Chinese Banks FY25: NIM Relief, Asset Risks Linger
Karen Wu, CFA: Senior Analyst, Financials - CreditSights
31 March 2026
- How margin trends in FY25 signal a potential inflection point for net interest income amid still soft credit demand.
- What Chinese Banks FY25 NIM Relief Asset Risks Linger reveals about earnings durability across large state banks and joint stock peers.
- Why asset quality pressures from retail borrowers, inclusive finance, and property exposures continue to warrant close credit monitoring.
- How funding mix shifts, deposit behavior, and loan growth patterns influence balance sheet resilience into 2026.
- Where credit costs, capital buffers, and policy support may shape relative stability for bank creditors going forward.
Executive Summary
- In this note, we summarize the FY25 operating performances for the Chinese banks under our coverage, namely the Big 5 banks (ICBCAS, CCB, BCHINA, AGRBK and BOCOM) and 5 JSBs (CHINAM, CINDBK, CHEVBK, SHANPU and INDUBK).
- Chinese banks’ FY25 results continued the trends seen in previous quarters, characterized by low-single-digit profit growth and lower returns.
- A key highlight of the results was the QoQ performance of 4Q25 NIMs, which rose by 2-5 bp at three banks, remained flat at three banks, and fell by 2-4 bp at only two banks; on a YoY basis, NIMs declined by 7-17 bp.
- Fee income generally posted low- to mid-single-digit growth in FY25, supported by wealth-related fees, while credit card income remained a key drag.
- Other non-interest income was pressured by unfavorable bond yield movements and a high base in FY24.
- Credit costs were stable or lower YoY to support profit growth, standing at 46-64 bp at the Big 5 banks and CHINAM, and 92-119 bp at the JSBs.
- Asset quality risks were concentrated in three areas: retail, inclusive finance, and property corporates.
- As is typically the case, loan growth was low in 4Q; for the full year, gross loans grew by 7%-9% YoY at the Big 5 banks and by 1%-6% at the JSBs, lagging FY24 growth of 8%-10% and 4%-7%, respectively.
- CET1 ratios were largely stable QoQ but mostly lower YoY, due to faster growth in corporate loans, which typically carry higher risk weights than retail loans.
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