The threefold support for China Bank's resilient growth

(Source: Meicai.com)

In 2025, Bank of China’s revenue increased by 4.28% year-on-year, ranking first among major state-owned banks in growth rate; net profit attributable to the parent increased by 2.18% year-on-year, ranking second in growth rate, demonstrating resilient growth.

Text / Daily Financial Report Zhang Heng

In a low-interest-rate era, market scrutiny of bank financial reports has gone beyond profit figures themselves. Whether net interest margin can stabilize, whether growth is sustainable, and whether differentiation advantages are strong enough have become the threefold benchmarks for measuring bank resilience. As the industry shifts from chasing growth rates to seeking certainty, Bank of China (hereinafter referred to as BOC, 601988.SH; 3988.HK) responded to market core concerns with a “steady progress” report card for 2025.

The annual report shows that in 2025, BOC’s operating income was 6.599 trillion yuan, up 4.28% year-on-year, ranking first among major state-owned banks in growth rate; shareholders’ net profit after tax was 2.43 trillion yuan, up 2.18%, ranking second in growth rate. In terms of scale, by the end of 2025, BOC’s total assets exceeded 38 trillion yuan, an increase of 9.4% from the beginning of the year; total customer loans and deposits were 23.45 trillion yuan and 26.18 trillion yuan respectively, with growth rates of 8.61% and 8.18%, continuing to maintain balanced growth.

▲Chart: Bank of China’s revenue and net profit have both steadily increased over the past three years

This achievement stems from BOC’s systemic breakthroughs amid industry-wide pressure on interest margins, achieved through proactive business structure optimization, enhanced operational resilience, and adherence to prudent principles. As stated by Chairman Ge Haijiao in the annual report speech, BOC adheres to high-quality development as its top priority, continuously improves group governance efficiency, and makes great efforts to promote business transformation, deepen reforms, and strengthen infrastructure, all to enhance competitiveness and implement long-term assessments, promoting balanced development of volume, price, risk, and efficiency. Accelerating transformation under a low-interest-rate environment, the changes in comprehensive strength indicators such as operating income, net profit, and net interest margin have outperformed major Chinese peers.

Interest margin breakthrough dual engines:

Asset optimization and liability cost reduction

In 2025, narrowing net interest margin remains a common challenge for banks. BOC’s net interest margin in 2025 was 1.26%, remaining flat quarter-on-quarter since mid-last year, stabilizing and warming. Net interest income was 659.9B yuan; after turning positive in the third quarter of last year, the growth rate in the fourth quarter increased, establishing a stable upward trend. The narrowing of the interest margin indicates an enhanced ability to adjust the balance sheet, and profit expectations will become more certain.

BOC’s ability to stabilize net interest margin benefits from coordinated efforts on both assets and liabilities.

On the asset side: structural optimization replaces scale expansion. In 2025, BOC’s customer loans and advances grew by 8.61% year-on-year, including manufacturing loans of 3.5 trillion yuan, up 17.18%; strategic emerging industry loans of 3.23 trillion yuan, up 30.59%; meanwhile, over 2 trillion yuan in credit was injected into key consumer sectors, with domestic personal consumption loans growing by 28.35%. This indicates that BOC is not simply compensating for price declines with volume, but continuously optimizing loan allocations, focusing more on manufacturing, technology, inclusive finance, and livelihood sectors, supporting national strategies while also boosting medium- and long-term earnings.

On the liability side: balancing cost control and scale growth. In 2025, BOC’s customer deposits increased by 8.18% from the end of last year; more importantly, the average interest paid on deposits fell to 1.75%, a significant drop of 37 basis points from the previous year. This is due to BOC’s proactive management, strengthening deposit cost control. The annual report clearly reflects this: in 2025, interest expense decreased by 10.02%, and effective cost control on liabilities offset the pressure on asset yields, resulting in only a slight decline of 1.83% in net interest income.

Management is optimistic about 2026. At the earnings release, BOC’s management stated that they expect net interest margin to narrow significantly in 2026, with potential positive growth in net interest income.

Therefore, the value of BOC’s 2025 interest margin performance lies in its ability to minimize the impact of interest rate declines on revenue through asset structure optimization and liability cost control, achieving “manageable pressure,” confirming that its net interest income base remains solid, forming the first pillar of high-quality development.

Growth engine shift: non-interest income rises

If stabilizing interest margins concerns the current operational foundation, then optimizing income structure determines future development quality. A clear signal from BOC’s 2025 annual report is that a profound and sustainable structural shift in growth momentum is underway.

This shift is primarily reflected in the strong growth of non-interest income. In 2025, BOC’s non-interest income reached 2.19161 trillion yuan, a high increase of 19.21% year-on-year, far faster than overall revenue growth, accounting for 33.21% of total operating income, up 4.16 percentage points from the previous year. Notably, net fee and commission income increased by 7.37% to 822.37 billion yuan; other non-interest income surged by 27.67% to 1.36924 trillion yuan.

▲Chart: BOC’s non-interest income share increased significantly in 2025

Non-interest income features low capital intensity and low sensitivity to interest rate changes, and its rising proportion indicates that the bank’s profit model is shifting from reliance on traditional interest margins to more dependence on comprehensive financial services. This is not just a “quantitative” change but a “qualitative” transformation in business mode and competitiveness.

Management states that China’s high-quality economic development will deepen, providing diversified and structural opportunities for banks to develop non-interest businesses.

Specific business progress confirms this direction. In 2025, BOC performed well in wealth management, settlement, clearing, custody, financial market transactions, foreign exchange, and integrated operations. For example, the balance of RMB “bills, certificates, and financing” assets increased by 34%; agency sales of personal financial products reached 1.54 trillion yuan, up 11.80%; and the scale of global asset custody remained the largest among Chinese peers.

Interpreting BOC’s 4.28% revenue growth in 2025 hinges on its internal composition—steadily shifting from “interest income-driven” to a “stable interest income and rising non-interest income” momentum. This more resilient and sustainable income structure constitutes the second solid pillar of BOC’s high-quality development.

Strategic layout and globalization forge long-term resilience

Stabilizing the fundamentals and optimizing income structure lay the foundation for navigating cycles, but whether the bank can remain steady and far-sighted depends more on its future growth reserves and development base.

First, operational efficiency has been optimized, with significant improvements in profitability. By the end of 2025, BOC’s cost-to-income ratio was 27.84%, down 0.93 percentage points year-on-year, indicating effective cost control and continuous efficiency gains. The average return on total assets reached 0.70%, and return on equity was 8.94%, maintaining relative stability amid industry pressures.

▲Chart: BOC’s cost-to-income ratio significantly decreased in 2025

Second, asset quality remains stable and excellent. BOC consistently adheres to a “prudent and steady” risk appetite. By the end of 2025, non-performing loan ratio was 1.23%, down 0.02 percentage points from the previous year; special mention loan ratio was 1.47%, unchanged; provision coverage ratio was 200.37%, maintaining a reasonable and adequate level.

▲Chart: BOC’s non-performing loan ratio and provision coverage over the past three years

Capital strength is the fundamental guarantee for long-term development. In 2025, BOC completed the first tranche of the 165 billion yuan capital increase led by the Ministry of Finance, with a core Tier 1 capital adequacy ratio of 12.53% and a total capital adequacy ratio of 18.85%, reaching the highest levels in recent years, providing ample capital space to cope with uncertainties and seize growth opportunities.

Finally, what adds long-term value is BOC’s systematic cultivation of new growth curves.

On one hand, it has deepened deployment around the “five big articles” of finance. In fintech, it took the lead in releasing an action plan supporting AI industry development, launching initiatives like the “BOC Sci-Tech Innovation Cultivation Program,” providing 4.82 trillion yuan in tech loans to 171.8k enterprises by the end of 2025, with tech loans growing by 18.78%, leading among major Chinese peers. In green finance, green loans grew by 27.83% from the beginning of the year; green bond underwriting scale also led among Chinese peers. In inclusive finance, customer numbers and loan balances increased by 22.86% and 21.52% respectively, reaching 1.84 million households and 2.77 trillion yuan. In pension finance, the “BOC Silver Age” pension brand was launched, with over 3 million new personal pension contributions. In digital finance, digital economy industry loans exceeded 880 billion yuan, up 7.52%.

On the other hand, BOC’s unique global advantages continue to consolidate. As the most internationalized Chinese bank, its global service network covers 64 countries and regions, forming a differentiated long-term competitive advantage. In 2025, domestic institutions’ international settlement volume was 4.45 trillion USD, up 9.56%; supporting the Belt and Road Initiative, total credit support exceeded 439 billion USD; cross-border RMB settlement volume reached 17.7 trillion yuan. Overseas assets, operating income, and pre-tax profit contributed 22.18%, 23.88%, and 27.99% respectively to the group.

In summary, excellent operational efficiency, solid asset quality, and strong capital strength form the “ballast” for BOC to withstand cycles; while forward-looking investments in the “five big articles” and deepening globalization open future growth space. Together, these constitute the third pillar supporting BOC’s long-term high-quality development.

At the start of the “14th Five-Year Plan,” China Bank delivered a steady, progressive performance report that demonstrates responsibility. While consolidating traditional business fundamentals and focusing on serving the real economy, its comprehensive strength continues to grow.

2026 marks the 20th anniversary of BOC’s A+H shares listing. Since going public, total assets have increased 6.2 times, and over 970 billion yuan in dividends have been paid to shareholders, truly rewarding the trust of the country and investors. Looking ahead, BOC is building on a more solid foundation and more prudent stance, moving into a new stage of high-quality development.