CITIC SEC has released a research report stating that the operating results of banks that have disclosed their 2025 annual reports show that the weighted average revenue and profit growth rates of 22 banks were 1.05% and 1.77% year-on-year, respectively, largely meeting expectations. It is anticipated that subsequent disclosures will show minimal deviations from expectations. Looking ahead to the first quarter, bank asset deployment remains stable, net interest margins are declining as expected, credit risk conditions are relatively stable, and the profit growth curve continues to stabilize and trend upward. Due to a decline in market risk appetite and a relatively stable broad liquidity environment, equity assets such as banking stocks may be more favored by capital with low drawdown requirements, potentially sustaining both relative and absolute returns.
As of March 29, 2026, 22 listed banks have disclosed their 2025 annual reports or annual performance summaries. Among them, 13 have disclosed full annual reports, while 9 have released performance summaries. This group includes 4 major state-owned banks, 6 joint-stock banks, 8 city commercial banks, and 4 rural commercial banks. The financial results of these banks indicate a trend of "stable volume expansion, stabilizing pricing, and optimizing quality." Overall performance continues to recover, though individual differences persist.
The revenue growth, net profit attributable to shareholders growth, and Return on Equity (ROE) for the 22 banks in 2025 varied within the ranges of [-10.40%, +10.48%], [-4.21%, +21.66%], and [6.76%, 14.65%], respectively. The weighted average year-on-year growth rates for revenue and net profit attributable to shareholders were +1.05% and +1.77%, increasing by 0.54 and 0.29 percentage points compared to the first three quarters. The average ROE reached 10.27%. Fourteen of the 22 banks showed improved revenue and net profit growth compared to the first three quarters. Overall, most banks experienced marginal improvement in their fourth-quarter performance, suggesting a potential continuation of positive trends into the first quarter.
Balance sheet expansion strategies remained prudent, with corporate banking being the primary growth driver. The average total assets of the 22 banks at the end of 2025 increased by 10.23% compared to the end of the previous year (growth range: [+2.54%, +20.67%]). For banks disclosing relevant data, the average liabilities, loans, and deposits grew by 10.64%, 10.13%, and 9.56% year-on-year, respectively (growth ranges: [+1.90%, +22.05%], [+0.50%, +20.72%], [+1.39%, +19.49%]). A breakdown shows that the 13 banks with full financial reports posted average growth in corporate loans and retail loans of 14.13% and 1.74%, respectively, compared to the end of the previous year. Average corporate demand deposits, corporate time deposits, retail demand deposits, and retail time deposits grew by 9.17%, 17.17%, 8.30%, and 12.87%, respectively. Analysis indicates active overall balance sheet expansion, with differentiated strategies among bank types. City commercial banks, leveraging regional government and business resources, were more aggressive in corporate credit deployment and derivative deposit generation.
Net interest margins declined as anticipated, with significant benefits from liability cost reduction. The average net interest margin for the 13 banks with full reports was 1.54% in 2025, down 10 basis points year-on-year. Among the 11 banks providing quarterly data, the margin decreased by only 1 basis point compared to the first three quarters, indicating marginal stabilization in the fourth quarter. A detailed look shows that the average yield on interest-earning assets and the cost rate of interest-bearing liabilities for the 13 banks were 3.10% and 1.65%, down 48 and 44 basis points year-on-year, respectively. The declines in pricing on both asset and liability sides were comparable. Cost savings achieved through liability repricing and structural optimization effectively offset the drop in asset-side pricing.
Asset quality remained stable, with improvements in corporate loans but pressure on retail loans. In terms of book quality, the average non-performing loan (NPL) ratio for the 22 banks at the end of 2025 was 1.05%, an improvement of 3 basis points from the end of the previous year. For banks disclosing data, the average special-mention loan ratio and overdue loan ratio were 1.38% and 1.45%, changing by +0.03 and -0.07 percentage points year-on-year, respectively. The NPL ratio, special-mention loan ratio, and overdue loan ratio improved year-on-year for 14/22, 7/13, and 7/13 banks, respectively, and remained flat for 4/22, 1/13, and 0/13 banks, indicating a continued trend of steady improvement in book quality. A breakdown reveals that the average corporate and retail NPL ratios for the 12 banks with detailed data were 0.89% and 1.72%, changing by -0.15 and +0.26 percentage points year-on-year, respectively. Nine of the 12 banks showed improvement in corporate NPLs, with two remaining flat, while only one of the 12 showed improvement in retail NPLs.
Provisions contributed to profits, with sufficient safety cushions. The average provision coverage ratio for the 22 banks was 290.49%, down 14.19 percentage points from the end of the previous year, continuing a broad narrowing trend. Only 7 of the 22 banks saw an increase in their provision coverage ratio, indicating that industry provisions continue, to some extent, to feed back into profits. Furthermore, the average "loan provision ratio minus NPL ratio minus special-mention loan ratio" for the 13 banks with relevant data was 0.27%, a slight decrease of 0.18 percentage points from the end of the previous year. Four of the 13 banks saw an increase in this metric. While the broad safety cushion slightly declined, its median level remained within a reasonable range.
Market performance was volatile last week, with banking stocks, particularly H-share Chinese banks, relatively outperforming. Amid external market uncertainties, the sector's relative value became apparent. In the A-share market, sector performance was mixed last week. The CSI 300 Index, Shanghai Composite Index, Shenzhen Component Index, and Wind All-A Index fell by 1.41%, 1.09%, 0.76%, and 0.73%, respectively. In contrast, the CITIC Banking Stock Index declined by 0.78%, showing relative outperformance against core broad-based indices. In the H-share market, the Hang Seng Index fell by 1.29% last week, while the Hang Seng Tech Index rose by 0.81%. Meanwhile, the Hang Seng H-Financials Index decreased by 1.96%, but the Hang Seng Mainland Banks Index increased by 1.25%, indicating relatively positive momentum for Chinese bank stocks listed in Hong Kong.
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