Continuous negative growth, the six major banks' personal mortgage balances decreased by 1.9 trillion yuan over three years

Questioning AI · What economic signals are reflected behind the three-year continuous decline in mortgage balances?

As the core participant in the real estate financial market, the six major state-owned banks are the main force in the personal mortgage market, accounting for over 75% among 42 listed banks.

According to CBNData statistics, by 2025, the total personal housing loan balance of the six major state-owned banks will be 25 trillion yuan, a year-on-year decrease of about 2.7%, continuing the negative growth trend since 2023. As of last year, the mortgage balances of the six major banks had decreased by 1.88 trillion yuan from their peak in 2022.

“The reduction in personal mortgage balances is essentially a natural result and objective reflection of the real estate cycle adjustment process,” said Xue Hongyan, a special researcher at Suzhou Commercial Bank, analyzing to reporters. Behind this are both the weakening demand for new mortgages and the loss of existing loans.

Less by 1.88 trillion yuan from the peak

According to Wind data compiled by CBNData, in 2025, the total personal housing loan balance of the six major state-owned banks reached 25.07 trillion yuan, a decrease of 693.1 billion yuan from 2024, a 2.69% year-on-year decline. In terms of year-on-year decline, the decrease in 2025 compared to 2024 slightly widened to 2.52%.

Since 2020, the scale of personal housing loans in the six major banks has experienced a cycle of “rapid growth - slowdown - continuous negative growth.” From 2020 to 2021, the mortgage scale still maintained double-digit growth, marking the end of the era of a one-sided rise in real estate.

2022 was a significant turning point. That year, the growth momentum of the real estate market weakened significantly, and the growth rate of the mortgage balances of the six major banks plummeted to 1.78%, reaching a historical high of nearly 27 trillion yuan.

From 2023 to 2025, as the real estate industry entered a deep adjustment phase, the mortgage scale of the six major banks has experienced three consecutive years of negative growth, with the rate of decline increasing each year: 1.92%, 2.52%, and 2.69%. Last year, the mortgage balance of the six major banks was 1.88 trillion yuan less than the peak in 2022.

“The reduction in personal mortgage balances is essentially a natural result and objective reflection of the real estate cycle adjustment process,” said Xue Hongyan. Behind the shrinking volume are two factors: first, weak demand for new mortgages, as the continued adjustment of the real estate market has led to a significant decline in the sales area and sales revenue of commercial housing, weakening residents’ willingness to buy homes, and new long-term loans are at a low level; second, banks strengthening risk control and raising approval standards, with some high-priced housing areas seeing residents’ leverage ratios already high, both factors limiting new loan issuance.

“Second, existing loans are accelerating their loss, as some residents choose to repay early during the interest rate decline cycle to reduce interest burdens; third, normal principal and interest repayments, where the principal part of monthly mortgage payments also naturally lowers the balance when new loans are insufficient to cover the repayments,” he said.

Lu Yang, an analyst at Dongwu Securities, believes that China’s real estate market is currently in a critical stage of transforming new and old driving forces and seeking a new dynamic balance. By the end of 2025 and early 2026, the market environment will show new characteristics: on one hand, the simultaneous reduction of mortgage interest rates and housing provident fund loan rates has pushed residents’ home purchase costs to a new low in recent years; on the other hand, stabilizing market confidence still requires more precise, effective, and sustainable policy support.

Mortgage delinquency rates of two major banks surpass 1%

Looking at the mortgage scales of various banks, last year, China Construction Bank maintained the top position with nearly 5.99 trillion yuan in mortgage balances. At the 2025 performance release, CCB President Zhang Yi stated that the bank seized the structural opportunities in the real estate market last year, implemented city-specific policies, improved strategies for first- and second-hand housing, supported the reform of the basic system for commercial housing sales and housing provident fund, and strengthened its competitiveness in personal housing finance services.

ICBC ranked second with a scale of 5.88 trillion yuan. Historically, the combined mortgage balances of CCB and ICBC accounted for about 36%-37% of the 42 listed banks.

Next are Agricultural Bank of China and Bank of China, with last year’s personal mortgage balances of 4.82 trillion yuan and 4.57 trillion yuan respectively; Postal Savings Bank and Bank of Communications had smaller scales, at 2.37 trillion yuan and 1.44 trillion yuan respectively.

In terms of growth rate, all six major banks showed negative growth in 2025, but the decline varied. The smallest decline was Postal Savings Bank (-0.37%); followed by Bank of Communications (-1.65%) and Bank of China (-1.89%), with declines controlled within 2%. Larger declines included ICBC (-3.41%), Agricultural Bank (-3.38%), and CCB (-3.18%), all over 3%, indicating larger adjustments among leading banks. Especially ICBC, whose personal mortgage scale decreased by over 200 billion yuan year-on-year.

Regarding non-performing loan ratios, affected by macroeconomic conditions and the downward cycle of the real estate market, the non-performing mortgage rates of banks generally increased.

Last year, except for a slight 0.01 percentage point decrease in Bank of China’s personal housing loan non-performing rate, the other five major state-owned banks saw their non-performing rates rise to varying degrees. Notably, Bank of Communications and ICBC’s non-performing rates increased by 0.43 and 0.33 percentage points respectively, both surpassing 1%, reaching 1.01% and 1.06%.

At the 2025 performance conference, many bank executives reviewed last year’s mortgage issuance, non-performing asset disposal, and their strategies and progress for this year.

The management of Bank of China said that last year, the bank helped stabilize the real estate market, with total personal housing loans exceeding 500 billion yuan. This year, they plan to steadily expand personal housing loans and non-housing consumer loans, promote product, customer, and scenario synergy, and build a complete scenario-based consumption ecosystem.

Zhou Wanfu, Vice President of Bank of Communications, mentioned that during the first quarter last year, the real estate market experienced a slight rebound, with mortgage loans increasing year-on-year, but in the first quarter of this year, the market was still in deep adjustment, and the bank’s mortgage repayments exceeded new disbursements, showing negative growth. However, he also noted that since March, the number of mortgage applications has significantly increased. Compared to the first two quarters last year or the third and fourth quarters, the growth is about 15%.

Zhou Wanfu believes this is a sign of the real estate market stabilizing. He is confident that, following this trend, this year’s mortgage loans can gradually emerge from negative growth to positive growth, driving retail loans to achieve the expected growth targets.

(This article is from CBNData)