Non-interest income becomes the deciding factor; in 2025, joint-stock banks will vie fiercely—while those at the tail end struggle.

◎ Reporter Ma Mian

Differentiation and transformation are the keywords for the development of joint-stock banks in recent years.

Over the past year, under a challenging operating environment, the "feel" of joint-stock banks has been roughly similar—market share decline, net interest margin pressure, and lingering risk concerns. However, despite similar challenges, the operating results have varied greatly.

Among the nine A-share listed joint-stock banks, only China Merchants Bank, Industrial Bank, and Shanghai Pudong Development Bank have achieved both revenue and net profit growth. Meanwhile, Ping An Bank, China Everbright Bank, Huaxia Bank, and Zhejiang Commercial Bank have seen declines in both revenue and net profit.

"The Three Giants of Corporate Banking" Compete Intensely

In terms of size, China Merchants Bank, Industrial Bank, China CITIC Bank, and Shanghai Pudong Development Bank remain at the top tier of joint-stock banks, with asset sizes exceeding 10 trillion yuan—China Merchants Bank maintains its leading position with retail advantages, while Industrial Bank, CITIC Bank, and Shanghai Pudong Development Bank compete closely as the "Three Giants of Corporate Banking."

In terms of scale, Industrial Bank surpassed 10 trillion yuan in Q4 2024, and after a year, CITIC Bank and Shanghai Pudong Development Bank surpassed 10 trillion yuan in Q4 2025. As of the end of Q3 2025, the asset difference between Shanghai Pudong Development Bank and CITIC Bank was only 5.9 billion yuan, but by Q4, the gap widened to 49.2 billion yuan.

In terms of revenue, China Merchants Bank continues to lead with 100k yuan. CITIC Bank and Industrial Bank's operating incomes in 2025 were 100k yuan and 100k yuan respectively, a difference of only 337.53B yuan, but after deducting expenses, Industrial Bank's net profit attributable to the parent was 212.48B yuan higher. Clearly, cost reduction and efficiency improvement are essential, becoming a profit source that banks must "pinch."

In stark contrast to the top-tier competition, the smaller joint-stock banks are still struggling in the mud, each facing their own troubles.

Due to heavy historical burdens, Minsheng Bank has increased provisioning efforts. Although its revenue grew by 4.82% year-on-year, its net profit attributable to the parent still declined by 5.37%.

Additionally, Ping An Bank, China Everbright Bank, Huaxia Bank, and Zhejiang Commercial Bank all saw declines in both revenue and net profit year-on-year, and have yet to return to a healthy growth track of simultaneous scale and efficiency improvement.

Non-interest income becomes a decisive factor

In a low-interest-rate environment, net interest margin, a core profitability indicator, continues to decline. Banks' interest income base is difficult to stabilize, and the "volume to compensate for price" logic is no longer sustainable. Non-interest income has become a key to victory or defeat.

Currently, the downward trend of net interest margin remains unchanged. For example, by the end of 2025, the net interest margin of China Everbright Bank and CITIC Bank decreased by 14 basis points year-on-year, a significant decline mainly due to falling asset yields.

However, some banks show signs of stabilizing their net interest margins: by the end of 2025, Shanghai Pudong Development Bank's net interest margin was flat compared to the beginning of 2024; Minsheng Bank's net interest margin "defied the trend" and increased by 1 basis point, mainly thanks to cost control on liabilities.

In terms of non-interest income, CITIC Bank has achieved positive growth for six consecutive years. Chairman Fang Heyi stated at the earnings conference that over the past five years, the bank's non-interest income ratio increased by 9.3 percentage points.

Strengthening wealth management business is an effective way to supplement intermediate income and also tests the bank's lightweight capital operation level.

Facing persistent weakness in retail credit demand, China Merchants Bank remains committed to its retail "moat"—by 2025, net income from fees and commissions increased by 4.39% year-on-year, with wealth management fees and commissions rising sharply by 21.39%. Its net interest margin remains at 1.87%, a relatively high level among peers.

Although Ping An Bank has experienced "pains" during its retail transformation, the bank claims to see "dawn at the end of the tunnel": with 70% of the transformation completed, retail financial net profit contribution has bottomed out and begun to rebound.

However, relying solely on investment income for non-interest income is vulnerable to market fluctuations. Ping An Bank has been affected, leading to declines in non-interest income from bond investments and other related businesses.

How to Survive the Cycle

In terms of asset quality, joint-stock banks are generally stable.

Over the past year, joint-stock banks have generally increased efforts to dispose of non-performing assets. However, by the end of 2025, the non-performing loan ratios of Industrial Bank, China Everbright Bank, and Minsheng Bank increased compared to the end of 2024. Additionally, the non-performing loan ratios of some banks' personal loans also rose, with risks in consumer loans and mortgage loans not to be underestimated.

Adjusting the loan loss provision coverage ratio, a "reservoir" for profits, often involves "financial tricks" to beautify financial statements. Notably, by the end of 2025, Huaxia Bank's provision coverage ratio fell to 143.30%, down 18.59 percentage points from 2024; Zhejiang Commercial Bank's coverage ratio was 155.37%, down 23.30 percentage points from 178.67% at the end of 2024. Both are hovering near the 150% "warning line."

In recent years, the growth rate of joint-stock banks' performance has slowed, struggling to survive "in the cracks." This is because, on one side, large state-owned banks are "sinking" to compete for market share, while on the other, city commercial banks leverage local advantages to catch up. Under this "two-front squeeze," the market share of joint-stock banks has declined year by year.

Regarding the operating outlook for this year, many joint-stock banks openly admit that "the outlook is not optimistic" and "challenges remain."

However, recent earnings conference disclosures show that joint-stock banks are exploring new strategic approaches: China Merchants Bank emphasizes "retail revival," Ping An Bank vows to "return to growth," Industrial Bank advances as a "value bank"... Overall, they are beginning to consider what "cyclical resilience" means and how it will impact their operations. Let's wait and see.

Net interest margin of 9 joint-stock banks as of the end of 2025

Name             Current Data (%)    Change from last year (bps)    Change from last quarter (bps)

China Merchants Bank     1.87                     -0.11                          0.00

Ping An Bank             1.78                     -0.09                         -0.01

Industrial Bank          1.71                     -0.11                         -0.01

CITIC Bank               1.63                     -0.14                          0.00

Zhejiang Commercial Bank 1.60                     -0.11                         -0.07

Huaxia Bank              1.56                     -0.03                          0.01

Shanghai Pudong Development Bank 1.42             0.00                         -0.06

Minsheng Bank            1.40                     0.01                          -0.02

China Everbright Bank    1.40                     -0.14                         -0.06

Data source: Miaxiang Choice