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

Wu Yang, China Securities Journal

Recently, six major state-owned banks have sequentially turned in their 2025 annual performance answer sheets characterized by progress while maintaining stability and a dual improvement in quality and efficiency. Operating revenue and net profit have both grown across the board, while non-interest income has become an important growth engine. The net interest margin narrowed somewhat, with coordinated efforts on both deposits and loans helping stabilize pricing and control costs. Asset quality remained solid, and with high-percentage cash dividends, a strong foundation for high-quality development was laid while serving the real economy. At the earnings release conference, the senior management of the six major banks responded to topics 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 asset scale of the six major banks continued to expand, with a notable clustering effect at the top. As of the end of 2025, Industrial and Commercial Bank of China’s total assets exceeded 53 trillion yuan; China Construction Bank and Agricultural Bank each crossed the 45 trillion-yuan and 48 trillion-yuan thresholds, respectively; Bank of China exceeded 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 front, all six major banks achieved “double growth” in operating revenue and net profit attributable to shareholders, showing strong business resilience. Industrial and Commercial Bank of China ranked first in the industry with operating revenue of 530k yuan and net profit attributable to shareholders of 450k yuan. Agricultural Bank’s net profit attributable to shareholders was 480k yuan, up 3.18% year over year, leading the peer banks in growth rate. For China Construction Bank, Bank of China, Bank of Communications, and Postal Savings Bank, net profit attributable to shareholders grew by 0.99%, 2.18%, 2.18%, and 1.07% year over year, respectively; in total, the six major banks’ net profit attributable to shareholders exceeded 1.42 trillion yuan.

Breaking down the components of operating revenue, in a low-interest-rate environment net interest income generally faces pressure, so non-interest income has become the core pillar supporting performance growth.

In 2025, Industrial and Commercial Bank of China’s non-interest income was 380k 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 non-interest income accounted for 33.06%; standout contributions came from wealth management, settlement and clearing, and financial market transaction business. Bank of Communications’ non-interest net income grew 2.22% year over year.

Agricultural Bank achieved fee and commission net income of 186.8k yuan, up 16.6% year over year, including an 87.8% increase in agency business. The bank explained that this was mainly due to deepening the transformation of wealth management business, which increased income from wealth management products and fund distribution.

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

Affected by the LPR cut and the market interest rates operating at low levels, in 2025 the net interest margins of the six major banks generally narrowed. Postal Savings Bank’s net interest margin ranked first 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 the year-over-year narrowing of the decline by 2 basis points. Bank of Communications was 1.20%, down 7 basis points year over year.

It is worth noting that across the board, the magnitude of the interest margin decline showed a pattern of narrowing each quarter and stabilizing at the margin. Regarding the trend of the interest margin, management at each bank released positive signals at the earnings release conference.

Industrial and Commercial Bank of China’s Deputy Governor Yao Mingde believes that in 2026 the net interest margin will most likely show an “L-shaped” trend. If further major adjustments to interest rates are not considered, the bank expects its net interest income to turn positive year over year this year. China Construction Bank’s management believes that by optimizing the asset-liability structure, it is confident it can maintain a leading edge in net interest margin among comparable peer banks.

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 the end of 2025, Industrial and Commercial Bank of China’s outstanding manufacturing loans exceeded 5 trillion yuan. China Construction Bank’s outstanding technology loans exceeded 5 trillion yuan, up 18.91% from the end of the previous year. Bank of China provided technology-loan support totaling 4.82 trillion yuan to 155.5k enterprises.

On the liability side, deposit cost management has shown clear results. Taking Postal Savings Bank as an example, its net interest margin has been maintained at the relatively strong industry level of 1.66%. Its President Lu Wei said, “Our deposit funding sources are relatively stable, and our deposit interest payment rate is very low among listed banks, which gives us strong cost advantages.”

Regarding the issue of concentrated maturity of time deposits that the market is watching, Bank of China’s Deputy Governor Yang Jun said that starting in the second half of 2025, the maturity size of time deposits increased somewhat, but most of it was still kept in the form of deposits. The bank expects the related impact on this year to be limited. China Construction Bank’s Deputy Governor Tang Shuo introduced that in recent years this bank’s development of savings deposits has accelerated. The size of time-deposit maturities has grown in tandem, and the overall follow-through and acceptance of maturing funds has been good.

High-percentage dividends to reward shareholders

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

As of the end of 2025, the non-performing loan ratios of all six major banks were lower than at the end of the previous year. Industrial and Commercial Bank of China’s non-performing loan 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%. For 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 coverage capacity.

Risk in the retail segment remains a key focus. China Construction Bank’s Deputy Governor Li Jianjiang said that the year-over-year narrowing in the rise of personal-loan non-performing rates was evident. Based on the current operating trend, risk prevention and control in the retail segment will remain a key focus. Postal Savings Bank’s Deputy Governor Xu Xueming said that in a situation where the retail segment faced very heavy pressure, the bank achieved positive growth, holding its position as the “stabilizing anchor.”

In terms of shareholder returns, the six major banks continued the tradition of high-percentage dividends. Industrial and Commercial Bank of China is expected to pay 110.6 billion yuan in annual cash dividends in 2025, with a dividend payout ratio maintained at over 30%; the other major banks’ dividend payout ratios were also kept around 30% at high levels.

Bank of Communications’ President Zhang Baojiang disclosed that during the “14th Five-Year Plan” period, the bank cumulatively distributed cash dividends of 123.9 billion yuan to all shareholders, with the dividend payout ratio staying above 30% for consecutive years.

(Editor: Qian Xiaorui)

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