The six major state-owned banks will conclude their 2025 performance! What's the confidence behind the 420 billion yuan in dividends?

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Source: Beijing Business Today

As Agricultural Bank of China and Bank of China’s annual reports were officially released on the evening of March 30, the performance disclosures for China’s six state-owned banks for FY2025 have come to a successful close. Over the past year, amid a complex and ever-changing market environment, all six state-owned banks recorded positive year-on-year growth in both operating revenue and attributable net profit, delivering a solid performance report. Against the backdrop of widespread pressure on the net interest margin, the six banks actively responded by optimizing their credit operations and strengthening cost controls on the liabilities side, while also setting aside more than RMB 420 billion for dividend payouts to reward shareholders—earning the label of a steady “anchor stone” in the capital market. Meanwhile, amid the wave of digital transformation, the rapid rollout of AI technology has been especially striking. From credit approval to risk management, artificial intelligence is deeply embedded into the end-to-end business process.

In the view of analysts, this set of results reflects a further enhancement in the operating resilience of China’s state-owned banks during the economic adjustment cycle. Looking ahead, it is expected that the dividends of China’s state-owned banks will continue with a stable cadence, while financial services will be embedded more deeply into real-economy industry supply chains, gradually forming a new ecosystem linking finance, technology, and industry.

“Positive growth in both revenue and net profit”

On the evening of March 30, the annual reports of Agricultural Bank of China and Bank of China were released; with that, the FY2025 “answer sheets” of all six state-owned banks have been fully unveiled. A review by Beijing Business Today reporter found that all six banks achieved “positive growth in both revenue and net profit,” with total net profit of RMB 14,245.56 billion.

Operating revenue is the primary yardstick for measuring the operating performance of commercial banks. Industrial and Commercial Bank of China (ICBC) remains firmly in the “top spot.” Data show that at the end of the reporting period, the bank led the six major banks with operating revenue of RMB 8,382.70 billion. China Construction Bank (CCB), Agricultural Bank of China, and Bank of China ranked in the second tier with RMB 7,610.49 billion, RMB 7,253.06 billion, and RMB 6,583.10 billion, respectively. Postal Savings Bank of China and Bank of Communications recorded operating revenue of RMB 3,557.28 billion and RMB 2,650.71 billion, respectively.

Net profit, which directly reflects a commercial bank’s core profitability capability, shows a small shift in ranking compared with operating revenue. Among them, ICBC took the “profit king” crown again, with attributable net profit of RMB 3,685.62 billion. CCB followed closely with RMB 3,389.06 billion, staying in the “runner-up” position. Agricultural Bank of China and Bank of China both remained in the “billion-yuan club” for net profit of over RMB 200 billion—achieving attributable net profits of RMB 2,910.41 billion and RMB 2,430.21 billion, respectively. Bank of Communications and Postal Savings Bank recorded attributable net profits of RMB 956.22 billion and RMB 874.04 billion, respectively, with profitability steadily climbing.

In terms of growth rates, the six banks show differentiated patterns. Among them, Bank of China led the six banks with a year-on-year revenue growth rate of 4.48%, becoming the “front-runner” for revenue growth; Agricultural Bank achieved the highest growth among the six with a year-on-year growth rate of 3.18% in attributable net profit.

Regarding the favorable development trend of “stable scale growth, better profitability, and improved quality” exhibited by China’s six state-owned banks overall for FY2025, Wang Hongying, dean of China (Hong Kong) Financial Derivatives Investment Research Institute, said that in 2025 the domestic and international economic environment was complex and volatile. Against this backdrop, it is truly remarkable that China’s state-owned banks managed to achieve simultaneous positive growth in both operating revenue and net profit. On the one hand, this fully demonstrates that the operating resilience of state-owned banks has been further enhanced during the economic adjustment cycle, and that in counter-cyclical adjustment they proactively take on their role as major banks; on the other hand, amid pressures from economic adjustment, state-owned banks optimized their operating models and adopted diversified operating strategies. Under the backdrop of a narrowing net interest margin, they offset the impact caused by the squeeze on spread by expanding the scale of credit issuance. In addition, state-owned banks continued to advance innovation in integrated financial services—expanding profit potential through diversified services—while making notable progress in cost control and improving efficiency through digitalization. With the help of more refined cost management, they further improved overall returns and profitability.

Optimizing the credit structure to offset pressure on net interest margins

Affected by factors such as the reduction in the Loan Prime Rate (LPR), re-pricing of existing loans, and intensified competition for deposits, in 2025 the net interest yield of China’s six state-owned banks (i.e., “net interest margin”) all showed a downward trend.

Postal Savings Bank’s net interest margin was 1.66%, down by 21 basis points year over year. For CCB, Agricultural Bank, ICBC, and Bank of China, their net interest margins were 1.34%, 1.28%, 1.28%, and 1.26%, respectively—down by 17 basis points, 14 basis points, 14 basis points, and 14 basis points year over year, respectively. Bank of Communications had a net interest margin of 1.20%, down 7 basis points year over year, with a relatively smaller decline.

As the core indicator of bank profitability, a downward trend in net interest margins will impose higher requirements on banks’ loan issuance pace and cost control. For the net interest margin trend in 2026, at the earnings release conference, multiple bank executives also shared their response measures. Sheng Liurong, CFO of CCB, noted that “by strengthening effective proactive liabilities management, optimizing the asset-liability structure, and reinforcing tiered and classified customer pricing management, we can further tap into opportunities on both the asset side and the liabilities side, so that the rate of decline in net interest margin can be narrowed further.”

Liu Chenggang, vice president of Bank of China and secretary to the board, said that in 2026 the expected year-on-year decline in net interest margin will narrow significantly, and net interest income is expected to achieve positive growth. To do so, banks need to strengthen the fundamental business of asset-liability operations and effectively control the decline in RMB spread; they should also optimize the globalized service system to keep the overall foreign-currency business spread stable.

By aligning with the “five major initiatives in financial services” and the development of new quality productive forces, and by reasonably expanding the scale of loans and optimizing the credit structure, it is also possible—at least to a certain extent—to offset the profitability pressure brought by the decline in net interest margins.

From the structure of incremental credit issuance, ICBC’s total customer loans and advances reached RMB 30.5 trillion, up 7.5% year over year. Support for key areas such as the “five major initiatives in financial services” continued to increase. Loans directed to manufacturing, inclusive finance, and technology innovation grew by 19.4%, 22.8%, and 19.9%, respectively.

Agricultural Bank’s total loans and advances issued were RMB 27.13 trillion, including an increase of RMB 2.23 trillion. The loan growth rate in county-level areas continued to be higher than the bank-wide level. The loan balance was RMB 10.9 trillion, with a growth rate of 11.0%, and the balance accounted for 41.0% of loans within the country. For Bank of China, the total loans and advances issued were RMB 23.45 trillion, with loans directed to manufacturing and to manufacturing medium- and long-term loans with balances of nearly RMB 3.5 trillion and RMB 1.5 trillion, respectively—2.4 times and 3.3 times the levels at the beginning of the “14th Five-Year Plan” period.

For CCB, the net amount of loans and advances issued was RMB 26.93 trillion, an increase of 7.53%. The growth rate of loans to key areas such as the “five major initiatives in financial services” and manufacturing was higher than the average growth rate of all loans. In its annual report, Bank of Communications also mentioned guiding resources to concentrate in strategic areas; loans to technology, green, inclusive micro and small businesses, the senior care industry, and the core digital economy industries grew by 10.73%, 14.16%, 20.76%, 49.12%, and 14.46%, respectively.

As noted by Gao Zhengyang, a special research fellow at SuShang Bank, as the deposit interest rate market-oriented adjustment mechanism continues to take effect and deposit interest rates are lowered in tandem, the pressure on spread decline faced by state-owned banks will ease at the margin. The industry’s net interest margin is expected to enter a relatively steady range. Next, to alleviate net interest margin pressure in loan issuance, directions such as high-end segments in manufacturing, technology innovation enterprises, and green industries will receive strong support at the policy level. Benefiting from low-cost funding support provided by structural monetary policy instruments, and as banks’ bargaining power in these areas continues to improve, they have good upside potential in returns. At the same time, consumer loan pricing has higher flexibility. Under conditions where risks are controllable, together with support measures such as policy-based interest subsidies, there is also considerable room for returns. Sectors with policy tailwinds all have potential for growth in returns, but banks still need to continuously improve their capabilities in refined pricing and risk identification, in order to stabilize overall return levels.

Total dividends exceed RMB 420 billion

On shareholder returns, based on steady and healthy growth in earnings, the six banks have continued to increase dividend payouts, becoming benchmarks for “high dividend yield” in the capital market.

In 2025, the total dividends of the six banks for the full year exceeded RMB 420 billion. ICBC is expected to pay RMB 110.593 billion in full-year dividends, and CCB RMB 101.684 billion. Agricultural Bank, Bank of China, Bank of Communications, and Postal Savings Bank are expected to pay full-year dividends of RMB 87.321 billion, RMB 72.917 billion, RMB 28.692 billion, and RMB 26.217 billion, respectively. The dividend payout ratios of all six banks remain stable at 30% and above of attributable net profit.

When discussing the next phase of capital planning and dividend arrangements, ICBC President Liu Jun said, “We will further scientifically quantify capital planning, so that ICBC’s capital planning becomes an annual rolling and dynamic capital plan—highly integrating capital usage, capital raising, and replenishment of both internally and externally sourced capital. In terms of dividend arrangements, we will closely monitor changes and demands in the capital markets, and respond to everyone’s needs and voices.”

In responding to market concerns, Bank of Communications President Zhang Baojiang said, “The total dividend amount of Bank of Communications for 2025 increased by nearly 2% compared with 2024. This is mainly attributable to steady progress in business development and an overall positive trend in performance. Continued positive growth in net profit increases the amount of profit available for distribution. In 2026, Bank of Communications is confident it can continue to give shareholders steady returns through solid performance and stable dividends.”

The stable implementation of dividends cannot happen without robust capital support. As of the end of March 2025, Bank of China, CCB, Bank of Communications, and Postal Savings Bank announced their targeted-issuance (private placement) proposals. They planned to issue A-share stock to specific targets such as the Ministry of Finance, raising no more than RMB 165 billion, RMB 105 billion, RMB 120 billion, and RMB 130 billion, respectively. The combined fundraising scale was RMB 520 billion, of which the Ministry of Finance contributed RMB 500 billion, and then the targeted-issuance matters were carried out in full.

The 2026 Government Work Report once again sent a signal, explicitly proposing the issuance of special treasury bonds of RMB 300 billion to support major state-owned banks in replenishing capital.

“Against the backdrop of policy clearly supporting state-owned major banks to replenish capital, the continued implementation of measures such as fiscal capital injection and special treasury bonds will effectively ease capital constraints for state-owned banks, providing more buffer space for the expansion of their credit scale and for risk resolution efforts.” Gao Zhengyang further said that the improvement in capital adequacy ratios lays the foundation for stabilizing—and even modestly raising—the dividend payout ratio of major banks. At the same time, under the policy push to enhance shareholder returns, it is expected that the dividends of state-owned major banks will continue with a steady cadence, highlighting the principle of sustainability. State-owned major banks may coordinate capital planning more precisely. On the one hand, by increasing ROE and optimizing the structure of risk-weighted assets, they can strengthen their ability to replenish capital internally. On the other hand, while meeting regulatory requirements and ensuring credit support to the real economy, they will maintain a prudent level of dividends, balancing shareholder returns with the needs of long-term development.

Ramping up AI at full speed

Behind steady improvement in performance, deeper digital transformation has also become a core driving force for commercial banks. Especially notable is the accelerated rollout of artificial intelligence (AI) applications. With rapid iteration and widespread adoption of AI technologies, commercial banks’ “AI+” strategic deployments have been continuously deepened. In their FY2025 annual reports, all six state-owned banks highlighted progress in applying AI technologies, embedding AI capabilities deeply into the end-to-end business process.

In its annual report, ICBC disclosed that the bank innovatively implemented the “Leading AI+” initiative, deploying more than 500 AI applications across over 30 business areas. Its AI digital employees handle 55,000 man-hours per year. At the same time, the bank keeps pace with technological developments, exploring and building an intelligent-agent collaboration system under the “one super multiple specialists” model based on ICBC’s Zhiyong. ICBC said it will align with trends in technological change, seize the “artificial intelligence+” opportunities, continuously strengthen data-and-intelligence-driven momentum, and deepen the digital and intelligent transformation of business management and risk governance.

At the FY2025 earnings release conference, Agricultural Bank President Wang Zhiheng said that Agricultural Bank is firmly capturing the wave of AI technology development. The bank has specifically set up an office for smart bank construction, increasing efforts to coordinate and advance smart bank construction. It also clarified that it will use intelligent-agent applications as a starting point and project needs as a driving force, continuously improving the “AI+” capability system, and focusing on promoting intelligent and inclusive applications of AI.

When discussing risk control measures, Agricultural Bank Vice President Lin Li also said that the bank has currently strengthened technology empowerment, expanded new risk-control capabilities, and introduced the “Agribank version of a lobster.” Lin stated plainly, “This isn’t about chasing trends. We are using this tool to automatically process analytical data and intelligently generate due diligence reports, making the lending process more convenient, more efficient, and safer.”

Overall, AI applications in the banking sector have shown an accelerating momentum. In its annual report, Bank of China shows that in 2025 it built two governance mechanisms for agile, efficient, safe, and reliable AI enablement based on three platforms: computing power, technology, and data. It also advanced six representative application paradigms, such as intelligent Q&A and report generation, establishing BOCAI model capability platform deployments, deploying series of large models such as DeepSeek and Qwen3, and building more than 400 intelligent assistants to deeply enable key areas including credit, marketing, operations, office work, customer service, and technology. At the earnings release conference, Bank of China President Zhang Hui said the bank needs to further build a “AI+” financial ecosystem. CCB is also systematically promoting the construction of AI applications; relevant technologies have been scaled to enable 398 group scenario applications, deeply penetrating key areas such as wealth management, inclusive finance, risk management, and technology R&D.

In response, Gao Zhengyang said that the acceleration of deep integration of “AI+ business” by state-owned major banks indicates that the banking industry is rapidly leaping toward greater intelligence. He pointed out that, from a trend perspective, AI is gradually being embedded into core business segments such as credit approval, wealth management, operations management, risk control, and marketing, significantly improving business operational efficiency and decision accuracy. This transformation is expected to reshape financial service models—making financial services more personalized, real-time, and scenario-based—while also effectively lowering marginal service costs. From the standpoint of ecosystem building, cooperation between banks and technology companies and industrial platforms may become even closer. Financial services will be embedded more deeply into the real-economy industry supply-chain, gradually forming a new ecosystem linking finance, technology, and industry.

Beijing Business Today reporter Song Yitong Zhou Yili

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