dividends

Financial institutions’ once-in-a-century foreign exchange transaction SWAP is bullish. Many banks have hit record highs in 2023. As financial reports are released one after another, Taichung Bank took the lead last week to announce a proposed dividend of 0.96 yuan, with the yield rate exceeding 6%. , triggering the fermentation of the theme of bank stock dividends. “Yahoo Finance” compiled the legal person ranking of bank stock dividend yields this year. Taiwan Enterprise Bank temporarily ranked first with 7.8%, and there were four other stocks with more than 5%.

A look at the yield rate from a table: Taiwanese bank profits will soar in 2023. The dividend yield rate of Taiwanese banks is estimated to be 7%.File photo: Central News Agency

According to statistics from the Financial Supervisory Commission, China’s 38 domestic banks made a huge profit of 472.44 billion yuan in pre-tax surplus in 2023, an annual increase of 20.5%, setting a record high in history. They mainly benefited from two major benefits. First, the stock market was strong last year, which led to an increase in bank net income. , this time it is the bilateral interest rate difference between Taiwan and the United States that drives the net investment income of SWAP (exchange transactions) to increase significantly.

Taichung Bank took the lead in announcing last year’s dividend policy on Friday 23rd. It earned NT$1.31 per share and distributed a dividend of NT$0.96. The distribution rate was as high as 76%, which shocked the market. Based on the stock price last Friday, the dividend yield was The interest rate is as high as 6.11%, of which the dividend is 0.4 yuan, and the dividend yield is 2.55%.

Another company that has a chance of surpassing Taichung Bank in dividend yield after including stock dividends is Taiwan Small and Medium Enterprises Bank (2834). Last year’s earnings per share were 1.51 yuan higher than Taichung Bank, and the allotment rate in previous years was around 70% or above. In addition, due to the unrealized price decline of the bonds on the books last year, other equity recognized a loss of 3.7 billion, which is expected to be offset, resulting in a record low dividend, with only 27% allocated, setting a new low in the financial tsunami.

Taiwan Enterprise Bank’s dividend this year has the opportunity to greatly compensate shareholders. In previous meetings, senior executives have expressed optimism about the bright outlook for this year’s dividend, saying that it will “make a big turnaround.” By the third quarter of last year, the price loss of 3.7 billion yuan had recovered to 2.412 billion yuan. Distributable earnings can be put into it. The legal person estimates that the allotment this year is expected to exceed 1 yuan or higher, and the dividend yield is expected to be 7.8%, or even above 8%. Taiwan Enterprise Bank has recently stated that its dividend this year will be mainly stock dividends.

Excluding financial holdings, the earnings per share performance of China’s pure banking stocks last year was the highest with Jingcheng Bank’s EPS of 5.59 yuan, followed by Shanghai Commercial Bank’s 3.052 yuan. Judging from the allotment rate in 2021 before the epidemic, there is a chance of allotment It is above 2 yuan and 1.7 yuan, and 2021 is a relatively prudent year for Beijing Silver’s dividend distribution. If we look at the hair-cut rate, we cannot rule out looking at 3 yuan.

If bank stocks are estimated based on last year’s self-generated profits and the dividend distribution rate in 2021, the total dividend yield rate exceeds 5%, including Taiwan Enterprise Bank, Taichung Bank, Far East Bank, Kaohsiung Bank, Jingcheng Bank, etc. 5 banks, Chang Bank and Wangdaoyin is above 4.3%. However, although the profits of banks were extremely high last year, the challenges this year are not small. Since November last year, banks have increased their provisions for bad debts under the “Sunny Day Grain Reserve”. It is possible that some banks’ dividend policies will adopt the principle of “maintaining profits and maintaining stability”. practice.

Experts generally believe that life insurance securities stocks are relatively more favorable than bank stocks, but they still have investment value in the long term.

Although the profits of most banking stocks will soar to record highs in 2023, looking forward to 2024, most analysts believe that life insurance and securities-based financial holdings have relatively high growth potential. Lu Hanwei, a senior securities analyst, said that although banking stocks do not have insurance as financial holding stocks, and although they have less baggage in the past, it depends entirely on interest rates, interest rate spreads and fee income from financial products, plus exchange income. Therefore, last year’s The year-on-year growth is more significant. This year, because the base period is higher, the growth will be relatively stable. In comparison, Jin Holdings has relatively large fluctuations, bank stocks are relatively stable, and the risk is relatively low, but the base period is not that low. Growth this year may be relatively stable.

Huang Wenqing, vice president of Taishin Investment Consulting, also has a similar view. Financial holdings will have many issues in 2024, and depending on the general environment, the Fed’s interest rate cut will bring benefits. Relatively speaking, life insurance and securities will benefit from growth, which is worth looking forward to. The banking industry made good profits last year. , mainly due to the exchange gains brought by the entire interest rate differential. However, from the perspective of long-term stock deposits, whether it is financial holdings or banking stocks, the current stock prices can still be invested. After all, Taiwanese electronics, transmission, and financial stocks Among the three major categories of stocks, the evaluation of financial and industrial stocks is still low, and their fundamentals are also growing, so they are relatively favorable.

• Yahoo Finance special correspondent Ye Yiru: With more than 20 years of experience in mainstream financial media, from the Web1.0 bubble in 2000 to the Meta Yuanverse Web3.0, he has witnessed the rise and fall of Taiwan’s large and small business groups, and has experienced five international financial crises. We believe that finance is life and is everywhere. No matter how difficult financial knowledge is, we should explain it in a simple way. Everyone, young and old, should manage money. If you don’t manage money, money will not care about you.

2024-02-26 03:24:25
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