Chinese banks grow earnings 2.3% in 2025 as margin pressures ease

State-owned enterprises outperformed joint stock banks in revenue, net profit, and fee income growth.

Chinese banks earnings and revenue improved in 2025 on stabilising interest income and accelerating fee income growth, reported UOB Kay Hian (UOBKH).

Banks’ earnings growth improved to 2.3% in 2025, according to industry data. In comparison, in the first nine months of 2025, growth had been flattish year-on-year, said UOBKH’s Greater China Research Team and analyst Tham Mun Hon.

State-owned enterprises (SOE) banks outperformed joint stock banks (JSBs) in both revenue and net profit. SOE banks reported a 3.8% revenue versus JSBs’ 1.1%, whilst net profit is 3% for SOEs compared to 0.3% for JSBs.

Net interest margin (NIM) pressures also eased further during the last quarter of the year, holding at 1.42%.

Some banks, notably ICBC and China Merchants Bank (CMB), recorded sequential NIM rebounds during the quarter, the report said.

Net fee income growth accelerated 11.5% You in Q4 2025, from an 8% growth in Q3. Robust wealth management and agency fees, and improved investor risk appetite, maintained recovery momentum.

This was offset by weakness in bank card fees, UOBKH said.

SOE banks once again outpaced JSBs, with a 12.4% fee income growth vs JSBs’ 9.9%.

“Looking ahead, management is broadly optimistic on fee income growth in 2026, underpinned by strong wealth management and insurance sales momentum, but highlighting that Phase 3 mutual fund distribution fee cuts and continued credit card sluggishness are expected to exert some downward pressure,” the report said.