by AN Zhen
China's six largest state-owned banks reported steady growth in 2025, with combined net profit reaching 1.42 trillion yuan (US$206 billion) and total revenue rising to 3.6 trillion yuan, even as narrowing lending margins weighed on profitability.
The country's "big six" lenders — Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Agricultural Bank of China (ABC), Bank of China (BOC), Bank of Communications (BoCom) and Postal Savings Bank of China (PSBC) — all posted gains across key indicators including assets, revenue and net profit, underscoring their role as stabilizers of the banking system.
Revenue rose 2.3%, while net profit increased 1.65%, as revenue growth outpaced earnings in a prolonged low-rate environment.
Among the six, ICBC maintained its lead by scale, with total assets surpassing 53 trillion yuan for the first time, reinforcing its position as the world's largest bank by assets. Growth was also strong at peers, with CCB and ABC posting asset expansion of more than 12%, while BOC and PSBC grew by over 9%.
Pressure on profitability remains centered on shrinking net interest margins (NIMs), a key gauge of lending returns. PSBC reported the highest margin at 1.66%, followed by CCB at 1.34%, while BoCom lagged at 1.20%. All six banks saw margins decline from a year earlier, although executives said the pace of contraction has slowed.
ICBC executives said the impact of loan repricing tied to cuts in China's loan prime rate (LPR) has largely been absorbed, with margins likely to follow an "L-shaped" trend in 2026 and net interest income potentially returning to growth.
With interest income under pressure, banks are increasingly shifting toward non-interest income as a secondary growth driver.
ICBC reported non-interest income of 203.14 billion yuan, up 10.2%, while PSBC's fee and commission income rose 16.15%. At BOC, non-interest income accounted for 33.06% of total revenue, supported by wealth management, settlement and trading businesses.
Executives described the shift as structural. PSBC president LU Wei said the bank aims to build non-interest business as a "second growth curve", alongside efforts to stabilize margins, focusing on wealth management, payments and financial markets.
Asset quality remained stable, with non-performing loan (NPL) ratios declining at five of the six banks. ICBC and CCB both reported ratios of 1.31%, ABC stood at 1.27%, and BOC at 1.23%. PSBC was the only outlier, with its ratio rising slightly to 0.95%.
Risks remain concentrated in the property sector and retail lending. BOC vice-president WU Jian said real estate remains the largest source of new bad loans in China, although risks are gradually easing as the market adjusts.
Banks also flagged growing pressure in retail credit, including mortgages and consumer loans, as household income growth slows and leverage increases. Some lenders have tightened credit standards, with PSBC saying low-risk borrowers accounted for nearly 80% of new lending in the first quarter.
Analysts said the big state lenders remain resilient but face a structural shift as lower interest rates erode traditional income sources.
