Bank of China Net Interest Margin Rebounds to 1.27% in H1 2026, Big Six Lenders Diverge
Bank of China reported a net interest margin of 1.27% for the first half of 2026, up from 1.26% in the previous quarters, as deposit costs fell and foreign-currency spreads improved. Among China's six largest state-owned banks, margins diverged: Agricultural Bank rose to 1.28%, China Construction Bank to 1.37%, while Postal Savings Bank slipped to 1.63%.
On August 28, Bank of China released its interim results for 2026, with the group's net interest margin stabilizing and edging up to 1.27%. Compared with the first quarter of 2026, the six major state-owned banks showed divergent net interest margin trends in the first half. Agricultural Bank of China rose 2 basis points quarter-on-quarter to 1.28%; Bank of China and China Construction Bank each gained 1 basis point to 1.27% and 1.37%, respectively; Industrial and Commercial Bank of China and Bank of Communications were broadly flat at 1.29% and 1.23%; Postal Savings Bank of China fell 2 basis points quarter-on-quarter to 1.63%, the only one among the six to weaken sequentially, though its absolute level remained high.
Since the second quarter of 2025, Bank of China's net interest margin had held steady at 1.26%, and it achieved a modest uptick in the first half of 2026. During the period, domestic renminbi loans grew at a steady and balanced pace, with marginal stabilization in new lending rates and a marked slowdown in yield declines compared with 2025. The maturity of long-term time deposits and an improved deposit structure drove down deposit costs. The group's foreign-currency net interest margin rose considerably from 2025. Given its relatively high share of foreign-currency assets, the interest rate spread on major foreign currencies exceeded that of the renminbi, and its foreign-currency bond investments were diversified by currency, with overall duration maintained within a reasonable range.