Leading the growth among state-owned banks! Highlights from the Bank of Communications' earnings call: technology investment of 12.3 billion, AI mentioned 30 times in the annual report

This article comes from: Times Weekly Author: Huang Yukun

On March 27, Bank of Communications released its 2025 annual report. The data shows that by the end of 2025, the bank’s total assets will exceed 15.5 trillion yuan, an increase of 4.35% compared to the end of the previous year, with both operating income and net profit attributable to shareholders growing by over 2%.

In addition to Bank of Communications, three other state-owned banks, including Industrial and Commercial Bank of China, Postal Savings Bank of China, and China Construction Bank, also released their 2025 annual performance on the evening of March 27. In horizontal comparison, Bank of Communications outperformed the other three state-owned banks in terms of revenue and net profit growth.

While performance steadily grew, Bank of Communications’ dividend level continued to rise. According to the bank’s 2025 profit distribution plan, it plans to distribute 14.88 billion yuan in cash dividends. Coupled with the previously distributed interim dividends, the total dividend for 2025 will reach 28.692 billion yuan, with a cash dividend ratio of 32%.

At the performance release conference held that day, Zhang Baojiang, Vice Chairman and President of Bank of Communications, stated that the bank has always placed a high value on investor returns. During the “14th Five-Year Plan” period, a total of 123.9 billion yuan in cash dividends has been distributed to all shareholders, with the dividend ratio maintained at over 30% for 14 consecutive years.

“The total amount of dividends for Bank of Communications in 2025 increased by nearly 2% compared to 2024, mainly due to our steady and advancing operational development, overall positive performance, and continuous positive growth in net profit, which increased the amount of distributable profits. In 2026, we are confident in continuing to provide returns to shareholders with good performance and stable dividends,” Zhang Baojiang said.

                      Source: Bank of Communications Performance Briefing           

Interest margin stabilizing, a significant proportion of fixed deposits maturing in the first quarter

“Faced with continuously declining interest rates and insufficient effective demand, we adhere to a balanced approach of ‘volume, price, and risk,’ enhance internal management, grasp external trending opportunities, and strive to respond to external environmental uncertainties with the certainty of our own work. For the whole year, the four core indicators—net profit attributable to shareholders, net operating income, net interest income, and net commission income—achieved positive growth, maintaining a steady and positive trend,” Zhang Baojiang stated in the annual report address.

Specifically, in 2025, Bank of Communications achieved operating income of 265.071 billion yuan, a year-on-year increase of 2.02%; net profit attributable to shareholders was 95.622 billion yuan, a year-on-year increase of 2.18%, equivalent to an average daily profit of 262 million yuan.

In terms of revenue structure, Bank of Communications’ net interest income in 2025 was 173.075 billion yuan, a year-on-year increase of 1.91%; non-interest net income was 91.996 billion yuan, a year-on-year increase of 2.22%. Among this, net commission income was 38.183 billion yuan, a year-on-year increase of 3.44%. Wealth management income from agency and financial advisory services grew well. Bank of Communications indicated in the annual report that this was mainly due to the bank’s continuous deepening of its wealth management characteristics and the increase in income from financial management and fund distribution.

Currently, the banking industry still faces pressure on interest margins. In 2025, Bank of Communications’ net interest yield was 1.20%, a year-on-year decrease of 7 basis points. The bank stated that this was mainly due to a significant decline in yields on the asset side, influenced by factors such as the reduction of the Loan Prime Rate (LPR) and intense competition in a weak demand environment, resulting in a year-on-year decrease of 58 basis points in customer loan yields. Meanwhile, the overall decline in market interest rates led to a decrease of 25 basis points in investment income from securities.

Zhou Wanfeng, Executive Director and Vice President of Bank of Communications, stated at the performance conference that since last year, through various efforts, the bank’s interest margins have been basically stable since the third quarter of last year. As a large number of fixed deposits are repriced upon maturity, the cost of interest on deposits will significantly decrease. “From the situation of Bank of Communications, we see a significant increase in the maturity amount of our fixed deposits this year compared to last year, with a considerable proportion concentrated in the first quarter,” Zhou Wanfeng said.

Zhou Wanfeng indicated that Bank of Communications will work hard to maintain a stable and improving interest margin in three aspects: first, strictly managing the balance between the volume and price of deposits and loans; second, implementing detailed pricing management for deposits and loans and strictly adhering to self-discipline pricing mechanisms; and third, scientifically optimizing the arrangement of the asset and liability structure.

Non-performing loan ratio down for the fifth consecutive time, reaching a near ten-year low

In terms of asset quality, by the end of 2025, Bank of Communications’ non-performing loan balance was 116.983 billion yuan, an increase of 5.306 billion yuan compared to the end of the previous year, with a non-performing loan ratio of 1.28%, a decrease of 0.03 percentage points compared to the end of the previous year. The non-performing loan ratio has now declined for five consecutive years, reaching a near ten-year low.

Gu Bin, Vice President of Bank of Communications, candidly stated at the performance conference that the current pressure on the bank’s asset quality is relatively high in consumer lending and small business lending, with the increase in non-performing loans in 2025 primarily coming from these areas.

The annual report of Bank of Communications shows that due to the macroeconomic environment and the downturn in the real estate market, the overall asset quality of retail loans in domestic banks is under pressure. By the end of 2025, the non-performing loan ratio for personal loans of the bank was 1.58%, which has risen slightly compared to the end of the previous year, and the trend of change is generally consistent with major peers.

Gu Bin mentioned that this year, asset quality control still faces certain pressures, firstly due to the impact of personal repayment capacity and declining market demand, it is expected that this year the asset quality in retail lending and small business lending will remain under pressure; secondly, the real estate market is still at a stage of stabilizing after hitting bottom, and real estate risks will continue to be monitored; thirdly, some industries still face homogenized competition, leading to narrowed profit margins for enterprises and intensified operational differentiation. Bank of Communications will also continue to pay attention to the operational situations of enterprises in these industries and subsequent risk changes.

Regarding asset control measures for retail lending in 2026, Gu Bin stated that the bank will further integrate internal resources to strengthen the risk control capabilities of retail business, through coordinated credit policy formulation, access control, post-loan monitoring and inspection, overdue collection, and non-performing asset recovery and disposal, transforming “passive firefighting” into “proactive fortification.”

“This year we will carry out a special action for improving the quality of retail assets in 2026, adhering to the three-pronged approach of ‘clearing silt, unblocking, and sealing leaks,’ and a series of measures have been formulated to strive to quickly reverse the downward trend in the quality of retail lending assets,” Gu Bin emphasized.

Technology investment exceeds 10 billion for four consecutive years, significantly increasing AI content

In recent years, Bank of Communications has consistently maintained a large proportion of technology investment.

From 2022 to 2024, Bank of Communications’ investment in financial technology was 11.631 billion yuan, 12.027 billion yuan, and 11.433 billion yuan, all maintaining above 10 billion.

The latest data shows that in 2025, Bank of Communications’ financial technology investment reached 12.342 billion yuan, a year-on-year increase of 6.81%, accounting for 5.78% of operating income, up 0.32 percentage points year-on-year. By the end of 2025, the bank had 9,782 financial technology personnel, an increase of 8.20% compared to the end of the previous year, accounting for 9.99% of the bank’s total workforce, an increase of 0.55 percentage points from the previous year.

Reporters from Times Weekly noted that compared to previous years, Bank of Communications mentioned “AI” and “artificial intelligence” more frequently in its 2025 annual report, reaching 30 times, making it one of the key terms for the bank’s future development.

According to the annual report of Bank of Communications, the bank has implemented several AI application scenarios, such as new AI product interpretation in wealth management systems, AI-assisted generation of investment research viewpoints, etc., to meet the personalized asset allocation needs of a wide range of clients; utilizing AI and other technologies to achieve online and automated processing of consumer protection reviews, complaint management, financial education, etc.; and launching smart assistants to apply AI agents in corporate electronic banking channels, improving customer experience and service efficiency.

Qian Bin, Vice President and Chief Information Officer of Bank of Communications, introduced at the performance conference that during the “14th Five-Year Plan” period, the bank proposed to build a new AI business card for Bank of Communications, making artificial intelligence the core direction of digital transformation for the bank. In 2025, the bank further released the “Artificial Intelligence +” action plan to strengthen the foundation for the development of artificial intelligence.

“In 2025, Bank of Communications’ technology investment reached 12.3 billion yuan, with a significant portion allocated to the AI field. The bank’s intelligent computing scale grew over 50% compared to the previous year, and we have cumulatively deployed over 2,500 AI intelligent assistants, achieving significant results in retail inclusive finance, risk credit, operational customer service, and other scenarios,” Qian Bin stated. Looking to the future, the bank will firmly commit to the application of artificial intelligence as an important breakthrough direction for the “15th Five-Year Plan,” increasing resource investment, utilizing new productive forces, reducing costs, improving quality, and increasing efficiency to achieve high-quality development.