Full Overview of Listed Banks' 2025 Annual Reports: Net Interest Margin Narrowed by up to 21bps, but some banks defied the trend and turned positive; Non-interest income has become the second growth curve in banks' transformation

Ask AI · How does non-interest income reshape banks’ profitability models?

China Financial News (3月30日) (Editor: Li Xiang) As of March 29, 13 A-share listed banks have already released their official annual reports. Against the industry backdrop of ongoing declines in funding costs for the real economy and compressed net interest margins under pressure, the performance of banks that have disclosed results shows a pattern of “overall repair and divergence among individual banks.” Compared with the trend of broad net interest margin declines among state-owned banks, some regional banks have seen a rebound in their net interest margins against the trend, with year-on-year growth of up to 4bp.

At the same time, China Financial News, after combing through the annual report data, found that stabilizing interest margins at the margin and breakthroughs in the transition to non-interest income are the core highlights of this round of annual report season. While leading banks stabilize the foundation of net interest margins through more refined management of their asset-liability structures, they are also accelerating their deployment of non-interest businesses such as wealth management and asset management—pushing their role forward from a traditional “provider of funds” toward a “resource integrator.”

In the view of multiple institutional practitioners, the decline in banks’ interest margins this year is expected to narrow significantly. With the renewal and repricing at maturity of high-interest deposits concentrated in the first quarter of 2026, the certainty of banks’ full-year earnings recovery is expected to continue improving.

Figure: A roundup of listed banks’ 2025 annual report performance as of March 29

Data source: Wind; China Financial News整理; Xingzheng Bank Team

Leading banks’ interest margin stabilization at the margin; significant differences in individual performance

In 2025, the banking industry’s NIM (net interest margin) continued its downward trend, but the downward slope slowed, and clear signals of stabilization at the margin emerged in the fourth quarter.

Mingming, Chief Economist at CITIC Securities, said that, based on the 13 banks that have already released their official financial statements, the average net interest margin in 2025 was 1.54%, down 10bp year over year. Breaking it down, the average yield on interest-earning assets / cost rate on interest-bearing liabilities for the 13 banks was 3.10% / 1.65%, down 48 / 44 bps year over year, respectively. On both the asset and liability sides, the pricing declines were quite similar; cost savings brought by liability-side repricing and structural optimization effectively offset the asset-side pricing decline.

However, performance still diverged among different banks. From the perspective of state-owned major banks, the compression in net interest margin was most evident. Postal Savings Bank of China, China Construction Bank, Industrial and Commercial Bank of China, and Bank of Communications saw their net interest margins narrow year over year by 21bp, 17bp, 14bp, and 7bp, respectively. While Postal Savings Bank recorded a relatively larger decline, its net interest margin of 1.66% still ranked first among state-owned major banks.

When responding to the downward trend in interest margins, executives of several state-owned banks explicitly clarified their core thinking in earnings briefings. The key points discussed include stabilizing the basic盘 of net interest income, narrowing the decline quarter by quarter, and continuously improving the contribution from non-interest income.

Taking CCB as an example, in 2025, CCB’s net fee and commission income reached RMB 110.307 billion, up 5.13%. In terms of total amount, it is already very close to ICBC’s RMB 111.171 billion. The share of non-interest income increased by 3.71 percentage points to 24.74%. In investment banking business, CCB’s underwriting scale for bonds issued by non-financial enterprises surged 85.85%, and the balance of merger and acquisition loans also rose 24.01%.

According to a review by China Financial News, CCB’s funds wealth management and asset management business has developed at a faster pace in recent years. The annual report shows that CCB’s funds wealth management business, with an 18.99% share of revenue, leveraged 33.58% of the group’s total profit. Behind this data shift lies a subtle optimization of the income structure.

Figure: CCB’s performance in its main businesses

Data source: CCB annual report; China Financial News整理

At an earnings briefing, CCB President Zhang Yi said: “We deepen integrated services, and the contribution of non-interest income continues to rise. On one hand, we consolidate traditional income such as payment and settlement. On the other hand, we accelerate the cultivation of capabilities in ‘Rongzhi’ services, and ensure steady growth in income in areas such as wealth management and asset management. In addition, we strengthen market assessment, optimize investment strategies, and improve our trading capabilities. The growth rates of related gains in exchange gains and losses and equity investment exceed 40% as well.”

For joint-stock banks, China Merchants Bank ranked first among listed joint-stock banks already disclosed, with a net interest margin of 1.87%, steady. In 2025, it narrowed by 11bp year over year, but was flat quarter over quarter in the fourth quarter. In addition, CITIC Bank, Industrial Bank, and Ping An Bank saw their net interest margins narrow by 14bp, 11bp, and 9bp year over year in 2025, respectively—all smaller declines than those of the state-owned major banks.

At an earnings briefing, Chen Jianmin, Chairman of China Merchants Bank, said directly that the People’s Bank of China will further cut interest rates and reserve requirements in 2026, and CMB will place keeping its interest margin stable in an even more prominent position. “We have three goals in managing the net interest margin—reduce the magnitude of narrowing, stabilize as quickly as possible, and still maintain a leading position in the market,” said Peng Jiwen, Vice President of CMB.

It is worth noting that regional banks have shown a notable structural split. Some banks that deeply focus on local markets have achieved stabilization or even improvement of their net interest margins against the trend, becoming highlights in the industry.

For example, Chongqing Bank’s net interest margin in 2025 was 1.39%, up 4bp year over year. It became the only entity among the 13 listed banks that have disclosed results to see net interest margin rise year over year, leading the industry in marginal improvement. In its annual report, the bank mentioned that the group’s average yield on interest-earning assets fell by 27bp compared with the prior year, which is smaller than the 40bp decline on the interest-bearing liability side. As a result, the net interest spread rose by 13bp year over year to 1.35%. The share of net interest income also increased from 74.39% in 2024 to 82.44%.

Non-interest income becomes the second growth curve; banks accelerate their transition to “resource integrators”

Against the industry backdrop of continued narrowing of net interest margins, China Financial News has noticed that many listed banks are using non-interest income as a core lever, stepping up efforts in areas such as wealth management, asset management, and investment banking, continuously optimizing their transition from traditional “fund providers” to “resource integrators.”

China Galaxy Securities’ research team pointed out in a research report that, during the industry cycle when interest margins face sustained pressure, non-interest income growth can not only offset the impact on revenue from the decline in interest margins, but also drive banks to transform and upgrade their business models, reducing reliance on traditional credit businesses. “A turning point in banks’ wealth management business in 2026 will emerge,” said Zhang Yix i, an analyst at Bank of China Securities. With the trend of residents moving deposits continuing and the recovery of capital markets, businesses such as wealth management distribution and insurance distribution will become core engines for growth in fee-based income.

Looking at the performance of the banks whose annual reports have already been disclosed, state-owned major banks have achieved steady growth in fee-based income related to wealth management, leveraging their distribution channels and customer base advantages.

Among them, Postal Savings Bank’s performance is the most impressive. In 2025, its net fee and commission income increased by 16.15% year over year, ranking first among the disclosed state-owned banks. Wealth management-related income became the core growth engine. The annual report data shows that at the end of 2025, Postal Savings Bank’s total assets under management (AUM) exceeded RMB 1.8 trillion, up nearly 10% year over year. Income from wealth management businesses such as agency insurance, funds, and wealth management products grew significantly year over year. Among them, fee income from wealth management products increased by 35.99% year over year.

However, it is worth noting that non-interest income diverged more among city and rural commercial banks. For example, Chongqing Bank and Chongqing Rural Commercial Bank’s full-year fee-based income fell by 32.7% and 19.7%, respectively, while Richmond Bank (瑞丰银行) increased the scale of agency businesses and at the same time continuously reduced fee expenses for securities market fund trading, guarantee businesses, and others, achieving a 207.4% year-on-year increase for the full year.

“One of the fundamental reasons for the gap in fee-based income among small and medium-sized banks is whether they can rely on their customer-operations capabilities to make an early layout for agency wealth management business amid the trend of deposit migration,” brokerage practitioners told China Financial News. For regulatory requirements that continue to reduce the self-operated scale of wealth management products by unlicensed institutions, some small and medium-sized banks increase their customer reserves and product-selection capabilities. Deeply binding with bond-issuing enterprises is key to income growing against the trend.

In the view of institutional analysts, during the cycle of declining net interest margins, an increase in the share of non-interest income can not only stabilize banks’ revenue and profit performance, but also drive transformation and upgrading of banks’ business models. Banks with a strong customer base, a complete product system, and end-to-end service capabilities will enjoy a first-mover advantage in the wealth management transition, achieving a leap from a model of “earning interest margin” to “earning service fees.”

It is worth noting that as 2025 annual reports are released one after another, market attention to banks’ performance in the first quarter of 2026 continues to rise.

According to Ma Tingting, Chief Banking Analyst at Guotai Junan Securities, the net interest margin of listed banks in the first quarter of 2026 is estimated to be 1.37%, only down 3bp versus the full year of 2025. Compared with the 9bp decline in net interest margin in the first quarter of 2025, the narrowing is expected to be significantly more contained.

Ma Tingting said that the expected easing of net interest margin pressure in banks is mainly due to three core factors: first, the maturity-driven repricing of high-cost long-term time deposits concentrated at maturity will continue to optimize the cost on the liability side; second, since August 2025, interest rates on newly issued loans have basically remained stable, greatly alleviating downward pressure on asset-side yields; third, self-discipline in managing interbank deposit interest rates is expected to be further upgraded, providing more support for controlling banks’ liability costs.

China Galaxy Securities also expects in its research report that in the first quarter of 2026, listed banks’ operating revenue will grow 2.8% year over year, and their net profit attributable to shareholders will grow 2.58% year over year. Compared with the same period last year, this would represent a steady and positive growth.

(China Financial News; Li Xiang)