CEB Bank announced its quarterly report, high dividends attract "important shareholders" competing to "grab shares"?

On the evening of April 25, CEB Bank disclosed its Q1 2025 report.

The quarterly report shows that CEB Bank's operating income in the first quarter decreased by 4.06% compared to the same period last year, while operating expenses decreased by 10.44% compared to the same period last year. Through cost reduction and efficiency improvement, the bank ultimately achieved a net profit growth of 0.28% compared to the same period last year.

A decent performance report has instead boosted shareholders' confidence in purchasing, as the quarterly report shows that CEB Bank's controlling shareholder, China Everbright Group, and the second-largest shareholder, CITIC Financial Assets, have both increased their holdings in CEB Bank.

The actions and attitudes of both parties in increasing their holdings have suddenly attracted external attention.

Operational Stability Maintained

According to the Q1 report, CEB Bank achieved an operating income of 33.086 billion yuan in the first quarter, a decrease of 4.06% compared to the same period last year; it achieved a net profit of 12.530 billion yuan, an increase of 0.28% compared to the same period last year.

Specifically, the net interest income, which accounts for a larger proportion of revenue, was 22.538 billion yuan, a decrease of 6.84% compared to the same period last year; net fee and commission income was 5.678 billion yuan, an increase of 3.27% compared to the same period last year, with the two showing a widening gap.

During the same period, CEB Bank's actions to control costs were very decisive and yielded good results. The bank's operating expenses in the first quarter were 17.415 billion yuan, a decrease of 10.44% compared to the same period last year, of which business and management expenses were 8.254 billion yuan, a decrease of 5.00% compared to the same period last year; credit impairment losses were 8.488 billion yuan, a decrease of 15.63% compared to the same period last year.

Under the cost reduction and efficiency improvement, CEB Bank successfully achieved a slight year-on-year increase in net profit in the first quarter.

Last Year's Dividends Were Quite Considerable

CEB Bank's Q1 report continues the operational trend of its annual report last year.

The bank's 2024 annual report shows that at the end of the reporting period, the bank's total assets were 69.6 trillion yuan, an increase of 2.75% compared to the end of last year; the total principal of loans and advances was 39.3 trillion yuan, an increase of 3.88% compared to the end of last year.

During the reporting period, CEB Bank achieved an operating income of 135.415 billion yuan, a year-on-year decrease of 7.05%, and a net profit of 41.911 billion yuan, a year-on-year increase of 2.03%.

In addition, the cumulative actual cash dividend amount of CEB Bank in 2024, according to WIND statistics, shows that the stock's actual dividend yield in the past 12 months is 7.27% (see chart below).

Major Shareholders Competing to Increase Holdings

Perhaps due to the relatively high dividend yield in the industry, or perhaps due to "deep confidence" in the bank's future development, CEB Bank received a rush of increased holdings from major shareholders in Q1 2025 The Q1 2024 report shows that the controlling shareholder, China Everbright Group, increased its holdings in the bank's A-shares by 41.3236 million shares, with an increase in market value of approximately 156 million yuan.

Another important shareholder, China CITIC Financial Asset Management Co., Ltd., increased its holdings in the bank by 263.6 million shares, with an increase in market value of approximately 995 million yuan (see the chart below).

Each has its own "plans"

Both institutions have disclosed announcements related to their increased holdings.

Everbright Group announced at the end of March this year that, based on confidence in the bank's future development prospects, it would cumulatively increase its holdings of the bank's A-shares by 121,943,100 shares through the Shanghai Stock Exchange system via centralized bidding from March 29, 2024, to March 28, 2025, accounting for 0.21% of the bank's total share capital, with a cumulative increase amount exceeding 400 million yuan (excluding transaction fees).

CITIC Financial Assets announced on November 29, 2024, that its extraordinary general meeting of shareholders voted to approve the proposal on "further promoting investment allocation." This proposal clarified that CITIC Financial Assets intends to purchase a total of no more than 4 billion yuan (excluding stamp duty and related fees) of Everbright Bank shares within 12 months.

Considering that the amount purchased in the first quarter is still less than 1 billion yuan, CITIC Financial Assets may further increase its holdings in Everbright Bank in the future.

Bank stocks are gradually becoming "popular"

In recent years, bank stocks have shown a trend of becoming "popular" in the A-share market.

On one hand, stock prices below net assets and a price-to-book ratio below 1 have led many industrial capital, financial capital, and related entities to form a "consensus" on the high value and undervaluation of bank stock equity.

On the other hand, even in the relatively harsh operating environment from 2023 to Q1 2025, most bank stocks have still achieved profit stability or even positive growth, demonstrating the operational resilience and competitiveness of bank stocks in recent years.

As a result, mainland insurance capital, mainland public funds, as well as industrial capital and major shareholders of financial institutions have begun to increase their holdings in competition.

This situation has actually occurred more than once in history; the steel sector below net assets before 2005 and the real estate sector with significant profit leverage from 2015 to 2019 were both heavily pursued by industries and subsequently achieved considerable value recovery.

Whether this situation will occur in the current banking sector is indeed worth observing.

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not consider individual users' specific investment goals, financial conditions, or needs. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at their own risk