On June 8th, despite a collective adjustment in the three major A-share indices with the Shanghai Composite Index falling below the 4000-point mark, the banking sector bucked the trend with a strong independent performance. During the trading session, China Citic Bank Corporation Limited (SSE: 601998) surged over 4.5% at one point to become the leading gainer, while Agricultural Bank of China Ltd (SSE: 601288) and Industrial and Commercial Bank of China Ltd (SSE: 601398) also showed active trading.

Following a deep correction in May and the gradual implementation of cash dividend payments, the A-share banking sector has initiated a robust rebound since the beginning of June. Historically, the primary period for dividend distributions for banking stocks falls between June and August. Based on an incomplete tally of dividend announcements already disclosed by listed banks, at least 11 banks are scheduled to distribute cash dividends within June. Among them, China Citic Bank Corporation Limited (SSE: 601998) and Industrial Bank Co., Ltd. (SSE: 601166) are set to pay out the highest amounts, each exceeding 10 billion yuan, with ex-dividend dates on June 10th and June 12th, respectively.

Divergent Performance Among Banking Stocks

The lively scene of the dividend season, however, cannot mask the significant internal divergence within the banking sector. As of the close on June 8th, the Shenwan Banking Index (801780.SI) has declined by 4.90% year-to-date. Among the 42 A-share listed banks, 28 have recorded losses. At the individual stock level, joint-stock banks have shown the weakest overall performance. Shanghai Pudong Development Bank Co., Ltd. (SSE: 600000) has fallen nearly 25% year-to-date, leading the decline within the entire banking sector.

It has been observed that in the face of persistently declining share prices, some investors have become impatient, frequently inquiring about progress on market value management on interactive platforms.

Marked Divergence in Year-to-Date Trends

During a correction phase from late April to the end of May, the banking sector faced considerable pressure. Data shows that from April 21st to May 28th, the Wind Banking Index (882115.WI) experienced a maximum drawdown exceeding 6%. Individual stocks such as Agricultural Bank of China Ltd (SSE: 601288), China Citic Bank Corporation Limited (SSE: 601998), and Xiamen Bank Co., Ltd. (SSE: 601187) all saw declines of over 10% during that period.

However, since the start of June, the A-share banking sector has recovered some lost ground. On June 8th, the banking sector continued to advance, with China Citic Bank Corporation Limited (SSE: 601998) reaching an intraday high gain of 4.61%. Major state-owned banks like Agricultural Bank of China Ltd (SSE: 601288) and Industrial and Commercial Bank of China Ltd (SSE: 601398) also traded actively, rising over 2%.

Yet, when viewed over the year-to-date horizon, the divergence in the performance of banking stocks is quite pronounced. The leading group is primarily composed of city commercial banks. Data indicates that as of the June 8th close, Qingdao Rural Commercial Bank Corporation Ltd (SZSE: 002948) leads with a year-to-date gain exceeding 22%, followed by Bank of Chengdu Co., Ltd. (SSE: 601838), Bank of Chongqing Co., Ltd. (SSE: 601963), and Bank of Jiangsu Co., Ltd. (SSE: 600919) with gains of 17.68%, 14.35%, and 13.53%, respectively.

Among the major state-owned banks, China Construction Bank Corporation (SSE: 601939) has shown the most impressive performance this year. As of the June 8th close, its shares have risen 11.31% year-to-date, and its price briefly broke through 10 yuan per share in late May, reaching a historical high. In stark contrast, Agricultural Bank of China Ltd (SSE: 601288), which soared last year, has become one of the banks with the sharpest correction among the 42 listed banks, declining 12.78% year-to-date.

Notably, the Joint-Stock Bank Index (801783.WI) has fallen nearly 10% year-to-date, as the overall pullback for joint-stock banks far exceeds the average for A-share banks.

Data shows that among the nine listed joint-stock banks, only Hua Xia Bank Co., Ltd. (SSE: 600015) and China Zheshang Bank Co., Ltd. (SSE: 601916) have maintained marginal gains year-to-date. Shanghai Pudong Development Bank Co., Ltd. (SSE: 600000) has seen the largest decline, down 24.68%, ranking first among the 42 listed banks. Industrial Bank Co., Ltd. (SSE: 601166) has fallen 9.34%, also among the top decliners. China Everbright Bank Co., Ltd. (SSE: 601818) and China Minsheng Banking Corp., Ltd. (SSE: 600016) are both down over 7%, China Merchants Bank Co., Ltd. (SSE: 600036) is down over 6%, and Ping An Bank Co., Ltd. (SZSE: 000001) is down over 3%.

Faced with the continuous share price correction, some investors have grown restless. It has been noted that since May, investors have repeatedly raised questions about market value management on interactive platforms.

On June 3rd, the board secretary of Industrial Bank Co., Ltd. (SSE: 601166) responded three times on the Shanghai Stock Exchange's interactive platform to investor inquiries regarding market value management. The responses stated that share prices are influenced by multiple factors including macroeconomic conditions, industry trends, and market sentiment, and short-term volatility is normal, while long-term trends better reflect investment value. The bank emphasized its long-term commitment to shareholder returns and market value management, noting a current dividend yield around 6% and good momentum in its core business growth.

Recently, investors of Shanghai Pudong Development Bank Co., Ltd. (SSE: 600000) also called on the platform for the company to expedite dividend payments and enhance its responsibility for market value management. In response, the company's board secretary stated that it highly values investor returns and will hold its annual general meeting within the statutory period, implementing the dividend distribution as soon as possible after shareholder approval.

Over Ten Banks to Distribute Dividends in June

Despite the divergent stock performance, the sincerity of banking stocks regarding dividends is undeniable.

As the first listed bank to distribute dividends after entering June, Bank of Shanghai Co., Ltd. (SSE: 601229) had its cash dividend payment date and ex-dividend date on June 8th, making it the first listed city commercial bank on the A-share market to implement a dividend distribution this cycle.

According to the dividend announcement, Bank of Shanghai Co., Ltd. (SSE: 601229) distributed a cash dividend of 0.22 yuan per share (before tax) for the 2025 final dividend, totaling approximately 3.126 billion yuan. Combined with the 2025 interim dividend already paid, the bank's total annual cash dividend payout amounts to approximately 7.389 billion yuan, ranking just behind Bank of Jiangsu Co., Ltd. (SSE: 600919) and Bank of Ningbo Co., Ltd. (SZSE: 002142) among city commercial banks.

In addition to Bank of Shanghai Co., Ltd. (SSE: 601229), two other city commercial banks, Bank of Guiyang Co., Ltd. (SSE: 601997) and Bank of Nanjing Co., Ltd. (SSE: 601009), have announced their entitlement distribution plans, with payment dates set for June 10th and June 15th, respectively. Among them, Bank of Nanjing Co., Ltd. (SSE: 601009)'s total 2025 cash dividend payout reaches approximately 6.542 billion yuan, ranking fourth among the 17 A-share city commercial banks. Bank of Guiyang Co., Ltd. (SSE: 601997)'s cash dividend scale is smaller, around the 1 billion yuan level.

Dividend payments from several joint-stock banks are also imminent this week. On June 7th, Industrial Bank Co., Ltd. (SSE: 601166) announced the implementation of its A-share entitlement distribution, scheduled for June 12th, involving a total 2025 final cash dividend payout of approximately 10.603 billion yuan. Combined with the already distributed 2025 interim dividend, the bank's total annual cash dividend payout reaches approximately 22.560 billion yuan.

Furthermore, according to the previously disclosed dividend schedule by China Citic Bank Corporation Limited (SSE: 601998), its cash dividend payment date and ex-dividend date are both set for June 10th. At that time, the bank will distribute a 2025 final cash dividend totaling approximately 10.740 billion yuan, bringing its total annual distribution (including tax) to approximately 21.201 billion yuan.

Regarding the future trajectory of banking stocks, institutions hold a relatively optimistic view.

A research report from CITIC Securities dated June 7th pointed out that the supply-demand dynamics for banking stock funds have recently shown marginal improvement, with the sector performing well for two consecutive weeks. Looking ahead to the second half of the year, as banks enter a channel of fundamental recovery, a valuation uplift for the industry is anticipated. Furthermore, the sustained dividend yield continues to attract low-risk-preference capital, suggesting the potential for relatively certain absolute returns.

Analyzing individual stocks, a special researcher noted that banks deeply embedded in core urban clusters and leading in retail and wealth management transformation within economic zones possess stronger safety margins due to their net interest margin resilience and asset quality advantages. Secondly, high-quality regional banks that have seen improvements in funding costs first and whose net interest margins are expected to stabilize sooner may have higher certainty for valuation recovery.