Getting really fierce! Dividend yield over 4% — bank stocks outperform bank wealth management products

How Can Banks Deliver High Dividends Under Pressure From Net Interest Margins?

Reporter Ye Maishui, 21st Century Business Herald

Although annual reports are still being disclosed, banks are paying dividends aggressively! The main dividend-paying banks—China’s six major state-owned banks—have already disclosed their dividend plans in full. Against the backdrop of net interest margins generally under pressure, the six major banks actively respond by optimizing their credit business, strengthening cost control on the liability side, and also setting aside more than 420 billion yuan for dividends to reward shareholders, becoming the stable “ballast stones” in the capital market. According to data from Tonghuashun, the dividend yield of bank stocks is around 4.2%; among them, 6 banks’ dividend yields exceed 5%, which is already far higher than last year’s average annualized return of 1.98% from bank wealth management products.

Bank dividend yields have already exceeded 4%

So far, 21 banks have disclosed their dividend plans, and the six major state-owned banks are second to none, becoming the big dividend payers. In 2025, the six major banks’ total dividends for the full year reached 427.424 billion yuan. Industrial and Commercial Bank of China is expected to pay 110.593 billion yuan in dividends for the full year; China Construction Bank, 101.684 billion yuan; Agricultural Bank of China and Bank of China and Bank of Communications and Postal Savings Bank of China, 87.321 billion yuan, 72.917 billion yuan, 28.692 billion yuan, and 26.217 billion yuan respectively. The dividend payout ratios of the six major banks are all stable at 30% or above of net profit attributable to shareholders.

Among joint-stock banks, China Merchants Bank’s annual report shows: it plans to distribute cash dividends to all shareholders, with cash dividends of 2.016 yuan per share for the full year (tax included). Of this, the proposed cash dividend to be paid is 1.003 yuan per share (tax included); the interim dividend for fiscal 2025 of 1.013 yuan per share has already been paid. Based on the total share capital of approximately 25.22 billion shares as of the end of 2025, the total cash dividends for the full year are about 50.843 billion yuan, accounting for 35.34% of the net profit attributable to the bank’s ordinary shareholders for 2025.

CITIC Bank pays 3.81 yuan per 10 shares, with a total payout of 21.2 billion yuan. The registration date is June 19, the ex-dividend date is June 22, and the payment date is June 22. Shanghai Rural Commercial Bank pays 4.8 yuan per 10 shares, with a dividend payout ratio of 33% or more. The registration date is June 20, the ex-dividend and payment dates are June 23.

Yu Nong Commercial Bank pays 3.2091 yuan per 10 shares, including two parts: the interim and the year-end. The dividend payout ratio is 30.05%. The registration date is June 23, the ex-dividend date and payment date are June 24. Industrial Bank pays 10.66 yuan per 10 shares, with a total payout of 22.56 billion yuan.

Ping An Bank pays 5.96 yuan per 10 shares, with a dividend payout ratio of 28.79%. However, due to Ping An Bank’s stock price currently being in a relatively low trough, its dividend yield is 5.4%.

According to Tonghuashun data, the banks’ dividend yield (calculated based on the closing price as of March 31) has reached 4.2%, with 6 banks’ dividend yields above 5%. Among them, Huaxia Bank and Industrial Bank have dividend rates of 5.7%, ranking among the top.

On March 31, Qu Gang, President of Huaxia Bank, said at the 2025 annual performance briefing that Huaxia Bank maintains a continuous and stable dividend policy. Over the past three years, total dividends have increased year by year, the dividend payout ratio has risen year by year, and in 2025 the dividend payout ratio reached 25.94%, an increase of 0.9 percentage points over the previous year.

According to Huaxia Bank’s 2025 annual report, the bank plans to distribute cash dividends of 3.20 yuan per 10 shares for 2025 (tax included), with cash dividends totaling 5.093 billion yuan. Together with the cash dividends already distributed in the 2025 interim period of 1.00 yuan per 10 shares (tax included), totaling 1.591 billion yuan, the bank will distribute cash dividends of 4.20 yuan per 10 shares for the full year (tax included), with total cash dividends of 6.684 billion yuan.

When discussing its next steps in capital planning and dividend arrangements, the President of ICBC, Liu Jun, said, “We will further scientifically quantify capital planning, turning ICBC’s capital planning into annual rolling, dynamic capital planning, so that the use of capital, capital raising, and the replenishment of endogenous and exogenous capital are highly integrated. In terms of dividend arrangements, we will closely observe changes and demand in the capital market and respond to everyone’s needs and calls.”

When responding to market concerns, Zhang Baojiang, President of Bank of Communications, said, “Bank of Communications’ total dividends for 2025 increased by nearly 2% compared with 2024. This is mainly due to steady progress in business development, overall favorable performance, and continuous positive growth in net profit, which increases the amount of distributable profits. In 2026, Bank of Communications is confident that it can continue to reward shareholders with good performance and stable dividends.”

Banks Use ETF Routes to Break Through

In sharp contrast to the steady climb in bank dividend payout ratios, bank wealth management product yields have continued to decline. The Bank Wealth Management Registration and Custody Center recently issued the “China Banking Wealth Management Market Annual Report (2025)” (hereinafter referred to as “the Report”). The Report shows that as of the end of 2025, the outstanding scale of the banking wealth management market was 33.29 trillion yuan, up 11.15% from the beginning of the year. The number of investors holding wealth management products reached 143 million, up 14.37% from the beginning of the year. For 2025, wealth management products generated 730.3 billion yuan in returns for investors, with an average yield of 1.98%. Compared with 2.65% in 2024, this is down by 67 basis points, marking the first time it fell below 2%.

Moreover, industry expectations for wealth management yields in 2026 are not optimistic. “The yield will most likely remain at a low level and fluctuate within a narrow range, with limited room for a significant upward move,” said Wang Pengbo, Chief Analyst at BoTong Consulting. “On the one hand, the interest rate pivot remains on a downward track, and the shortage of high-quality assets continues. On the other hand, prudent pricing of credit risk remains the mainstream approach. For example, mixed-category and equity-category products may have higher return potential, but their volatility will also increase, and actual returns heavily depend on stock market performance.”

In the first quarter of this year alone, more than 2,000 banks adjusted their performance comparison benchmarks, and some made cuts as large as nearly half. For instance, Minsheng Wealth’s “Gui Zhu Fixed Income Enhancement Two-Year Open 2” product saw its performance comparison benchmark drop sharply from 4%~6% to 2.6%~3.1%, with the maximum reduction reaching nearly 50%.

In a recent research report, Huabao Securities stated that the performance benchmarks of wealth management subsidiaries must disclose in detail the calculation basis. They have a strong connection to investment strategy, underlying assets, and market performance, and in principle must not be adjusted arbitrarily. Traditional fixed benchmarks lack market-based logic and are prone to frequent adjustments, creating compliance pressure. At the same time, as yields on fixed-income assets continue to decline, the wealth management asset side finds it difficult to support previously high fixed benchmarks. Coupled with regulatory crackdowns on chaotic practices such as “yield ranking publicity,” these forces together push the industry toward more prudent and more truthful disclosures of expected returns.

Against the backdrop of returns falling short of expectations, recently more than 30 products have failed to raise funds due to insufficient scale.

To improve returns, banks are also pulling out all the stops. According to banks’ annual reports, two new developments have emerged in wealth management product investments in equity-type assets: first, low-risk product categories that previously rarely allocated to equities have begun to participate in equity investments via ETFs; second, the lineup of wealth management products directly investing in individual stocks has continued to expand.

Equity investing is no longer exclusive to products rated at R3 level or above. Previously, R2-level products with a shorter holding period and relatively lower risk appetite seldom allocated to equity assets, but in the fourth quarter of 2025, multiple products in this category broke the pattern. For example, Guangyin Wealth’s Happiness Low Volatility Daily Open Fixed Income Wealth Management Product No. 1 2025 Q4 Investment Operations Report shows that after look-through analysis, among the top ten assets of this daily-open R2 product, it includes three equity-category assets: Huatai-PineBridge CSI 300 ETF, Invesco Great Wall ChiNext ETF, and E Fund CSI 300 ETF. During the reporting period, the product followed a steady and prudent operational approach; within a risk-controlled framework, it participated in equity investments through ETFs to strive for a better risk-return ratio.

Dai Zhifeng, head of the financial team at Zhongtai Securities, expects that in 2026, the scale of wealth management products allocating to equity-type assets will reach 930 billion yuan, an increase of more than 60 billion yuan compared with 2025.

On E Fund’s index investment service platform “Index Express,” this reporter found that there are currently more than 460 indices in the market, and the number of linked ETFs has exceeded 1,400. In addition to some broad-based indices, ETFs in today’s market also cover various industry sectors, including power, new energy, satellites, and more.

In addition to gaining indirect market access through asset management products, multiple wealth management products have begun to directly invest in individual stocks. For example, among the top ten assets at the end of Q4 2025 for Hangzhou Bank Wealth’s Happiness 99 Hongyi (Jinying) 30-Day Holding Period Wealth Management, new stock Yixin Sheng appeared among the top ten assets for the first time. Hangzhou Bank Wealth’s 2025 annual report shows that the company’s scale of direct investment in equity-type assets at the beginning of the year was 771 million yuan, increasing to 1.626 billion yuan at year-end, an increase of over 100%. Xingye Wealth’s Li Xing Cheng Jin Yun three-month holding period hybrid wealth management product No. 1 is an R2-level product. At the end of 2025, it held key positions in six individual stocks including Tongwei Co., Ltd. and CATL (Contemporary Amperex Technology). Direct equity investment accounted for 26.28% of the product’s total assets.