Postal Savings Bank management: The latest deposit interest rate has dropped to around 1%, and first-quarter year-on-year loan growth exceeded 100 billion yuan.

Jiemian News reporter | An Zhen

On March 30, Postal Savings Bank of China (601658.SH, 01658.HK) held its 2025 annual performance briefing. In 2025, the bank achieved operating revenue of RMB 355.728 billion, up 1.99% year over year; net profit was RMB 87.623 billion, up 1.05% year over year.

At this performance briefing, the bank’s management exchanged views with the media on issues such as the asset-liability structure, the trend of net interest margin, and asset quality.

Four strategies to optimize the asset-liability deployment

As of the end of the reporting period, the bank’s total assets were RMB 1.8688 trillion, up 9.35% from the end of the previous year; of which, total customer loans were RMB 965.0 billion, up 8.25% from the end of the previous year. Total liabilities were RMB 1.752 trillion, up 9.13% from the end of the previous year; of which, customer deposits were RMB 1.654 trillion, up 8.20% from the end of the previous year.

In an interpretation of its business structure during the meeting, the bank president Lu Wei said to media outlets including Jiemian News:

First, the overall loan volume is steady. Last year, loans increased by RMB 73.51 billion year over year, with a growth rate of 8.3%, which is 1.9 percentage points above the industry average. Among them, corporate loans’ growth rate reached 17%, and the bank stepped up lending to emerging areas such as high-tech, new energy, and advanced equipment manufacturing. Retail loans achieved “balanced development in both volume and price-risk,” with mortgage loan incremental performance relatively strong within the industry and higher composite returns; consumer loan growth was 17%;

Second, deposit volume and quality are both excellent. Deposits grew 8.2%, and the bank’s own-operations growth hit a near record high in recent years, driving down the incremental funds’ cost by 17 BP;

Third, bond and trading businesses keep in step with market timing. It used low-cost funds proactively to expand its balance sheet, and revenue from funds business grew by 23.53%.

Lu Wei disclosed that, since the beginning of this year, loan, deposit, and bond businesses have all successfully achieved a strong start to the year. In the first quarter, credit growth exceeded the prior year by more than RMB 100 billion.

In 2026, Postal Savings Bank of China will implement four strategies: Strategy One, shift from traditional credit-earning to integrated value creation both on- and off-balance-sheet, further optimizing the structure; Strategy Two, further consolidate advantages on the liabilities side, achieving “improving the quality of deposits” and “increasing wealth increment”; Strategy Three, enhance the contribution of bond and trading businesses to the bank’s overall income; Strategy Four, comprehensively promote a shift toward a light-capital model to improve capital efficiency and effectiveness.

Net interest margin: marginal improvement

Postal Savings Bank’s net interest margin has continued to stay at a relatively strong level within the industry. In 2025, the net interest margin was 1.66%, which was 36 BP higher than comparable peers; the advantage over the past three years expanded by 10 BPs. Through proactive net interest margin management, the marginal trend in 2025 improved. After the one-time repricing downward move at the beginning of last year, the size of the reduction narrowed significantly; in the subsequent three quarters, it declined by only 1 BP quarter over quarter. On the liabilities side, in 2025 the deposit interest payable rate was 1.15%, further declining on top of an already relatively strong industry level, down by 29 BP; on the assets side, the average yield on loans was also 30 BPs higher than comparable peers.

For this year, Lu Wei said that with the People’s Bank of China implementing symmetric rate cuts, the strengthening role of self-discipline mechanisms, and the Financial Regulatory Administration’s rollout of various measures to prevent and crack down on unfair competition, it is clearly possible to feel that external parties are pushing at the same time, with broad emphasis on stabilizing net interest margins.

Lu Wei said, “Our latest deposit interest payable rate has already been reduced to around 1%. For individuals, it is currently 1.01%, while for corporates it is 0.94%. At the branch level as well, we need to strengthen performance assessment and tighten responsibility, and push the deposit-to-loan interest spread at branches to stabilize as soon as possible. With the low-cost liabilities advantage and the capabilities for refined management that we have formed over the long term, we are confident that we can continue to maintain excellent net interest margin levels.”

Discussing retail asset quality

At the briefing, Yao Hong, vice president and chief risk officer of Postal Savings Bank of China, broke down asset quality for media outlets including Jiemian News.

As she said, at the end of 2025, the bank’s non-performing loan ratio was 0.95%, the watchlist ratio was 1.57%, and the overdue ratio was 1.30%, outperforming the industry overall. Among them, the non-performing loan ratio for corporate loans was 0.54%, flat year over year, and continued to be at a leading level in the industry; personal loans are the main area under pressure for asset quality, with a non-performing loan ratio of 1.42%. Personal loans have a high proportion, accounting for 50.2% of all loans. Affected by the credit mix, in 2025 the bank’s “three ratios” for non-performing, watchlist, and overdue loans all increased year over year, rising by 0.05, 0.62, and 0.11 percentage points, respectively. Of these, the watchlist ratio increased by a larger margin. This is mainly because the bank carried out targeted debt relief and extended repayments for customers who had good repayment willingness but faced temporary difficulties; it also prudently classified these loans into the watchlist category.

Yao Hong believed that, since 2024, Postal Savings Bank of China has continuously deepened research on regions and industries, optimized customer entry standards, strengthened constraints on checks and balances in key links, and severely cracked down on the infiltration of financial “black and gray” industries and illegal intermediaries, which has produced positive governance and control effects:

First, in terms of personal business loans and retail small enterprise loans, since 2024 the risk performance of newly granted and newly disbursed loans has remained stable and improved. By the 15th month at the end of 2025, the proportion of loans overdue by more than 90 days had fallen from the peak period’s 1.19% and 2.22% to 0.64% and 1.19%, respectively. In newly issued loans in 2025, within personal business loans and retail small enterprise loans, the share of higher-risk customers fell by 1.23 and 1.40 percentage points, respectively, year over year;

Second, in personal housing loans, the quality of loans newly issued since 2024 at Postal Savings Bank of China has also shown a clear improvement. By the 13th month at the end of 2025, the proportion of personal housing loans overdue by more than 30 days dropped from the peak period’s 1.07% to 0.37%; in newly issued loans in 2025, the share of high-risk customers declined by 1.68 percentage points year over year;

Third, for non-housing consumption loans and credit cards, in 2025 the non-performing generation rates were 2.00% and 3.06%, respectively, down by 0.19 and 0.10 percentage points year over year.

Regarding risk in corporate loans, Postal Savings Bank of China further reduced the share of high-risk industries such as real estate and construction by 0.32 and 0.77 percentage points, respectively. The non-performing loan ratios for the real estate industry and local government financing platforms were 1.58% and 0.28%, respectively, decreasing by 0.36 and 0.31 percentage points year over year, respectively.

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