A Tale of Two Extremes! Some city commercial banks see a 34% surge in investment income in 2025 despite the downturn, while some joint-stock banks experience a decline.

Financial Association March 27 - (Editor Wang Wei) Recently, the annual reports of publicly listed banks for 2025 have been gradually disclosed, revealing their investment returns.

The bond bull market of 2024 has accumulated substantial investment returns for commercial banks; however, as we enter 2025, with increased market volatility, the investment return landscape of banks has undergone significant changes.

From the data of six listed banks that have disclosed their annual reports, some joint-stock banks and rural commercial banks have seen a noticeable decline in investment returns. Industrial Bank’s net investment return in 2025 decreased by 24.54% compared to 2024, Ping An Bank decreased by 16.79%, Chongqing Rural Commercial Bank lowered by 2.65%, and CITIC Bank slightly decreased by 0.93%; while city commercial banks achieved counter-cyclical growth, with Chongqing Bank and Qingdao Bank growing by 16.76% and 34.11%, respectively. As shown in the figure below:

Data Source: Wind, compiled by Financial Association

Overall investment returns are under pressure, with a significant decline in joint-stock banks.

In 2025, the intensified volatility in the capital markets has become the core factor affecting banks’ investment returns. Industrial Bank’s investment return for 2025 is 27.319 billion yuan, down 24.54% from 2024. Among them, core asset categories show polarization:

Trading financial assets: In 2025, 22.668 billion yuan, a substantial decrease of 7.683 billion yuan from 30.351 billion yuan in 2024, is the core factor dragging down the overall scale.

Debt investment: In 2025, 6.171 billion yuan, an increase of 1.673 billion yuan from 4.498 billion yuan in 2024, with a year-on-year growth rate exceeding 37%, becoming the main support for investment returns, with increased contributions from coupon-type asset yields.

Other debt investments: In 2025, 885 million yuan, an increase of 627 million yuan from 258 million yuan in 2024, with a year-on-year growth rate exceeding 243%, showing significant scale expansion, serving as an important growth supplement.

Equity and instrument categories generally weakened:

Long-term equity investment income accounted for using the equity method: In 2025, 51 million yuan, a decrease of 100 million yuan from 151 million yuan in 2024, with a year-on-year decline of over 66%, leading to a substantial reduction in equity investment income contribution.

Derivative financial instruments: In 2025, -90 million yuan, a narrowing of losses by 93.8 million yuan from -1.028 billion yuan in 2024, indicating a relief from loss pressure after adjustments in risk exposure or trading strategies.

Precious metals and related financial instruments: In 2025, -3.971 billion yuan, compared to a profit of 1.215 billion yuan in 2024, turning from profit to a significant loss, with a single item change of -5.186 billion yuan, being the largest negative drag, reflecting the significant impact of precious metal market volatility on returns.

Ping An Bank’s net investment return for 2025 is 20.474 billion yuan, down 16.79% from 24.604 billion yuan in 2024. Ping An Bank explained in its annual report that other non-interest net income decreased by 33.0% year-on-year, primarily due to market volatility affecting non-interest net income from bond investments and other businesses.

CITIC Bank’s investment returns also show a downward trend. In 2025, CITIC Bank’s net investment income is 28.999 billion yuan, a slight drop of 0.93% from 29.27 billion yuan in 2024. Although the decline is small, in conjunction with its other non-interest income decreasing by 1.93% year-on-year, the impact of market volatility remains present.

CITIC Bank stated in its annual report that the decline in other non-interest income is mainly due to capital market volatility and a higher base during the same period. However, the bank also released positive signals—after years of reform in financial market operations and capability system construction, under the intensified market interest rate fluctuations, it continues to enhance its refined management level, proactively preparing long-term asset allocation, improving trading turnover efficiency, and expanding the breadth and depth of trading strategies, with an expected increase in investment income in the second half of the year.

As a representative of rural commercial banks, Chongqing Rural Commercial Bank’s net investment return for 2025 is 4.087 billion yuan, down 2.65% from 4.198 billion yuan in 2024. The bank detailed the reasons for the decline in its annual report: investment income and net gains from fair value changes of 2.993 billion yuan, a year-on-year decrease of 855 million yuan, mainly due to market interest rate fluctuations impacting the yield of trading financial assets like fund investments, resulting in investment income and fair value changes not meeting the same period last year.

Additionally, the net foreign exchange gains and losses amounted to a loss of 114 million yuan, a year-on-year decrease of 131 million yuan, primarily driven by the growth in foreign currency asset scale leading to a moderate increase in foreign exchange swap financing scale. However, the bank also emphasized that foreign exchange swaps have locked in both near and far-end exchange rates, making cross-period exchange rate volatility risk controllable.

City commercial banks achieve counter-cyclical growth, with strategy differences determining performance direction.

In contrast to the general decline of joint-stock banks, Chongqing Bank and Qingdao Bank achieved counter-cyclical growth in investment returns in 2025. Chongqing Bank’s net investment return in 2025 reached 2.758 billion yuan, an increase of 16.76% from 2.362 billion yuan in 2024. The bank clearly pointed out in its annual report that the increase in investment returns is mainly due to gains from the disposal of bonds and fund investments this year.

Qingdao Bank’s growth is even more significant, with a net investment return of 2.299 billion yuan in 2025, up 34.11% from 1.714 billion yuan in 2024. Qingdao Bank stated in its annual report that it strengthened dynamic monitoring of financial investment scale and returns, conducting timely bond profit-taking operations, leading to increased investment returns.

From the rhythm of cashing in floating profits, there are significant differences among banks. Chongqing Bank and Qingdao Bank effectively captured market opportunities by timely disposing of bonds and fund investments, converting paper profits into actual returns. In contrast, joint-stock banks have been more significantly impacted by market volatility.

CITIC Securities pointed out in its research report that in 2025, compared to the overall rise in the third quarter, the fourth quarter saw a stabilization of the Treasury yield center and a range of fluctuations. It is expected that banks’ other non-interest income in the fourth quarter will ease pressure compared to the third quarter, but considering the higher base in the fourth quarter, the year-on-year growth rate remains under pressure.