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 generated operating income of RMB 91.91B, down 5.39% year-on-year; attributable net profit to common shareholders was RMB 27.2 billion, down 1.72% year-on-year. Although both revenue and profit fell slightly, net interest income grew 1.43% year-on-year to RMB 62.95B.

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

With the rapid growth of its featured businesses, Huaxia Bank’s asset size has been steadily expanding. As of the end of 2025, the bank’s total assets reached RMB 4.74 trillion, up 8.25% year-on-year. Meanwhile, incremental deposit and loan growth rates 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 rises against the trend, while net fee and commission income stabilizes after bottoming out

In 2025, Huaxia Bank recorded full-year operating income of RMB 47.4k, down 5.39% year-on-year. Although the interest spread continues to narrow, thanks to control over funding costs and growth in interest-earning asset scale, after four consecutive years of decline, Huaxia Bank’s net interest income returned to positive growth in 2025, 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%.

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 rate on interest-bearing liabilities was 1.73%, down 0.42 percentage points year-on-year. A portion of the decline in funding costs offset the impact of the decline in asset yields on the interest spread.

Huaxia Bank disclosed in the annual report that the yield on its assets declined mainly due to insufficient effective demand for credit, interest rate declines, and the impact of lower interest rates on existing stock mortgage loans from the previous year. To address this, the bank advanced optimization of funding costs through measures such as lowering deposit interest rates via market-based mechanisms and accelerating growth in low-cost demand deposits. The full-year decline was roughly comparable to the decline in asset yields, effectively supporting the interest spread’s reasonable and steady operation.

When discussing the expected trend of the interest spread in 2026, Huaxia Bank President Qú Gāng said that, considering both internal and external conditions, the bank expects that the interest rates on newly issued loans will continue to move downward. As term deposits gradually reprice, there is still room for funding costs to decline in the future. The bank expects full-year pressure on the interest spread to remain, but that the magnitude of the decline will slow.

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

Huaxia Bank disclosed the performance of its custody business in the annual report. In 2025, it 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 RMB 332 million in intermediary business income, up 13.54% year-on-year. In total, across various products including custody of securities investment funds, securities firms’ asset management plans, bank wealth management products, insurance asset management plans, asset-backed special plans, equity investment funds, and others, there were 12,107 products in custody, with custody scale of RMB 20.07B, up 18.89% from the end of the previous year, generating custody fee income of RMB 916 million, up 3.27% year-on-year.

Loan and deposit incremental growth rates reach a five-year high; focus on technology and green “two distinctive features”

Against the backdrop of short-term pressure on the profit side, Huaxia Bank continues to推进 the transformation of corporate finance, striving to build two major operating characteristics—technology finance and green finance—and cultivate new growth momentum.

The annual report shows that in 2025 Huaxia Bank’s balance-sheet growth momentum was strong. As of the end of 2025, outstanding loans across all categories were RMB 2.57 trillion, up 8.47% year-on-year. Incremental deposits and loans and their growth rates reached new highs over the past five years. Total deposits were RMB 2.38 trillion, an increase of RMB 5.58B from the end of the previous year, up 10.71%; the deposit growth rate was 9.70 percentage points faster than the bank-wide average. Total loans were RMB 2.57 trillion, an increase of RMB 462.65B from the end of the previous year, up 8.47%; the loan growth rate was 6.01 percentage points faster than the bank-wide average.

Among them, the contribution of corporate business is particularly notable, with both corporate deposit and loan scales achieving double-digit growth. In 2025, Huaxia Bank’s corporate customers increased 6.72% from the end of the previous year; corporate deposits increased 11.43% from the end of the previous year; corporate loans (excluding discounted bills) increased 13.88% from the end of the previous year.

Huaxia Bank also disclosed in the annual report that it implemented a “customer doubling plan,” strengthening customer acquisition and retention through basic settlement services to attract and keep customers, improving overall marketing and comprehensive services for head-office-level strategic customers and key customers; strengthening the organization and marketing of low-cost deposits and demand deposits to achieve faster growth in deposit scale, gradual optimization of structure, and continued reduction in costs.

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

Technology-sector enterprise loans and green loans both achieved rapid growth, with growth rates exceeding the bank-wide total loan growth rates by 45.02 and 22.27 percentage points respectively. The annual report shows that in 2025, Huaxia Bank’s technology-sector enterprise loan customers were 8,762, up 47.38% from the end of the previous year; the balance of technology-sector enterprise loans was RMB 4.06T, up 53.74% from the end of the previous year. The balance of green finance business was RMB 25.7k, up 31.42% from the end of the previous year; the balance of green loans was 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 initiatives. In 2025, the bank successfully participated in the first batch of bank-interbank market technology innovation bond investments nationwide; as of the end of 2025, its technology investment balance grew by more than twofold year-on-year. The bank continued to develop specialized green finance investment-type businesses, fully advancing the use of existing financial products in the green sector, strengthening communication and interaction with enterprises, innovating green finance featured products and business models, and increasing support for the green economy, low-carbon economy, and circular economy. By the end of 2025, the balance of green investments within financial market businesses was RMB 230.33B.

2025 dividend payout ratio was 25.94%, increasing 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 fiscal year 2025, totaling RMB 25.7k. Together with the cash dividends already distributed in the 2025 interim period of RMB 1.00 per 10 shares (including tax), totaling RMB 200.35B, the full year would distribute cash dividends of RMB 4.20 per 10 shares (including tax), totaling RMB 244.62B.

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

Qú Gāng further noted that in 2024 and 2025 the bank implemented interim dividend policies, enabling investors to share in the company’s growth dividends earlier. He said: “In the future, the cash dividend policy will balance regulatory requirements, shareholders’ investment returns, and the company’s sustainable development needs. This bank will continuously enhance its profitability and maintain a reasonable dividend payout ratio.”

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

Looking at Huaxia Bank’s dividend records over the past three years, the bank shows a consistently improving trend in shareholder returns. For FY2023, the bank paid 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 FY2024, the bank paid 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 FY2025, the bank paid a combined 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, Qú Gāng also said that the bank’s major shareholders have actively fulfilled their responsibilities and obligations to shareholders over the years, continuously supporting capital retention, and made significant contributions to improving capital adequacy and better development of its business. In 2025, some directors, supervisors, and senior management of the bank increased their shareholdings.

According to disclosures in the annual report, as of September 9, 2025, the bank’s partial directors, supervisors, and senior management, as well as certain main leaders of some head-office departments, branches, and subsidiaries, had voluntarily completed the shareholding increase plan. The cumulative 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%, the tier-one capital adequacy ratio was 11.75%, and the capital adequacy ratio was 13.16%, all meeting regulatory requirements.

By/Qián Xiǎo Ruì

Edited by/Wáng Xīn Yǔ Xu Nán

(Editor: Qián Xiǎo Ruì)

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