Bank of China Ltd announced its first interim dividend since listing in 2006 at a time when profit growth is faltering.

The state-owned lender will distribute 1.208 yuan (74 sen) per 10 shares in interim payouts, according to a Thursday exchange filing. Its first half (1H) profits slid 1.24% from a year earlier to 118.6 billion yuan as margins deteriorated. 

The move shows China’s largest state banks are heeding calls from regulators to boost investor returns after markets sold off. It adds further pressure on lenders, which also have been called on to support the flagging economy and are struggling with record low margins and rising bad loans.  

Smaller peer Bank of Communications Co (Bocom) on Wednesday also announced an interim dividend even as it reported a decline in profits. Bocom dropped 4.8% in Shanghai on Thursday.

All of the big five state lenders have flagged they were considering interim dividends. Bank shares have surged to multi-year highs this year on payout bets as yields on the country’s sovereign bonds have tumbled near record lows.

Industrial & Commercial Bank of China Ltd, China Construction Bank Corp and Agricultural Bank of China Ltd are slated to report their 1H earnings on Friday.

  - Bloomberg