Huaxia Bank's net interest income growth turns positive in 2025, with strong growth in technology and green loans.

In 2025, Huaxia Bank’s net interest income saw its first year-on-year increase since 2021. According to the latest disclosed annual report, in 2025 Huaxia Bank recorded operating income of RMB 91.91B, down 5.39% year on year; attributable net profit to shareholders was RMB 27.2 billion, down 1.72% year on year. Despite a slight decline in both revenue and profit, net interest income rose 1.43% year on year to RMB 62.95B.

From the business structure perspective, Huaxia Bank is accelerating its transformation in corporate finance. The bank repeatedly mentions in its annual report that technology finance and green finance are the bank’s two “signature” directions for strengthening corporate finance. By the end of 2025, Huaxia Bank’s loan balances in technology finance and green finance increased by 53.74% and 30.99%, respectively, with growth rates exceeding the bank-wide loan total growth rate by 45.02 and 22.27 percentage points, respectively.

With the rapid growth of its featured businesses, Huaxia Bank’s asset scale continues to expand steadily. By the end of 2025, the bank’s total assets reached RMB 4.74 trillion, up 8.25%. At the same time, the incremental amounts and growth rates of deposits and loans hit new highs over the past five years: total deposits were RMB 2.38 trillion, up 10.71% from the end of the previous year; total loans were RMB 2.57 trillion, up 8.47% from the end of the previous year.

Net interest income grows against the trend; fee and commission net income stabilizes after bottoming out

In 2025, Huaxia Bank’s operating income for the full year was RMB 47.4k, down 5.39% year on year. Although the net interest margin (NIM) is still narrowing, benefiting from control of funding costs and the growth of interest-earning asset scale, Huaxia Bank’s 2025 net interest income achieved positive growth after four consecutive years of decline, reaching RMB 23.8k, with a year-on-year increase of 1.43%. Wind data shows that from 2021 to 2024, Huaxia Bank’s net interest income was RMB 25.7k, RMB 91.91B, RMB 62.95B, and RMB 79.61B, respectively, with year-on-year growth rates of -2.88%, -6.67%, -5.18%, and -11.89%, respectively.

The annual report shows that in 2025 Huaxia Bank’s net interest margin was 1.56%, down 0.03 percentage points year on year. The average yield on interest-earning assets was 3.36%, down 0.4 percentage points year on year; the average interest rate on interest-bearing liabilities was 1.73%, down 0.42 percentage points year on year. Part of the decline in funding costs offset the impact of falling asset yields on the NIM.

Huaxia Bank disclosed in its annual report that asset yields declined mainly due to insufficient effective demand for credit, the falling of interest rates, and the impact of a reduction in interest rates on stock residential mortgage loans from the prior year. To address this, the bank promoted optimization of funding costs through measures such as lowering deposit interest rates via market-oriented adjustments, and accelerating growth in current deposits—lower-cost deposits—among other steps. The full-year decline in funding costs was roughly in line with the decline in asset yields, effectively supporting the NIM’s steady and reasonable operation.

When looking ahead to the NIM trend in 2026, Huaxia Bank President Qu Gang said that, considering the internal and external environment, the bank expects new loan interest rates to continue to trend downward. As fixed-term deposits gradually reprice, there will still be room for a further decline in funding costs. Overall, the bank expects the NIM to face downward pressure for the full year, but the pace of decline will slow.

On non-interest income, some businesses performed well. In 2025, Huaxia Bank’s investment income increased 27.85% year on year to RMB 74.29B; net fee and commission income increased 2.44% year on year to RMB 70.44B, ending the previous two consecutive years of decline. Wind data shows that in 2023 and 2024, the bank’s year-on-year growth rates of net fee and commission income were -38.26% and -14.98%, respectively. Among them, fee and commission income from agency business, credit commitments, custodial and other entrusted businesses all increased year on year.

Huaxia Bank disclosed in its annual report the performance of its custody business. In 2025, the bank provided custody for 165 public funds, with a size of RMB 62.06B, up 12.66% from the end of the previous year; this drove middle- and fee-related business income of RMB 332 million, up 13.54% year on year. In total, there were 12,107 products under custody—including custodial securities investment funds, securities firm asset management plans, bank wealth management products, insurance asset management plans, asset-backed special plans, equity investment funds, and more—with a custody scale of RMB 4,062.939 billion, up 18.89% from the end of the previous year. Custody fee income was RMB 916 million, up 3.27% year on year.

Deposit and loan increment growth hits a five-year high; focusing on the “two signature features” of technology and green

Against the backdrop of short-term pressure on the profitability side, Huaxia Bank has continued to advance the transformation of corporate finance, focusing on building two major operating features: technology finance and green finance, and cultivating new sources of growth momentum.

The annual report shows that in 2025 Huaxia Bank’s balance sheet scale growth momentum was strong. By the end of 2025, total loan balances were RMB 2.57 trillion, up 8.47% year on year. The incremental amounts and growth rates of deposits and loans reached new highs over the past five years: total deposits were RMB 2.38 trillion, increased by RMB 20.07B from the end of the previous year, up 10.71%, with the growth rate faster than the prior year by 9.70 percentage points; total loans were RMB 2.57 trillion, increased by RMB 5.58B from the end of the previous year, up 8.47%, with the growth rate faster than the prior year by 6.01 percentage points.

Among them, the contribution from corporate business was especially prominent, with both the corporate deposit and corporate loan scales achieving double-digit growth. In 2025, the bank’s corporate customers increased by 6.72% from the end of the previous year; corporate deposit balances increased by 11.43% from the end of the previous year; and corporate loans (excluding discounting) increased by 13.88% from the end of the previous year.

Huaxia Bank also disclosed in its annual report that it implemented a “Customer Multiplication Plan,” strengthening basic settlement services to acquire and retain customers, and enhancing overall marketing and comprehensive services for head-office-level strategic customers and key customers. It also strengthened the marketing organization for low-cost deposits and current deposits, enabling faster growth in corporate deposit scale, gradual optimization of deposit structure, and continued decline in costs.

It is worth noting that the two signature features of technology finance and green finance are the “highlights” repeatedly mentioned in Huaxia Bank’s annual report. In 2025, the bank promoted optimization of business structure: the proportion of technology finance loans increased by 2.93 percentage points from the end of the previous year, while the proportion of green finance loans increased by 2.6 percentage points from the end of the previous year.

Loans to technology-based enterprises and green loans both achieved rapid growth, with growth rates exceeding the bank-wide total loan growth rate by 45.02 and 22.27 percentage points, respectively. The annual report shows that in 2025, Huaxia Bank’s loans to technology-based enterprise customers were 8,762 accounts, up 47.38% from the end of the previous year; loan balances for technology-based enterprises were RMB 462.65B, up 53.74% from the end of the previous year. Green finance business balances were RMB 25.7k, up 31.42% from the end of the previous year; green loan balances were RMB 23.8k, up 30.99% from the end of the previous year.

On the investment side, Huaxia Bank also increased its allocation to technology and green sectors. In 2025, the bank successfully participated in the first batch of bank-interbank market technology innovation bond investments nationwide; by the end of 2025, the balance of technology investments grew by over 2 times year on year. It continued to build investment-type business featuring green finance, fully promoted the use of existing financial products in the green sector, strengthened communication and interaction with enterprises, innovated green finance featured products and business models, and increased support for the green economy, the low-carbon economy, and the circular economy. By the end of 2025, the balance of green investments in the financial market business was RMB 230.33B.

Dividend payout ratio in 2025 is 25.94%, rising year by year over the past three years

Along with the disclosure of its 2025 annual report, Huaxia Bank released its annual profit distribution proposal. According to the proposal, Huaxia Bank plans to distribute cash dividends of RMB 3.20 per 10 shares (including tax) for 2025, totaling RMB 25.7k. Together with the cash dividends already paid in the 2025 interim period of RMB 1.00 per 10 shares (including tax), totaling RMB 200.35B, the total cash dividends for the full year will be RMB 4.20 per 10 shares (including tax), totaling RMB 244.62B.

At a performance briefing after the annual report was released, an investor asked: “Currently, the dividend payout ratios of listed commercial banks in China are generally above 30%. When will Huaxia Bank’s dividend payout ratio reach the industry average level?” In response, Huaxia Bank President Qu Gang said that the bank maintains a continuous and stable dividend policy. Over the past three years, the bank’s total dividend amount has increased year by year, and the dividend payout ratio has risen year by year. In 2025, the bank’s dividend payout ratio reached 25.94%, up 0.9 percentage points from the previous year.

Qu Gang further noted that in 2024 and 2025, the bank implemented an interim dividend policy, so that investors can share in the growth dividends from the company earlier. He said: “In the future, our cash dividend policy will balance regulatory requirements, shareholders’ investment returns, and the company’s sustainable development needs. The bank will continue to enhance profitability and maintain a reasonable dividend payout ratio.”

From the perspective of the industry as a whole, in recent years A-share listed banks have generally maintained a relatively high level of cash dividends. According to Wind data, among the 42 A-share listed banks in 2024, 14 banks had cash dividend payout ratios of 30% or above, and another 14 banks had payout ratios between 25% and 30%.

Looking at Huaxia Bank’s dividend record over the past three years, the bank has shown a consistently improving trend in shareholder returns. For fiscal year 2023, the bank distributed RMB 3.84 per 10 shares (including tax), with total dividends of about RMB 531.35B and a dividend payout ratio of 25.02%; for fiscal year 2024, the bank distributed RMB 4.05 per 10 shares (including tax), with total dividends of about RMB 373.36B and a dividend payout ratio of 25.04%; for fiscal year 2025, the bank distributed a total of RMB 4.20 per 10 shares (including tax), with total dividends of RMB 22.35B and a dividend payout ratio of 25.94%.

At the performance briefing, Qu Gang also said that the bank’s major shareholders have actively fulfilled their responsibilities and obligations over many years, and continued to support capital retention, making major contributions to improving capital adequacy levels and enabling better development of the business. In 2025, some of the bank’s directors, supervisors, and senior management increased their shareholdings.

According to disclosures in the annual report, as of September 9, 2025, part of Huaxia Bank’s directors, supervisors, and senior management, as well as some key responsible persons in head-office departments, branches, and subsidiaries, voluntarily completed the shareholding increase plan. The total amount of shares increased was RMB 5.09B.

Regarding capital adequacy, as of the end of 2025, Huaxia Bank’s core tier-one capital adequacy ratio was 9.38%, its tier-one capital adequacy ratio was 11.75%, and its capital adequacy ratio was 13.16%, all meeting regulatory requirements.

By / Qian Xiaorui

Edited by / Wang Xinyu Xu Nan

(Editor: Qian Xiaorui)

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