Focusing on “variables” and anchoring on “constants”: listed banks build a high-quality development equation — EY releases Listed banks in China: 2025 review and outlook

EY Greater China region released its “Listed banks in China 2025 – review and outlook report” (Executive summary). The report provides an in-depth analysis of the latest trends across all 57 listed banks¹ in China in 2025, covering operating performance, asset quality and business transformation. It also offers an outlook on future developments, exploring pathways for the banking sector to achieve high-quality development in a complex and evolving macroeconomic environment.

EY also released an overview 1Q26 results for 42 Chinese A-share listed banks. The overview shows that the 42 A-share listed banks recorded year-on-year (YOY) increase of 3.16% in net profit and 7.59% in operating income in the first quarter of 2026 (the period). The total assets at the end of the period increased by 3.67% compared to the end of 2025. The weighted average non-performing loan ratio (NPL) stood at 1.22%, unchanged from year-end 2025, while the provision coverage ratio was 233.36%, down by 0.84 percentage points. Overall, the EY analysis indicates the listed banks delivered stable and improving performance in the period.

Advancing steadily amid pressure, entering a new stage of high-quality growth

The prolonged low interest rate and narrow net interest margin (NIM) environment continues to pose significant challenges to the profitability and operating development of listed banks. In 2025, listed banks advanced steadily under pressure and maintained stable progress, achieving operating income of RMB2.25 trillion, representing a YOY increase of 1.53%. Although the growth rate moderated from 2.36% in 2024, sustained positive earnings growth remains notable given the complex and volatile business environment faced by listed banks. 

Kelvin Leung, EY² Greater China Financial Services Partner, said: “The net profit growth of listed banks has remained at around 2% over the past three years, marking the banking sector’s transition into a shift to a “low-growth, high quality” development stage. Amidst shifting ‘variables’ such as the operating environment, market dynamics and technology, listed banks are anchoring on their ‘constants’, including core capabilities, customer base and risk management, to forge a ‘high-quality development equation’. By leveraging the predictability of their own high-quality development to navigate the uncertainty of the operating environment, banks are strengthening their resilience across cycles.”

Proactively responding to market changes while stabilizing revenue growth

The report shows that in 2025, listed banks generated operating income of RMB5.94 trillion, representing a YOY increase of 1.34%. The average NIM declined by 13 basis points to 1.40%, marking the sixth consecutive year of contraction. In response to ongoing pressure from narrowing margins, listed banks adopted a two-pronged approach. On one hand, they increased loan disbursements and investment activities, with the year-end net loan balance and financial investment balance rising by 7.36% and 13.27% respectively, compared to the prior year. By offsetting pricing with volume, net interest income increased by 0.11% YOY, halting the downward trend of the previous two years. On the other hand, listed banks capitalized on rising household wealth and a recovery in capital markets by expanding investment banking, wealth management and asset custody businesses. Net fee and commission income increased by 5.92% YOY in 2025, rebounding after three consecutive years of decline. 

Meanwhile, the upward trend in bond yields during 2025 led to a YOY decline of 1.70% in fair value and investment income. However, listed banks partly offset this impact through the timely disposal of selected bond investments measured at amortized cost. As a result, gains on derecognition of financial assets measured at amortized cost surged by 182.79% YOY, mitigating the decline in fair value changes and investment income.

Adapting to macro changes and reshaping new growth engines

In 2025, listed banks aligned with national strategies by focusing on the development and improvement in the “five major areas” by innovating business models and enhancing efficiency in serving the real economy. The report shows that, in terms of technology finance, 43 listed banks disclosed their technology loans status over the past two years, with a balance of RMB32.01 trillion by the end of 2025, representing an increase of 28.91% YOY. Among them, the balance of loans from large banks and national joint-stock banks to technology enterprises was RMB23.30 trillion and RMB6.33 trillion respectively, representing increases of 24.33% and 49.24% respectively, from the previous year. In addition, in response to regulatory requirements, asset investment companies (AIC) established by listed banks entered the pilot stage of AIC equity investment business. They set up several equity investment funds to intensify support for technological innovation. For green finance, 57 listed banks disclosed their green loan balance, totaling RMB33.20 trillion, up 19.60% YOY, outpacing overall loan growth by 12.24 percentage points. In terms of inclusive finance, 54 listed banks reported their figures on inclusive loans with a total of RMB24.91 trillion, an increase of 15.64% from end of the previous year, which is 8.28 percentage points higher than the overall loan growth rate.

Benny Cheung, EY³ Greater China Financial Services China South Markets Leader says: “Revenue growth at listed banks, especially non-interest income, is largely affected by market volatility. In the long run, listed banks have to adapt to trends such as industrial transformation and upgrading, the shift toward low-carbon lifestyle and the aging population. By deepening their engagement across the ‘five major areas’, listed banks can reshape new engines for business growth while serving the real economy and accumulating renewed momentum to navigate the low interest rate and narrow NIM cycle.”

Adhering to self-positioning to cultivate differentiated edges

The report shows that the overall performance of listed banks was stable with steady progress, while individual results varied. 39 and 46 banks achieved revenue and net profit growth respectively, while 18 and 11 banks experienced declines in these indicators. NIMs widened at nine banks, narrowed at 45 banks and remained stable at three banks. Leung says: “Serving the real economy does not imply homogeneous development. Listed banks have continued to explore differentiated development paths and build core competitive edges in niche segments. Leveraging the advantages in their global network and integrated services, large banks have remained as the main force in serving the real economy and maintaining financial stability. National joint-stock banks have played to their strengths to excel in niche markets, serving regional industrial clusters and delivering distinctive, agile and bespoke banking services. Meanwhile, city and rural commercial banks have focused on local specialty industries and synchronize with local development priorities. They have advanced localized financial services to support serving the local economy, while laying a solid foundation for their own sustainable development.”

Harnessing technological innovation to accelerate digital intelligence transformation

In recent years, as cutting-edge technologies such as blockchain, generative AI, agentic AI and quantum computing continue to evolve, the banking industry is being fundamentally reshaped. Driven by this, digital transformation is accelerating beyond the initial phase of infrastructure build-out and process online migration, toward a new stage of intelligence digitalization, with data, models, platforms and intelligent collaboration as the core.

The report shows that 25 listed banks have disclosed their fintech investment for five consecutive years, amounting to RMB199.919 billion in 2025, with the proportion of revenue increasing steadily from 3.11% in 2021 to 3.89% in 2025. The number of fintech personnel revealed by 24 listed banks has been rising from 5.05% in 2021 to 7.70% in 2025.

Leung says: “AI has become a key variable shaping banks’ operating efficiency, service capability, risk control level and innovation speed. For listed banks, AI is a core engine that drives the upgrade of business models, the evolution of organizational capabilities and the reconstruction of value creation. It enables banks to build new competitive advantages and open up fresh growth opportunities amid intensifying market competition.”

Strengthening risk discipline to enhance cyclical resilience

The report shows that by the end of 2025, the average NPL ratio of listed banks was 1.24%, down 0.02 percentage points from the end of 2024. The average provision coverage ratio was 232.22%, down 5.33 percentage points YOY, while the average capital adequacy ratio reached 16.34%, a decline of 0.25 percentage points. Overall, asset quality remained stable, supported by relatively adequate risk buffers. Leung says: “Risk prevention and control is an eternal theme for the banking industry. By the end of 2025, the overdue loan ratio of listed banks increased by 0.02 percentage points compared with the end of 2024. The ‘scissors difference’ between the overdue loans and NPLs increased from 117% to 120%, while the proportion of restructured loans increased by 0.08 percentage points. Retail credit risks continued to surface, with NPL ratios for personal housing mortgages, personal business loans, consumer loans and credit card loans rising by 0.16, 0.30, 0.04 and 0.21 percentage points respectively. In addition, among some small and medium-sized banks, the ratio of impaired loans remained higher than the NPL ratio, indicating persistent downward pressure on asset quality. Risk prevention and control remain a critical and long term priority.”

Looking ahead, Cheung says: “On one hand, listed banks must keep pace with change and strengthen their ability to operate in a complex and volatile environment. This requires aligning with policy guidance, advancing business restructuring, optimizing profit models, improving risk management and enhancing technological capabilities. On the other hand, banks must remain true to their original mission. By putting customers at the center, serving the real economy, focusing on core businesses, strengthening governance and pursuing differentiated development, banks can successfully navigate economic cycles and achieve high-quality development.”

1. Including 15 A+H listed banks, 27 A-share listed banks and 15 H-share listed banks, whose total assets and net profit account for 83% and 95%, respectively, of all commercial banks in China
2. Ernst & Young Hua Ming LLP
3. Ernst & Young (EY member firm in Hong Kong)

-Ends-

About Listed banks in China: 2025 review and outlook

This is the 19th EY annual report on China’s listed banks. The purpose of this annual report is to provide an outlook on the direction of the future development of China’s banking industry based on the observations of the businesses, operating models and regulatory environment of listed banks in China.

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