The banking profit model has changed, and the six major banks are launching a "breakthrough" in wealth management.

In a report by our reporter Zhang Meng and Lu Mengxue from chinatimes.net.cn, Beijing

All six state-owned banks have now released their 2025 annual reports. Faced with a complex and shifting economic environment, the six banks’ operating income and net profit both recorded year-over-year growth, showcasing the strong operating resilience of large financial institutions.

A deeper breakdown of profit composition shows that the net interest margin has continued its downward trend, narrowing further compared with the previous year. Except for Bank of Communications, net interest income for the other five large banks fell year over year. By contrast, net fee and commission income brought good news across all six banks, becoming a key driver of profit growth.

Among them, Agricultural Bank of China delivered the most standout increase. In 2025, it recorded net fee and commission income of RMB 88.085 billion, up RMB 12.5185 billion year over year, representing a growth rate of 16.6%, the highest among the six major banks.

Against the backdrop of sustained pressure on traditional interest margins, non-interest businesses represented by wealth management have shifted from “icing on the cake” to an indispensable “second growth curve,” becoming the core focus of strategic transformation and future competition for banks.

Non-Interest Income Becomes the Key to Growth

In 2025, the six state-owned banks turned in results showing “double growth” in operating revenue and net profit.

Industrial and Commercial Bank of China achieved net profit of RMB 370.766 billion, up 1%; Agricultural Bank of China achieved net profit of RMB 292.0 billion, up 3.3%; the Bank of China recorded net profit of RMB 257.936 billion, up 2.06%; China Construction Bank recorded net profit of RMB 339.79 billion, up 1.04%; Bank of Communications recorded net profit of RMB 96.514 billion, up 2.42%; Postal Savings Bank of China recorded net profit of RMB 87.623 billion, up 1.05%.

However, behind the “double growth,” the industry’s common challenge remains the narrowing of the net interest margin. Affected by multiple cuts to the LPR and the continued low level of market interest rates, the six banks’ net interest margins are under pressure across the board. Among them, Postal Savings Bank of China has continued to lead, with a net interest margin of 1.66%, down by 21 basis points year over year.

Although net interest income remains the core portion of operating revenue, besides Bank of Communications, which saw a year-over-year increase of 1.91%, the other five banks saw declines in that item to varying degrees. Against this backdrop, non-interest income has become a key force driving earnings growth. Annual reports show that in 2025, non-interest income at all six banks grew across the board, with net fee and commission income performing especially well.

Industrial and Commercial Bank of China’s net fee and commission income was RMB 111.171 billion, an increase of RMB 17.74 billion, up 1.6%. This was mainly due to expansion in corporate wealth management, personal wealth management, and private banking businesses, as well as increased income related to agency precious metals, funds, wealth management products, securities, and other related businesses. Agricultural Bank of China’s net fee and commission income was RMB 88.085 billion, up RMB 12.5185 billion from the previous year, up 16.6%, mainly because it advanced the transformation of wealth management business and increased income from wealth management and fund distribution/agency.

The Bank of China’s net fee and commission income was RMB 82.237 billion, up RMB 5.647 billion year over year, up 7.37%. Benefiting from a rebound in the capital markets, wealth management, asset custody, and agency-related businesses boosted efforts comprehensively. China Construction Bank’s net fee and commission income was RMB 110.307 billion, up RMB 5.379 billion from the previous year, up 5.13%.

Bank of Communications’ net fee and commission income was RMB 38.183 billion, up RMB 1.269 billion year over year, up 3.44%. Strong contribution came from wealth management businesses such as wealth management and fund distribution/agency. Postal Savings Bank of China’s net fee and commission income was RMB 29.365 billion, up RMB 4.083 billion year over year, up 16.15%.

At the performance briefing, Sun Yourong, Chief Financial Officer of China Construction Bank at the time, said that as residents’ awareness of investing and managing wealth continues to grow, there is still a great deal of room for development in wealth management, asset management, and custody businesses that connect the two ends.

“In 2025, the six state-owned banks saw their net interest margins fall across the board. The core reasons are that loan repricing on the asset side has been continuously advanced, and declines in market interest rates have pushed down asset yields; at the same time, competition in the deposit market has intensified, and liability costs have remained rigidly high, making the pressure from margin compression prominent. To address this challenge, state-owned banks need to coordinate efforts across both the asset and liability sides to stabilize the net interest margin from multiple dimensions.” Zeng Gang, director of the Shanghai Finance and Development Laboratory, told a reporter from The Huaxia Times.

Wealth Management Transformation Is Underway

At the 2025 annual performance release meetings, all six state-owned banks focused their attention on wealth management, sending signals of accelerating transformation.

Lin Li, deputy general manager of Agricultural Bank of China, positioned its wealth management business as a link connecting residents’ savings with economic circulation, emphasizing that for commercial banks, this business has “great potential and great room to accomplish.” He told on-site media such as The Huaxia Times: “Wealth management has core characteristics of light capital use, stable returns, and sustainability. It is an important path for banks to shift from expansion in scale toward deeper value cultivation.”

Tang Shuo, deputy general manager of China Construction Bank, approached the issue from residents’ asset allocation trends. He said, “During the ‘14th Five-Year Plan’ period, the composition of residents’ financial asset allocations changed; funds flowed into new business forms such as funds. It is expected that this trend will be sustained during the ‘15th Five-Year Plan’ period.” He said that in 2025, China Construction Bank’s AUM for individual customers exceeded RMB 2.3 trillion, an increase of RMB 241 billion over the previous year. The main driver was faster growth in investment and wealth management products such as funds, insurance, and precious metals.

“Next, starting from the underlying logic of wealth management, our bank will continue to enrich the wealth management product shelf, and, based on different clients’ risk preferences, provide differentiated follow-through solutions.” Tang Shuo said.

Zeng Gang noted that in 2025, the six state-owned banks saw a “double growth” in revenue and net profit. With net interest income slowing while net fee and commission income accelerated, it indicates that intermediary businesses such as wealth management have gradually become a new core engine of banks’ earnings growth.

“Against the backdrop of industry-wide sustained pressure on interest margins, banks are accelerating business-structure transformation and stepping up efforts in intermediary businesses such as wealth management, payment and settlement, custody, and investment banking. This is not only an inevitable choice to address bottlenecks in traditional credit-earning models, but also aligns with the long-term trend of upgraded resident wealth management needs.” Zeng Gang said. “At present, residents’ risk appetite is relatively low. Although it may affect the growth rates of high-risk wealth management products and fund distribution in the short term, the growth foundation for intermediary businesses remains solid.”

On one hand, state-owned banks rely on customer trust, offline channels, and compliance advantages to focus on steady-performing products such as fixed-income products and retirement wealth management products, accurately matching demand for low-risk preferences. On the other hand, regulators continuously standardize the development of intermediary businesses, guiding the industry back to its original purpose of serving the real economy. Combined with the irreversible trend toward diversification in residents’ asset allocation, the long-term growth logic of intermediary businesses will not change, and short-term fluctuations will not alter the trend of becoming an earnings pillar.

Multiple banks also further anchored their next-phase strategic directions for wealth management in their annual reports.

Postal Savings Bank of China disclosed that in recent years it has strategically set up a wealth management department and comprehensively advanced business transformation. Focusing on reforms of the process-based business model, the bank has worked to enhance five key professional capabilities: “acquiring and activating customers, leading research and investment, product selection, team building, and content operations.” It is committed to building “the wealth management lead institution of choice for the mass affluent customer segment.”

China Construction Bank, meanwhile, has adopted “accompaniment-style service” as its differentiated “playbook.” Through its “CCB Preferred” service, it refines investment strategies, explains professional knowledge in an intuitive way, strictly selects high-quality products, and provides timely post-investment companionship. In 2025 alone, it launched nearly 40 investment strategies and cumulatively reached more than 10 million customers. At the same time, leveraging an enterprise-level AI technology system built on “CCB Cloud,” it has deeply empowered key scenarios such as wealth management and promoted upgrades toward intelligent service delivery.

Private Banking Continues to Grow

Within the overall landscape of wealth management, private banking—serving high-net-worth clients—has become a key focus in the strategic layout of the state-owned banks.

At the 2025 performance release meeting, Zhang Yi, president of China Construction Bank, revealed that the bank’s wealth management clients and private banking clients both grew by over 10%. The annual report shows that the management scale of China Construction Bank’s family trust advisory business and insurance trust advisory business increased by over 20%, demonstrating strong demand among high-end clients for comprehensive wealth planning services.

Other major banks also reported positive results. The number of wealth management trust and charitable trust clients at Bank of China increased by 64% compared to the end of the previous year. Bank of Communications’ private banking clients reached 105,100 households, up 11.62% year over year, with managed assets totaling RMB 1,430.128 billion, an increase of 10.39%. Postal Savings Bank of China’s “Dingfu” private banking client base reached 43,100 households, a sharp increase of 26.14% from the previous year.

To enhance service efficiency, all banks have continued to promote the professionalization and centralization of private banking operations. Lin Li, deputy general manager of Agricultural Bank of China, explained that the bank has deepened the construction of its wealth management service system, establishing 500 private banking centers at the branch and head-branch levels, 1,000 wealth management centers at the branch level, and numerous specialized financial studios at key outlets. It has built a practical training system of “research support—tiered training—multi-dimensional empowerment” to improve professional service capabilities.

“Currently, private banking has entered an era of stock-based competition.” Yang Haiping, a special researcher at the Beijing Wealth Management Industry Association, told The Huaxia Times. “At this stage, the core barriers for banks competing for high-end clients are service quality, which is reflected in three aspects: first, the ability to build detailed customer profiles and deliver personalized, customized services based on understanding clients; second, professional research and investment capabilities as well as asset allocation skills; third, resource integration and internal-external coordination—using internal and external linkages to integrate and deliver both financial and non-financial services.”

Yang Haiping further emphasized that the strategic importance of wealth management in banks’ development will be further elevated, driven mainly by two factors. First, given the current economic environment, the persistent pressure on net interest margins will likely continue for a long period, making the expansion of non-interest income a strategic priority. Second, the downward trend in deposit interest rates pushes some investors to seek alternative products, making wealth management a key tool to seize opportunities from changes in residents’ asset allocation structures.

Editor-in-charge: Feng Yingzi; Editor: Zhang Zhiwei