FINANCE

China’s Banks Rebound in First Quarter as Funding Costs Improve

Published: May. 1, 2026 12:20 a.m. GMT+8

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In the first quarter 2026, interest income growth for large and medium-sized banks rebounded, driving revenue growth

China’s major state-owned and joint-stock commercial banks showed a broad rebound in revenue and profit in the first quarter of 2026, driven by stabilizing net interest margins as funding costs improved.

Six major state-owned lenders reported an average revenue growth of 8.5% year-on-year in the first quarter 2026, marking an acceleration of about 6 percentage points compared to the same period in 2025. China Construction Bank (CCB) and Agricultural Bank of China (ABC) led the way, with revenue expanding by 11.15% and 10.5%, respectively. Net profit for the six mega-banks increased by an average of 3.4%, with ABC and Bank of China reporting the strongest gains.

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China's six major state-owned banks reported Q1 2026 revenue growth of 8.5% YoY and net profit growth of 3.4%, led by CCB (11.15%) and ABC (10.5%).
Nine listed joint-stock banks saw average revenue growth of 5.2% YoY, reversing prior decline; profits mixed, with CITIC and Ping An up ~3%, Minsheng down 9.6%.
Rebound driven by stabilizing NIM from lower funding costs and regulations; asset quality risks persist amid property slump, with some NPL ratios up to 1.3%.

AI generated, for reference only

Who’s Who

China Construction Bank: China Construction Bank (CCB) led revenue growth among six major state-owned lenders, with an 11.15% year-on-year increase in Q1 2026, accelerating from 2025.

Agricultural Bank of China: In Q1 2026, Agricultural Bank of China (ABC) led revenue growth among six major state-owned banks with 10.5% YoY increase, accelerating from 2025. It also reported the strongest net profit gains, contributing to the sector's average 3.4% profit rise amid stabilizing net interest margins.

Bank of China: Bank of China, among China's six major state-owned banks, reported the strongest net profit gains in Q1 2026, aiding the group's average 3.4% year-on-year increase. Its NPL ratio remained stable. (38 words)

Hua Xia Bank: Hua Xia Bank reported a 35.3% surge in revenue in Q1 2026, significantly outperforming the 5.2% average growth among listed joint-stock banks, which reversed a 2.2% decline in 2025.

Industrial Bank: Industrial Bank posted a slight decline in revenue in Q1 2026, contrasting with the average 5.2% growth among listed joint-stock banks. (24 words)

China Everbright Bank: China Everbright Bank posted a slight revenue decline in Q1 2026, with net profit down 8.1% YoY. Its NPL ratio saw a minor uptick to 1.3% by end-March.

China CITIC Bank: China CITIC Bank, a listed joint-stock bank, achieved net profit growth of around 3% in Q1 2026, amid varying profitability among peers. (28 words)

Ping An Bank: Ping An Bank achieved around 3% growth in net income in Q1 2026, amid joint-stock banks' average revenue growth of 5.2% YoY.

China Minsheng Bank: China Minsheng Bank reported a sharper net profit decline of 9.6% in Q1 2026, contrasting with positive revenue growth of 5.2% on average among listed joint-stock banks. (28 words)

Everbright Securities: Wang Yifeng, chief financial analyst at Everbright Securities, attributed Q1 2026 net interest margin improvements to asset-side factors like stable loan rates around 3.1% and liability-side reductions in high-yield deposit costs. He forecasts further gains from regulatory curbs on interbank deposits, potentially adding 2 basis points to margins.

BoCom: BoCom experienced a minor uptick in its nonperforming loan (NPL) ratio to 1.3% by end-March 2026, amid stable or improving ratios for most lenders.

Postal Savings Bank of China: Postal Savings Bank of China saw a minor uptick in its nonperforming loan (NPL) ratio, reaching 1% by end-March 2026.

Guosheng Securities: Guosheng Securities noted in a research report that local government debt resolution has stabilized corporate risks, but the retail sector remains a primary concern due to weak income expectations, tightened policies, and falling collateral values. It expects banks to use recovered Q1 2026 revenue to increase impairment provisions and strengthen risk buffers.

Fitch Ratings: Fitch Ratings director Xue Huiru estimates corporate real estate loan NPL ratios at 3-4%, far above the 1.5% industry average. She highlights ongoing structural challenges in the property market pressuring asset quality. Mortgage risks are manageable barring sharp repayment declines, but unsecured retail and small-business loans face rising risks, prompting banks to shrink high-risk portfolios.

AI generated, for reference only