AsianFin -- China’s six largest state-owned banks collectively posted revenue of about US$254 billion in the first half of 2025, returning to growth after several had reported declines last year. Net profit attributable to shareholders reached nearly US$95 billion, averaging more than US$500 million per day.
The Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, Postal Savings Bank of China, and Bank of Communications demonstrated resilience in a challenging macroeconomic environment, even as they face narrowing net interest margins and rising risks in retail lending, highlighting the need for continued structural transformation.
Industrial and Commercial Bank of China once again led the pack with revenue of US$59.3 billion and net profit of US$23.3 billion, while China Construction Bank followed closely with US$54.8 billion in revenue and US$22.5 billion in net earnings. Agricultural Bank of China, Bank of China, Postal Savings Bank of China, and Bank of Communications contributed US$51.4 billion, US$45.7 billion, US$24.9 billion, and US$18.5 billion in revenue respectively.
Growth momentum, however, was uneven. Agricultural Bank of China posted the fastest net profit increase at 2.53 percent year on year, followed by Bank of Communications and Postal Savings Bank of China, which gained 1.61 percent and 1.08 percent.
In contrast, Industrial and Commercial Bank of China, China Construction Bank, and Bank of China all saw slight declines, reflecting the drag from shrinking net interest margins despite overall revenue gains.
Margin pressure remains a central challenge. Loan prime rate reductions, mortgage repricing, and a shift in deposit structures all weighed on profitability. Postal Savings Bank of China continued to enjoy the highest net interest margin at 1.70 percent, thanks to its strong retail deposit base, but this represented a decline of 21 basis points from a year earlier.
Bank of Communications recorded the lowest margin at 1.21 percent, though its decline of just eight basis points made it the most stable among peers. The other major lenders posted margins between 1.26 percent and 1.40 percent. Still, the pace of margin compression slowed compared with previous reporting periods, suggesting tentative signs of stabilization.
To cushion the impact of weaker interest income, the banks leaned more heavily on fee-based business. Bank of China saw non-interest income jump 26.4 percent, lifting its share of total revenue to nearly 35 percent. Postal Savings Bank of China boosted fee and commission income by 11.6 percent, with wealth management fees rising nearly 48 percent.
Agricultural Bank of China also reported strong momentum in agency business, with fees growing more than 60 percent year on year. These efforts demonstrate how the big six are pushing to diversify revenue streams beyond traditional lending.
On the balance sheet side, the combined assets of the six lenders climbed above US$29.7 trillion. Industrial and Commercial Bank of China remained the world’s largest bank with assets of US$7.3 trillion, while China Construction Bank posted the fastest growth at nearly 10 percent. Postal Savings Bank of China passed US$2.5 trillion in total assets and reported customer deposits of US$2.24 trillion, reinforcing its position as a funding powerhouse.
Asset quality metrics remained relatively stable overall. The average non-performing loan ratio across the six banks stood at 1.23 percent, comfortably below the industry average. Bank of Communications posted the sharpest improvement, with its NPL ratio falling to 1.28 percent, while Industrial and Commercial Bank of China and China Construction Bank both improved to 1.33 percent. Postal Savings Bank of China reported a small uptick to 0.92 percent, still the lowest among peers. Yet retail risk is emerging more clearly.
Non-performing ratios for personal housing loans rose across the board, reaching between 0.73 percent and 0.86 percent, reflecting the delayed impact of China’s prolonged property downturn. Provisioning levels varied, with Agricultural Bank of China maintaining the highest coverage at 295 percent, followed by Postal Savings Bank of China at 260 percent and China Construction Bank at 239 percent. Bank of China slipped below the symbolic 200 percent threshold, a reminder that buffers are uneven among the big lenders.
Dividend payouts underscored the sector’s defensive appeal for investors. Interim dividends across the six banks exceeded US$28 billion, with Industrial and Commercial Bank of China distributing about US$7 billion and Agricultural Bank of China US$5.8 billion. All six maintained payout ratios around 30 percent, continuing to position themselves as reliable sources of income for shareholders.
Beyond the headline numbers, technology financing and digital transformation featured prominently. China Construction Bank’s technology loan balance rose 16.8 percent to US$715 billion, while Agricultural Bank of China’s grew more than 20 percent to US$653 billion, with an emphasis on county-level enterprises.
Bank of China reported that more than 30 percent of its corporate lending was directed to technology, and Bank of Communications grew loans to tech-focused small and medium enterprises by nearly 23 percent. At the same time, banks are investing in human capital, particularly in fintech roles. China Construction Bank noted that more than 80 percent of its employees now hold bachelor’s degrees or higher, with fintech professionals prioritized for recruitment despite overall staff cuts.
Workforce restructuring continued in the first half of the year. Combined headcount across the six banks fell to 1.83 million, down 26,700 from the end of 2024, returning to levels last seen in 2022. Agricultural Bank of China remained the largest employer with 445,000 staff, while Bank of Communications employed just 95,000. The reductions reflect both digitalization and branch consolidation, as the shift toward online and mobile services reduces demand for traditional roles.
At the same time, competition for talent in data analytics, fintech, and wealth management remains intense, even as employee turnover in wealth management divisions stays high due to performance pressures.
Lending growth remained robust. The six banks collectively expanded credit by more than US$1 trillion in the first half, with Bank of China leading in pace and Bank of Communications lagging. Corporate lending anchored overall growth, particularly in priority areas such as green finance and inclusive finance for small businesses. China Construction Bank grew its green loan book by nearly 15 percent, while Agricultural Bank of China expanded small-business loans by more than 15 percent.
Retail lending, weighed down by sluggish housing demand, showed signs of rebalancing. Banks reported stronger demand for personal consumption and business loans, with China Construction Bank noting growth of 27.8 percent in consumption loans and 38.9 percent in personal business loans. Postal Savings Bank of China continued to rely on its retail-heavy model, with retail loans comprising more than 60 percent of its portfolio, though that concentration has exposed it to higher credit risks.
Each bank is approaching this transitional period with a different emphasis. Industrial and Commercial Bank of China is focused on stabilizing profitability through investment returns. China Construction Bank is leaning into green finance and retail lending growth. Agricultural Bank of China is doubling down on county-level development and inclusive finance. Bank of China is leveraging its international footprint to boost non-interest income. Postal Savings Bank of China is banking on its deposit base to maintain funding advantages. Bank of Communications is steering resources toward technology, green finance, inclusive finance, elderly care, and digital transformation.
Despite these variations, the outlook voiced by executives was broadly similar. Management teams expect margin pressure to ease in the second half as the pace of repricing slows and loan-deposit dynamics stabilize. But they also recognize that sustainable growth will depend on expanding non-interest income, from wealth management to international operations.
Overall, the first-half results show that China’s big six banks remain resilient pillars of the economy. They continue to expand assets, deliver steady revenue, and reward shareholders with reliable dividends. At the same time, the challenges of narrowing margins, rising retail loan risks, and an evolving workforce highlight that transformation is still in progress.
With Beijing looking to these lenders to support strategic sectors such as technology, green development, and small businesses, their ability to balance policy mandates with profitability will be critical. The performance of the big six in the coming quarters will help define not only the future of China’s financial system but also the country’s broader economic trajectory in an era of slower growth.
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