After a 9.69% dividend in the previous fiscal year, Zhengzhou Bank, with 740 billion yuan in assets, will continue not to pay dividends in 2025.

Questioning AI · Why does Zhengzhou Bank, against the backdrop of industry-wide high dividends, choose zero dividends in a contrarian move?

Author | Shi Ye Yun Ye

Editor | Gu Ning

Zhengzhou Bank’s 2025 profits again continue without dividends, what is the reason?

On March 30, 2026, Zhengzhou Bank’s board of directors approved the 2025 profit distribution plan: no cash dividends, no bonus shares, and no capital reserve conversion into shares. This is another decision to not distribute dividends after the bank’s four consecutive years of no dividends from 2020 to 2023, and the brief 9.69% dividend in 2024. The bank stated that the plan to retain undistributed profits is beneficial for consolidating the capital foundation for high-quality development, enhancing risk resistance, and providing strong support for stable operations.

At the recently concluded annual performance conference of listed banks, many banks announced dividend ratios exceeding 30%, with some even including a clause in their articles of association that “the annual cash dividend ratio shall not be less than 30%.” In this context, Zhengzhou Bank’s choice appears “unusual” among peers. In the entire capital market, banks have always been the “top performers” in dividend distribution. In 2024, the total dividends paid by 42 A-share listed banks exceeded 600 billion yuan, accounting for 27% of the entire A-share market; in 2025, among 22 banks that have published financial reports, 21 paid out over 580 billion yuan in total dividends, a year-on-year increase of over 10 billion yuan…

There are no standard rules for whether a listed company pays dividends or how much in a given year; it is usually decided based on their own strategic considerations. Analyzing Zhengzhou Bank’s annual performance may provide deeper insights into its dividend choices.

ST risk lifted, Zhengzhou Bank continues to skip dividends in 2025

New regulations came into effect, and banks that only pay dividends after passing ST risk are now halting dividends. Zhengzhou Bank’s dividend trajectory has shown dramatic fluctuations.

From 2020 to 2023, the bank achieved profits for four consecutive years but did not pay any cash dividends, making it the only one among 42 listed banks in A-shares to do so for four years in a row, earning it the label “iron rooster” from investors. This naturally caused dissatisfaction among investors. The China Securities and Small Investors Service Center (Investor Service Center) even sent a shareholder inquiry letter questioning the reasonableness of its dividend policy.

In the 2023 annual general meeting, Zhengzhou Bank’s zero-dividend plan led to an opposition rate of 83.1% among H-share shareholders present. However, since about 90% of A-share shareholders approved the plan, the bank’s decision to not pay dividends was ultimately approved despite widespread opposition from H-shares.

The turning point began in April 2024, when the Shanghai and Shenzhen stock exchanges revised and issued the “New Guo 9 Rules,” which explicitly stipulate: for companies with positive net profit in the most recent fiscal year and positive undistributed profits at year-end in their parent company’s financial statements, if the total cash dividends over the past three years are less than 30% of the average annual net profit, and the total accumulated dividends are below 50 million yuan, they will be subject to “other risk warnings.”

For Zhengzhou Bank, which has not paid dividends for four consecutive years, if it continues to skip dividends in 2024, it is highly likely to become the first listed bank in A-shares to be ST. Against this backdrop, the bank announced a 2024 dividend plan in March 2025, proposing a cash dividend of 0.2 yuan per 10 shares, totaling about 182 million yuan, with a dividend payout ratio of only 9.69%. While this meets regulatory requirements, it is far below the industry average. Zhengzhou Bank explained that this decision was made after considering both shareholder returns and business development needs, aiming to retain as much capital as possible to support capital replenishment.

However, just one year later, Zhengzhou Bank again proposed a zero-dividend plan in its 2025 annual report, citing “retaining undistributed profits to solidify the capital base for high-quality development, enhance risk resistance, and ensure stable operations,” emphasizing that “under stricter financial regulation and capital constraints, profit retention for internal capital replenishment is the main effective way to ensure capital adequacy.”

“Today’s Bank” noted that after the announcement of the 2025 profit distribution plan not to pay dividends, a user on Sina Blog publicly wrote: “I mentioned two important messages about Zhengzhou Bank: one is whether the funds are received after winning the lawsuit; the other is the 2025 dividend. At the end of last month, Zhengzhou Bank released its 2025 annual report, which disappointed me. Neither of these two messages has been fulfilled. It’s not that Zhengzhou Bank cannot hold, but that this holding will be indefinitely delayed. Moreover, based on comprehensive information analysis, there seems to be no short-term hope for a restart. So, I decided to give up and sell all my Zhengzhou Bank shares.”

Core Tier 1 capital adequacy ratio only 8.45%, capital replenishment pressure evident

One of the core reasons behind Zhengzhou Bank’s frequent zero dividends is related to “capital replenishment.”

The bank responded to the Investor Service Center’s inquiry by stating that for small and medium-sized banks, external channels for capital replenishment are limited, and internal sources of capital are crucial for maintaining sufficient capital, especially core Tier 1 capital. Therefore, retained earnings will be used to supplement core Tier 1 capital, which helps ease capital replenishment pressure, improve capital adequacy, support business growth, and protect investors’ long-term interests.

As of the end of 2025, Zhengzhou Bank’s core Tier 1 capital adequacy ratio was only 8.45%, down 0.25 percentage points from 2024, marking its third consecutive year of decline and just slightly above the regulatory red line of 7.5%. The Tier 1 capital adequacy ratio was 10.44%, and the total capital adequacy ratio was 11.71%, down 0.26 and 0.29 percentage points respectively from 2024, both showing a decline.

In comparison, data from the China Banking and Insurance Regulatory Commission (CBIRC) shows that at the end of Q4 2025, the banking sector’s overall core Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio, and total capital adequacy ratio were 10.92%, 12.37%, and 15.46%, respectively. The average capital adequacy ratios of city commercial banks at year-end were 12.39%. Whether looking at the industry as a whole or at city commercial banks, Zhengzhou Bank’s ratios lag significantly behind these benchmarks.

Currently, among the 22 banks that have published their 2025 financial reports in A-shares, Zhengzhou Bank ranks second from the bottom in core Tier 1 capital adequacy ratio, fourth from the bottom in Tier 1 capital adequacy ratio, and last in total capital adequacy ratio, further highlighting the urgency of capital replenishment.

However, the reality is that Zhengzhou Bank faces multiple constraints in raising capital. As a city commercial bank and small to medium-sized bank, its equity financing space is limited. Since 2020, it has not conducted any equity refinancing; the cost of issuing secondary capital bonds has continued to rise, with the 2025 issuance’s coupon rate reaching 4.5%, up 0.8 percentage points from 2023. Using retained earnings to replenish capital remains the most practical option, which is the core reason for its zero-dividend policy—announced simultaneously with the 2025 zero-dividend plan, the bank also disclosed plans to set aside 707 million yuan in general risk reserves and 188 million yuan in statutory surplus reserves, with all remaining undistributed profits carried forward to the next year to supplement core Tier 1 capital. This “profit-for-capital” strategy can temporarily boost capital adequacy, but at the cost of shareholders’ short-term returns and long-term interests.

Asset expansion close to 10%, revenue and net profit at low levels but gradually recovering, diversified non-interest income less than 20%

Beyond capital pressures, the expansion of assets and ongoing profit pressures are also key factors influencing Zhengzhou Bank’s dividend policy.

Financial reports show that by the end of 2025, Zhengzhou Bank’s total assets reached 743.67B yuan, a year-on-year increase of 9.95%, the highest growth since its listing in 2018. Data from the Enterprise Early Warning System indicates that over recent years, the bank’s assets have been expanding steadily, with a cumulative increase of 59.54% from the end of 2018 (466.14B yuan). This asset growth has increased capital consumption and raised higher requirements for capital replenishment.

In terms of operational performance, Zhengzhou Bank achieved revenue of 12.92B yuan in 2025, up 0.34% year-on-year, and net profit attributable to the parent of 1.9B yuan, up 1.03%. However, this is a “smile” type low-level recovery after a phase of negative growth—while revenue and net profit increased slightly in 2025, they have not yet returned to the levels at the end of 2023 (revenue of 13.67B yuan) and 2022 (net profit of 2.42B yuan). Under industry pressure, these two indicators’ growth rates in 2025 are far below the asset expansion rate, indicating limited support for dividend payments.

Looking at the composition of Zhengzhou Bank’s 2025 profits, the sources are relatively single, and the support from diversified income is weak. Interest net income remains the main contributor to revenue. In 2025, the bank’s interest net income was 2.06B yuan, up 4.82% year-on-year, accounting for 84.08% of operating income, indicating high dependence on traditional lending business.

Non-interest income accounted for only 15.92% of revenue. During the reporting period, non-interest income was 2.057 billion yuan, down 18.13% from the previous year. Among this, net fee and commission income was 406 million yuan, down 13.95%, mainly due to declines in wealth management, fund management, securities underwriting, and acceptance business fees and commissions.

In terms of asset quality, as of the end of 2025, Zhengzhou Bank’s non-performing loan ratio was 1.71%, down 0.08 percentage points from 2024. Its loan loss reserve coverage ratio was 185.81%, up 2.82 percentage points from the previous year, showing overall improvement. Although the non-performing loan ratio and reserve coverage ratio are better than the average for city commercial banks, they still lag behind the overall banking industry, indicating that risk resistance needs further strengthening.

Notably, before this year’s Spring Festival, Li Honggang, who was appointed as Zhengzhou Bank’s president after leaving Postal Savings Bank’s North Branch over a year ago for personal reasons, resigned. Currently, the bank’s senior management team only includes Chairman Zhao Fei, Secretary of the Board Han Huili, Vice President Sun Runhua, two assistant presidents Zhang Houlin and Gao Rui, Chief Risk Officer Pan Feng, Co-Secretaries of the Board Han Huili and Wei Weifeng. It is not hard to see that key positions such as president and vice presidents still have vacancies, which is rare for a listed bank with a scale of 700 billion yuan.

For this city commercial bank that has been controversial over dividends for many years, the future challenge is how to balance strengthening capital, optimizing operational structure, and improving corporate governance, while ensuring steady business growth and reasonable shareholder returns. This will be a critical issue for Zhengzhou Bank and will determine whether it can truly shed the “iron rooster” label and achieve long-term high-quality development.