On May 27, Bank of Xi'An Co.,Ltd. (600928) convened its 2025 annual general meeting of shareholders. During the deliberation of the "2025 Profit Distribution Plan," 1.878 billion shares voted in favor, representing 69.89% approval. Approximately 3.8974 million shares voted against, accounting for 0.1451% opposition. Notably, 805 million shares were cast as abstentions, making up 29.96% of the vote.

While the proposal passed as the approval rate exceeded 50%, the significant abstention rate of nearly 30% quickly drew market attention. The number of abstaining shares from shareholders holding over 5% of the stock precisely matches the shareholding quantity of the bank's largest shareholder, Bank of Nova Scotia (BNS).

The relationship between Bank of Nova Scotia and Bank of Xi'An dates back to June 2004, when the former regulatory authority approved Bank of Nova Scotia's investment in Bank of Xi'An. Initially acquiring a 2.5% stake by subscribing to shares at 1 yuan per share for a total investment of 26.88 million yuan, Bank of Nova Scotia has since increased its holdings to become the largest shareholder.

It was observed that during the Bank of Xi'An board meeting on April 22, when the "2025 Profit Distribution Plan" was reviewed, the voting result was 7 in favor, 0 against, and 2 abstentions. The two directors appointed by Bank of Nova Scotia, Li Yong and Chen Yongjian, were among those who abstained. Their stated reason for abstention was an understanding of the bank's comprehensive considerations for long-term development in formulating the profit distribution plan, coupled with a hope that Bank of Xi'An would further enhance its dividend level in the future based on sustained, sound business performance.

Reviewing past records, the bank's distribution plans were "0.56 yuan per 10 shares" for 2023 and "1 yuan per 10 shares" for 2024, with no significant abstentions or oppositions reported in those years.

For 2025, Bank of Xi'An reported a net profit attributable to shareholders of 2.65 billion yuan. Under the proposed "1 yuan per 10 shares" distribution, the total cash dividend planned for 2025 amounts to 444 million yuan (including tax), representing 16.77% of the net profit. Compared to the dividend payout ratios of nearly 30% seen among most banks this year, this figure is indeed relatively low.

In its annual report, Bank of Xi'An explained that the 2025 profit distribution plan primarily considered two factors. First, the continuous tightening of capital regulatory policies for commercial banks has increased the difficulty of external capital supplementation, necessitating reliance on internal capital replenishment and accumulation. Second, the bank is at a critical stage of strategic development, and retaining profits reasonably to enhance capital adequacy levels will support its long-term, healthy, and sustainable growth.

At a time when investor expectations for bank stock dividends are generally rising, whether this "long-term planning" arrangement gains genuine recognition from long-term shareholders is now in question. If Bank of Xi'An fails to find a better balance between performance growth and dividend enhancement in the future, these 805 million abstention votes may only be the prelude to a larger strategic contest.