Log on to...
Home > Investor Relations > Share and Dividend Distribution > Dividend Distribution Policy > Dividend Distribution Policy

Dividend Distribution Policy

Under the PRC Company Law and our Articles of Association, our Board of Directors is responsible for submitting proposals (adopted by a two-thirds majority) in respect of dividend payments, if any, to the shareholders' general meeting for approval. The dividend payments plan shall be passed and adopted by a simple majority of voting rights held by shareholders attending the meeting. The Board of Directors of the Bank shall implement plans of profit distribution as soon as possible within two months after conclusion of shareholders’ general meeting on which relevant resolution has been adopted.
 
In distributing the profits of the Bank, importance shall be attached to a reasonable return on the investment made by investors. Continuity and stability shall be maintained with the profit distribution policy. At the same time, the long term benefit of the Bank and overall interests of all the shareholders as well as sustainable development of the Bank shall be considered. Except in extraordinary circumstance, the Bank shall make its profit distribution by way of cash dividend if the Bank makes profits and its accumulated undistributed profit is a positive figure in the current year. The profit distributed by way of cash dividend shall not be less than 10% of the net profit of the Bank in the relevant financial year. In case of force majeure such as war and natural disaster, or external changes in the operation circumstances having material effects to the Bank’s operation, or material internal changes in the Bank’s operation, the Bank may modify its profit distribution policy. When modifying the profit distribution policy, the Board of Directors shall provide specific explanations to the reasons thereof, and such modification shall be submitted to the shareholders’ general meeting for approval after being approved by the independent shareholders. “Extraordinary circumstance” shall mean any circumstance in which profit distribution is forbidden by the state laws and regulations, including but not limited to the situation that the general reserves or capital adequacy ratio fail to reach the regulator’s requirements.Under the PRC Company Law and our Articles of Association, all of our shareholders holding the same class of shares have equal rights to dividends and other distributions proportionate to their shareholding.
 
According to our Articles of Association, the after-tax profit of the Bank for the year shall be distributed in the following order:
(1) to make up for the losses of previous years;
(2) to allocate 10% as statutory reserve fund;
(3) to allocate for general reserve;
(4) to allocate for discretionary reserve fund; and
(5) to divide profits and pay dividends to shareholders in proportion to their shareholdings.
Where the cumulative amount of the statutory reserve funds of the Bank amounts to not less than 50% of the registered capital of the Bank, allocation becomes not strictly necessary. After allocation to the statutory reserve fund and general reserve fund, whether allocation shall be made to the discretionary reserve fund shall be determined by the shareholders’ general meeting.
 
According to recent MOF regulations, we are required, in principle, to maintain a general reserve no less than 1% of the balance of our risk-bearing assets from our net profits after tax. This general reserve constitutes part of our reserves.
 
Under PRC laws, we may only pay dividends out of our distributable profit. Our distributable profit represents our distributable net profit less appropriations to statutory surplus reserve, general reserve, and discretionary surplus reserve as approved by our shareholders meeting, each such appropriation based on the unconsolidated net profit of our Bank determined under PRC GAAP. Our distributable net profit referred to above represents the lowest of (i) our consolidated net profit attributable to our equity holders for a period plus the distributable profit or net of the accumulated losses, if any, at the beginning of such period as determined under PRC GAAP, (ii) the unconsolidated net profit of our Bank for the period plus distributable profit or net of accumulated losses, if any, at the beginning of such period, as determined under PRC GAAP, (iii) our consolidated net profit attributable to our equity holders for the period plus distributable profit or net of accumulated losses, if any, at the beginning of such period, as determined under IFRS, and (iv) the unconsolidated net profit of our Bank for the period plus distributable profit or net of accumulated losses, if any, at the beginning of such period, as determined under IFRS. Any distributable profit that is not distributed in a given year is retained and available for distribution in subsequent years. We are prohibited from making any profit distributions to our shareholders before recovering our accumulated losses and making appropriations to the statutory surplus reserve and the general reserve. If we make any profit distributions in violation of these rules, our shareholders are required to return the amounts they received in such profit distributions to us.

If the bank fail to meet the applicable capital adequacy requirements, the CBRC has the authority to take regulatory measures, including restricting the Bank to distribute dividends and other forms of income.

Note: Please contact your local branch for detailed information about the service.

Customer Service Center : 95599

Outlet

Contact Us| Statement Copyright©AGRICULTURAL BANK OF CHINA (ABC) All Rights Reserved