The answer may still be uncertain. While the recovery in wealth management has driven growth in agency-related income, weak consumption continues to weigh on revenue from credit card businesses and other segments.
Amid a low-interest-rate environment, fee-based income is crucial for banks to counter narrowing interest margins, achieve high-quality development, and transition toward asset-light operations. After years of contraction, state-owned banks have finally seen an overall positive growth in fee income since 2025.
In Q3 2025, fee income continued its upward trend from the first half, with many banks shifting from negative to positive growth. However, statistics reveal significant divergence among different types of banks: All six state-owned banks reported year-on-year growth, while among nine A-share-listed joint-stock banks, six saw positive growth and three declined—with Zhejiang Commercial Bank posting the steepest drop of over 22%. City commercial banks showed stark contrasts, with Bank of Ningbo Co.,Ltd. surging nearly 30%, while Chengdu Bank and Chongqing Bank fell by 35% and 27%, respectively.
Notably, fee income presents a "two-track" scenario: Wealth management recovery has spurred a surge in agency income, but sluggish consumption continues to drag down credit card-related revenues.
1. **Divergent Trends: State-Owned Banks Lead, Some Smaller Banks Struggle** State-owned banks demonstrated the strongest recovery, with Agricultural Bank of China (ABC) and Postal Savings Bank of China (PSBC) leading nationwide with growth exceeding 10%. Among joint-stock banks, six reported modest growth, while Zhejiang Commercial Bank, SPD Bank, and Ping An Bank saw declines.
City commercial banks exhibited extreme divergence. Top performers like Bank of Ningbo (up ~30%), Jiangsu Bank, Hangzhou Bank, Beijing Bank, and Xiamen Bank (all above 10%) highlighted robust recovery, while Chengdu Bank and Chongqing Bank’s steep declines underscored regional vulnerabilities amid economic cycles—though their fee income bases remain small.
Interestingly, leading city commercial banks have surpassed some joint-stock peers in fee income metrics. For instance, Zhejiang Commercial Bank, which outperformed all city banks in 2024, has now fallen behind Bank of Ningbo, Jiangsu Bank, Nanjing Bank, Hangzhou Bank, and Beijing Bank in 2025, driven by wealth management and asset management growth. This signals that top city banks now rival lower-tier joint-stock banks in wealth management capabilities.
2. **Turning Point Elusive: Wealth Management Booms, Consumption Lags** The "two-track" dynamic stems from contrasting performances in wealth management and consumption-driven businesses.
Wealth management recovery—fueled by agency fund and wealth product sales—has buoyed fee income. As capital markets strengthened, banks accelerated wealth management transitions, making retail a key driver of net fee and commission income. For example, China Merchants Bank (CMB) reported a 0.9% YoY rise in Q1–Q3 net fee income to RMB 56.2 billion, reversing H1 declines. Wealth management fees jumped 18.8% to RMB 20.7 billion, led by sales growth and product optimization.
However, many banks missed this opportunity, exposing gaps in wealth management capabilities.
Conversely, consumption-linked revenues—particularly credit cards—remained weak. CMB’s card fees fell 17.1%, while settlement/clearing fees dropped 4.55%. Ping An Bank, despite a 16.1% rise in wealth fees, saw overall fee income decline due to steep drops in consumption-related segments.
While most national banks posted fee income growth, a sustained recovery remains uncertain. Agency income hinges on capital market stability, whereas consumption declines appear more entrenched.
3. **The Future of Fee Income: Diversified Capabilities Are Key** Sustainable fee income requires robust, diversified capabilities—not reliance on a single business line. Here, state-owned banks’ comprehensive operations shine.
**Lessons from ABC and PSBC’s Rebound** Earlier analysis noted that state-owned banks leveraged varied strategies: ABC and Bank of China relied on retail (over 52% of ABC’s fee income), PSBC grew corporate fees, and China Construction Bank drove asset management.
PSBC’s 11.5% YoY fee income growth to RMB 23.1 billion in Q1–Q3 2025 reflected its balanced approach—bolstering retail while expanding corporate, investment banking, transaction banking, custody, and wealth management.
**Future Imperatives** Banks must strengthen integrated service capabilities across wealth management, consumer finance, and corporate banking. Key trends outlined in industry reports include: - **Strategic Synergy**: Align agency, asset management, and custody to grow AUM and wealth fees. - **Resource Integration**: Combine investment banking, commercial banking, private banking, fintech, and research for comprehensive services. - **Scenario Development**: Digitize to meet diverse financial needs (payments, credit, investments). - **Tech Empowerment**: Foster cross-innovation via tech-business-product fusion.
This evolution will widen gaps between top-tier and smaller banks, intensifying industry polarization.
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