The 2025 financial reports of China's six major state-owned banks have all been released. As pillars of the banking sector, these institutions collectively achieved total operating revenue of 3.60 trillion yuan and a net profit exceeding 1.44 trillion yuan in 2025, despite continuing efforts to support the real economy.
As a core indicator of bank profitability, the net interest margins (NIM) of the six major banks showed clear signs of stabilization in 2025, with the pace of decline narrowing. Although NIMs remained on a downward trend, the rate of decrease has moderated significantly, supported by measures such as optimizing credit structures, refining liability cost management, and expanding non-interest income.
Looking ahead to 2026, with a large volume of high-cost time deposits maturing, the repricing of existing loans nearing completion, and interbank liability costs continuing to fall, the six major banks generally anticipate a substantial narrowing in the year-on-year decline of NIM across the industry.
The pace of NIM decline has clearly slowed, showing signs of stabilization. Financial reports indicate that both operating revenue and net profit of the six major banks achieved positive growth in 2025. However, influenced by factors such as cuts in the loan prime rate (LPR), repricing of existing loans, and intensified deposit competition, NIMs continued to trend downward.
Specifically, Postal Savings Bank of China maintained a relative advantage, leading the six with an NIM of 1.66%. China Construction Bank reported an NIM of 1.34%, while the remaining banks all had NIMs below 1.3%: Agricultural Bank of China and Industrial and Commercial Bank of China both at 1.28%, Bank of China at 1.26%, and Bank of Communications at 1.20%.
In terms of the decline, all six banks saw lower NIMs compared to 2024. Bank of Communications recorded the smallest drop, narrowing by 7 basis points. Notably, although still declining, the overall year-on-year decrease in NIM for the six major banks in 2025 showed a converging trend compared to 2024. The NIM declines for Bank of China and Industrial and Commercial Bank of China were 5 basis points smaller than their 2024 decreases. Agricultural Bank of China and China Construction Bank saw their declines narrow by 4 and 2 basis points, respectively, compared to 2024.
Market expectations for NIM stabilization among the six major banks had been building since the second half of 2025. Full-year data shows that the NIMs of Industrial and Commercial Bank of China and Bank of Communications remained unchanged from the end of the third quarter of 2025. The declines in NIM for China Construction Bank and Postal Savings Bank of China at the end of 2025 were also contained within a range of 0.01 to 0.02 percentage points compared to the end of the third quarter, indicating clearer signs of quarterly stabilization.
Against the backdrop of a moderating NIM decline, the drop in net interest income for the six major banks also improved in 2025. Bank of Communications continued its growth trend in net interest income, with a year-on-year increase of 1.91%. The declines in net interest income for Industrial and Commercial Bank of China, China Construction Bank, and Bank of China narrowed by 3.12, 7.54, and 5.76 percentage points, respectively, compared to 2024.
The marginal improvement in NIM is not accidental. Based on financial reports and earnings call commentary, the core strategy for the six major banks to counter NIM pressure involves strengthening two-way management of assets and liabilities, stabilizing the foundation of net interest income, and increasing the contribution of non-interest income.
China Construction Bank's Chief Financial Officer attributed the narrower NIM decline in 2025 to three main factors: the gradual completion of repricing for existing loans, which eased pressure on loan yield declines; the concentrated maturity of high-cost time deposits, combined with the effects of self-regulatory mechanisms on interbank deposit rates, leading to a significant decrease in the cost of liabilities; and proactive optimization of the asset-liability structure, including reducing high-cost deposits and expanding low-cost interbank deposits.
On the asset side, China Construction Bank increased the proportion of financial investments with relatively higher returns, raising their share in interest-earning assets by 1.66 percentage points in 2025. On the liability side, the bank effectively managed pricing through customer segmentation, reduced the scale of high-cost deposits, and expanded low-cost interbank deposits. The CFO emphasized that effective liability cost management played a significant role in the marginal narrowing of the NIM decline.
Regarding fee-based income, all six major banks maintained positive growth in net fee and commission income in 2025. Agricultural Bank of China led with a year-on-year growth rate of 16.57%, followed by Postal Savings Bank of China at 16.15%. In terms of the proportion of fee-based income to total operating revenue, five of the six major banks saw an increase compared to 2024.
Agricultural Bank of China's Vice President reported that the bank's wealth management revenue reached 35.7 billion yuan in 2025, with wealth management fee income hitting 25.1 billion yuan, becoming a new growth engine. The significant growth in net fee and commission income was primarily driven by increased revenue from wealth management products and fund distribution, with agency business growing by 87.8%.
Postal Savings Bank of China's Head of Retail Business stated that the bank's strategy is to fully expand fee-based business and vigorously develop a second growth curve, while consolidating the first growth curve. Wealth management is a key pillar of this second curve. The bank's wealth management business experienced rapid development last year, with private banking clients growing by 26%. Additionally, while maintaining its insurance advantage, the bank's non-insurance revenue increased by over 38%, accounting for more than half of total distribution income, up 14 percentage points from the previous year.
Amid a complex and volatile external environment with heightened uncertainty in 2025, the six major banks delivered a report card showing generally stable asset quality but varying degrees of profitability pressure. Overall, the profitability of large commercial banks has been affected by the low-interest-rate environment, with NIM compression becoming a common challenge.
A turning point in NIM trends appears to be approaching. A relevant official previously indicated that a significant volume of long-term deposits, such as three-year and five-year maturities, will be repriced in 2026. Research reports estimate that approximately 75 trillion yuan in household time deposits will mature in 2026. With deposit rates continuing to fall, several major state-owned banks addressed the topic of bulk time deposit maturities during their earnings presentations.
Bank of Communications' Vice President noted that in recent years, the banking industry generally faced slower repricing of deposits compared to loans. However, with cuts in listed deposit rates and the repricing of a large volume of maturing time deposits, deposit costs are expected to decline significantly. The scale of time deposits maturing at Bank of Communications in the current year has increased compared to last year, with a significant portion concentrated in the first quarter. The repricing effect is expected to provide strong support for the full-year NIM.
Bank of China's Vice President also mentioned that starting from the second half of 2025, the volume of maturing time deposits at the bank increased. Since current deposit rates are lower than those from three years ago, this repricing will lead to a decrease in the cost of deposits, positively impacting the bank's efforts to stabilize its NIM.
Looking ahead to NIM trends in 2026, the six major banks generally believe the marginal stabilization trend is likely to continue.
Industrial and Commercial Bank of China's Vice President projected that the banking industry's NIM may follow an "L-shaped" trajectory in 2026. Although the downward trend has not yet reversed in the short term, favorable factors for improvement are accumulating, and the marginal stabilization is expected to persist.
He specifically mentioned that in the first two months of the year, new lending rates for corporate loans and personal housing loans at Industrial and Commercial Bank of China have shown signs of stabilizing. The rate for newly issued loans decreased by only 2 basis points compared to the previous year, a reduction that is 18 basis points smaller than the同比 decline, indicating a significant narrowing in the pace of decrease. Barring further significant adjustments to the LPR or listed deposit rates, the bank expects its net interest income to turn positive year-on-year in the current year, marking an inflection point, with the NIM decline narrowing further compared to 2025.
Agricultural Bank of China's President also responded that the growth rate of net interest income is expected to turn positive year-on-year, potentially reaching an inflection point in the first quarter. He revealed that based on the first two months of 2026, the bank's business operations continue to show a stable and improving trend. Loans to the real economy increased by 1.1 trillion yuan, representing a year-on-year increase, and the trend of NIM stabilization is evident, laying a solid foundation for profit growth throughout the year.
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