Leading the growth among state-owned banks! Live coverage of the Bank of Communications earnings call: 12.3 billion yuan in technology investment, AI mentioned 30 times in the annual report

This article is sourced from: Economic Observer Author: Huang Yukun

On March 27, Bank of Communications released its 2025 annual report. The data shows that, as of the end of 2025, the bank’s total assets surpassed 15.5 trillion yuan, up 4.35% from the end of the previous year. Growth rates in operating income and net profit attributable to the parent both exceeded 2%.

In addition to Bank of Communications, on the evening of March 27, three other major state-owned banks—including Industrial and Commercial Bank of China, Postal Savings Bank of China, and China Construction Bank—also released their 2025 annual performance. In a horizontal comparison, Bank of Communications’ growth rates in both operating revenue and net profit attributable to the parent were higher than those of the other three major state-owned banks.

While performance continued to grow steadily, Bank of Communications’ dividend level has also been kept on rising. According to the bank’s 2025 profit distribution plan, it plans to distribute cash of 14.88 billion yuan; together with the interim dividend already paid earlier, the total dividends for 2025 will reach 155k yuan, with a cash dividend payout ratio of 32%.

At the performance briefing held that day, Zhang Baojiang, Vice Chairman of the Board and President of Bank of Communications, said that the bank has always attached great importance to investor returns. During the “14th Five-Year Plan” period, it has cumulatively distributed cash dividends of 123.9 billion yuan to all shareholders, and the dividend payout ratio has remained above 30% for 14 consecutive years.

“Compared with 2024, the total cash dividend amount for Bank of Communications in 2025 increased by nearly 2%. This is mainly because our business development has been steady and progressing, and overall performance has been improving. Continuous positive growth in net profit increases the amount of profits available for distribution. In 2026, we are confident we will continue to repay shareholders with strong performance and steady dividends.” Zhang Baojiang said.

Source: Bank of Communications 2025 performance briefing

Interest spread stabilizes; a relatively large proportion of fixed deposits matures in the first quarter

“Given the continued decline in interest rates and insufficient effective demand, we adhere to overall planning that balances ‘volume and pricing with risk considerations,’ strengthen internal management, seize external trend-based opportunities, and strive to address the uncertainty of the external environment with the certainty of our own work. In the full year, four core indicators—net profit attributable to the parent, net operating income, net interest income, and fee and commission net income—recorded positive growth, maintaining an overall trend of steady improvement.” Zhang Baojiang said in the annual report address.

Specifically, in 2025, Bank of Communications achieved operating income of 28.69B yuan, up 2.02% year on year; it achieved net profit attributable to the parent of 265.07B yuan, up 2.18% year on year, equivalent to earning 262 million yuan per day.

From the revenue structure perspective, in 2025 Bank of Communications’ net interest income was 95.62B yuan, up 1.91% year on year. Non-interest net income was 173.08B yuan, up 2.22% year on year. Among this, net fee and commission income was 92B yuan, up 3.44%. Growth in wealth management income such as agency services and wealth management products has been relatively strong. In the annual report, the bank said this is mainly because it has continued to deepen its wealth management-focused distinctive positioning and built its characteristic capabilities; income from wealth management and entrusted fund sales has increased.

At present, the banking industry is still facing pressure on the interest spread. In 2025, Bank of Communications’ net interest margin was 1.20%, down 7 basis points year on year. The bank said the main reason is that asset-side yields fell by a larger amount. Affected by factors including the LPR cut and intense industry competition under conditions of stronger supply than demand, the yield on customer loans declined by 58 basis points year on year. Meanwhile, the overall downward movement of the market interest rate mid-point drove a 25-basis-point decline in securities investment yields.

Zhou Wanfu, Executive Director and Vice President of Bank of Communications, said at the performance meeting that since last year, through efforts on multiple fronts, Bank of Communications has kept the interest spread basically stable starting from the third quarter of last year. After a large amount of time deposits matured and were repriced, deposit interest expense costs will decline clearly. “From the situation of Bank of Communications, the amount of fixed deposits maturing this year is obviously higher than last year, and a relatively large proportion is concentrated in the first quarter,” Zhou Wanfu said.

Zhou Wanfu said Bank of Communications will work to maintain the interest spread stabilizing and improving from three aspects: first, strictly manage the balance of deposit and loan volume and pricing; second, implement refined deposit and loan pricing management and strictly comply with the requirements of pricing self-discipline mechanisms; third, scientifically optimize and arrange the asset-liability structure.

Nonperforming loan ratio declines for the fifth consecutive time, hitting a new low in nearly a decade

As for asset quality, as of the end of 2025, Bank of Communications’ balance of nonperforming loans was 38.18B yuan, up 116.98B yuan from the end of the previous year. The nonperforming loan ratio was 1.28%, down 0.03 percentage points from the end of the previous year. Of note, the nonperforming loan ratio has declined for five consecutive years, reaching a new low in nearly a decade.

At the performance meeting, Vice President Gu Bin frankly acknowledged that the bank is currently facing relatively significant pressure on asset quality, mainly in retail credit and small business credit. The incremental increase in nonperforming loans in 2025 mainly came from there.

The annual report of Bank of Communications shows that, affected by the macroeconomic environment and the downturn in the real estate market, asset quality pressure across domestic banks’ retail lending has increased overall. As of the end of 2025, the bank’s personal loan nonperforming loan ratio was 1.58%, up somewhat from the end of the previous year. The trend of change is basically consistent with that of major peers.

Gu Bin said that asset quality control this year will still face certain pressure. First, affected by borrowers’ repayment capacity and a decline in market demand, asset quality in retail credit and small business credit is expected to face pressure as well this year. Second, the real estate market is still in a phase of bottoming out and stabilizing, and real estate risks will continue to be closely watched. Third, in some industries, competition has become relatively homogeneous, which leads to compressed corporate profit margins and increased operational differentiation; Bank of Communications will continue to monitor how companies in these industries are operating and how subsequent risks change.

Regarding 2026 asset quality control measures for retail credit business, Gu Bin said the bank will further integrate internal resources and strengthen its risk management and control force for retail business. Through coordinating and formulating credit granting policies, entry controls, post-loan monitoring and inspections, overdue collection, and disposal of nonperforming asset clean-up, it will turn “passive firefighting” into “active reinforcement.”

“This year, we will carry out a special campaign to improve retail asset quality for 2026, and we will push ahead on three fronts: ‘cleaning up the sludge, unblocking channels, and sealing leaks.’ We will develop a series of measures and strive to reverse the downward trend in retail credit asset quality as soon as possible.” Gu Bin emphasized.

Technology investment has exceeded 10 billion yuan for four consecutive years; the “AI” content has increased significantly

In recent years, Bank of Communications has always maintained a relatively high proportion of technology investment.

From 2022 to 2024, Bank of Communications’ investment in financial technology was 5.31B yuan, 12.03B yuan, and 12.34B yuan, respectively, staying above 10 billion yuan throughout.

According to the latest data, in 2025 Bank of Communications’ financial technology investment was 12.342 billion yuan, up 6.81% year on year. Its share of operating income reached 5.78%, up 0.32 percentage points year on year. As of the end of 2025, the bank had 9,782 financial technology personnel, up 8.20% from the end of the previous year. This accounted for 9.99% of total employees, up 0.55 percentage points from the end of the previous year.

A reporter from Economic Observer noted that compared with previous years, in the 2025 annual report of Bank of Communications, the mention frequency of “AI” and “artificial intelligence” has clearly increased to 30 times, becoming one of the keywords for the bank’s future development.

According to Bank of Communications’ annual report, the bank has already rolled out multiple AI application scenarios. These include adding AI product interpretation to the wealth management system and features such as AI-assisted generation of investment and research viewpoints, to meet customers’ needs for personalized asset allocation; using AI and other technologies to enable online and automated processing of consumer rights and interests protection review, complaint management, and financial education; and launching an intelligent assistant to realize the application of AI agents in the bank’s corporate e-banking channels, improving the customer experience and service efficiency, among other areas.

At the performance meeting, Qian Bin, Vice President and Chief Information Officer of Bank of Communications, introduced that during the “14th Five-Year Plan” period, the bank proposed to build a new corporate identity card for Bank of Communications’ artificial intelligence, treating artificial intelligence as a core direction for building a digital Bank of Communications. In 2025, the bank further issued the “Artificial Intelligence +” action plan for Bank of Communications, further strengthening the foundation for AI development.

“In 2025, Bank of Communications’ technology investment was 12.3 billion yuan. A very significant portion of that investment is put into the AI field. The bank’s scale of intelligent computing in the whole year increased by more than 50% compared with the previous year. We have cumulatively deployed more than 2,500 AI agent assistants, and achieved remarkable results in scenarios such as retail inclusive finance, risk credit granting, and operational customer service.” Qian Bin said. Looking ahead, the bank will firmly and unswervingly treat the deployment and application of artificial intelligence as an important breakthrough direction in its “15th Five-Year Plan,” increase resource investment, apply new-quality productive forces, reduce costs, improve quality, and enhance efficiency, and achieve high-quality development.