Bloomberg (gated) have the report on Citigroup, UBS and Daiwa arguing that Chinese lenders will withstand the strains of bad local government debt and less fee income without cutting dividends.
Making the point that Beijing needs payouts from state-owned banks to fund spending, and balance sheets are robust.
The three responded in a rebuttal to Goldman analysts who have cut ratings and target prices.
Daiwa, for example:
- “The Ministry of Finance has the incentive to keep dividend payout ratios stable,”
- it’s the controlling shareholder for most state-owned banks, cash dividends are “key source of revenue” for the government
Here is the link to the Bloomberg piece for more, but may be gated.