Can We Expect Stabilized Net Interest Margins?

The 2025 interim earnings season is approaching. As of July 28, among A-share listed banks, four—Ningbo Bank, Qilu Bank, Hangzhou Bank, and Changshu Bank—have disclosed their interim performance reports. All four reported growth in both revenue and net profit, with three seeing net profit growth exceeding 10%. Notably, some banks have signaled a stabilization in net interest margins.

According to Qilu Bank’s performance report released on July 26, the bank achieved operating revenue of 6.782 billion yuan in the first half of 2025, a year-on-year increase of 5.76%, and net profit attributable to shareholders of 2.734 billion yuan, up 16.48% year-on-year.

Of particular interest is Qilu Bank’s report that its net interest margin (NIM) stabilized and rebounded in the first half of the year, driving a notable over-10% growth in net interest income. The report shows that Qilu Bank’s net interest income reached 4.998 billion yuan in H1 2025, up 13.57% year-on-year, compared to a 2.17% decline in the same period last year.

Hangzhou Bank also stated in an investor relations report on July 22 that the rapid decline in external liability costs and the bank’s continued optimization of its business structure have effectively offset the impact of declining asset-side interest rates. The bank expects its NIM contraction in 2025 to be milder than in the previous year.

Among the four banks that have released interim reports, as of June 2025, Ningbo Bank and Hangzhou Bank had total assets exceeding 3 trillion yuan and 2 trillion yuan, respectively. In H1 2025, Ningbo Bank and Hangzhou Bank reported operating revenues of 37.16 billion yuan and 20.093 billion yuan, up 7.91% and 3.89% year-on-year, respectively. Their net profits attributable to shareholders were 14.772 billion yuan and 11.662 billion yuan, rising by 8.23% and 16.67% year-on-year.

Qilu Bank and Changshu Bank are relatively smaller in scale. By the end of June 2025, their total assets exceeded 750 billion yuan and 400 billion yuan, respectively. In H1 2025, Qilu Bank and Changshu Bank posted operating revenues of 6.781 billion yuan and 6.062 billion yuan, up 5.76% and 10.10% year-on-year, respectively. Their net profits attributable to shareholders were 2.734 billion yuan and 1.969 billion yuan, increasing by 16.48% and 13.55% year-on-year.

In terms of asset quality, as of June 2025, the non-performing loan (NPL) ratios of Ningbo Bank and Hangzhou Bank both stood at 0.76%, unchanged from the end of the previous year. Qilu Bank and Changshu Bank reported NPL ratios of 1.09% and 0.76%, down by 0.1 and 0.01 percentage points, respectively, from the end of last year.