15 Major Banks Distribute Over 570 Billion in Dividends! How to Choose Based on Dividend Yield, Stock Price, and Fundamentals

Ask AI · How can high-dividend-yield bank stocks avoid valuation traps?

While the A-share market is still debating endlessly how the second half of the bull market will unfold, bank stocks have already fed investors a steadying “peace-of-mind pill” through a string of dividend numbers. As 2025 annual reports for listed banks have been released one after another, dividend plans for 6 state-owned banks and 9 A-share listed joint-stock banks have officially come out. Together, 15 banks will distribute more than RMB 570 billion in cash dividends—using cold, hard cash to demonstrate the resilience of industry earnings. Behind the “big-spender” dividend payments, the investment value of the banking sector has become more prominent. The 15 banks’ average dividend yield is over 4.4%, outperforming the returns of bank deposits and wealth-management products. In 2025, the banking sector trended upward with volatility. Agricultural Bank’s annual gain exceeded 52%; Industrial and Commercial Bank of China and SPDB Bank each topped 20%. Many banks’ share-price performance has been impressive. With such generous “red envelopes” in front of them, how should investors make a choice? And how can they precisely capture the investment opportunities within, while avoiding potential risks?

Total “Red Envelopes” Exceed RMB 570 Billion

As the A-share market advances amid fluctuations, bank stocks with high dividend yield and low volatility have always been the most dependable “anchor” in the eyes of capital. The 15 large- and mid-sized listed banks delivered a答卷 for 2025, with total combined dividends of RMB 576.48B. In this “cash in hand” payout list, you can find not only the resilience of banks’ profitability, but also the code that lets ordinary investors “earn while lying down.”

Looking through this “dividend gallery,” by scale, the first tier is clearly the state-owned megabanks. Industrial and Commercial Bank of China ranks first in total dividend at RMB 110.59B, staying true to its long-standing steady style; China Construction Bank follows with RMB 101.68B; Agricultural Bank of China and Bank of China each come in at RMB 87.32B and RMB 72.92B, placing them in ranks three and four. Judging by the dividend payout ratios of the six state-owned banks, they generally stay at 30% or even higher.

In 2025, the six state-owned megabanks combined to pay out more than RMB 420 billion in dividends, accounting for more than 70% of the total dividends distributed by the 15 banks—undoubtedly the “cash cow.” Behind the “scale dominance” are the massive asset bases of the state-owned megabanks and a stable foundation for earnings. In 2025, all six major banks achieved positive growth in both revenue and net profit, with total net profit exceeding RMB 1.4 trillion.

Unlike the “march in step” approach of the state-owned megabanks, the dividend landscape among joint-stock banks shows clear differentiation. China Merchants Bank leads joint-stock banks with total dividends of RMB 14k. Its dividend payout ratio of 35.34% is also among the highest among the 15 banks, continuing the “king of retail” tradition of high returns. China CITIC Bank’s dividend amount increased year over year by RMB 50.84B; its dividend payout ratio rose from 30.5% at the end of 2024 to 31.75%. Industrial Bank and Huaxia Bank also saw steady growth in dividend amounts, continuing to step up their payout力度. However, against the backdrop of pressure on the performance of some listed joint-stock banks, several banks’ dividend scales have also declined.

Wang Hongying, head of the Research Institute for Financial Derivatives Investments of China (Hong Kong), stated that, from a structural classification perspective, large banks maintain consistently high dividend payout ratios thanks to scale advantages and innovation in diversified fee-based business. The differentiation among joint-stock banks reflects differences in operating strategies.

Dividend yield, share price, and dividends must be considered comprehensively

For investors, “more dividends” does not equal “more profit.” Only by combining dividend level, share-price gains, and dividend yield can you measure the core value for money.

Among them, dividend yield is an important indicator for investors to judge a listed company’s long-term investment value, and a key reference for selecting income-oriented stocks. The formula is: dividend yield = (cash dividend per share / current share price) × 100%.

From Wind data, by the end of 2025, the average dividend yield among the 15 listed banks was 4.41%. Six banks had dividend yields above 5%: Huaxia Bank, Everbright Bank, Ping An Bank, Minsheng Bank, Zheshang Bank, and Industrial Bank, with dividend yields of 5.9%, 5.42%, 5.24%, 5.17%, 5.13%, and 5.03% respectively. China Merchants Bank and China CITIC Bank, and Bank of Communications, also had dividend yields above 4%.

Compared with bank deposit and wealth-management product yields, current net asset value performance for one-year bank wealth-management products is basically between 2.2% and 3%. Most mainstream R2-level fixed-income products fall in the 2.6% to 2.8% range. Meanwhile, one-year term deposit rates are generally on the low side. State-owned megabanks and joint-stock banks mostly execute around 1.1% to 1.15%. Large-denomination certificates of deposit have slightly higher rates, typically around 1.2%.

As for share-price trends, since 2025, the A-share banking sector as a whole has shown a volatile upward pattern that first rose and then fell, followed by a repair. In this round of行情, Agricultural Bank even surged 5.17% in a single day, hitting a intraday high of 7.55 yuan and setting a new historical high. Total market cap reached RMB 2.55 trillion, surpassing Industrial and Commercial Bank of China for the first time to top the banking sector market-cap rankings. Wind data shows that in 2025, Agricultural Bank led listed banks with a gain of 52.66%. SPDB Bank and Industrial and Commercial Bank each exceeded 20% in annual growth. The annual share-price gains of China CITIC Bank, Industrial Bank, China Construction Bank, China Merchants Bank, and others were in the 10% to 16% range.

The logic behind the rally in bank stocks this time differs from the past model that relied on an economic rebound and strong loan demand. Against the backdrop of “asset scarcity,” insurers have continued to increase their positions in bank stocks and have triggered back-to-back purchase solicitation mechanisms multiple times. Among ordinary investors, a consensus has gradually formed as well: buying bank stocks is effectively equivalent to allocating to high-yield fixed-income-type products.

However, since this year began, as the stock market has fluctuated, A-share listed banks have also entered a period of range-bound adjustment. In 2024, among 42 listed banks, more than half saw their share prices decline overall during the year. Meanwhile, some individual stocks that led gains last year, such as SPDB Bank, are also near the top of the decline ranking this year.

Wu Zewei, a special research fellow at 苏商银行, said that dividend yield equals the payout rate divided by the price-to-earnings (P/E) ratio, and stock price equals EPS multiplied by the P/E ratio. Dividend yield and share-price changes show an inverse relationship. From this perspective, dividend yield is more suitable for looking back at the past than for predicting the future. That’s because the past purchase cost has already been locked in. We can roughly measure the stable return level generated by cash dividends after buying stocks using dividend yield. But when predicting the future, you need to avoid a “valuation trap” where valuation decline causes dividend yield to rise.

Wang Hongying believes that from the “earn while lying down” perspective, dividend yield is the primary judgment criterion. It directly reflects the proportion of income relative to the principal invested. Compared with dividend amounts used only as absolute figures, dividend yield better shows the value-for-money of an investment. Dividend amounts and stock price upside/downside can be used as secondary references, but the core still lies in whether dividend yield is high or low. However, while focusing on return metrics, you must not ignore banks’ fundamental factors, such as net interest margin, the scale of non-performing loans, and the provision coverage ratio that reflects risk-control capability. Only when these basic indicators that support commercial banks’ operating quality fall within a reasonable range does it make sense to discuss the value and significance of high dividend yield, stable dividends, and stock-price volatility.

Can holding long-term really mean “earning while lying down”?

For the banking industry, which has entered an era of competition for stock already on the books, continued dividend returns are not only an important way to reward investors, but also a direct proof of banks’ profitability quality, capital strength, and operational stability.

At earnings briefings, regarding hot topics investors care about—dividend policy, payout ratio, and long-term return planning—management teams of multiple banks responded one after another.

Liu Jun, president of Industrial and Commercial Bank of China, said, “For the long-term, sustainable, healthy development of the capital market, if the capital market indeed calls for further upward adjustments to the dividend payout ratio, as a market bellwether, ICBC will certainly respond with urgency to what the market needs and what the market wants. In terms of dividend arrangements, we will closely observe changes and demand in the capital market, and respond to everyone’s needs and calls.” Qugang Qu, president of Huaxia Bank, pointed out that over the past three years, the total dividend amount has grown year by year, and the dividend payout ratio has increased year by year. In the future, the bank’s cash dividend policy will balance regulatory requirements, shareholders’ investment returns, and the company’s sustainable development needs. The bank will continue to enhance its profitability and maintain a reasonable dividend payout ratio.

For investors, the core logic of choosing bank stocks has long shifted from “making money from scale growth” to “making money from dividends and valuation repair.” Under the current market environment, banks with high dividends, low valuations, and stable asset quality remain the most cost-effective allocation direction.

In this regard, Wu Zewei mentioned two major screening criteria: first, the target should have had sufficiently attractive dividend yields in the past—at least far higher than the current level of yield to maturity of the 10-year government bond, meaning it offers enough risk premium relative to the risk-free rate. Second, because investors aim to hold long-term to enjoy regular dividends, these targets must have sufficient continuity in their dividend payouts.

Wu Zewei further reminded investors that you can’t put all your eggs in one basket. Whether you choose multiple bank stocks or combine equities, bonds, deposits, and other assets into a diversified portfolio, these are necessary actions to reduce risk and improve returns.

“From an investor’s perspective, first you should focus on fundamentals—such as asset scale, level of net interest margin, provision coverage ratio, and non-performing loan ratios—when investing in bank stocks. Second, you should pay attention to dividend yield, dividend payouts, and the stability of the share price, to select suitable investment targets. If you take a prudent approach, dividends and payouts from large banks are the preferred choice for long-term investment. For certain distinctive small and medium-sized banks with core competitiveness, you may hold them in smaller quantities,” said Wang Hongying.

Beijing Business Daily reporter Song Yitong