Non-interest income "supports" net interest margin stabilizes Six major banks' 2025 performance demonstrates resilience

Wu Yang, China Securities Journal

Recently, the six state-owned major commercial banks have submitted their 2025 performance answer sheets featuring progress while maintaining stability and achieving improvements in both quality and efficiency. Operating revenue and net profit have shown positive growth across the board, and non-interest income has become an important driver of growth. The net interest margin has narrowed somewhat, while coordination between both sides of deposits and loans has been strengthened to stabilize pricing and control costs. Asset quality has remained sound, and combined with a high proportion of cash dividends, the banks have laid a solid foundation for high-quality development while serving the real economy. At the earnings release meeting, the management of the six major banks responded to issues of market concern, such as the trend of the net interest margin and dividend arrangements, sending out positive signals.

Non-interest income takes up the banner of growth

Overall, the six major banks have continued to expand their asset scale, with a strong clustering effect at the top. As of end-2025, Industrial and Commercial Bank of China’s total assets exceeded 53 trillion yuan; China Construction Bank and Agricultural Bank each reached the 45-trillion-yuan and 48-trillion-yuan thresholds; Bank of China surpassed 38 trillion yuan; and Postal Savings Bank and Bank of Communications also reached 18.68 trillion yuan and 15.55 trillion yuan, respectively.

On the profitability side, all six major banks achieved “double growth” in revenue and attributable net profit, showing operational resilience. Industrial and Commercial Bank of China ranked first in the industry with operating revenue of 838.70 billion yuan and attributable net profit of 368.62 billion yuan. Agricultural Bank’s attributable net profit was 530k yuan, up 3.18% year over year, leading the peer group in growth rate. For China Construction Bank, Bank of China, Bank of Communications, and Postal Savings Bank, attributable net profit increased year over year by 0.99%, 2.18%, 2.18%, and 1.07%, respectively. Combined, the six major banks’ total attributable net profit exceeded 1.42 trillion yuan.

Breaking down the composition of operating revenue, it can be seen that in a low interest-rate environment, net interest income is generally under pressure, and non-interest income has become the core pillar supporting performance growth.

In 2025, Industrial and Commercial Bank of China’s non-interest income was 450k yuan, up 10.2% year over year. Postal Savings Bank’s net fee and commission income grew 16.15% year over year, and its other non-interest net income grew 19.73%. Bank of China’s share of non-interest income reached 33.06%, with outstanding contributions from wealth management, settlement and clearing, and financial market transaction businesses. Bank of Communications’ non-interest net income grew 2.22% year over year.

Agricultural Bank achieved fee and commission net income of 480k yuan, up 16.6% year over year, of which agency business grew 87.8%. The bank explained that this was mainly due to deepening the transformation of its wealth management business, which increased income from wealth management products and fund distribution.

**　The decline in the net interest margin has narrowed somewhat**

Affected by the LPR cut and market interest rates running at low levels, in 2025 the net interest margins of the six major banks narrowed across the board. Postal Savings Bank had the highest net interest margin among the six major banks at 1.66%, showing a downward trend year over year. Industrial and Commercial Bank of China’s net interest margin was 1.28%, down 14 basis points year over year; Agricultural Bank was 1.28%, down 14 basis points; Bank of China was 1.26%, down 14 basis points; China Construction Bank was 1.34%, with its decline narrowing by 2 basis points year over year; Bank of Communications was 1.20%, down 7 basis points year over year.

It is worth noting that the rate of decline in banks’ interest spreads has shown a trend of narrowing each quarter and stabilizing at the margin. Regarding the interest spread outlook, management of each bank released positive signals at the earnings release meetings.

Yao Mingde, vice president of Industrial and Commercial Bank of China, believes that in 2026 the net interest margin will most likely follow an “L-shaped” trend. If further large adjustments to interest rates are not taken into account, the bank expects its net interest income to turn positive year over year this year. The management of China Construction Bank believes that by optimizing the asset-liability structure, it is confident to maintain a leading position in net interest margin among comparable peers.

On the asset side, the six major banks have continued optimizing their credit structure and stepping up support for the real economy. For example, as of end-2025, Industrial and Commercial Bank of China’s manufacturing loan balance exceeded 5 trillion yuan; China Construction Bank’s technology loan balance exceeded 5 trillion yuan, up 18.91% from end of the previous year; and Bank of China provided 4.82 trillion yuan in technology loans to 380k enterprises.

On the liability side, deposit cost control has achieved notable results. Taking Postal Savings Bank as an example, its net interest margin has been maintained at 1.66%, which is at a relatively superior level within the industry. Its president, Lu Wei, said: “Our deposit sources are relatively stable; the deposit interest rate we pay is very low among listed banks, which gives us a strong cost advantage.”

Regarding the issue that time deposits increasingly reach maturity in concentrated periods that the market is watching, Yang Jun, vice president of Bank of China, said that starting from the second half of 2025, the maturity amount of time deposits has increased somewhat, but most of it is still kept in the form of deposits, and the related impact expected this year will be limited. Tang Shuo, vice president of China Construction Bank, introduced that in recent years, the development of savings deposits at the bank has been relatively fast; the maturity amount of time deposits has also grown at the same time, and the overall rollover and handling of matured funds is in good shape.

High proportion of dividends to reward shareholders

While increasing credit deployment, the six major banks have maintained stable asset quality.

As of end-2025, the six major banks’ NPL ratios all declined to some extent compared with end of the previous year. Industrial and Commercial Bank of China’s NPL ratio was 1.31%, Agricultural Bank’s was 1.27%, Bank of China’s was 1.23%, China Construction Bank’s was 1.31%, and Postal Savings Bank’s was 0.95%. In terms of the provision coverage ratio, Agricultural Bank ranked first among the six major banks at 292.55%. China Construction Bank and Postal Savings Bank were 233.15% and 227.94%, respectively, indicating sufficient risk offsetting capacity.

Risk in the retail segment remains a key focus. Li Jianjiang, vice president of China Construction Bank, said that the year-over-year narrowing of the rise in the NPL ratio of personal loans is evident. Judging from the current operating trend, risk prevention and control in the retail segment will still be a work focus. Xu Xueming, vice president of Postal Savings Bank, said that the bank’s retail segment achieved positive growth under very high pressure, holding onto its position as the “stabilizing anchor.”

In terms of shareholder returns, the six major banks continue the tradition of high proportion dividend payments. Industrial and Commercial Bank of China is expected to pay 110.6 billion yuan in annual cash dividends for 2025, and its dividend payout ratio will remain above 30%; the other major banks’ dividend payout ratios are maintained at high levels of around 30%.

Zhang Baojiang, president of Bank of Communications, disclosed that during the “14th Five-Year Plan” period, the bank cumulatively distributed cash dividends totaling 123.9 billion yuan to all shareholders, and its dividend payout ratio has remained above 30% for many consecutive years.

(Editor: Qian Xiaorui)

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