Research On The Dividend Policy And Financial Causes Of The Listed Banks In China

Dividend policy is the decision that is made by the listed companies about howto distribute the after-tax profit at the end of the accounting period, mainly involved inthe issue whether to distribute the after-tax profit or retain for reinvestment. Scholarsat home and abroad have many researches on the dividend policy, some from theaspect of the relationship between the dividend policy and the company value, somefrom the influence factors of dividend policy. But in many of the researches, financialcompanies, especially the listed banks have all been excluded because of the specialindustry characteristics. However, along with the joint-stock commercial banks, citycommercial banks and the big four state-owned commercial banks listed in success,the number of the listed banks are increasingly growing up, and its dividend policyshould be paid more attention.The current situation of the dividend policy of listed banks is that although thedividend distribution tendency is high, its dividend payout ratio is low; cash dividendis the main dividend method; dividend distribution has good continuity and stability.On the one hand, the dividend policy has a strong information transfer function if theoperating performance is good; on the other hand, behind the good operatingperformance, banks have the characteristics of high risk, high debt, adequate cashflow, no physical assets circulation and so on. According to the situation that the listedbanks’ dividends distribution tendency is high but the dividend payout ratio is low, wewant to explore whether this situation is affected by the banks’ financial performanceor its financial risk.Aiming at this problem, this article selected a sample of listed banks in2000-2013from the aspect of financial performance and financial risk. The financialperformance indicators include profit, debt, growth, and the financial risk indicatorsinclude capital adequacy, liquidity and the asset quality. The asset size, ownershipconcentration and ownership property is the control variables. We use SPSS andEviews to establish binary logistic regression model and multiple linear regressionmodel to have a research on the dividends distribution tendency and dividend payoutratio of the listed banks in China. The conclusion is:(1) The dividend distribution tendency is mainly affected by its financial performance: the better of profitability, thestronger of dividend distribution tendency; the better of growth ability, the weaker ofdividend distribution tendency;(2) The dividend distribution tendency is mainlyinfluenced by its financial risk: the higher of capital adequacy ratio, the higher ofdividend payout ratio; the stronger of liquidity, the lower of dividend payout ratio; thebetter of asset quality, the higher of dividend payout ratio; Meanwhile, thestate-controlled listed banks’ dividend distribution tendency and dividend payout ratioare both higher than the non-state controlled listed banks.Based on the conclusions: we propose the following recommendations:(1)Improve the legal environment and regulate the behavior of dividend distribution;(2)Actively respond to the challenge of Internet Finance and continue to improve theprofitability of listed banks (3) Increase the dividend payout ratio appropriately andreduce the short-term speculation;(4) Establish the operating target of enterprisevalue maximization.