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<Research>UBS Prefers ICBC/ CCB/ CITIC BANK/ BANK OF CHINA, Holds Constructive View on CN Banks w/ 5%+ Div. Yield
Recommend 37 Positive 67 Negative 35 |
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According to a report from UBS, following the RMB500 billion capital injection into the four major Chinese banks in March 2025, Bloomberg reported that: 1) China is considering issuing around RMB500 billion worth of special government bonds to supplement the capital of ICBC (01398.HK), ABC (01288.HK), and several large insurers; 2) around RMB300 billion of this amount may be injected into ICBC and ABC, while the remaining RMB200 billion will be injected into insurers like CHINA LIFE (02628.HK), PICC GROUP (01339.HK), and CHINA TAIPING (00966.HK); and 3) the capital injection plan could be announced as early as 1Q26, though specific details remain variable and may be adjusted. In UBS' estimate, the capital injection for state-owned banks could be completed in 1Q26. Consequently, the dividend distribution dates of the banks may be advanced to late April and early May, instead of the usual June and July. The report also highlighted a couple of key trends following the 2025 capital injection into the four major state-owned banks, one being that banks with greater dilution lagged. Within this group, BANKCOMM (03328.HK) and PSBC (01658.HK), which were facing greater dilution, tended to lag behind their peers. Holding a constructive view on Chinese bank stocks with dividend yields of over 5%, UBS prefers ICBC, CCB, CITIC BANK (00998.HK), and BANK OF CHINA. AAStocks Financial News |
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