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Daisy Wu

China’s six largest state-owned banks recorded their first simultaneous rise in first-half revenue and net profit since 2022, according to interim results released last week, as margins that had been under pressure for two years showed tentative signs of stabilising.
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) together generated more than 2 trillion yuan (US$297 billion) in operating income for the first half.
Combined net profit attributable to shareholders amounted to about 712.6 billion yuan. Revenue grew between 4 and 11 per cent across the six lenders, while net profit rose 4 to 6 per cent – the first time since 2022 that all six registered positive growth on both counts at the same time.
The improvement was underpinned by a tentative rebound in net interest margin (NIM) – the spread between what banks earn on loans and pay on deposits – after two years of steady compression that dragged the industry average down to a record low of nearly 1.4 per cent in the first quarter.
A structural inflection point has yet to be confirmed and will depend on broader economic recovery and shifts in the interest rate environment
Dong Ximiao, Merchants Union Consumer Finance
CCB led the turn, posting a half-year NIM of 1.37 per cent – up 0.03 percentage points from full-year 2025 and 0.01 percentage points from the first quarter.
ABC’s margin climbed 0.02 percentage points from the first quarter to 1.28 per cent, while ICBC and BOC each edged up 0.01 percentage points year on year, to 1.29 and 1.27 per cent, respectively.
Bocom’s NIM rose 0.02 percentage points to 1.23 per cent. PSBC’s margin slipped 0.07 percentage points to 1.63 per cent but remained the highest among peers.
Disciplined liability-cost management proved crucial. CCB reported a 0.34 percentage point drop in time deposit payout rates relative to early 2026, while domestic demand deposit balances expanded.
ABC reported a 4.7 per cent drop in interest expenses as high-cost, fixed-term deposits matured and were repriced at lower prevailing rates, cutting overall deposit interest costs by 0.21 percentage points compared with late 2025.
ICBC president Liu Jun said in a press release on Friday the bigger driver was “more appropriate liability costs and a more optimised liability structure … not just repricing”.
Analysts urged caution over declaring a full-fledged turnaround.
The recent margin rebound marked a low-level bottoming phase rather than a clear trend reversal, said Ming Ming, chief economist at Citic Securities. As relief from deposit repricing diminished, “the core conflict surrounding bank interest margins would gradually shift from elevated liability costs to pressure on asset yields”.
Ming added that, going forward, bank operations would “pivot from passively offsetting margin compression to refined asset-liability management, raising the proportion of low-cost liabilities and optimising loan structures”.
Dong Ximiao, chief economist at Merchants Union Consumer Finance, described the margin recovery as an “L-shaped bottoming”, noting that the boost from lower deposit costs would fade in the second half of the year while asset yields continued to fall.
“A structural inflection point has yet to be confirmed and will depend on broader economic recovery and shifts in the interest rate environment,” Dong said in a recent domestic report.
Asset quality across the state-owned lenders remained resilient, with PSBC recording the lowest non-performing loan ratio at 1 per cent, while peers hovered between 1.22 per cent and 1.3 per cent.
Underpinned by steady balance sheets, the six lenders announced combined interim dividend plans exceeding 220 billion yuan, raising their cash payout ratio to around 31 per cent – up by about 1 percentage point from previous levels.
Upbeat half-year results buoyed investor sentiment across mainland markets on Monday, with BOC leading gains as its Shanghai-listed shares closed more than 5 per cent higher.


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Half-year results rise across China’s largest state-owned lenders amid tentative signs of margin stabilisation


Half-year results rise across China’s largest state-owned lenders amid tentative signs of margin stabilisation.


China’s 6 biggest state banks post rare shared growth as margins show tentative rebound

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Half-year results rise across China’s largest state-owned lenders amid tentative signs of margin stabilisation

Half-year results rise across China’s largest state-owned lenders amid tentative signs of margin stabilisation