Live Performance Conference | Bank of Communications Vice President Zhou Wanfu: Deposit Repricing Will Support Stable and Improving Net Interest Margin

Every journalist｜Li Yuwen Every editor｜Yang Jun

On March 27, the Bank of Communications held its 2025 performance briefing. Bank of Communications Vice President Zhou Wanfu responded to market concerns about net interest margin, stating that looking forward, the net interest margin is expected to maintain a stable and improving trend. The supporting conditions are, on one hand, the repricing of deposits, and on the other hand, a significant enhancement in the constraints of the pricing self-discipline mechanism.

At the performance meeting, the management of the Bank of Communications also responded to hot topics such as loan issuance plans, asset quality, and the implementation of artificial intelligence+.

The 2025 annual report disclosed on the same day shows that at the end of the reporting period, the total assets of the Bank of Communications exceeded 15.5 trillion yuan, an increase of 4.35% compared to the end of the previous year; the annual operating income reached 265.071 billion yuan, and the net profit attributable to shareholders was 95.622 billion yuan, representing year-on-year increases of 2.02% and 2.18%, respectively.

It is reported that in the second half of this year, the Bank of Communications will distribute dividends for 2025 to all shareholders, with the total amount of dividends accounting for 32.8% of the net profit attributable to ordinary shareholders. The dividend payout ratio has remained above 30% for 14 consecutive years.

Repricing of deposits is expected to support the stabilization and improvement of net interest margin

“Since the third quarter of last year, our net interest margin has been basically stable,” said Bank of Communications Vice President Zhou Wanfu, noting that from the perspective of the new year, loan interest rates still face downward pressure, while the repricing of liabilities will bring some benefits.

In recent years, the banking industry has generally faced a situation where the speed of deposit repricing was slower than that of loan repricing, leading to a rapid narrowing of net interest margins. However, with the reduction of listed deposit rates and the repricing of a large number of time deposits in the past two years, the cost of interest payments on deposits will significantly decrease.

“From the Bank of Communications’ perspective, the scale of maturing time deposits this year has increased compared to last year, with a large proportion concentrated in the first quarter.” Zhou Wanfu mentioned that in the first quarter of this year, the bank’s deposit pricing decreased compared to the same period last year, remaining basically flat with the fourth quarter of last year.

Zhou Wanfu stated that looking forward to the whole year, the net interest margin is expected to maintain a stable and improving trend, supported by the impact of deposit repricing and a significant enhancement in the constraints of the pricing self-discipline mechanism.

When asked how to maintain the stable and improving trend of net interest margin, Zhou Wanfu stated that first, it is necessary to strictly manage the balance of volume and price for deposits and loans, ensuring that all business lines and operating units are held accountable for the responsibility of balanced development; second, to implement refined pricing management for deposits and loans, strictly adhering to the requirements of the pricing self-discipline mechanism; third, to scientifically optimize the arrangement of the asset-liability structure, adjusting it dynamically based on the group’s operational goals and pricing trends, as well as factors such as asset-liability ratios, overall liquidity, and interest rate risks.

Since March, the volume of mortgage applications has significantly increased

Regarding this year’s total credit issuance target, Zhou Wanfu stated that the incremental loan issuance for the year will not be lower than last year. In terms of the issuance rhythm, it will balance timely efforts with sustainable growth. “According to this arrangement, about 40% is planned for the first quarter, and over 60% for the first half.”

It is reported that the Bank of Communications’ loan increment this year is roughly comparable to the same period last year, with a structure showing a year-on-year increase in corporate loans and a decrease in retail loans, primarily due to the impact of mortgages and auto loans.

However, there has been a recent upward trend in retail loan growth. “Since entering March, the volume of mortgage applications has significantly increased, growing by about 15% compared to the same period last year, which should also be a signal of stabilization in the real estate market. I believe that if this continues, our mortgage loans will gradually achieve positive growth this year, driving retail loans to meet the expected growth targets,” Zhou Wanfu stated.

In terms of corporate loans, Bank of Communications Vice President Yin Jiuyong stated that last year, the incremental amount of RMB corporate loans from the Bank of Communications was 505.5 billion yuan, with a growth rate of 10.1%. This year, the bank’s corporate loans are expected to maintain a plan that allows for a year-on-year increase compared to 2025.

Regarding the credit issuance and project reserve situation since the beginning of the year, Yin Jiuyong mentioned that in the first two months of this year, the actual issuance of corporate loans from the Bank of Communications increased by 10.9% compared to the same period last year, continuing the trend of year-on-year increases. On the demand side, it is observed that the overall demand for corporate credit in the first quarter is still relatively strong, and it is expected to maintain stable growth overall.

Asset quality control will still face certain pressures

In terms of asset quality, by the end of 2025, the non-performing loan ratio of the Bank of Communications was 1.28%, a decrease of 0.03 percentage points compared to the end of the previous year. The annual new non-performing loan ratio remained basically flat compared to the previous year, maintaining a low level of below 1% for three consecutive years.

Despite this, Bank of Communications Vice President Gu Bin acknowledged at the performance meeting that asset quality control will still face certain pressures this year.

Gu Bin mentioned that several areas will be focused on: first, due to factors such as individual repayment ability and declining market demand, it is expected that the asset quality of retail credit and small business credit will still be under pressure this year; second, the current real estate market is still in the stage of bottoming out and stabilizing, and risks in the real estate sector will continue to be closely monitored; third, certain industries face homogenized competition, leading to narrowing profit margins for enterprises and intensified operational differentiation, and the operating conditions and subsequent risk changes of enterprises in these industries will continue to be monitored.

In recent years, the banking industry has generally faced downward pressure on the asset quality of retail credit. In response, Gu Bin stated that this year, a special action to improve retail asset quality in 2026 will be launched across the bank, adhering to a three-pronged approach of “clearing, unblocking, and patching,” and formulating a series of measures to strive to quickly reverse the downward trend of retail credit asset quality.

Specifically, first, to fully clear, utilizing various measures to accelerate the recovery and disposal of existing non-performing retail credit loans; second, to focus on unblocking, primarily enhancing the management of loans before they become due, minimizing the transition to non-performing loans; third, to strictly block leaks, dynamically optimizing proactive management, continuously adjusting customer structures, and improving the fraud risk control system.

Cumulative deployment of AI intelligent assistant agents exceeds 2,500

Since the beginning of this year, the implementation of “artificial intelligence+” in the banking industry has attracted significant attention from the industry.

Bank of Communications Vice President Qian Bin introduced at the performance meeting that in 2025, the bank’s investment in technology reached 12.3 billion yuan, with nearly 9,800 tech personnel, a significant proportion of which is invested in AI. The scale of intelligent computing for the entire bank increased by over 50% compared to the previous year.

Qian Bin mentioned that the Bank of Communications has cumulatively deployed over 2,500 AI intelligent assistant agents, achieving results in scenarios such as retail inclusiveness, risk credit, and operational customer service.

It is reported that over 20,000 employees of the Bank of Communications utilize intelligent agents to enhance and improve work efficiency. Qian Bin noted that particularly, business processes have been restructured with AI thinking, with early applications in areas such as account opening, credit approval, authorization, and international settlement. For example, by utilizing AI capabilities, the volume of counter authorization business has decreased by over 60% year-on-year, and the efficiency of international settlement business has improved by over 20%, achieving multi-step business assistance and intelligent processing in the credit process, and initially establishing a new model of human-machine collaboration.

Cover image source: Zhang Jian