Bank of China (BOC) 3968 performance: the final dividend is 1.003 RMB per share; full-year profit increased by 1%, and net interest margin in the fourth quarter rose by 3 basis points quarter-on-quarter.

China Merchants Bank (03968)
In 2025, the full-year performance shows an annual cash dividend of 2.016 RMB per share, an increase of 0.8% year-on-year. The final dividend is 1.003 RMB per share. The net profit for 2025 is 150.18 billion RMB, a gain of 1.2%.

For the full year of 2025, the operating net income increased slightly by 0.05% year-on-year to 337.27 billion RMB, with net interest income at 215.59 billion RMB, a year-on-year growth of 2%, and non-interest net income at 121.68 billion RMB, down 3.3%.

During the year, the group’s net interest margin was 1.87%, down 11 basis points; in the fourth quarter, the net interest margin was 1.86%, up 3 basis points compared to the third quarter. The year-on-year decline in net interest margin is mainly due to: on the asset side, one, influenced by last year’s adjustments to existing mortgage rates, declines in the LPR (Loan Prime Rate) and insufficient effective credit demand, the pricing of new loans continues to decline, and the average yield on loans continues to decrease; two, the continuous decline of market interest rates has driven the yields of market-based assets such as bond investments, interbank loans, and bill discounts to continue to decrease. On the liability side, the growth of low-cost demand deposits is under pressure, the trend of time deposits has not seen a significant inflection point, which somewhat undermines the effect of market-based reductions in deposit rates, while the cost of liabilities remains relatively rigid. To maintain the relative stability of net interest yield, the group has further strengthened asset-liability portfolio management, promoting a stabilization rebound in the net interest margin in the fourth quarter. On the asset side, efforts to increase the organization of effective assets have been sustained, enhancing the portfolio management of major asset classes, maintaining strict pricing management, and promoting a narrowing of the quarter-on-quarter decline in asset yields; on the liability side, efforts have been focused on promoting the growth of low-cost core deposits, moderately reducing high-cost liabilities, with the proportion of demand deposits rebounding quarter-on-quarter in the fourth quarter, flexibly arranging the absorption of market-based funds, continuously optimizing the allocation of major liabilities, further advancing the steady decline of the cost of liabilities.

The bank also indicated that currently, interest rates on various assets are at low levels, and the recovery of effective financing demand still requires time; the banking industry still faces downward pressure on net interest yield. Looking ahead to 2026, the group’s net interest margin is expected to remain under pressure to some extent. On the asset side, the existing policy factors such as the effects of LPR reductions still need to be digested, and a moderately loose monetary policy will continue to be implemented in 2026, with room for further interest rate cuts and reserve requirement ratio reductions, while effective asset deployment continues to face pressure, and it is expected that asset yield will continue to decline; on the liability side, further downward space for deposit cost rates is limited, and pressure for controlling liability costs still exists.

Regarding positive factors for the net interest margin, first, fiscal policies are becoming more proactive and effective, and the domestic economy is continuing to consolidate a favorable recovery trend, which will create a stable operating environment for the banking industry; second, under the regulatory demand for “anti-disordered competition,” phenomena such as “internal competition” in loan pricing are gradually being rectified, and the decline in asset pricing is expected to converge. The group will strengthen asset-liability portfolio management to promote the continuous growth of net interest income and the stable operation of the net interest margin. On the asset side, first, focusing on the development of key businesses, enhancing the organization capability of high-quality assets, continuously optimizing the credit structure, and strengthening the overall arrangement of major asset categories such as letters of credit, bill financing, interbank borrowing, and bond investments; second, enhancing the refined management of pricing, strictly implementing regulatory requirements to “combat disordered competition,” and promoting the enhancement of risk pricing capabilities. On the liability side, first, strengthening the overall management of liabilities, continuously solidifying the customer base, enhancing the acquisition of low-cost funds, and optimizing the deposit structure; second, strengthening the diversified management of liabilities, increasing efforts to promote low-cost interbank deposits, flexibly and proactively arranging the absorption of various active liabilities, and ensuring good management of the liability portfolio.

As of the end of the reporting period, the group’s non-performing loan balance was 68.206 billion RMB, an increase of 2.596 billion RMB compared to the end of the previous year; the non-performing loan ratio was 0.94%, a decrease of 0.01 percentage points compared to the end of the previous year; the provision coverage ratio was 391.79%, a decrease of 20.19 percentage points compared to the end of the previous year; the loan provision ratio was 3.68%, a decrease of 0.24 percentage points compared to the end of the previous year.

As of the end of the reporting period, the non-performing loan ratio for corporate real estate was 4.78%, a year-on-year decrease of 0.16 percentage points.

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