China's six largest banks return to simultaneous revenue and profit growth for first time since 2022

China's six largest state-owned banks have returned to simultaneous growth in revenue and net profit for the first time in over two years, driven by early signs that net interest margins may have bottomed out after a prolonged period of compression.

Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, Bank of Communications and Postal Savings Bank of China collectively posted operating income exceeding 2 trillion yuan (US$297 billion) in the first half, with combined net profit attributable to shareholders reaching approximately 712.6 billion yuan.

Revenue climbed between 4 and 11 per cent across the six lenders, while net profit rose 4 to 6 per cent, marking the first occasion since 2022 that all six institutions reported positive growth on both measures simultaneously.

Margins edge up from historic lows

The turnaround follows two years of steady margin erosion that pushed the industry average net interest margin, the difference between lending income and deposit costs, to a record low near 1.4 per cent in the first quarter.

China Construction Bank became the first major lender to reverse the trend, reporting a half-year NIM of 1.37 per cent, up 0.03 percentage points from full-year 2025 and 0.01 percentage points from the first quarter. The stabilisation signals a possible reprieve for an industry that has struggled to balance state directives for economic stimulus lending against shrinking profitability.

The shared improvement across all six banks suggests systemic pressures may be easing, offering tentative relief to China's financial sector after an extended squeeze on earnings.

Source: South China Morning Post