Typically, it is common for bank executives to hold shares in their own institutions. There are two primary reasons for this: firstly, owning equity in their bank aligns the executives' personal interests with the institution's long-term development, demonstrating leadership confidence to the market. Secondly, the bank's often high dividend yields can provide executives with a steady stream of investment income, making it an attractive option for long-term value investing.
However, this is not an absolute rule, and not all executives who hold shares realize positive returns. For instance, Zhang Zhenghai, the Chairman of Bank Of Guiyang Co.,Ltd. (ASX: 601997) who retired on June 3, 2026, purchased 16,800 additional shares of the bank in September 2019 at an average price of 8.27 yuan per share to help stabilize the stock price. Seven years later, due to market volatility, Zhang's holdings still show an unrealized loss of approximately 30%, meaning he has not yet recouped his initial investment.
Another notable case is Bank Of Zhengzhou Co.,Ltd. (ASX: 002936), which is relatively unique among A-share listed banks for resisting various pressures and maintaining a policy of not paying dividends for multiple years (it skipped dividends from 2020 to 2023, paid briefly in 2024, and resumed skipping in 2025). Looking back to its A-share listing in 2018, the bank's stock price once reached 8.09 yuan per share (adjusted price) but has since declined steadily, fluctuating around 2 yuan per share since 2024 and currently trading at 1.77 yuan per share.
It is noted that currently only two executives at Bank Of Zhengzhou Co.,Ltd. hold shares in the bank: Assistant President Zhang Houlin holds 46,222 shares and Chief Risk Officer Pan Feng holds 1,331 shares. Other members of the leadership team, including Chairman Zhao Fei, Deputy President Sun Runhua, Assistant Presidents Zhang Houlin and Gao Rui, and Board Secretary Han Huili, do not hold any shares in the institution. This situation is partly related to significant executive changes at the bank last year, during which six departing executives did hold Bank Of Zhengzhou Co.,Ltd. shares.
Looking at the turning point in Bank Of Zhengzhou Co.,Ltd.'s dividend policy, it began in 2020.
Prior to 2020, following its initial listing in Hong Kong in 2015, the bank maintained relatively stable cash dividends, with payouts exceeding 1 billion yuan in both 2015 and 2016. Although dividend payments in Hong Kong paused briefly in 2017, after its A-share listing in 2018, the bank paid dividends on both its A and H shares for two consecutive years, distributing 888 million yuan in 2018 and 592 million yuan in 2019.
In 2020, impacted by the pandemic and capital replenishment pressures, the board proposed for the first time a plan to "not distribute cash dividends, not issue bonus shares, and not convert capital reserve into share capital." This policy was maintained for the next four consecutive years (2020-2023), making it the only A-share listed bank to skip dividends for four straight years.
In 2024, Bank Of Zhengzhou Co.,Ltd. resumed dividend payments, distributing 182 million yuan in cash with a payout ratio of 9.69%. However, in 2025, the bank returned to a "zero-dividend" policy. The board explained in its annual report that "considering the bank's capital replenishment needs and business development plans... retaining undistributed profits is conducive to consolidating the capital foundation for high-quality development and enhancing risk resilience."
In the recently released "2025 Annual General Meeting Materials," the bank's profit distribution plan for 2025, following the decision not to pay dividends, is as follows: After review, the parent company's net profit was 1.881 billion yuan. From this, 480 million yuan was allocated for interest on perpetual capital bonds, 188 million yuan (10% of net profit) was allocated to the statutory surplus reserve, and 707 million yuan was allocated to the general risk reserve. No cash dividends will be distributed, no bonus shares will be issued, and no capital reserve will be converted into share capital. The remaining undistributed profit will be carried forward to the next fiscal year.
Looking at the broader banking sector, which has faced significant pressure over the past three to four years, many institutions have seen executives increase their holdings to boost market confidence. For example, in May 2022, Wang Liang, President of China Merchants Bank, purchased 20,000 additional A-shares of the bank with his own funds just one week after formally taking office, at a cost of 766,600 yuan. In September 2023, Di Hao, a Deputy President of Bank of Xi'an Co., Ltd., purchased an additional 216,500 shares of the bank with his own funds, costing between approximately 772,900 yuan and 790,200 yuan.
On January 5, 2024, Jiangyin Bank launched the first A-share executive share purchase plan of the year for a bank: 14 directors, supervisors, senior managers, and core personnel planned to increase their holdings in the company by purchasing convertible bonds for conversion into shares or through secondary market purchases, with a total planned investment of 10 million to 20 million yuan.
As a regional bank, Bank Of Zhengzhou Co.,Ltd. faces a different development environment and regulatory requirements compared to large state-owned banks and nationwide joint-stock banks. As the banking industry enters a period of low growth, finding the right balance between retaining profits to strengthen capital and ensuring reasonable returns for shareholders will be a critical issue for Bank Of Zhengzhou Co.,Ltd. to ponder in its journey towards modernized governance.
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