Policy and Guiding Principles
China Banking Corporation, as a matter of policy, will declare cash dividends at a payout ratio of approximately 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 Bank uses a combination of cash or stock dividends as follows:
- The dividend is increased in response to the Bank’s achieving a higher level of sustainable earnings.
- 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 Bank 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:
- Ensuring compliance with externally imposed regulatory capital requirements.
- Maintaining strong credit ratings.
- Maintaining healthy capital ratios to support its business and maximize shareholder value.
China Bank manages its capital structure and makes adjustments to it in the light of:
- Changes in economic conditions.
- The risk characteristics of its activities.
- The assessment of prospective business requirements or directions.
Management of and adjustments to the capital structure are accomplished through the following principal means:
- Adjustments of dividend pay-outs to shareholders
- Adjustments in form of dividend pay-outs (cash vs. stock)
- The issuance or conversely reduction of capital securities.
Capital Management broadly follows the process outlined below:
- An assessment of regulatory capital and capital adequacy measures.
- Determination of the optimal capital structure based on an a risk-based capital planning approach that considers:
- 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.
- 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.
- 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.
- Desired capital mix, leverage, and target return on equity.
- Accretive or dilutive effects of incremental capital build up programs.
- 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.
- Sustainability of internally generated capital and consequently sustainability of dividend payouts.
Yearly Declaration of Dividend
2023 Declaration of Dividend
2022 Declaration of Dividend
2021 Declaration of Dividend
2020 Declaration of Dividend
2019 Declaration of Dividend