Postal Savings Bank of China 2025 Annual Report: Lowered Provisioning to Boost Profit, Growth Still Shows Signs of Fatigue

Ask AI · Postal Savings Bank’s provisioning coverage ratio drops sharply—why does performance growth still lag?

The 2025 annual report of Postal Savings Bank shows that its profit growth momentum is relatively weak. Among the six major state-owned banks, the company’s revenue growth rate and net profit growth rate are both in the lower middle.

Of particular note is its risk buffer—its provisioning coverage ratio—which fell sharply by more than 58 percentage points during the reporting period. Even after substantially reducing provisions, its performance growth still lags, which may further highlight the relative lack of growth momentum in its core business, as well as the challenges faced by the current “large retail bank” business structure in dealing with cyclical fluctuations in the industry.

Performance growth ranks in the lower middle among the six major state-owned banks

Data shows that in 2025, the six major state-owned banks all achieved positive growth in net profit attributable to shareholders of the parent, but the growth rates diverged significantly: Agricultural Bank leads with a growth rate of 3.18%; Bank of China and Bank of Communications both grew by 2.18%; Postal Savings Bank’s growth rate was 1.07%.

This means that, under the same macroeconomic and industry background, Postal Savings Bank’s profit growth elasticity is relatively insufficient, and it has not demonstrated stronger performance resilience like ABC and BOC.

The source of profit growth lies in revenue. In 2025, Postal Savings Bank’s operating income grew by 1.99% year on year. This growth rate is only slightly higher than that of China Construction Bank among the six major banks. The slowdown in revenue growth directly constrains the ceiling of its profit growth.

Provisioning coverage ratio fell by more than 58 percentage points

Notably, while Postal Savings Bank’s performance growth slowed, its risk buffer—“provisioning coverage ratio”—also shrank significantly. In 2025, this indicator fell by more than 58 percentage points, a decline that was clearly larger than that of other major state-owned banks. Even after the decline, Postal Savings Bank’s provisioning coverage ratio remains relatively high.

A drop in the provisioning coverage ratio usually means that the bank’s loan impairment provisions are reduced, which can “release” profits and bolster earnings in the short term. However, against the backdrop of a sharp decline in the provisioning coverage ratio, Postal Savings Bank’s net profit growth rate still ranks toward the lower end among the six major state-owned banks.

This may indirectly confirm that the profitability and growth momentum of Postal Savings Bank’s core business are under significant pressure.

Net interest margin narrows, net interest income faces pressure

Research shows that Postal Savings Bank’s strategic positioning as a “large retail bank” gives it a large base of personal deposits, making its liabilities relatively stable. However, in an environment where the real economy is continuously supported through interest concessions and market interest rates move downward, the banking industry’s net interest margin is generally under pressure. Compared with other major banks that have more balanced corporate, financial markets, and international business, Postal Savings Bank’s income structure may rely more heavily on the interest spread between deposits and loans.

Data shows that in 2025, Postal Savings Bank’s net interest income was 281.62 billion yuan, down 1.57% year on year. In 2025, the company’s net interest margin was 1.66%, down noticeably from 1.87% in 2024.

During the reporting period, Postal Savings Bank’s net fee and commission income increased by 16.15% year on year, with a solid growth rate. However, in terms of absolute scale, its 29.365 billion yuan in net fee and commission income is still relatively small compared with Industrial and Commercial Bank of China, Agricultural Bank of China, and others.

This means that although the contribution of non-interest income to Postal Savings Bank’s overall revenue and profit has increased, in the short term it still cannot shake the dominant position of net interest income. The task of transforming its revenue structure remains arduous.

(Article sequence number: 2039211000393240576/CJT)

Disclaimer: This article does not constitute any investment advice to anyone.
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