China’s Six Major Banks Post Revenue, Profit Growth, Dividends Top 220 Billion Yuan

China’s six largest state-owned banks all reported simultaneous revenue and net profit growth for the first half of 2026, marking the first time since 2022 that the group collectively achieved both metrics. Combined operating revenue exceeded 2 trillion yuan, while total planned interim dividends surpassed 220 billion yuan, according to Xinhua News.

A Turning Point for the Banking Sector

The six banks — Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Agricultural Bank of China (ABC), Bank of China (BOC), Postal Savings Bank of China (PSBC), and Bank of Communications (BoCom) — disclosed their H1 results collectively on August 28. Combined net profit attributable to shareholders reached approximately 712.6 billion yuan, up about 4.4 percent year-on-year, while revenue grew approximately 9.4 percent, according to China News Service Jingwei.

Revenue growth ranged from 4 percent to 11 percent across the six banks, with ABC leading at 11.07 percent and CCB close behind at 10.72 percent. Net profit growth ranged from 3.32 percent to 5.10 percent, with BOC posting the strongest gain. The results represent a significant improvement over the previous year, when the banks reported mixed outcomes with three posting profit declines.

Net Interest Margins Show Stabilization Signs

After two years of sustained pressure, net interest margins (NIM) are showing signs of stabilization. The pattern across the six banks was “two up, four down” year-on-year, but several institutions reported quarter-by-quarter improvement, according to China Times via 10jqka.

CCB’s NIM reached 1.37 percent, up 3 basis points from full-year 2025 and 1 basis point from Q1 2026, maintaining a sequential improvement trend. ABC’s NIM rose 2 basis points from Q1 to 1.28 percent, while BOC and BoCom both saw year-on-year increases to 1.27 percent and 1.23 percent respectively. PSBC maintained the highest NIM among peers at 1.63 percent, though it declined 7 basis points year-on-year.

Liability cost management has been the key driver of the improvement. CCB President Zhang Yi noted that domestic demand deposit average balances increased by 542.4 billion yuan in H1, with deposit interest rates down 7 basis points. ABC President Wang Zhiheng highlighted that deposit rates fell 21 basis points from end of last year due to maturing time deposits being repriced at lower rates, contributing to a 4.7 percent year-on-year decline in interest expenses.

ICBC President Liu Jun emphasized that the stabilization reflects “more appropriate liability costs and optimized liability structure, not just repricing.” However, he cautioned that “as the volume of maturing time deposits decreases and the spread between new and old products narrows further, the repricing dividend’s support to NIM will gradually weaken.”

Experts Cautious on NIM Outlook

Analysts remain cautious about whether the stabilization marks a true trend reversal. Lou Feipeng, a researcher at PSBC, noted that downward pressure on NIM persists due to weak effective credit demand, describing the current stabilization as “stage-based.” Dong Ximiao, chief economist at Zhaolian, characterized the situation as an “L-shaped bottoming,” warning that the repricing dividend from time deposits will weaken in H2 while asset-side yields still face downward pressure.

Fu Yifu, a special researcher at Su Shang Bank, told China Times that the stabilization has “strong endogenous support, but is more likely to show L-shaped stabilization rather than V-shaped rapid rebound.” He noted that the most difficult period for the industry has passed, but a sustained NIM recovery would require a clear rebound in real economy returns and stronger endogenous credit demand.

Credit Structure Optimization Takes Center Stage

Beyond the headline numbers, the shift in credit allocation is arguably more significant. All six banks have prioritized the “five major articles” — technology finance, green finance, inclusive finance, pension finance, and digital finance — as their credit deployment framework, though each bank’s approach reflects its unique strengths.

ICBC’s manufacturing loans exceeded 5.8 trillion yuan, and its technology enterprise loans reached 3 trillion yuan, both ranking first among peers. CCB reported manufacturing loan growth of 17.95 percent, personal consumption loans up 14.59 percent, and private enterprise loans up 9.42 percent. ABC leveraged its county-level advantage, with county loans reaching 11.9 trillion yuan, accounting for 41.9 percent of domestic loans.

BOC further expanded its global footprint, with overseas institution loans increasing by $26.1 billion (5.82 percent growth) — the highest overseas commercial bank loan growth in five years. Cross-border RMB settlement and cross-border e-commerce transaction volumes both grew over 20 percent, according to Time Weekly via 163.com.

Liu Jun articulated the strategic shift clearly: “The past growth relied more on scale effects; future development must reshape the growth equation through deepening reform.” ICBC is “accelerating beyond the single growth curve of traditional credit, seeking momentum from the vast blue ocean of comprehensive, international, and digital-intelligent development.”

Asset Quality Remains Stable

Asset quality across the six banks remained broadly stable. Non-performing loan (NPL) ratios at end-H1 2026 were: PSBC at 1.00 percent (the lowest), BOC at 1.22 percent, ABC at 1.25 percent (down 2 basis points, marking five consecutive years of decline), ICBC and CCB both at 1.29 percent (each down 2 basis points), and BoCom at 1.30 percent.

Provision coverage ratios remained robust, with ABC leading at 290.10 percent and a provision balance exceeding 1 trillion yuan. CCB and ICBC both increased their ratios, reaching 238.69 percent and 217.58 percent respectively. However, retail loan NPL ratios are rising across the industry, with ICBC’s personal loan NPL reaching 1.77 percent, up 19 basis points, according to Xueqiu.

Dividends Surpass 220 Billion Yuan

All six banks raised their interim dividend payout ratio to 31 percent, up from approximately 30 percent previously. Total planned interim dividends reached 220.989 billion yuan, an increase of 7.98 percent year-on-year, according to China News Service Jingwei.

ICBC plans to distribute 53.853 billion yuan, the largest among the six, with A-share and H-share dividend yields of 4.22 percent and 5.36 percent respectively based on H1 average stock prices. Since its listing in 2006, ICBC has distributed over 1.64 trillion yuan in cumulative dividends — the highest in the A-share market. CCB’s cumulative dividends exceed 1.4 trillion yuan, while ABC’s approach nearly 1 trillion yuan.

ICBC Board Secretary Tian Fenglin explained the rationale: “To further enhance investors’ sense of gain, for this interim dividend, our bank has further raised the cash dividend payout ratio to 31 percent.” He added that “dividend policy is not static; it needs to dynamically adapt to the macroeconomic environment, regulatory guidance, and the bank’s own operating reality.”

What to Watch Next

The second half of 2026 will test whether the NIM stabilization can be sustained. Bank executives generally expect “pressure and support coexist,” with asset-side yield pressure offset by continued liability cost optimization, asset structure improvements, and foreign currency NIM contributions.

The dividend trajectory will also be closely watched. The National Nine Guidelines issued in April 2024 strengthened dividend requirements for listed companies, and the banks’ decision to raise payout ratios to 31 percent signals a commitment to shareholder returns. However, as Tian Fenglin noted, dividend policy must balance shareholder expectations with capital adequacy and long-term development needs.

For global investors tracking China’s financial system, the key question is whether this marks a genuine inflection point for the banking sector or a temporary reprieve. As Dong Ximiao put it, the “L-shaped bottoming” suggests the worst may be over — but the path to sustained improvement will be gradual, requiring continued economic recovery and stronger credit demand to fully materialize.