Ask AI · How Did the Bank of Communications’ “Trillion-Yuan Dividend Mistake” Reveal Internal Governance Gaps?

Author｜Li Xin

Editor｜Jiang Zhou

On March 31, a single correction announcement from the Bank of Communications sparked heated discussion in the capital markets. In the Bank’s 2025 profit distribution plan, the “cash dividend of 3.247 yuan per share” was revised to “cash dividend of 3.247 yuan per 10 shares.”

And by omitting the character “10,” a data discrepancy on the scale of a trillion was triggered. Based on the Bank’s total share capital of 88.364 billion shares, the erroneous statement corresponds to a dividend total as high as 286.918 billion yuan. The actual dividend amount was only 28.692 billion yuan. The difference precisely reached 258.2 billion yuan—far exceeding the Bank’s 2025 full-year net profit attributable to shareholders.

Image source: Bank of Communications announcement

Going Straight for the Soft Underbelly of Governance

“Global Finance” found that similar mistakes have long served as a warning bell. In 2024, Hangzhou Bank had a dividend blunder, and the then secretary to the board of directors resigned over the incident; in 2023, the Xi’an Bank annual report had data errors as well, which also led to personnel adjustments for senior management.

According to regulatory rules, the secretary to the board of directors is the first person responsible for disclosure, and must bear core responsibility for the truthfulness and completeness of announcements. The current secretary to the board of directors at Bank of Communications has years of experience in financial regulation. This controversy over his performance in the role has made his future stay or exit a focal point in the market.

Putting aside the disclosure controversy, Bank of Communications’ 2025 operating performance continued the steady tone typical of state-owned large banks, with core operating data maintaining stable growth. For the full year, operating revenue reached 265.071 billion yuan, up 2.02% year over year; net profit attributable to the parent was 95.622 billion yuan, up 2.18%. Daily average profit remained stable, reinforcing the foundation of profitability.

Total assets continued to expand. At year-end, the Group’s total assets exceeded 15.5 trillion yuan. Loan origination maintained a steady rhythm. Domestic RMB loan balance reached 8.87 trillion yuan, precisely supporting financing needs of the real economy.

On the shareholder-return front, the Bank of Communications stayed true to its long-term dividend commitment. In 2025, cash dividends totaled 28.692 billion yuan, with a dividend payout ratio of 32.3%. It maintained high dividend payouts of 30% or more for 14 consecutive years, closely aligning with the needs of long-term capital allocation.

Overall asset quality remained controllable. The non-performing loan ratio fell to 1.28%, showing continuous year-over-year improvement. The allowance coverage ratio rose to 208.38%, indicating ample risk reserves and solid shock-absorbing capacity.

However, structural operating pressure has already emerged as a key weakness constraining development. The retail credit segment has faced persistent pressure: the non-performing loan ratio for personal loans was 1.58%, up from the end of last year; the non-performing loan ratio for credit cards exceeded 2.68%. Non-performing data for housing loans and personal business loans also moved upward at the same time. A range of factors played a role, including adjustments in the real estate sector, weak consumption, and the concentration of maturities for business loans. In 2026, retail risk-control pressure is still expected to continue.

In addition, industry-wide common challenges have become more prominent. The full-year net interest margin narrowed to 1.20%, down by 7 basis points year over year. Falling loan yields squeezed profitability. Even if pressure is eased by reducing deposit costs, it is still difficult to reverse the industry-wide trend of net interest margin decline.

Deepening the Push for Transformation

Facing the dual dilemma of narrowing interest spreads and retail pressure, Bank of Communications has anchored itself in technology finance and AI-driven digital transformation. It aims to build a differentiated competitive advantage and reshape the logic of long-term value.

On the corporate business front, technology finance has become the core engine of growth. At year-end, the balance of technology loans exceeded 1.58 trillion yuan, with a year-over-year growth rate of 10.73%, far above the Bank’s overall average loan growth rate. It precisely targets financing needs of specialized, innovative and “new” enterprises, deeply aligned with the country’s science and technology innovation strategy, and forms a second growth curve for corporate business.

Digital transformation has moved into a phase of deep cultivation, with significant results from large-scale deployment of AI. In 2025, the Bank’s technology investment totaled 12.342 billion yuan, accounting for 5.78% of revenue. Its intelligent computing scale grew by more than 50% year over year. It had cumulatively deployed more than 2,500 AI agents, fully covering core scenarios such as account opening and credit granting, counter authorization, and international settlement.

With technology empowerment, the volume of counter authorization business was reduced by more than 60%. Cross-border settlement efficiency improved by more than 20%. More than 20,000 employees use AI tools to improve efficiency on a regular basis. The thousand-person science-and-technology innovation teams have been set up, and the share of fintech personnel is approaching 10%, providing a talent foundation for the shift to smart transformation.

Today, AI has upgraded from a tool focused only on reducing costs. It has become a strategic core for risk-control optimization, process reengineering, and precision marketing. The intelligent risk-control system can issue real-time warnings for retail credit risks, effectively compensating for the shortcomings of manual risk control.

Riding on broader industry trends, the banking sector has formally entered a new stage characterized by “narrow net interest margins, strong technology, and emphasis on quality.” In 2026, high-cost deposits will be concentrated for repricing. On the liability side, the cost of funds is expected to continue trending downward, helping the net interest margin reach its floor and stabilize.

At the policy level, support continues to tilt toward the sectors of science and technology innovation and green finance. The Bank of Communications’ earlier positioning advantages in related areas are expected to continue releasing development dividends. Meanwhile, its high dividend yield and low valuation characteristics are becoming increasingly evident. In a volatile market, it offers strong defensive value and can continuously attract long-term capital to allocate.

However, potential risks also cannot be ignored. This disclosure blunder may trigger regulatory accountability, and it could also further erode brand reputation and market confidence.

The difficult problem of retail asset quality under pressure is hard to solve. Slow repair of the real estate market will continue to drag down performance. Moreover, the conversion cycle of technology investment is generally long. In the short term, large R&D spending is unlikely to quickly translate into performance, inevitably creating the risk of imbalance between input and output.

Beyond that, the rebound in net interest margin also carries uncertainty. Under the guidance of letting financing to the real economy benefit at the margin, there is still room for loan yield to decline.

The Long-Term Framework Is Set

A dividend blunder worth 258.2 billion yuan tore open governance gaps beneath Bank of Communications’ seemingly solid outer shell, yet it has not shaken its business fundamentals.

Impressive 2025 profitability data, stable shareholder returns, and solid risk reserves all attest to the core resilience of state-owned large banks. At the same time, its forward-looking technology finance positioning and comprehensive AI-enabled reform have opened up growth space for the future.

Currently, Bank of Communications is at a pivotal crossroad for transformation. It must face today’s shortcomings head-on while also anchoring itself in long-term direction.

In the short term, it should seize this disclosure controversy as an opportunity to conduct a full review and audit of the disclosure process, close internal control gaps, restore the operational tone of strict and compliant governance, and rebuild trust in the capital markets.

In the medium term, it needs to intensively tackle the issue of retail asset quality, further refine risk-control measures, and curb the upward trend in the non-performing loan ratio.

In the long term, it must continue to deepen digital transformation, accelerate the deployment and effectiveness of technology investment, and turn AI empowerment and science-and-technology innovation positioning into tangible increments in earnings. This will drive a deep transition in business models from scale expansion toward quality-and-efficiency improvement.

For investors, Bank of Communications is still a high-quality allocation target with high dividend yield and low volatility. However, investors should view short-term earnings elasticity rationally.

Whether future corporate value can be re-rated does not depend on changes in executives’ or personnel arrangements. It depends on whether the Bank can balance risk control and innovation—holding steady on its fundamentals while breaking into new tracks.

To move from traditional scale-oriented banks to smart science-and-technology banks, it is necessary to build a solid compliance bottom line and deeply cultivate technology empowerment, thereby navigating through industry cycle fluctuations and achieving long-term steady development.

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