Bank of Communications correction notice still contains errors? Internal control deficiencies cannot be brushed off

Ask AI · Does the wording of the correction announcement expose shortcomings in internal controls?

A Transportation Bank slip-up not only puts itself in an awkward position, but also makes the entire banking industry—especially state-owned banks—look bad as a group. Even more interesting is that in its subsequent correction announcement, Bank of Communications apparently started playing word games, which seems a bit perfunctory. To some extent, it even gives itself a covert, “silent commendation” for its past information disclosure review process.

Made a mistake in the dividend amount: a basic error appears in Bank of Communications’ announcement

This is not complicated. In the announcement disclosing its 2025 profit distribution plan, Bank of Communications, due to textual omissions and errors, wrote the amount of cash dividends per share as 10 times the actual figure.

In its correction announcement, Bank of Communications says that the reason for the error was “due to insufficient scrutiny during proofreading, the original announcement contained a textual error.” But when you carefully compare the contents of the first announcement with the correction announcement, the problem at Bank of Communications likely isn’t just “insufficient scrutiny.” More importantly, the handling process for the erroneous announcement, as well as the wording used in the correction announcement, is still open to question—there is a taste of “bureaucratic language” and “doing the bare minimum.”

The correction announcement is also problematic

First, the announcement was not corrected in a timely manner. The erroneous announcement was issued on March 27, while the correction announcement was only released on the evening of March 30—three days later. It is important to note that March 30 was Monday, a trading day. This means that throughout the entire trading session, the market received an announcement containing incorrect dividend data. Why didn’t Bank of Communications detect the announcement error immediately, or did it detect the error but, for some reason, still did not issue the correction announcement for a long time?

Second, the wording of the correction announcement sidesteps the issue. Under a literal reading, it even, as a side note, “praises” its past work. In the correction announcement, Bank of Communications says: “Our bank will further strengthen the preparation and review of information disclosure to ensure the quality of information disclosure.”

Pay special attention: the flaw lies in those five words—“will further strengthen.” What does “further” mean? Does it imply that it has already strengthened previously, and will strengthen again later?

The announcement had an error, and the correction was also not timely—can you say that the effect of a previously “strengthened” announcement is to correct such a mistake? Is it that the person drafting the announcement is used to speaking bureaucratically? And is it also that the reviewer this time has a habit of being “further” accustomed?

Ongoing decline: Bank of Communications’ ROE bottoms out among state-owned banks

While the aftershocks of this dividend fiasco are not yet over, Bank of Communications’ 2025 performance is still hard to hide in terms of operational concerns. As the core yardstick for measuring a bank’s profitability, Bank of Communications’ weighted average return on net assets (ROE) for 2025 fell to 8.38%, down 0.7 percentage points year-on-year, showing a downward trend for many consecutive years.

Compared with other state-owned banks, Bank of Communications’ weighted average ROE is already at the bottom. Objectively speaking, the banking industry as a whole is currently under pressure from ROE declines. However, compared with the “Big Four” banks—which are larger in scale and face greater operational difficulty—Bank of Communications’ ROE is still clearly lower and continues to decline. Is this related to insufficient internal controls at the bank and top management not being diligent enough and not fulfilling their duties?

Why insist so strongly on information disclosure from state-owned big banks? Because there are no small matters in financial risk control. The banking industry has always been known for its rigor, treating risk control as a lifeline. As a well-known state-owned big bank with total assets exceeding 15 trillion, and as a listed company, it should be responsible to investors and to its own reputation.

From the compliance perspective, the newly revised “Measures for the Administration of Information Disclosure by Listed Companies” implemented in July 2025 clearly requires that information disclosure must ensure it is true, accurate, and complete, and that directors and senior executives must fulfill their obligations to act diligently and responsibly.

Under pressure from operating performance, listed companies should especially hold the line on compliance. The dividend incident at Bank of Communications is not only a warning about an isolated case; it also sends a strong signal to the entire market: compliance is an enterprise survival question that must be answered—not an optional one. Information disclosure is a lifeline for the market’s operation, and absolutely not a formality. Only by building a closed-loop internal control system with clearly defined rights and responsibilities, establishing a multi-level cross-verification mechanism, and promoting compliance management to extend end-to-end from the decision-making end, execution end, and disclosure end, can we avoid systemic risks of “one typo affecting the whole picture,” truly strengthen the barrier protecting investors’ rights and interests, and maintain the foundation for the sound development of the capital market.

Disclaimer: This article does not constitute any investment advice to anyone.
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