Deposit relocation has not occurred. Bank of China executive: Most maturing fixed deposits remain retained, and re-pricing benefits the interest margin level.

Ask AI · How Can Bank of China Stabilize Its Deposit Base Amid High-Interest Maturity Cliffs?

China Financial News, March 30 (Reporter Peng Kefeng) This evening, Bank of China released its 2025 annual report and held an annual performance briefing in Beijing. A number of senior executives, including Bank of China President Zhang Hui, Vice Presidents Yang Jun and Wu Jian, attended the event, and exchanged views with the public on issues such as asset quality, “deposit shifting,” and risks in personal loan businesses.

Revenue and profit both grow; Bank of China accelerates operational transformation in a low-interest-rate environment

On March 30, Bank of China officially released its 2025 performance results. According to official data, as of the end of 2025, the group’s total assets and total liabilities each exceeded RMB 38 trillion and RMB 35 trillion, respectively, increasing by 9.40% and 9.47% from the end of the previous year. For the full year, operating income and after-tax profit were RMB 659.9 billion and RMB 257.9 billion, respectively, up 4.28% and 2.06% year over year.

In response, President Zhang Hui said that in 2025, Bank of China accelerated the pace of transformation and development under a low-interest-rate environment, and that its operating performance met expectations. Over the past three years, 11 quarters saw cumulative year-over-year growth rates among the leading levels within major peers; financial performance at the margin improved, with the growth rate of profit before provisioning last year increasing by 2.62 percentage points versus 2024; after-tax profit and after-tax profit attributable to shareholders of the Bank increased year over year by 2.06% and 2.18%, respectively, with growth rates improving quarter by quarter; last year’s net interest margin was 1.26%, and the cost-to-income ratio fell by 0.93 percentage points year over year, further enhancing operating efficiency.

Zhang Hui also explained that last year, Bank of China’s net interest income improved quarter by quarter, with the year-over-year growth rate turning positive in the second half on a single-quarter basis. Non-interest income increased by 19.21%, and its share of operating income remained at a high level of 33.21%, up 4.16 percentage points year over year. Non-interest income such as wealth management, settlement, clearing, custody, financial market transactions, foreign exchange business, and integrated operations grew relatively quickly, providing strong support for operating performance.

“Last year, the group’s non-performing loan ratio was 1.23%, down 0.02 percentage points from the end of the prior year; the special-mention loan ratio was 1.47%, unchanged from the end of the prior year; the allowance coverage ratio was 200.37%, staying at a reasonable and sufficient level. Non-performing loan balance and non-performing loan ratio at overseas institutions both declined; the first batch completed RMB 165 billion in capital replenishment. The capital adequacy ratio was 18.85%, reaching the highest level of the year-end period in history.” Zhang Hui said.

From the second half of last year, the maturity scale of time deposits increased somewhat; the personal loan business is still under pressure

At present, “deposit shifting” remains a topic highly watched by capital markets. In response, Vice President Yang Jun said that starting from the second half of 2025, Bank of China saw a larger scale of maturing time deposits. For these maturing time deposits, the bank has taken its time with strict care to stabilize and retain deposits. “Based on the actual results, most have still been kept in the form of deposits. Among them, the rollover rate for time deposits is relatively high. We expect that maturing time deposits this year will still show these characteristics.”

Yang Jun further said that because current deposit interest rates are lower than time-deposit interest rates from three years ago, repricing of the above deposits will drive down the deposit interest expense ratio. This will have a positive impact on Bank of China’s ability to stabilize its interest spread. From a structural perspective, it is expected that all social funds will continue to concentrate toward individuals and non-financial institutions.

“Meanwhile, as a package of policies for boosting domestic demand through coordinated fiscal and financial efforts takes hold and delivers results, with the economy continuing to improve, companies’ liquidity will improve as well, and growth in corporate deposits will accordingly improve to some extent.” Yang Jun also said.

Regarding the asset-quality issues the market is concerned about, Vice President Wu Jian said that based on conditions in Mainland China, non-performing loans in corporate loans have continued to decline for 7 consecutive years, with sustained improvements in asset quality in key industries such as manufacturing, and further optimization of the business structure. For newly originated personal loan non-performing loans, improvements began from the second half of 2025 and have improved quarter by quarter.

“The real estate market is in a transition period between old and new models. As risks are gradually cleared, we expect the real estate market to operate in a stable manner. At the same time, in the context of the macroeconomic cycle and adjustments in employment structure, the personal loan business will still face certain pressure. In addition, repeated U.S. tariff policies, escalating geopolitical conflicts, and other factors bring certain challenges to the management and control of overseas asset quality.” Wu Jian said. “Bank of China will continue to coordinate development and security, stay highly alert to new trends and characteristics in risk evolution, strengthen forward-looking risk assessment and effective responses, and firmly hold the bottom line of ensuring that systemic financial risks do not occur.”

(China Financial News reporter Peng Kefeng)