A Perspective on Bank of China's Annual Report: Total Assets Surpass 38 Trillion Yuan with Revenue and Net Profit Both Increasing

Ask AI · What is the global strategy behind China Bank’s net interest margin stabilizing?

Radio International (Beijing) March 31 report (Reporter Fang Feng) On March 30, China Bank released its 2025 annual report. During the reporting period, China Bank’s operating performance improved steadily, achieving operating income of RMB 658.3B, up 4.48% year on year, including non-interest income up 19.21% year on year; net profit of RMB 257.9B, up 2.06% year on year; net interest margin of 1.26%, with the second half of the year remaining stable at the same level for two consecutive quarters. In 2025, China Bank’s assets and liabilities grew in a balanced manner, with total assets and total liabilities both exceeding RMB 38 trillion and RMB 35 trillion, respectively, at year-end. In addition, the capital adequacy ratio at year-end reached 18.85%, the highest level among all year-ends, up by 9 basis points from the end of the previous year; the core tier-one capital adequacy ratio increased by 33 basis points to 12.53% from the end of the previous year.

At the annual performance briefing held on the 30th, China Bank’s management responded to hot topics of interest to the market, including the trend in net interest margin, deposit maturities, and asset quality control.

In addition, regarding the overall planning for the new development stage of the “14th Five-Year Plan and the 15th Five-Year Plan,” China Bank President Zhang Hui said, “During the ‘15th Five-Year Plan’ period, China Bank’s specific priorities and approach to business operations and management can be summarized as ‘building six capabilities and advancing two transformations.’” Regarding the six capabilities: first, building a strong capability to serve the real economy; second, building a strong global layout capability and international competitiveness; third, building a strong capability for comprehensive client services; fourth, building a strong capability to withstand risks; fifth, building a strong capability for integrated operations; and sixth, building a strong team of financial talent. Regarding the two transformations: first, accelerating the smart and data-driven transformation; and second, accelerating the transformation toward sustainable business development.

Take multiple measures to achieve a comprehensive balance of “volume, pricing, risk, and efficiency.”

In a low-interest-rate environment, banks’ net interest margins continue to face pressure. In 2025, China Bank’s net interest margin was 1.26%, down 14 basis points from the previous year, with the decline narrowing further. From a quarterly perspective, China Bank’s net interest margin in the third and fourth quarters of 2025 demonstrated resilience, remaining stable for two consecutive quarters.

“The global advantages of China Bank are reflected in its net interest margin: making good use of two markets at home and abroad, coordinating two types of currency—both local and foreign currencies—while continuously improving the mechanisms for volume–pricing coordinated management. This achieved good results in 2025.” China Bank’s deputy president Liu Chenggang said that since the second half of 2025, the group’s foreign-currency net interest margin has stabilized and rebounded. The group’s net interest margin was flat with the first half of the year, and both net interest income year on year and quarter on quarter achieved positive growth. Specifically: first, increase efforts in asset deployment, improve the efficiency of asset allocation, and strengthen self-discipline management of loan interest rates. Second, continue to optimize the liability structure and effectively reduce liability costs. Third, allocate funding globally, improve the utilization efficiency of foreign-currency funds, and connect the funding allocation channels between domestic and overseas markets.

Looking ahead to 2026, Liu Chenggang expects China Bank’s year-on-year decline in net interest margin to narrow significantly and net interest income to achieve positive growth. He said China Bank will steadily do a good job in achieving an integrated balance of “volume, pricing, risk, and efficiency” through the following three measures, further enhancing operating resilience and the capability for sustainable development:

First, do a better job of making the core base business profitable, and effectively control the decline in interest spreads in RMB business. On the assets side: in the opening year of the “15th Five-Year Plan,” China Bank will seize a more proactive set of macro policies, act ahead of schedule, and reasonably arrange the pace of credit deployment and bond investments. On the liabilities side: strengthen technology empowerment, focus on key scenarios and products, promote digital operations for corporate customers without loans, settlement accounts, and individual long-tail customers, among others, to encourage the retention and sedimentation of demand deposits. At the same time, actively seize the favorable window when term deposits gradually mature to effectively offset the downward pressure on asset yields.

Second, strengthen the global service system and keep the net interest margin in foreign-currency business generally stable. China Bank will continue to steadily expand its customer base for “going global,” and promote sustained growth in overseas institution lending and bond businesses, improving the level of earnings. Meanwhile, faster growth in low-cost deposits domestically will provide competitive funding support for the development of overseas institutions. China Bank will strengthen interest-rate sensitivity management and take multiple measures to ease the adverse impact of interest-rate changes on net interest margin and net interest income.

Third, refine interest-rate pricing management requirements and lay a solid foundation for steady development. China Bank will closely monitor policy developments, adhere to the bottom line of compliant interest-rate operations, and enhance the scientific and effective nature of pricing management. It will continuously strengthen interest-rate pricing capability, uphold the principle of risk pricing and covering costs with returns, reasonably set interest rates for deposits and loans, and promote steady improvement in overall benefits.

The impact of term deposit maturities on deposit growth is limited

Deposits are the core business of banks and the foundation for growth in asset business. In the past year, the market has paid close attention to the maturity and repricing of large amounts of term deposits across the banking industry. As of the end of 2025, China Bank’s total liabilities exceeded RMB 35 trillion. Of this, deposits were RMB 26.18 trillion, up 8.18% from the end of the previous year.

When asked about the issue of banks’ term deposit maturities that the market is closely watching, China Bank’s deputy president Yang Jun said that since the second half of 2025, the scale of term deposit maturities at China Bank has indeed increased. For these maturing term deposits, China Bank has seriously done solid work on maintaining deposit stability services; most of them remain in the form of deposits. Among them, the rollover rate for term deposits is relatively high, and it is expected that the impact of this year’s term deposit maturities on China Bank’s deposit growth will be limited. On the other hand, because the current deposit interest rates are lower than those on term deposits from three years ago, the repricing of the above deposits will lead to a decline in the deposit interest expense rate, which has a positive impact on stabilizing that bank’s interest spread level.

Regarding the deposit growth trend, Yang Jun said that in terms of total volume, in recent years the balance of broad money (M2) has continued to grow steadily, with an average growth rate of 8.5% over the past three years, and it is expected that this trend will continue in 2026. China Bank’s clients’ deposits overall show a sound and steady trend; in 2025, domestic RMB deposits saw additional growth beyond the baseline year-on-year figure, and pricing improved. From a structural perspective, it is expected that social funds will continue to concentrate on individuals and non-financial institutions; however, with the rollout and effectiveness of a package of policies for boosting domestic demand through coordinated fiscal and financial efforts, supported by sustained improvement in the economy, improving corporate liquidity, and thus a better outlook for corporate deposit growth. This will provide a good foundation for China Bank to consolidate its liability base and support the development of the real economy.

Yang Jun pointed out that China Bank will promote high-quality development of its liability business through four areas of initiatives: first, consolidate the client base and improve deposit quality. For example, by providing clients with international trade and cross-border RMB settlement services, China Bank will further expand its corporate client base; conduct targeted marketing for multiple client segments such as technology enterprises, multinational corporations, listed companies, small and micro enterprises, industry leaders, and institutional clients; and continuously optimize personal customer tiered management strategies, steadily advancing the “digital + cloud ops + relationship manager” three-level account-management model.

Second, improve the product and service system and enhance the quality and effectiveness of client services. Centering on clients’ asset allocation needs, China Bank will continue to enrich and refine a diversified, professional product and service system including global payroll outsourcing, quick payments, cash management, third-party deposits, wealth management, and more, creating value for clients and driving stable deposit growth.

Third, advance ecosystem-based operations to promote closed-loop retention of funds. Guided by policies that combine “investing in things” and “investing in people,” China Bank will track the flow of funds for areas including fiscal spending, social security, housing, healthcare, major project construction, technological upgrades, and industry chain supply chains, integrating financial services into ecosystem-based operational scenarios for clients. Through deep integration with clients’ fund flow, information flow, and logistics, China Bank will promote closed-loop management of client funds, drive deposit accumulation, and improve the stability of deposits.

Fourth, optimize proactive liability management and enhance resilience in business operations and management. Seize favorable market opportunities, issue bonds and negotiable certificates of deposit at opportune times to diversify funding sources such as non-bank deposits; meanwhile, by supplementing capital and enhancing total loss-absorbing capacity, achieve high-quality development across business cycles.

A double decline in non-performing balances and non-performing rates for overseas institutions

While assets and liabilities grow in a balanced manner, China Bank’s asset quality also remains stable and excellent. Zhang Hui said that as of the end of 2025, the group’s non-performing loan ratio was 1.23%, down 0.02 percentage points from the end of the previous year, maintaining the best level among major peers; the watch ratio was 1.47%, unchanged from the end of the previous year; the provision coverage ratio was 200.37%, remaining reasonably sufficient. The non-performing balances and non-performing rates for overseas institutions achieved a “double decline.” In addition, the first batch of capital replenishment totaling RMB 165 billion was completed; the capital adequacy ratio was 18.85%, reaching the highest level among all year-ends, and the bank’s risk coverage and loss-compensation capability continued to improve.

Regarding the reasons why asset quality remains steady, China Bank’s deputy president Wu Jian said that China Bank has continuously strengthened the proactive management of credit risk, taking more proactive and enabling measures to further improve refined management levels, continuously improve the quality and efficiency of collection and disposal, and achieve good results in full-year risk control, with new progress in risk prevention and control in key areas, and asset quality remaining stable.

“Looking ahead to 2026, we are confident in maintaining stable asset quality.” Wu Jian said that although changes in the external environment are increasingly affecting us, the support conditions and basic trend of our country’s economy continuing to improve over the long term have not changed. China Bank will continue to coordinate development and security, always monitor new trends and new characteristics in the evolution of risks, strengthen forward-looking risk assessment and effective response, and firmly hold the bottom line of ensuring that systemic risks do not occur.

First, earnestly deliver on the financial “five major articles,” further optimize the credit structure, and enhance credit support in areas such as the strong domestic market, the modern industrial system, green transformation development, high-level opening-up to the outside world, and rural revitalization, strengthening risk management for real estate, local government debt, and structural contradictions in key industries.

Second, keep the bottom line of asset quality and defuse potential risks in key areas. Adhere to dual, refined management strategies for both newly occurring non-performing loans and collections and disposal, and coordinate control of asset quality from both the “import” and “export” sides.

Third, reshape and improve the group’s comprehensive risk management framework, enhance the level of risk governance, strengthen global risk management capability, reinforce controls over high-risk products, and proactively prevent and control risks in non-traditional areas.

Fourth, deepen the smart and data-driven transformation of risk management, consolidate system foundations, build solid risk support, and create standardized end-to-end management capabilities. Using data as the driver and new technology as the lever, China Bank will enhance its smart and data-driven risk control capability.