Key lenders keeping NPLs at bay

China's largest State-owned commercial lenders are showing renewed resilience as they navigate domestic and external challenges, with the country's "Big Four" banks keeping bad loans in check and strengthening buffers against rising risks in consumer and small-business lending.

Their nonperforming loan ratios edged down at the end of 2025, reflecting a careful balancing act between supporting growth and safeguarding financial stability, backed by proactive risk controls and solid loan loss provisioning.

According to its recently released 2025 annual results, Industrial and Commercial Bank of China reported an NPL ratio of 1.31 percent at the end of 2025, down 3 basis points from a year earlier.

Wang Jingwu, senior executive vice-president and chief risk officer at ICBC, said although pressure on asset quality management has increased in inclusive finance and personal lending, ICBC has taken proactive measures to prevent and mitigate risks. At present, credit risks in these two segments remain controllable, with adequate provisioning in place.

Over the past two years, ICBC's personal loan NPL ratio has risen modestly amid economic transition, property market adjustments and supply-demand imbalances. However, China's solid economic fundamentals and long-term growth outlook remain intact, and risks in personal lending are expected to stay manageable, Wang said.

"The outline of the 15th Five-Year Plan (2026-30) proposes to vigorously boost consumption and, for the first time, includes significantly raising the household consumption rate over the next five years as a key economic and social development target. We believe that as a package of policies is implemented more rapidly, the asset quality of personal loans will return to a reasonable level," Wang said.

ICBC has strengthened digital and intelligent capabilities, actively addressed potential risks and steadily advanced the disposal of nonperforming assets. The upward trend in the deterioration of personal loans has begun to slow, he added.

China Construction Bank has consistently prioritized risk prevention and mitigation as the top focus of its operations and management. As of end-2025, the group's NPL ratio stood at 1.31 percent, down 3 basis points year-on-year.

Li Jianjiang, executive vice-president and chief risk officer of CCB, said the bank has responded to rising retail lending risks by strengthening checks and balances in key stages of the credit process and centralizing risk management, helping to narrow the increase in nonperforming personal loans. Li added that CCB continues to support the real economy, optimize its credit structure and enhance group-wide, intelligent risk governance to address structural risks.

Last year, Bank of China also adopted more proactive measures to refine credit risk management and improved the efficiency of the recovery and disposal of nonperforming assets. By end-2025, the group's NPL ratio stood at 1.23 percent, down 2 basis points from the previous year-end.

Looking ahead to this year, Wu Jian, executive vice-president of BOC, said the bank is confident of its ability to maintain stable asset quality. Domestically, nonperforming corporate loan ratios have declined for seven consecutive years, while nonperforming new personal loans have shown quarter-by-quarter improvement since the second half of 2025. Overseas, both the balance and ratio of NPLs fell last year.

BOC will step up risk management in real estate, local government debt and key industries, improve NPL management and disposal, strengthen global risk controls, and advance data-driven, technology-enabled risk management systems.

Agricultural Bank of China's nonperforming loan ratio also declined by 3 basis points year-on-year to 1.27 percent at the end of 2025, registering five consecutive years of declines.

Lin Li, executive vice-president of ABC, said that by continuously strengthening integrated group-wide management, the bank has steadily improved its capabilities in proactively managing and precisely mitigating risks. As of end-2025, ABC's NPL ratio for real estate loans remained unchanged from the previous year, while new NPLs declined year-on-year.

The bank will continue to strengthen risk management for large-value clients, strictly oversee presale fund accounts and ensure closed-loop management of project funds.

Regarding local government debt, the bank will enhance risk control in key regions, optimize existing debt structures, while upholding the "red line" against adding new hidden debt, Lin said.