High dividends, pro-cyclical performance, debt relief and deepened reform of State-owned enterprises (SOEs) will lead investments into China’s A-share listed banks in 2025. The high dividends are expected to raise stock prices of major A-listed State-owned banks as it did during the first nine months of 2024. Meanwhile, monetary tools like the Securities, Funds and Insurance companies Swap Facility and reloans for repurchase and increase of shares with an initial scale of 300 billion yuan (US$41.1b) will consolidate the financial position of major State-owned banks. For five years since 2024, local governments are required to spend 800 billion yuan (US$109.6b) annually from their additional special bonds on debt relief. Moreover, the listed State-owned enterprises, including State-owned banks, are required to enhance their stock valuation by equity incentives, business expansion and information disclosure. Experts believe that proactive fiscal and the announced moderately loose monetary policies will have an effect on bank investment during 2025.
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