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On Monday morning, bank stocks that had fallen into a correction last week began to rebound rapidly. By the midday close, Huaxia Bank had risen by more than 5%, Chongqing Rural Commercial Bank by more than 4%, and Agricultural Bank of China nearly 4%. Suzhou Bank, Bank of China, Shanghai Rural Commercial Bank, Qilu Bank, and Bank of Beijing all saw gains of over 2%, with more than half of the stocks in the sector turning red.

As the first half of the year's financial reports come to an end, the much-anticipated interim dividend plans have also been disclosed. Despite ongoing profit pressures such as narrowing interest spreads, slowing credit growth, and weak middle-income performance, the six major banks have actively responded to the "New National Nine Articles" requirements and plan to take the lead in issuing more than 200 billion yuan in "red envelopes." Some joint-stock banks and urban and rural commercial banks have also officially announced their interim dividend plans.

Specifically, the interim dividend amounts for Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, and Bank of Communications are approximately 51.1 billion yuan, 49.3 billion yuan, 40.7 billion yuan, 35.6 billion yuan, and 13.5 billion yuan, respectively.

According to the semi-annual report disclosed by Postal Savings Bank of China, it plans to implement the 2024 interim dividend distribution, with the total interim dividends not exceeding 30% of the net profit attributable to the bank's shareholders in the consolidated statement for the first half of 2024. If calculated roughly at a 30% dividend ratio, the bank's interim dividend amount would reach 14.6 billion yuan.

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This also means that the interim dividend amount for the six major banks alone will exceed 200 billion yuan. In addition, CITIC Bank, Minsheng Bank, Ping An Bank, Shanghai Rural Commercial Bank, and Huaxia Bank will also carry out interim dividends, with amounts of approximately 9.9 billion yuan, 5.7 billion yuan, 4.8 billion yuan, 2.3 billion yuan, and 1.6 billion yuan, respectively. Among them, Shanghai Rural Commercial Bank has the highest dividend ratio, exceeding 33%, while Ping An Bank and Huaxia Bank have slightly lower dividend ratios, at 18.45% and 12.77%, respectively.

Based on these calculations, the aforementioned 11 listed banks will collectively carry out interim dividends of about 229 billion yuan. In addition, some banks, including Nanjing Bank, have announced their interim dividend plans but have not yet disclosed specific details.

Regarding the aforementioned dividend plans, each bank has stated that they have passed the board of directors' preliminary plan and are awaiting approval from the shareholders' meeting. Several banks have indicated that they expect to pay the 2024 interim ordinary share dividends to ordinary shareholders within two months after the temporary shareholders' meeting approves the plan, and the aforementioned "red envelopes" are expected to arrive in early 2025.

In the entire A-share market, banks have always been the most "generous" dividend payers. Last year, except for Zhengzhou Bank, which did not conduct cash dividends, the remaining 41 listed banks combined to distribute more than 613.3 billion yuan in dividends. During the same period, more than 3,800 companies in the A-share market conducted annual dividends, with a total amount of about 2.2 trillion yuan, and the banks' dividends accounted for nearly 30% of this total.

Looking at the interim dividends, Wind data shows that more than 600 listed companies in the A-share market plan to conduct interim dividends, setting a new high, with a total dividend amount exceeding 500 billion yuan, and banks remain the "main force" in dividends.

Among bank stocks, state-owned large banks are representatives of high dividend yields. Taking Industrial and Commercial Bank of China as an example, data shows that since its listing in 2006, ICBC's cash dividends have exceeded 1.4 trillion yuan, making it the company with the highest dividend amount in the A-share market. In 2023, ICBC's total annual dividend amount reached 109.2 billion yuan, with a cash dividend of 3.064 yuan (including tax) for every 10 shares. Based on the average stock price of ICBC in 2023, the dividend yields for A-shares and H-shares are 6.51% and 8.54%, respectively.Since last year, bank stocks have become the "darling" of various funds in the A-share market, which is rich in risk-avoidance sentiment. This year, the sector's increase still leads far ahead, with the stock prices of state-owned large banks repeatedly hitting new highs. As the stock prices rise, the dividend yield has decreased, but the median is still above 5%, and the situation of breaking through the net asset value has not been broken.

Recently, the performance of the bank sector has declined, and some institutions have previously warned of the risk of chasing high bank stocks. Regarding the recent rapid rise and subsequent correction of bank stocks, Lin Yingqi, a banking analyst at CICC, believes that in addition to the concerns about the pressure on the interest margin due to the expectation of adjusting the existing mortgage loan interest rates, it is also due to the increase in short-term trading congestion and the improvement of the overall market risk preference, leading to the outflow of risk-avoidance funds from the high dividend sector.

For the next trend of bank stocks, many institutions have pointed out in their reports that they may enter a volatile phase, and the structural differentiation will become more obvious. The upward movement of the sector will gradually return to the fundamentals driven by funds. Ni Jun, the chief analyst of the banking industry at GF Securities, said that as the economic downturn approaches three years, with the forward-looking indicators of asset quality beginning to fluctuate, the risk of retail asset quality exposure, the relative advantage of the bank sector's performance may converge. If the economy rebounds beyond expectations and drives the market to rebound beyond expectations, banks may continue to benefit from the relative advantage brought by the increase in passive index funds, and the high dividend large banks within the sector will have more advantages; if the macroeconomic policy is implemented to bring economic expectations and market stabilization and rebound, recovery and growth-oriented banks are more worth paying attention to.