In October, the third quarter reports of A-share listed banks will be released successively. The performance in the first half of 2025 shows that the industry is generally facing pressure from the narrowing net interest margin. However, in a low interest rate environment, most banks have still delivered a steady growth in total assets, a stable and improving quality of credit assets, and an overall sufficient ability to offset risks. Industry experts have analyzed that in the complex and ever-changing macroeconomic environment, China's banking industry will continue to demonstrate strong resilience and vitality in the first half of 2025, playing a key role in the financial system and helping the real economy maintain stable growth and adjust its structure. Stable and resilient performance. In terms of asset size, the six major state-owned banks achieved steady growth in asset size in the first half of this year. Industrial and Commercial Bank of China (ICBC) has climbed to the top spot with an asset size of 52 trillion yuan, while Agricultural Bank of China and Construction Bank both have asset sizes exceeding 40 trillion yuan, with 46.86 trillion yuan and 44.43 trillion yuan respectively. The asset size of Bank of China, Postal Savings Bank of China, and Bank of Communications have all increased compared to the end of 2024. In terms of profitability, as of the first half of this year, the total revenue of 42 A-share listed banks exceeded 292 million yuan, a year-on-year increase of over 1%; The net profit attributable to the parent company was 1.1 trillion yuan, a year-on-year increase of 0.8%. In the first half of the year, the operating income of the six major state-owned banks all achieved positive year-on-year growth, with a total revenue of about 183 trillion yuan and a total net profit attributable to the parent company of about 682.5 billion yuan. Specifically, Industrial and Commercial Bank of China achieved a revenue of 4270.92 billion yuan, a year-on-year increase of 1.6%, and maintained its position as the top revenue scale. Bank of China achieved a revenue of 329.003 billion yuan, becoming the institution with the fastest revenue growth among the six major banks at a growth rate of 3.76%. The revenue of Construction Bank, Agricultural Bank of China, Postal Savings Bank of China, and Bank of Communications were 394.273 billion yuan, 369.937 billion yuan, 179.446 billion yuan, and 133.368 billion yuan, respectively, with year-on-year growth rates of 2.15%, 0.85%, 1.5%, and 0.77%. In terms of net profit attributable to shareholders, Industrial and Commercial Bank of China ranked first with 168.03 billion yuan, followed closely by China Construction Bank, achieving a net profit attributable to shareholders of 162.076 billion yuan. Agricultural Bank of China and Bank of China both had net profits attributable to shareholders exceeding 100 billion yuan. In terms of growth rate, Agricultural Bank of China's net profit attributable to shareholders increased by 2.66% year-on-year, ranking first among the six major banks. Among the joint-stock banks, China Merchants Bank became the only one with a revenue of 169.969 billion yuan to enter the first tier. Its net profit attributable to the parent company ranked fifth with 74.93 billion yuan, demonstrating its strong profitability. In addition, Industrial Bank and CITIC Bank both had operating revenues exceeding 100 billion yuan in the first half of the year, with 110.458 billion yuan and 105.762 billion yuan respectively, ranking second and third among joint-stock banks. Although there is still pressure on the revenue side, some joint-stock banks have achieved positive net profit growth by optimizing their structure and controlling costs. For example, Shanghai Pudong Development Bank's net profit increased by 10.19% year-on-year, while China CITIC Bank increased by 2.78%. Shanghai Pudong Development Bank is the only A-share listed joint-stock bank to achieve both revenue and net profit growth, ranking fourth among joint-stock banks with a revenue of 90.559 billion yuan, showing impressive performance. In terms of urban (rural) commercial banks, the asset scale has steadily expanded and performed well. Among them, the total assets of Jiangsu Bank were 4.79 trillion yuan, with a growth rate of 26.99%, and both business indicators ranked first among city commercial banks; Bank of Beijing and Bank of Ningbo ranked second with a scale of 4.75 trillion yuan and 3.47 trillion yuan respectively, with asset growth rates of 20.33% and 14.39%, respectively. In terms of revenue and net profit growth rate, Xi'an Bank's operating revenue increased by 43.70% year-on-year, ranking first among urban (rural) commercial banks, but the net profit growth rate was relatively low at 8.41%; Although the revenue growth rate of Hangzhou Bank is only 3.90%, it ranks first among urban (rural) commercial banks with its net profit growth rate of 16.66%. Ma Kunpeng, head of the financial research group and chief analyst of the banking industry at CITIC Securities, analyzed that the positive growth in revenue of listed banks in the first half of 2025 is mainly due to the recovery of the bond market in the second quarter and the significant increase in other non interest income of banks. Volume based pricing is the main driving force for performance, and from the perspective of profit driven segmentation, scale growth is the most significant positive contributing factor; In terms of negative contribution factors, the narrowing of interest rate spreads remains the main drag. Since the beginning of this year, the central bank has a clear intention to protect the interest rate spread of the banking industry. In the future, the asset side will follow the changes in LPR, while the cost side will continue to optimize, and the decline in interest rate spread is expected to narrow quarter by quarter. ”According to the "Global Banking Outlook Report (Q4 2025)" recently released by the China Banking Research Institute, the credit scale of commercial banks will moderately increase throughout the year, and more attention will be paid to structural optimization. It is expected to achieve high growth rates in areas such as supporting household consumption and supporting the development of new quality productivity, becoming a new driving force for the sustained growth of banking assets. It is expected that the growth rate of the asset liability scale of commercial banks will remain at a relatively high level of around 8.5% by 2025. The report points out that banks face structural opportunities in non interest income. In the second quarter of 2025, non interest income of commercial banks accounted for 25.75%, an increase of 1.44 percentage points year-on-year, mainly due to the rapid growth rate of related non interest income driven by financial investment of commercial banks. Looking at the whole year, the recovery of the capital market will further drive the income growth of commercial banks in areas such as bank wealth management and fund sales. There are also structural opportunities for investment business in the low interest rate environment. At the same time, commercial banks are accelerating the implementation of various cost reduction and efficiency improvement measures, and increasing efforts to reduce operating expenses. Looking ahead to the whole year, commercial banks will prudently reduce customer acquisition costs, marketing costs, and operating costs, and maintain a reasonable cost to income ratio of around 35%. In summary, under the pressure of interest and non interest income growth, it is expected that the net profit and revenue of commercial banks will remain basically the same in 2025 compared to 2024. Overall, in the first half of the year, most banks showed a good trend of stable to positive asset quality and low non-performing loan ratios, reflecting the continuous efforts of the banking industry in supporting the real economy and risk management. In terms of state-owned banks, the overall asset quality remains stable, and the non-performing loan ratio has decreased. The non-performing loan ratios of Industrial and Commercial Bank of China and Construction Bank were both 1.33%, a decrease of 0.01 percentage points from the end of the previous year. The non-performing loan ratio of Bank of China was 1.24%, also a decrease of 0.01 percentage points from the end of the previous year. The non-performing loan ratios of Bank of Communications and Agricultural Bank were both 1.28%, with Bank of Communications decreasing by 0.03 percentage points from the end of the previous year and Agricultural Bank decreasing by 0.02 percentage points. Although the non-performing loan ratio of Postal Savings Bank of China increased by 0.02 percentage points from the end of the previous year, its 0.92% non-performing loan ratio is still at the lowest level among the six major banks. Joint stock banks present a situation of "overall controllability and obvious differentiation". China Merchants Bank maintains a leading position among joint-stock banks with a non-performing loan ratio of 0.93% and a provision coverage ratio of 410.93%, and its asset quality remains at a relatively high level. The non-performing loan ratios of China CITIC Bank and Everbright Bank were 1.16% and 1.25%, respectively, both unchanged from the end of last year, and the provision coverage ratios were maintained at a reasonable level. The non-performing loan ratio of Shanghai Pudong Development Bank has dropped to 1.31%, a decrease of 0.05 percentage points from the previous year, and the provision coverage has improved, indicating an improvement in its asset quality and enhanced profitability. However, the non-performing loan ratios of Huaxia Bank and Minsheng Bank are relatively high, at 1.60% and 1.48% respectively, facing certain pressure. In terms of urban (rural) commercial banks, the overall performance of asset quality is good, and the non-performing loan ratio mostly remains low. Among them, the non-performing loan ratio of Chengdu Bank is only 0.66%, which is the lowest among A-share listed banks. At the same time, the bank's provision coverage ratio reaches 452.65%, indicating strong risk resistance ability. In addition, the non-performing loan ratio of urban (rural) commercial banks in eastern coastal areas such as Hangzhou Bank, Ningbo Bank, and Changshu Bank remains low at 0.76%, far below the average non-performing loan ratio of listed banks. The provision coverage ratios are 520.89%, 374.16%, and 489.53%, respectively, which are at a relatively high level among peers, with controllable risks and stable operations. The non-performing loan ratio of Jiangsu Bank decreased by 0.05 percentage points to 0.84% compared to the beginning of the year, and the non-performing loan ratios of banks such as Chongqing Bank, Qingdao Bank, Qilu Bank, and Xi'an Bank have all decreased, indicating a continuous improvement in asset quality. Shen Xiaohong, Managing Partner of Deloitte China Financial Services Research Center, believes that the further recovery and improvement of China's macroeconomic situation, as well as the further enhancement of bank governance and risk management, will help commercial banks improve their operating performance and asset quality, effectively prevent and mitigate risks and hidden dangers. Ma Kunpeng's team analyzed that the asset quality of the banking industry remained stable in the first half of the year, with a slight decrease in the non-performing loan generation rate. The asset quality of state-owned large banks remained relatively stable, while the non-performing loan generation rates of Bank of China and Bank of Communications decreased year-on-year. Looking ahead to the second half of the year, it is expected that the non-performing loan ratio and provision coverage ratio will remain within a stable and reasonable range. (New Society)