Interest rate spread stops falling, non-interest income fills the gap! The six major banks accelerate their shift to light capital with their first-quarter reports.

Questioning AI · How does the deposit rate cut benefit manifest behind the differentiation in net interest margin?

After the first quarter 2026 financial reports are disclosed, the core operating indicators of large state-owned banks are showing new changes: the downward trend of net interest margin, which represents the profitability of traditional main businesses, has slowed, with some banks even experiencing marginal recovery; meanwhile, the proportion of non-interest income has generally increased compared to the end of last year, becoming a key support to stabilize revenue.

Interest margin trend differentiation: some large banks stop falling and rebound, deposit rate cut benefits become evident

As a key indicator measuring the profitability of banks’ deposits and loans, the trend of net interest margin (NIM) has attracted market attention. Comparing the 2025 annual report data, the NIM of large state-owned banks in the first quarter of 2026 shows a differentiated trend.

Specifically, Postal Savings Bank continues to lead among state-owned banks with a NIM of 1.65%, a slight decrease of 1 basis point from 1.66% at the end of 2025. Agricultural Bank of China and Bank of China had first-quarter NIMs of 1.26% and 1.26%, respectively, unchanged from the end of last year, demonstrating strong rigidity in liability costs.

Notably, some large banks’ interest margins have shown marginal improvement. China Construction Bank’s first-quarter NIM was 1.36%, up 2 basis points from 1.34% at the end of last year; Industrial and Commercial Bank of China increased from 1.28% to 1.29%; Bank of Communications rose from 1.20% to 1.23%.

The rebound in interest margins behind the stabilization is due to the effectiveness of lowering liability costs. At the earnings release, Yang Jun, Vice President of Bank of China, pointed out that deposit re-pricing has driven down the interest expense rate, helping to stabilize the NIM level. Management of Agricultural Bank also emphasized that the “deposit re-pricing benefits” and “strong foundational management” complement each other, resulting in a significant decline in deposit interest expense rate compared to last year in the first quarter. This indicates that the effects of multiple rounds of deposit rate cuts earlier are gradually reflected in banks’ balance sheets.

Non-interest income accounts for 23%-35%: “Light capital” business becomes the “second growth curve”

Against the backdrop of overall low interest margins, the contribution of non-interest income has become a key variable influencing the revenue structure of large banks. The first quarter reports show that the proportion of non-interest income among state-owned banks ranges from 23.2% to 35.1%, with a clear overall support to revenue.

Specifically, Bank of China and Bank of Communications are in the top tier, with non-interest income proportions of 35.06% and 34.39%, respectively, with Bank of China increasing by 2 percentage points from last year; China Construction Bank and Industrial Bank have shown significant increases, from 24.74% to 27.35% and from 24.20% to 26.84%, respectively; Agricultural Bank of China and Postal Savings Bank, though with lower proportions, have seen notable increases, from 21.47% to 26.69% and from 20.83% to 23.15%.

The management generally attributes the high growth of non-interest income to the transition toward light capital businesses. Agricultural Bank management revealed that by seizing opportunities in wealth management markets,代理保险 (agency insurance), fund sales, and other businesses achieved high growth, driving a 7.85% year-on-year increase in net fee and commission income. Postal Savings Bank also stated that the high growth in net fee and commission income is due to vigorous development of wealth management and light capital businesses.

“Using middle income to supplement interest” logic continues: large banks accelerate income structure optimization

Looking at the combined indicators of interest margin and non-interest income, the operating logic of large state-owned banks in the first quarter remains clear: the pressure of narrowing main business spreads still exists, but through expanding asset scale “to compensate for price,” combined with cost reduction on the liability side, signs of interest margin stabilization are emerging; at the same time, large banks are vigorously developing intermediary businesses such as wealth management and investment trading, with “using middle income to supplement interest” becoming a common choice to smooth revenue fluctuations.

Overall, the first quarter of 2026 shows positive signals of partial bottoming in the interest margin of large state-owned banks, while the widespread increase in non-interest income proportion confirms that major commercial banks are actively optimizing their income structures to cope with the long-term challenges of a low-interest-rate environment.