For the fifth time in a decade, a major shareholder's push to raise the dividend payout at HUISHANG BANK (03698.HK) has been defeated.

At the bank's recent 2025 annual general meeting, a temporary profit distribution proposal submitted by its second-largest shareholder, the Zhongjing group, was voted down. All 11 other proposals presented by the bank's board were approved.

Ahead of the meeting, the Zhongjing group, which holds a 10.59% stake, submitted a detailed proposal exceeding 5,000 words. It called for a 2025 dividend distribution of 4.734 billion yuan, a significant increase from the board's proposed 3.472 billion yuan plan.

The bank's management defended its original proposal, stating that the 22% payout ratio strikes a balance between returning profits to shareholders and accumulating capital, which it believes aligns with the bank's current development phase and serves the long-term interests of all shareholders. Following the vote, the 3.472 billion yuan cash dividend plan will proceed.

This marks the fifth instance in the last ten years where the Zhongjing group has formally objected to the bank's dividend policy, with all five attempts failing to gain sufficient shareholder support.

The ongoing dispute between the bank and this major shareholder is also cited as a key factor stalling the bank's long-planned A-share listing in Shanghai. A listing progress report issued by sponsors CITIC Securities and Guoyuan Securities in April 2026 explicitly identified two core issues requiring resolution: corporate governance and the equity dispute involving major shareholders Zhongjing and the Shanshan group.

During the 2025 AGM, a proposal to extend the validity period of the bank's A-share issuance plan was once again approved by shareholders.

The Zhongjing group's latest proposal argued for a higher dividend payout ratio of 30% of net profit, or 3.41 yuan per 10 shares. It cited the bank's strong financial foundation, its historical practice of higher payouts between 2013 and 2015, and the need to improve its valuation. The group contended that the increased payout would have a negligible impact of only 0.09 percentage points on the bank's capital adequacy ratio.

However, the proposal was rejected, receiving 26.29% votes in favor, 50.2% against, and 23.51% abstentions. The bank will pay the originally proposed dividend of 2.5 yuan per 10 shares on August 21.

The Zhongjing group first invested in HUISHANG BANK in 2006 and became its largest shareholder in 2015. Its chairman, Gao Yang, has served as a non-executive director since 2009.

For the 2025 financial year, the bank reported operating income of 37.67 billion yuan, a 1.18% increase, and a net profit of 16.926 billion yuan, up 6.34%. Its total assets exceeded 2.3 trillion yuan by the end of the year.

Despite strong regional growth, its A-share listing process, initiated years ago, remains in the preparatory stage. The sponsors' report noted that the unresolved equity dispute could lead to changes in major shareholding and impact the listing. The bank also needs to address a regulatory non-compliance issue regarding individual employee shareholdings exceeding 500,000 shares.

The validity of the bank's A-share issuance proposal has now been extended by 12 months from its original expiry date of June 29, 2026.