Check Management

Corporate Governance
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Dividend Policy


Policy and Guiding Principles:

China Banking Corporation, as a matter of policy, will declare cash dividends at a payout ratio of at least thirty percent of the Net income of the prior year, subject to the conditions and limitations set forth in this policy statement.

The Bank’s Dividend Policy is an integral component of its Capital Management Policy and Process rather than a stand-alone process. Its fundamental and overriding philosophy is sustainability.

Dividend pay-outs are reviewed annually.  These are referenced against the Bank’s Capital Management Process.  Based on the Capital Management Process, dividend pay-outs are calibrated based on the prior year’s earnings while taking consideration dividend yields, future earnings streams and future business opportunities.

In declaring dividend pay-outs, China Banking Corporation uses a combination of cash or stock dividends as follows:

  1. The dividend is increased in response to the Bank’s achieving a higher level of sustainable earnings.  
  2. Dividends may be increased for a specific year to plow back to shareholders a commensurate share of unusually high earnings for a given year. 

China Banking Corporation capital management philosophy and process, and consequently its Dividend Policy which comprises an integral component of this undertaking, is driven by the following primary objectives:

  1. Ensuring compliance with externally imposed regulatory capital requirements.
  2. Maintaining strong credit ratings. 
  3. Maintaining healthy capital ratios to support its business and maximize shareholder value.

China Banking Corporation manages its capital structure and makes adjustments to it in the light of:

  1. Changes in economic conditions.
  2. The risk characteristics of its activities.
  3. The assessment of prospective business requirements or directions. 

Management of and adjustments to the capital structure are accomplished through the following principal means:

  1. Adjustments of dividend pay-outs to shareholders
  2. Adjustments in form of dividend pay-outs (cash vs. stock)
  3. The issuance or conversely reduction of capital securities.

Capital Management broadly follows the process outlined below:

  1. An assessment of regulatory capital and capital adequacy measures.
  2. Determination of the optimal capital structure based on an a risk-based capital planning approach that considers:
    1. Planned levels and risk appetite for business activity with a focus on the implication of these plans on the resulting credit, market and operational risk exposure.
    2. An analysis of the implications of macroeconomic activity or industry developments and probability of a corresponding improvement or deterioration in the bank’s risk exposures.
    3. Provision of a capital buffer to mitigate against an unforeseen deterioration in the bank’s asset portfolio quality, or an increase in business risk, or business opportunities that arise over the course of its business activities.
    4. Desired capital mix, leverage, and target return on equity.
    5. Accretive or dilutive effects of incremental capital build up programs.
    6. Developments or opportunities in the capital markets or regulatory environment that have a direct relation to the Bank’s ability to build up or reduce its capital levels.
    7. Sustainability of internally generated capital and consequently sustainability of dividend payouts.

2019 Declaration of Cash Dividend

2018 Declaration of Cash Dividend

2017 Declaration of Cash Dividend

Dividend History

2019 2018 2017 2016 2015
Stock Dividend -- -- 8% 8% 8%
Cash Dividend 8.8% 8.3% 8% 10% 10%

Dividends

Declaration Date Record Date Payment Date
07 May 2015 12 August 2015 09 September 2015
05 May 2016 23 May 2016 03 June 2016
04 May 2017 18 May 2017 02 June 2017
03 May 2018 17 May 2018 01 June 2018 
02 May 2019 17 May 2019 31 May 2019 

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