Listed banks' net investment income last year showed divergence: state-owned banks made great strides, while joint-stock banks faced some pressure in certain areas.

21st Century Business Herald reporter Yu Qixin

As of the end of March, among publicly listed banks that have already released their 2025 annual reports, their investment net income performance shows a clearly divergent pattern.

Data from Wind shows that state-owned large banks and some city commercial banks have performed strongly, while several joint-stock banks have faced some pressure—so it can be said: “a few are doing well, while a few are not.”

On the one hand, state-owned banks and some city and rural commercial banks are showing a “push forward” stance in financial market business. In 2025, their investment net income year over year rose sharply by 129.46% at China Construction Bank, 54.62% at Industrial and Commercial Bank of China, and 39.96% at Postal Savings Bank of China. Among them, China Construction Bank’s investment net income surged from RMB 21.417 billion in 2024 to RMB 49.144 billion in 2025. With year-over-year growth exceeding 100% from last year’s investment net income, it leads the way with standout performance.

On the other hand, joint-stock banks’ investment income mostly shows a “shrinking” trend. Industrial Bank and Ping An Bank saw their 2025 investment net income decline by 24.54% and 16.79%, respectively. Among them, Industrial Bank’s investment income fell from RMB 36.202 billion to RMB 27.319 billion.

The reporter noted that, under this overall pattern of divergence, banks with excellent performance largely seized dual opportunities arising from macro trends and market volatility.

At a performance briefing, when responding to a reporter’s question, Zhang Yi, president of China Construction Bank, said that the improved contribution from non-interest income stems from strengthening market research and judgment, optimizing investment strategies, and enhancing trading capabilities. The growth rates of related income from foreign exchange gains and losses and equity investment each exceeded 40%.

Regarding the characteristics of the bank’s bond business, Ji Zhihong, deputy president of CCB, said that last year China Construction Bank increased its allocation in bond-related financial investments, which makes the group’s balance sheet more resilient. Its business development is first reflected in closely aligning with changes in the social financing structure, proactively adapting to a new market landscape for bonds, and increasing its allocation to bond assets.

Last year, in the increment of social financing, direct financing for the first time exceeded indirect financing. On the one hand, China Construction Bank fully supported the implementation of an active fiscal policy. Its annual government bond investment totaled RMB 2.8 trillion, ranking among the top in the market. On the other hand, it met the direct financing needs of customers both in and outside China in an all-around way. The growth rate of credit bond investment was relatively fast, and it actively participated in markets for “panda bonds” and offshore RMB bonds, among others. Second, it strengthened proactive active management of bond portfolios, actively responded to complex market conditions, and enhanced the forward-looking nature and adaptability of its strategies.

Ji Zhihong said, “At present, the scale of bonds held by China Construction Bank has exceeded RMB 1.2 trillion, which is relatively large. To effectively enhance value contribution, we have become more proactive and flexible in our investment strategies, and we actively seize market opportunities. In a period when interest rates are relatively low, we have increased our bond sale efforts to revitalize a considerable portion of existing inventory.”

ICBC also seized last year’s opportunities created by ups and downs in the bond market. Last year, its investment net income increased by 54.62% year over year. ICBC’s 2025 annual report states that other non-interest income was RMB 91.973 billion, an increase of RMB 16.972 billion from the prior year, representing growth of 22.6%. Of this, the main reason for the increase in investment income is that realized gains from bond and equity-type investments increased.

At a performance briefing, Yaomingde, ICBC’s deputy president, further analyzed and pointed out that last year’s allocation to major asset classes placed greater emphasis on long-term reserves. In 2025, the stock of social financing size grew by 8.3% year over year. Within that, corporate bonds grew by 6%, and government bonds grew by 17.1%. The proportion of bond investment by the entire society in social financing size has continued to rise. ICBC has fully leveraged the role of a leading bank in supporting national strategies and stabilizing the broader economic landscape, delivering 19.6% growth in bond investments.

Meanwhile, some city commercial banks have also demonstrated flexible adaptability and achieved growth against the trend. For example, Qingdao Bank stated in its annual report that it strengthened dynamic monitoring of the scale and returns of financial investments and carried out bond profit-taking operations when opportunities arose, resulting in an increase in investment income.

Chongqing Bank’s 2025 investment net income reached RMB 2.758 billion, up 16.76% from 2024. In its annual report, the bank clearly pointed out that the increase in investment income was mainly due to higher investment income generated from the disposal of bonds and fund investments during the current year.

In terms of the contribution of investment net income to net profit attributable to shareholders, differences among banks are also significant. At Postal Savings Bank and Wuxi Bank, the proportion of this income to net profit attributable to shareholders is as high as 50.78% and 54.26%, respectively, making the phenomenon of investment income “supplying blood” to profits relatively evident.

By contrast, for ICBC, China Construction Bank, and China Merchants Bank, this proportion is relatively lower—17.17%, 14.50%, and 24.53%, respectively—reflecting a more diversified structure of profit sources and a lighter dependence on investment income.

At the same time, several joint-stock banks also experienced year-over-year declines in investment income in 2025. In the related explanations in their annual reports, market volatility is generally considered the main reason. For example, last year Industrial Bank’s investment net income fell 24.54% year over year, and Ping An Bank declined 16.79%.

At a performance explanation meeting, Zhang Ting, deputy president of Industrial Bank, said that in recent years, Industrial Bank’s financial market investment and trading income has maintained relatively rapid growth, mainly sourced from fixed-income coupon income, trading income, and derivative income. “The Industrial Bank Fund and Treasury Operations Center that undertakes these responsibilities saw its assessed operating income increase by nearly RMB 9 billion over a three-year period, making a positive contribution to the growth of income across the whole bank.”

For the year-over-year decline in investment income in 2025, some banks provided detailed explanations in their annual reports. In its annual report, Ping An Bank stated that other non-interest net income declined 33.0% year over year, mainly due to market volatility; non-interest net income from businesses such as bond investment declined.

Similarly, Bank of Communications also mentioned in its 2025 annual report that during the reporting period, this group achieved other non-interest income of RMB 53.813 billion, up RMB 7.33 billion year over year. Among them, the combined net investment income and net gains/losses from fair value changes totaled RMB 25.295 billion, down RMB 4.283 billion year over year, a decline of 14.48%. This was mainly influenced by factors such as market interest rate fluctuations, resulting in year-over-year decreases in profit/loss related to bonds and interest rate derivatives.

In its annual report, CITIC Bank stated that the decline in other non-interest income was mainly driven by capital market volatility and a relatively high base in the same period. However, the bank also sent a positive signal: after years of reforms in financial market business and the building of a capability framework, under conditions of increasingly intense market interest rate volatility, it will continue to enhance its level of refined management, make forward-looking plans for long-term allocations to major asset classes, improve trading turnover efficiency, and expand the breadth and depth of its trading strategies. In the second half of 2025, investment income improved quarter over quarter.

Worth noting is that the internal performance of joint-stock banks also shows some divergence. For example, last year China Merchants Bank achieved a 23.28% year-over-year positive growth in investment net income.

As for rural commercial banks, Yunnan Rural Commercial Bank’s 2025 investment net income was RMB 4.087 billion, down 2.65% from RMB 4.198 billion in 2024. In its annual report, the bank provided a detailed explanation of the reasons for the decline: net losses and gains from investment income and fair value changes were RMB 2.993 billion, down RMB 0.855 billion year over year. This was mainly due to market interest rate fluctuations, which led to lower yields on trading financial assets such as fund investments; investment income and net gains/losses from fair value changes were also worse than in the same period last year.

Overall, after bidding farewell to the hot bond-market行情 of 2024, some institutions last year responded to market volatility and sought returns by expanding the diversification of asset categories.

A trader in the gold and bond markets department of a certain state-owned large bank told the reporter from 21st Century Business Herald: “In 2025, the contribution of bonds to our bank’s net profit has become relatively limited.” An investment professional from a city commercial bank’s gold and bond markets department also told the reporter: “Last year, our team was working toward gold and U.S. Treasuries. In the context of low volatility in the secondary trading market for government bonds last year, it was much harder for the trading desk to ‘manufacture’ excess returns than in 2024.”

In addition, the reporter noted that recent market discussions have been heating up around ‘restrictions on city and rural commercial banks’ proprietary investments in private debt and ABS.’ Some market voices believe that as restrictions tighten further, it will become more difficult for banks’ proprietary trading businesses to dig into higher-yield asset varieties. But several proprietary investment and trading professionals told the reporter: ‘That’s what is being invested in on the investment-banking side. For our gold and bond markets business, it doesn’t have much impact, and the overall position ratio is very small.’

At a performance briefing, Yao Mingde, deputy president and chief financial officer of ICBC, said: “What we need to see is that, currently, the yield on新增 bond investment income is still declining, and the bond asset repricing cycle is generally longer than that of loan assets. The impact in a period of falling interest rates is also a process of gradual release. In the short term, it will affect net interest margins to some extent. In the medium and long term, it will contribute to future asset reserves, earnings reserves, and value reserves.”

At a performance briefing, Zhang Yi, president of China Construction Bank, said that as of now, there are still many uncertainties in the market, especially that geopolitical factors have recently caused some impact on financial markets. “We need to pay attention to how much to what extent the rise in short-term energy prices will change market inflation expectations and risk appetite. Overall, however, domestic liquidity conditions are stable, while external market volatility is larger. Of course, domestic markets such as stocks, bonds, and FX also have linkage effects, and traditional safe-haven assets such as gold show risk characteristics different from before.”

Looking ahead, market uncertainties will remain the main challenge faced by banks’ investment businesses. Zhang Yi pointed out that China Construction Bank will adhere to the operating principles of “safe and steady, value investing,” and do a good job in responding in terms of bond categories, duration, and account strategy—balancing bond investment with trading business. It will focus on several areas, such as proactively adapting to changes in market and customer needs, and strengthening the value creation and customer service functions of the bond business.

He said, “We have noticed that in recent years, the RMB bond market has been developing at a very fast pace with strong opening up efforts. Now it is very convenient for domestic companies to issue dim sum bonds at offshore issuance points, and overseas companies can also issue panda bonds in China. China Construction Bank will strengthen overall group-level coordination and optimize the layout of bond investments in China and abroad, and in both RMB and foreign currencies.”

Regarding the offshore investment market, Zhang Yi further said that CCB (Asia), as the bank’s flagship institution overseas, is very active in investment and trading in the Hong Kong market. Jian Yin International is also actively participating in bond market making in Hong Kong, and its fixed-income business has good momentum. As Hong Kong’s financial market and the offshore RMB market continue to expand, “our development potential in this area is very large.”