Net interest margin has declined for 4 consecutive years! A direct look at China’s banking industry earnings conference: earning 6.66 billion yuan per day, with total annual dividends exceeding 72.9 billion yuan

Source: Times Weekly - Times Online

Bank of China 2025 Annual Results Conference. Photo by Times Weekly Reporter

On the evening of March 30, Bank of China held its 2025 annual results conference, attended by President Zhang Hui, Vice Presidents Yang Jun, Wu Jian, Liu Chenggang, Huang Xueling, and other senior executives. The Times Weekly Reporter was on-site.

In 2025, Bank of China achieved double growth in revenue and net profit, with operating income of 658.31 billion yuan, up 4.48% year-on-year; net profit attributable to the parent of 243.02 billion yuan, up 2.18% year-on-year, equivalent to about 666 million yuan earned daily.

By the end of 2025, Bank of China’s total assets reached 38.36 trillion yuan, and total liabilities were 35.15 trillion yuan, representing year-on-year increases of 9.40% and 9.47%, respectively.

Zhang Hui stated at the results meeting that 2025 is the final year of the 14th Five-Year Plan. Bank of China accelerated its transformation and development under a low-interest-rate environment, achieving stable progress and quality improvement in operations, with business performance meeting expectations and providing stable and good returns for shareholders.

In terms of dividends, the full-year cash dividend per 10 shares was 2.263 yuan (pre-tax), with an interim dividend of 1.094 yuan per 10 shares and a proposed final dividend of 1.169 yuan per 10 shares. The total annual dividend payout was 383.6k yuan (pre-tax), with a payout ratio of about 30%.

Net interest margin declines for four consecutive years

The Times Weekly Reporter noted that Bank of China’s net interest margin has decreased for four straight years. From 2022 to 2024, the margins were 1.75%, 1.59%, and 1.40%, respectively. In 2025, the net interest margin was 1.26%, down 14 basis points from the previous year, mainly due to the decline in the domestic RMB loan market quotation rate and foreign currency market interest rates.

Liu Chenggang, Vice President of Bank of China, said at the results conference that the bank’s global advantage is reflected in its net interest margin, which involves leveraging both domestic and international markets and managing both foreign and local currencies. The bank has continuously improved its volume-price coordination management mechanism, achieving good results in 2025. Since the second half of last year, the group’s foreign currency net interest margin has stabilized and rebounded, maintaining the same level as the first half, with both net interest income year-on-year and quarter-on-quarter showing positive growth.

The annual report shows that in 2025, Bank of China’s net interest income was 351.5k yuan, a decrease of 1.83% year-on-year, but the decline was significantly narrower than the 3.77% drop in 2024.

Looking ahead to 2026, Liu Chenggang expects that the bank’s net interest margin decline will narrow significantly, and net interest income will achieve positive growth. Given the current external uncertainties, international geopolitical changes have squeezed the room for major currency rate cuts, and the domestic banking sector still faces a low-interest-rate environment. Bank of China is confident in seizing market opportunities brought by the implementation of a package of incremental policies, fully leveraging its globalization and comprehensive features, and balancing “volume, price, risk, and efficiency” to further enhance operational resilience and sustainable development capabilities.

In comparison, Bank of China’s non-interest income in 2025 was impressive, reaching 72.92B yuan, up 19.21% year-on-year, with net fee and commission income of 440.71B yuan, up 7.37%.

Huang Xueling, Vice President of Bank of China, said that non-interest income contribution accounted for over 33%, a record high, mainly due to three factors: First, the bank sold and distributed over 7,500 public funds and wealth management products, benefiting from the rebound in the capital markets in 2025. Domestic individual customer investment assets grew by 15%, Bank of China Hong Kong’s client stock trading volume increased by 85%, and the bank’s fund management scale grew by 12.8%, driving a 26.67% increase in agency fees. Meanwhile, the bank accelerated its global custody capabilities, with the group’s custody assets growing by 21%, boosting related fees by 7.74%.

Second, the total number of corporate clients and corporate settlement accounts both achieved double-digit growth. International settlement volume increased by 9.56%, driving a 2.03% increase in group settlement and clearing fees, achieving positive growth for five consecutive years. Among these, domestic corporate settlement fees performed strongly, increasing by 7.2% year-on-year.

Finally, in 2025, amid significant volatility in global financial markets, Bank of China relied on its 24-hour global service network to meet the risk-hedging and value-preservation needs of clients worldwide, with steady growth in client trading services. By grasping the trends in local and foreign currency bond markets and dynamically optimizing investment portfolios, the bank’s financial investment income grew effectively.

Most fixed-term deposits still remain upon maturity

In 2025, Bank of China’s asset quality remained stable. By the end of 2025, the non-performing loan ratio was 1.23%, down 0.02 percentage points from the beginning of the year; the loan loss coverage ratio was 200.37%, roughly unchanged from 200.60% at the start of the year.

Looking at business segments, the non-performing loan ratio for corporate loans was 1.22% at the end of 2025, down 0.04 percentage points from the end of the previous year; for personal loans, it was 1.10%, up 0.13 percentage points.

Wu Jian, Vice President, said at the results conference that the non-performing loan ratio for corporate loans has been declining for seven consecutive years, with asset quality in key industries like manufacturing continuing to improve, and the business structure further optimized. The non-performing loans for personal loans have been improving quarter by quarter since the second half of 2025.

Wu Jian stated that moving forward, the bank will focus on the “five major articles” of finance, strengthen risk management related to real estate, local government debt, and key industry structural risks; improve the group’s comprehensive risk control system, enhance management of high-risk products, and proactively prevent risks in non-traditional areas.

Additionally, regarding the market’s high concern about the large amount of fixed-term deposits maturing and repricing, Vice President Yang Jun said that since the second half of 2025, the bank’s maturing fixed-term deposits have indeed increased. Most of these maturing deposits remain in deposit form, with a high proportion of renewal, and the impact of maturing fixed-term deposits on deposit growth this year is expected to be limited.

Yang Jun further explained that because current deposit rates are lower than those of fixed-term deposits three years ago, the repricing of these deposits will lead to a decline in the deposit interest expense rate. This will positively influence the bank’s net interest margin stability. Structurally, the overall society’s funds are expected to continue flowing toward individuals and non-bank institutions.