Bloomberg News

Central Huijin Plans for China Banks to Reduce Dividend Ratios

February 05, 2012

Feb. 4 (Bloomberg) -- Central Huijin Investment Ltd., the state-backed shareholder in China’s biggest banks, said the lenders will lower their dividend payouts to shore up capital.

Dividends will be cut by 5 percentage points to 35 percent of 2011 profit at Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and Bank of China Ltd., Central Huijin said in a statement yesterday on its website. The ratio for Agricultural Bank of China Ltd. will be unchanged at 35 percent, according to the statement.

ICBC, Construction Bank, Bank of China and AgriBank are China’s four biggest lenders. Central Huijin is a unit of China Investment Corp., which operates the nation’s sovereign wealth fund that totaled $409.6 billion at the end of 2010.

The 21st Century Business Herald first reported the news on Feb. 2. The reduction may add a combined 20 billion yuan ($3.17 billion) to the capital of ICBC and Construction Bank, according to the newspaper.

Central Huijin, set up to hold the government’s stakes in the lenders, owned 35.43 percent of ICBC and 67.6 percent of Bank of China, according to statements from the two banks on Jan. 5. Central Huijin owns 44.22 percent of AgriBank, according to data compiled by Bloomberg, and 57 percent of Construction Bank, according to that lender’s third-quarter report.

--Zhang Shidong. Editors: Jake Lloyd-Smith, Jim McDonald

To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net


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