Industrial analysis: By the fourth quarter of 2025, the stable growth in quantity and price will help banks achieve positive net profit growth.

Industrial Research released a research report, stating that the banking industry will show positive changes in operation by 2025, with a year-on-year increase in net profit, reversing the negative growth trend seen in the previous four consecutive quarters. Net interest margin has remained stable at 1.42% for three consecutive quarters, and while it may continue to bottom out in the future, some banks are expected to stabilize. Overall, total assets growth has rebounded, but with clear differentiation in structure. The core solvency ratio of the insurance industry has also decreased for two consecutive quarters, indicating that the industry as a whole still faces challenges. Key points from the Industrial Research report are as follows: Event On February 12, 2026, the China Banking and Insurance Regulatory Commission published the main regulatory indicators data for the banking and insurance industries for the fourth quarter of 2025. Profit Situation In 2025, banks accumulated a net profit of 2.38 trillion yuan, a year-on-year increase of 2.33%, reversing the trend of consecutive negative growth seen in the previous four quarters. Net Interest Margin In the second half of 2025, the stability of net interest margin was a key factor in achieving positive growth in bank net profit. The net interest margin for banks in 2025 was 1.42%, which remained unchanged for three consecutive quarters. Looking ahead, under the overall requirement of low comprehensive financing costs in society, although the net interest margin of Chinese banks may continue to bottom out, the phenomenon of some banks stabilizing their net interest margin on a monthly basis will continue to emerge due to the continuous promotion of stabilizing interest margins. Total Asset Growth By the end of 2025, the total asset growth of banks had rebounded compared to the end of the third quarter of 2025, which was also an important reason for the rebound in bank net profit. It is worth noting that the total asset growth of city commercial banks and rural commercial banks decreased compared to state-owned large banks and joint-stock banks. The slowdown in the total asset growth of rural commercial banks may also be closely related to certain difficulties in asset deployment. Capital Situation Although the capital adequacy ratio, Tier 1 capital adequacy ratio, and core Tier 1 capital adequacy ratio of banks had increased by the end of 2025 compared to the end of the third quarter of 2025, the month-on-month increase was at a historically low level. Asset Quality Situation By the end of 2025, the provision coverage ratio of commercial banks was 205.21%, a decrease of 1.94 percentage points compared to the end of the third quarter of 2025, declining for two consecutive quarters on a month-on-month basis. At the same time, the core solvency ratio of insurance companies at the end of 2025 was 130.40%, a decrease of 3.90 percentage points compared to the end of the third quarter of 2025, declining for two consecutive quarters on a month-on-month basis.