than 1.2 billion shares of Agricultural Bank of China, while insurance capital—described as “long-term capital”—continues to increase its holdings of Agricultural Bank of China.

Against the backdrop of the current low interest rate environment and a shortage of assets, the “certainty” of stable bank stock dividends is becoming a scarce resource. In the view of industry insiders, ordinary investors should uphold the philosophy of long-term investing and value investing, treat bank stocks as the ballast stone for assets to be held for the long term, and reduce risks brought by short-term trading.

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Total dividend amount surpasses CNY 58 billion; dividend yields of 6 joint-stock banks exceed 5%

As of April 2, 22 listed banks have already disclosed their 2025 annual reports. Among them, there are 6 state-owned large banks, 9 joint-stock banks, 3 city commercial banks, and 4 rural commercial banks. Of these, 21 banks have already released cash dividend plans. Compared with 2024, the overall trend of bank industry dividends in 2025 shows a pattern of steady improvement.

Wind data shows that, for fiscal year 2025, the cumulative dividends of the aforementioned 21 banks reached CNY 584.246 billion, up by CNY 9.397 billion from 2024. The number of banks with dividend totals exceeding CNY 10 billion was 12.

State-owned large banks remain the main force behind dividends among listed banks. For instance, Industrial and Commercial Bank of China’s cumulative dividends for 2025 reached CNY 110.593 billion, ranking first. Construction Bank, Agricultural Bank, and Bank of China followed closely, with dividend totals of CNY 101.684 billion, CNY 87.321 billion, and CNY 72.917 billion, respectively.

From the dividend payout ratio perspective, there are 15 banks with payout ratios above 30%. Among them, China Merchants Bank’s payout ratio is 35.34%, ranking first among listed banks. The payout ratios of the six state-owned large banks are all above 30%. According to its annual report, after 14 consecutive years, Bank of Communications has maintained a dividend payout ratio above 30%.

At present, Zhengzhou Bank is the only listed bank that has not made a 2025 cash dividend. Explaining the reasons for not paying dividends, Zhengzhou Bank states in its annual report that there are mainly two factors: first, the bank is in a critical stage of deepening reforms and shaping a transformation; retaining undistributed profits is beneficial for strengthening the funding base for high-quality development and further enhancing its risk resilience. Second, under the background of increasingly strict financial regulation and strengthened capital constraints, supplementing from retained profits is the main and effective approach to ensure adequate capital levels. The undistributed profits it retains will be used to supplement core tier-1 capital and improve capital adequacy.

From the dividend yield level perspective, based on the stock price on April 2, the dividend yields of the above 21 banks are all above 3%. Among them, Industrial Bank has the highest dividend yield at 5.64%. Besides Industrial Bank, there are five listed banks with dividend yields above 5%: Huaxia Bank, Everbright Bank, Ping An Bank, China Merchants Bank, and Minsheng Bank. Their dividend yields are 5.61%, 5.49%, 5.29%, 5.07%, and 5.03%, respectively—each being a joint-stock bank.

Among the 21 banks, the dividend yields of the state-owned large banks sit at a mid-range level. Among the six state-owned large banks, the highest dividend yield is Bank of Communications at 4.58%. Postal Savings Bank, Industrial and Commercial Bank of China, Construction Bank, Bank of China, and Agricultural Bank have dividend yields of 4.21%, 4.07%, 4.06%, 3.81%, and 3.61%, respectively.

Public funds cut positions in ABC by more than 1.2 billion shares; insurance capital adds on dips against the trend

Recently, public funds’ 2025 annual reports have been fully disclosed, and the details of overall holdings are now coming to light.

Wind data shows that, as of the end of 2025, the top three bank stocks by total shareholding volume among public funds are Industrial and Commercial Bank of China, Agricultural Bank of China, and Bank of Communications, with 3.709 billion shares, 3.083 billion shares, and 2.993 billion shares, respectively. However, compared with the end of June 2025, they have all been reduced to varying degrees.

In 2025, Agricultural Bank of China’s overall gain was as high as 54.26%, ranking first among A-share listed banks. However, in the second half of last year, public funds significantly reduced their holdings of Agricultural Bank of China, with the reduction magnitude ranking first within the banking sector.

Wind shows that, in the second half of 2025, the five banks with the largest reduction in fund holdings were Agricultural Bank of China, Jiangsu Bank, Industrial and Commercial Bank of China, Hangzhou Bank, and China Merchants Bank, with reductions of 1.239 billion shares, 0.640 billion shares, 0.533 billion shares, 0.275 billion shares, and 0.265 billion shares, respectively.

However, while reducing holdings, public funds also increased allocations to some local city commercial banks and rural commercial banks.

As of the end of 2025, public funds held 595 million shares of Qilu Bank, an increase of 246 million shares compared with the end of June 2025. Its holding size is close to doubling. In addition, the entities with increases exceeding 100 million shares include Zhangjiagang Bank, Zheshang Bank, China Everbright Bank (H shares), Huaxia Bank, and Bank of China, with increases of 157 million shares, 138 million shares, 137 million shares, 114 million shares, and 111 million shares, respectively.

Compared with public funds, insurance capital is stepping up its layout of bank stocks.

Wind data shows that, as of April 2, among listed companies that have disclosed annual reports, the top three companies with quarter-on-quarter increases in insurance capital holdings are Agricultural Bank of China, Industrial and Commercial Bank of China, and CITIC Bank. Specifically, Ping An Life Insurance holds 5.859 billion shares of Agricultural Bank of China, an increase of 0.946 billion shares quarter-on-quarter. Products under China Life Insurance Company hold 1.160 billion shares of Industrial and Commercial Bank of China and 0.906 billion shares of CITIC Bank, with quarter-on-quarter increases of 0.402 billion and 0.191 billion shares, respectively.

At present, in an environment where deposit rates continue to fall and volatility in the bond market intensifies, the yields of low-risk wealth management options such as bank wealth management products and money market funds have also been declining continuously.

Prudent Standard data shows that, as of the end of February 2026, across the whole market, the average annualized yield over the past one month for ongoing open-ended fixed-income wealth management products (excluding cash management-type products) is 2.34%, a quarter-on-quarter decline of 0.66 percentage points; the average annualized yield over the past three months is 2.27%, a quarter-on-quarter decline of 0.12 percentage points. By comparison, the attractiveness of dividend yields of bank stocks continues to rise.

Xue Hongyan, a special research fellow at Sushang Bank, told Economic Times Weekly’s reporter: “At present, the dividend yields of most listed bank stocks are at relatively high levels. During market interest rate decline cycles, these assets—combining steady cash flows with high dividend payout ratios—become a safe harbor for capital with low risk appetite. Although the under-allocation of the banking sector by active funds has expanded somewhat, long-term capital such as insurance and social security funds is still continuing to build positions. The ‘increase the dividend payout ratio and strengthen shareholder returns’ policy advocated by regulators further enhances the attractiveness of bank stocks for allocation.”

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Editor: Li Linlin