Bank of China reported a year-on-year revenue growth of 3.61% in the first half of the year, while net interest margin contraction dragged net interest income down by 5.27% | Financial Report Insights

Bank of China achieved a net profit attributable to shareholders of RMB 117.591 billion in the first half of the year, a slight decrease of 0.85% year-on-year. As the main source of revenue, net interest income fell by 5.27% year-on-year to RMB 214.816 billion, while non-interest income, including fees, trading gains, and others, saw a significant year-on-year increase of 26.43%, reaching RMB 114.187 billion, accounting for 34.71% of total operating income.

On the 29th, Bank of China released its semi-annual report for 2025:

• Bank of China achieved operating income of RMB 329.4 billion in the first half of the year, a year-on-year increase of 3.61%
• Net profit attributable to shareholders was RMB 117.591 billion, a slight decrease of 0.85% year-on-year.
• After-tax profit was RMB 126.1 billion, remaining stable year-on-year and improving compared to the first quarter.
• Total assets reached RMB 36.79 trillion, an increase of 4.93% from the beginning of the year.

Narrowing Interest Margin Erodes Profitability, Cost Control Shows Effectiveness

Bank of China's performance indicates that the narrowing net interest margin is the biggest challenge to profitability in the first half of the year. The financial report disclosed that the group's net interest margin was 1.26%, a decrease of 18 basis points compared to the same period last year. The report attributes this to multiple factors including the reduction of the domestic Renminbi loan market quotation rate (LPR), adjustments to existing mortgage rates, and interest rate cuts on foreign currencies, leading to a 48 basis point decline in the average yield on interest-earning assets.

Specifically, in the first half of the year, the group's net interest income decreased by RMB 11.944 billion year-on-year. Among them, the interest income from loans and advances, which constitutes a major part of interest income, fell by 10.47% year-on-year, mainly due to the decline in yield.

In the face of interest margin pressure, Bank of China demonstrated strong proactive management capabilities. The report stated that the bank achieved a 33 basis point reduction in the average interest rate of interest-bearing liabilities by adhering to coordinated development of volume and price and strengthening deposit cost control. At the same time, the bank continuously optimized its business structure, increasing the proportion of bond investments in interest-earning assets. In terms of cost control, the group's cost-to-income ratio was 25.11%, a decrease of 0.43 percentage points year-on-year, indicating good results in cost reduction and efficiency enhancement.

Surge in Non-Interest Income, Key Stabilizer

In the first half of the year, the group achieved non-interest income of RMB 114.187 billion, a significant year-on-year increase of 26.43%, with its proportion in operating income rising by 6.23 percentage points to 34.71%.

The growth of non-interest income was driven by multiple factors. Among them, net fee and commission income increased by 9.17% year-on-year, mainly benefiting from good growth in agency business, custody, and other entrusted services. Even more impressive was the other non-interest income, which surged by 42.02% year-on-year. The bank explained in the report that this was mainly due to "actively seizing market volatility opportunities, with gains from foreign exchange, precious metals sales, and fair value changes showing good growth."

Asset Quality Remains Stable, Risks in Key Areas Are Controllable

Despite the uncertainty in the macroeconomic environment, the asset quality of Bank of China has remained fundamentally stable. As of the end of June, the group's non-performing loan ratio was 1.24%, a slight decrease of 0.01 percentage points from the end of the previous year. The non-performing loan provision coverage ratio was 197.39%, which, although lower than the beginning of the year, remains at a sufficient level.

The report stated that the bank continues to adjust and optimize its credit structure while intensifying efforts to recover and resolve non-performing assets. Particularly in the real estate sector, which has drawn market attention, the bank indicated that it actively supports the stabilization of the real estate market, promotes a coordinated financing mechanism for urban real estate, and assists in building a new model for real estate development. At the same time, it actively supports the prevention and resolution of local debt risks.

In terms of credit issuance, the bank continues to increase support for key areas of the real economy. As of the end of June, its domestic loans to the manufacturing sector grew by 12.99% compared to the end of the previous year, and loans to private enterprises increased by 12.93%, demonstrating a continuous optimization of its credit structure in line with national industrial policy guidance.

Strengthening Capital Base, Focusing on the "Five Major Articles" Strategy

During the reporting period, Bank of China completed several important capital replenishment actions, significantly strengthening its capital base. The bank successfully issued A-shares to specific investors, raising CNY 165 billion, and issued CNY 50 billion in subordinated debt. As of the end of June, the group's capital adequacy ratio reached 18.67%, with a core Tier 1 capital adequacy ratio of 12.57%, providing a solid guarantee for risk resistance and supporting future business development.

At the strategic level, Bank of China continues to focus on the "Five Major Articles." Financial report data shows that as of the end of June:

• Financial Technology: The balance of technology loans reached CNY 4.59 trillion, with 161,100 credit accounts.
• Green Finance: The balance of green loans increased by 16.95% compared to the end of the previous year, and the underwriting scale of domestic and foreign green bonds remains market-leading.
• Inclusive Finance: The balance of loans for inclusive small and micro enterprises exceeded CNY 2.65 trillion, with the number of clients surpassing 1.72 million.
• Pension Finance: The scale of corporate annuity custody funds ranks among the top in the market.
• Digital Finance: The number of monthly active personal mobile banking customers increased by 8.59% year-on-year