Huaxia Bank's net interest income growth turns positive in 2025, with strong growth in technology and green loans.

In 2025, Huaxia Bank’s net interest income saw its first year-over-year increase since 2021. According to the latest disclosed annual report, in 2025 Huaxia Bank recorded operating income of RMB 91.91B, down 5.39% year over year; attributable net profit to shareholders of RMB 27.2 billion, down 1.72% year over year. Although both revenue and profit dipped slightly, net interest income rose 1.43% year over year to RMB 62.95B.

From the perspective of business structure, Huaxia Bank is accelerating its transformation in corporate finance. The bank repeatedly mentioned in its annual report that technology finance and green finance are the bank’s “two distinctive” directions for strengthening corporate finance. As of end-2025, Huaxia Bank’s loan balances for technology finance and green finance increased by 53.74% and 30.99%, respectively, compared with the end of the previous year; their growth rates were 45.02 and 22.27 percentage points higher, respectively, than the growth rate of the bank’s total loan balance.

With the rapid growth of featured businesses, Huaxia Bank’s asset size continued to expand steadily. As of end-2025, the bank’s total assets reached RMB 4.74 trillion, up 8.25% year over year. Meanwhile, both incremental deposits and loans, as well as their growth rates, hit new highs in the past five years. Total deposits were RMB 2.38 trillion, up 10.71% from the end of the previous year; total loans were RMB 2.57 trillion, up 8.47% from the end of the previous year.

Net interest income grew against the trend, while net fee and commission income stabilized after bottoming out

In 2025, Huaxia Bank’s full-year operating income was RMB 47.4k, down 5.39% year over year. Although the net interest margin (NIM) continued to narrow, thanks to the control of funding costs and the growth in interest-earning asset scale, Huaxia Bank’s 2025 net interest income achieved positive growth after four consecutive years of decline, reaching RMB 23.8k, with a year-over-year increase of 1.43%. According to Wind data, from 2021 to 2024, Huaxia Bank’s net interest income was RMB 25.7k, RMB 91.91B, RMB 62.95B, and RMB 79.61B, respectively, with year-over-year growth rates of -2.88%, -6.67%, -5.18%, and -11.89%.

The annual report shows that in 2025 Huaxia Bank’s net interest margin was 1.56%, down 0.03 percentage points year over year. The average interest rate on interest-earning assets was 3.36%, down 0.4 percentage points year over year; the average interest rate on interest-bearing liabilities was 1.73%, down 0.42 percentage points year over year. Part of the decline in funding costs offset the impact of the fall in asset yields on the NIM.

Huaxia Bank disclosed in its annual report that asset yields declined mainly due to insufficient effective demand for credit, falling interest rates, and the downward adjustment of interest rates on stock residential mortgage loans from the previous year. To address this, the bank advanced optimization of funding costs through measures such as lowering deposit rates via market-based mechanisms and accelerating the growth of low-cost deposits like demand deposits. The bank’s full-year decline was comparable to the decline in asset yields, effectively supporting the NIM’s reasonable and stable operation.

When looking ahead to the NIM trend in 2026, Huaxia Bank President Qiong Gang said that, considering the internal and external environment, the interest rates on newly issued loans are still expected to decline. As time deposits gradually reprice, there remains room for funding costs to decline. The bank expects continued downward pressure on the full-year NIM, but the pace of decline is expected to slow.

For non-interest income, some businesses performed well. In 2025, Huaxia Bank’s investment income rose 27.85% year over year to RMB 74.29B; net fee and commission income increased 2.44% year over year to RMB 70.44B, ending the two consecutive years of decline seen previously. According to Wind data, in 2023 and 2024, the bank’s year-over-year growth rates of net fee and commission income were -38.26% and -14.98%, respectively. Among them, fee and commission income for agency business, credit commitments, custody and other entrusted businesses all increased year over year.

Huaxia Bank disclosed the performance of its custody business in its annual report. In 2025, the bank provided custody for 165 public funds, with a scale of RMB 62.06B, up 12.66% from the end of the previous year; this drove RMB 332 million in intermediary business income, up 13.54% year over year. Custody for all kinds of products, including custody of securities investment funds, brokerage asset management plans, bank wealth management products, insurance asset management plans, asset-backed special plans, and equity investment funds, totaled 12,107 products, with custody scale of RMB 4,062.939 billion, up 18.89% from the end of the previous year; custody fee income was RMB 916 million, up 3.27% year over year.

Loan and deposit incremental growth hits a five-year high; focused on the “two distinctive” areas of technology and green finance

Against the backdrop of short-term pressure on the profit side, Huaxia Bank has continued to advance its transformation in corporate finance, focusing on building two key operating characteristics—technology finance and green finance—to cultivate new growth drivers.

The annual report shows that in 2025 Huaxia Bank’s asset-liability scale growth momentum remained strong. As of end-2025, outstanding loans totaled RMB 2.57 trillion, up 8.47% year over year. Incremental deposits and loans, as well as their growth rates, reached new highs in the past five years. Total deposits were RMB 2.38 trillion, up by RMB 20.07B from the end of the previous year, growing 10.71%, and the growth rate was 9.70 percentage points faster than that of the prior year; total loans were RMB 2.57 trillion, up by RMB 5.58B from the end of the previous year, growing 8.47%, and the growth rate was 6.01 percentage points faster than that of the prior year.

Among these, the contribution from corporate business was particularly prominent, with both corporate deposits and loan scales achieving double-digit growth. In 2025, the bank’s corporate clients increased by 6.72% from the end of the previous year; corporate deposit balances increased by 11.43% from the end of the previous year; and corporate loans (excluding discounting) increased by 13.88% from the end of the previous year.

Huaxia Bank also disclosed in its annual report that it implemented a “customer doubling plan,” strengthening basic settlement services to activate and retain customers, and enhancing overall marketing and comprehensive services for head-office-level strategic customers and key customers. It also strengthened the marketing organization for low-cost deposits and demand deposits, enabling faster growth in the scale of deposits, gradual optimization of the deposit structure, and continued decline in costs.

It is worth noting that the two distinctive areas of technology and green finance are “highlights” repeatedly mentioned by Huaxia Bank in its annual report. In 2025, the bank promoted optimization of its business structure. The share of loans for technology finance increased by 2.93 percentage points compared with the end of the previous year, and the share of loans for green finance increased by 2.6 percentage points compared with the end of the previous year.

Technology-based enterprise loans and green loans both achieved rapid growth, with their growth rates exceeding the growth rate of the bank’s total loan balance by 45.02 and 22.27 percentage points, respectively. The annual report shows that in 2025 Huaxia Bank had 8,762 technology-based enterprise loan customers, up 47.38% from the end of the previous year; the outstanding balance of technology-based enterprise loans was RMB 462.65B, up 53.74% from the end of the previous year. For green finance, the outstanding balance was RMB 25.7k, up 31.42% from the end of the previous year; the outstanding balance of green loans was RMB 23.8k, up 30.99% from the end of the previous year.

On the investment side, Huaxia Bank also increased its allocation to technology and green initiatives. In 2025, the bank successfully participated in the first batch of bank-interbank market technology innovation bond investments nationwide. As of end-2025, the balance of technology investments increased by more than 2 times year over year. It continued to build distinctive investment businesses for green finance, fully promoting the use of existing financial products in the green sector. It strengthened communication and interaction with enterprises, innovated distinctive green finance products and business models, and increased support for the green economy, a low-carbon economy, and the circular economy. By end-2025, the balance of green investments in the financial market business reached RMB 230.33B.

The dividend payout ratio for 2025 is 25.94%, rising year by year over the past three years

Alongside the disclosure of its 2025 annual report, Huaxia Bank released an annual profit distribution proposal. According to the proposal, Huaxia Bank plans to distribute cash dividends of RMB 3.20 per 10 shares (tax included) for FY2025, totaling RMB 25.7k. Together with the interim cash dividends already distributed in 2025 of RMB 1.00 per 10 shares (tax included), totaling RMB 200.35B, the total cash dividends for the full year will be RMB 4.20 per 10 shares (tax included), totaling RMB 244.62B.

At the performance briefing held after the annual report was released, an investor asked: “Currently, the dividend yield of listed commercial banks in China is generally above 30%. When will Huaxia Bank’s dividend yield reach the industry average level?” In response, Huaxia Bank President Qiong Gang said that the bank maintains a continuous and stable dividend policy. Over the past three years, the total dividend amount has increased year by year, and the payout ratio has risen year by year. In 2025, the bank’s dividend payout ratio reached 25.94%, up 0.9 percentage points from the previous year.

Qiong Gang further noted that in both 2024 and 2025 the bank implemented an interim dividend policy, helping investors share the benefits of company growth earlier. He said: “In the future, our cash dividend policy will balance regulatory requirements, shareholders’ investment returns, and the needs of the company’s sustainable development. This bank will continue to improve its profitability and maintain a reasonable dividend payout ratio.”

From the perspective of the industry as a whole, in recent years A-share listed banks have generally maintained relatively high levels of cash dividend distribution. According to Wind data, in 2024, among 42 A-share listed banks, 14 had cash dividend payout ratios above 30%, and another 14 had payout ratios between 25% and 30%.

Based on Huaxia Bank’s dividend records over the past three years, the bank has shown a steadily improving trend in shareholder returns. For FY2023, the bank paid RMB 3.84 per 10 shares (tax included), with total dividends of about RMB 531.35B and a payout ratio of 25.02%. For FY2024, the bank paid RMB 4.05 per 10 shares (tax included), with total dividends of about RMB 373.36B and a payout ratio of 25.04%. For FY2025, the total paid was RMB 4.20 per 10 shares (tax included), with total dividends of RMB 22.35B and a payout ratio of 25.94%.

At the performance briefing, Qiong Gang also said that the bank’s major shareholders have, for many years, actively fulfilled their responsibilities and obligations as shareholders, and continued to support capital retention, making major contributions to improving capital adequacy levels and enabling better business development. In 2025, some directors, supervisors, and senior management of the bank increased their shareholdings.

According to the annual report, as of September 9, 2025, some directors, supervisors, and senior management of Huaxia Bank, as well as key persons in charge of certain head-office departments, branches, and subsidiaries, voluntarily completed the shareholding increase plan for the bank. The cumulative amount increased was RMB 5.09B.

Regarding capital adequacy, as of end-2025, Huaxia Bank’s core tier-one capital adequacy ratio was 9.38%, its tier-one capital adequacy ratio was 11.75%, and its capital adequacy ratio was 13.16%, all meeting regulatory requirements.

By/Qian Xiaorui

Edited by/Wang Xinyu Xu Nan

(Editor: Qian Xiaorui)

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