Diviedends

Dividends

  • 2016-06-21 16:09

Profit and Dividend Distribution

To give investors reasonable return on investment and help investors develop steady expectation of investment returns, relevant provisions of the Articles of Association of the Bank lay down explicit requirements on dividend policies such as the basis, principle, interval, method and condition and online voting of profit distribution, provide for the minimum proportion of profit distribution made in cash under general circumstances, and offer shareholders an online voting platform for participation in voting for the proposals on distribution plans. As such, the Bank fully protects legitimate rights and interests of its minority investors.

The Bank has not distributed profit through transfer of capital reserve to share capital since its listing. Cash dividend distribution of the Bank in the past three years is listed below.

Unit: RMB million

Year for which dividends are distributed Cash dividends every ten shares (RMB yuan) (pre-tax) Total amount of cash dividends (pre-tax) Profit attributable to ordinary shareholders of the Bank as indicated in consolidated statements Distribution ratio (Note)

2013

2.52

11,790

39,175

30.10%

2014

40,692

2015

2.12

10,374

41,158

25.21%

 

Note: Distribution ratio is the ratio of the total amount of cash dividends for the current period to the profit attributable to the ordinary shareholders of the Bank on the consolidated financial statements.

After-tax profit as shown on the Bank’s audited domestic and overseas 2016 financial statements respectively prepared in accordance with the PRC GAAP and IFRS were both RMB39.010 billion.

The Bank transferred 10% of its after-tax profit as shown on the financial statements prepared in accordance with the PRC GAAP to the statutory surplus reserve, which was accrued at RMB3.901 billion as at the end of the current period. The Bank allocated the general risk reserve of RMB9.020 billion. No discretionary reserve was allocated.

In comprehensive consideration of the overall interests of all shareholders, its own need for safeguarding sustainable development and the regulatory requirements on capital adequacy ratios, the Bank proposed to distribute final dividends for the year 2016 in total amount of RMB10.521 billion, which accounts for 26.97% of the profit of the Bank for the current year and 25.27% of the consolidated profit attributable to the equity holders of the Bank, and shall be denominated and declared in Renminbi and paid to A shareholders in Renminbi and to H shareholders in Hong Kong dollar. Based on the total share capital of A shares and H shares, the final cash dividends will be RMB2.15 (pre-tax) for every 10 shares. The dividends to be paid in Hong Kong dollar shall have their amounts calculated in accordance with the average benchmark exchange rate of Renminbi to Hong Kong dollar as released by the PBOC one week prior to the convening of the 2016 Annual General Meeting (inclusive of the date of the general meeting). No scheme for transfer of capital reserve to share capital will be applied for the current year. Retained undistributed profit after dividend payment shall be carried forward to the next financial year and continue to be used to replenish the Bank’s capital, support implementation of the Bank’s development strategy, improve the Bank’s risk resilience, and satisfy regulatory requirements on capital adequacy ratios. The Bank recorded a 12.58% return on weighted average equity attributable to its ordinary shareholders in 2016 and is expected to maintain a certain level of return and contribution in 2017.

This profit distribution plan (the “Plan”) complies with relevant provisions of the Articles of Association of the Bank and follows clear criteria and proportions of dividends payment. After sufficient discussion and consideration at the Strategic Development Committee of the Board of Directors of the Bank, the Plan was submitted for deliberation at the meetings of the Board of Directors and the Board of Supervisors convened on 22 March 2017 and adopted afterward. It shall be submitted to the 2016 Annual General Meeting to be convened on 26 May 2017 for approval and implementation thereafter. It is expected that the Bank will pay the 2016 final dividends to its shareholders within two months as of the adoption of the Plan by the general meeting. The Bank’s independent non-executive directors have collectively expressed their independent opinion on the Plan as follows: The 2016 profit distribution plan of the Bank is consistent with the reality of the Bank and has taken the overall interests of both the Bank and its shareholders into consideration. We hereby endorse the Plan and agree to have the Plan submitted to the 2016 Annual General Meeting for deliberation.

When the Plan is submitted to the 2016 Annual General Meeting for deliberation, the Bank will, as required by the regulators, offer investors online voting facilities and disclose voting results in accordance with the shareholding percentages of the voting A shareholders. The shareholding percentages are placed in the three bands of below 1%, 1-5%, and above 5%. Those with less than 1% shareholding will be further classified into the two categories of above and below RMB500,000 market value of shareholdings and their voting results shall be further disclosed accordingly. The preparation and implementation of this Plan fully protects the legitimate rights and interests of minority investors.