The listed banks' 2025 "report cards" are being released one after another. Who is the "profit king"?

Ask AI · Why has the net profit growth rate of Agricultural Bank of China led for six consecutive years?

CNR Beijing, April 1 (Reporter Xia Qing) According to the Central Radio and Television Station’s “Global New Financial News,” as of now, more than half of listed banks have disclosed their annual performance reports. Based on the gradually released annual reports, how did the overall performance of listed banks look in 2025? In a complex internal and external environment, what pressures and challenges does the banking industry face?

Among the various data in the annual reports, net profit, as a “hard indicator” measuring banks’ profitability, has always attracted market attention. Overall, the banking industry maintained a steady operational trend in 2025, with most listed banks achieving positive year-on-year growth in net profit. Among them, the six major state-owned banks’ profitability remained impressive. Industrial and Commercial Bank of China ranked first with a net profit of 3.685 trillion yuan, followed by China Construction Bank, Agricultural Bank of China, and Bank of China, with net profits of 3.389 trillion yuan, 2.910 trillion yuan, and 2.430 trillion yuan respectively. Bank of Communications and Postal Savings Bank ranked fifth and sixth, with net profits of 956 billion yuan and 874 billion yuan. From the perspective of year-on-year growth, Agricultural Bank of China led with a growth rate of 3.20%.

Agricultural Bank of China’s President Wang Zhiheng said, “Operating income has maintained positive growth for two consecutive years. Net profit continues to grow positively, and the growth rate is increasing quarter by quarter, further consolidating the steady upward trend. Looking at a longer timeline, the bank’s financial performance is even more remarkable, with net profit growth rate leading the industry for six consecutive years.”

The steady performance of the six major state-owned banks has created favorable conditions for dividends. The six banks paid out more than 420 billion yuan in dividends throughout the year, continuing to maintain a high dividend payout ratio. Liu Jun, President of ICBC, said, “In 2025, the stock prices of ICBC A-shares and H-shares increased by 14.6% and 20.7%, respectively, performing relatively well among large banks. The bank paid a total cash dividend of 291B yuan for the year.”

In recent years, the continuous narrowing of net interest margins has become a common pressure faced by the banking industry. However, regulatory data shows that in Q4 2025, the net interest margin of commercial banks remained at 1.42%, stabilizing after three consecutive quarters of decline. From the annual reports of listed banks, nearly half of them also show signs of stabilization in their net interest margins.

Many bank managements have analyzed in detail the reasons for the improvement in net interest margins during earnings presentations. Fang Heying, Chairman of CITIC Bank, said, “Our liability business volume and price management balance promote the reduction of liability costs, creating a buffer against low-interest-rate shocks. Our deposit structure is relatively reasonable, with 46% of corporate demand deposits, ranking among the top two in joint-stock banks. Since strengthening deposit governance mechanisms, we call it ‘true demand deposits,’ which have significantly increased their value. Previously, the interest rate was about 1.5%, nearly 2%, but now it has fallen to less than one percent.”

Several listed banks explicitly stated in their annual reports that they will focus on expanding non-interest income, increasing their presence in wealth management, asset management, investment banking, and other areas, and transforming from traditional “funds intermediaries” to “comprehensive financial service integrators.” Dong Ximiao, Chief Economist of Zhaolian and Deputy Director of Shanghai Financial and Development Laboratory, said that under the background of continued narrowing of net interest margins, banks must undergo deep transformation in their operating models.

Dong Ximiao said, “The fundamental driver for the collective effort of listed banks to boost retail AUM (total client assets) now lies in the restructuring of their operating models after net interest margins fell to historic lows. As of Q4 2025, the net interest margin of commercial banks had dropped to a historic low of 1.42%. Under the dual pressures of declining yields on assets and relatively rigid liability costs, the previous profit model relying mainly on interest rate spreads between loans and deposits is no longer sustainable. Listed banks urgently need to increase AUM to boost non-interest income (especially wealth management fees) to hedge against declining interest income.”

It is worth noting that many banks mentioned that the non-performing loan ratio for personal loans has increased, especially in the consumer credit sector, where risk prevention and control pressures are significant. Lou Feipeng, researcher at China Postal Savings Bank, believes that the industry currently faces many challenges.

“Bank net interest margins are at low levels and still under downward pressure. Loan demand remains insufficient, and capital replenishment pressure is increasing. In risk management, risks in the real estate sector continue to surface, local government debt restructuring pressures persist, and the non-performing rate of small and micro enterprises may rise. External uncertainties also increase cross-border business risks,” Lou said.

However, industry insiders generally believe that most banks currently have provisioning coverage ratios significantly above regulatory requirements, and capital adequacy ratios remain at high levels, demonstrating sufficient risk buffer capacity.