China Commercial Bank NIM 1.41% in Q2 2026, Up 0.01% QoQ, First Rebound Since Q1 2022

Data from the National Financial Regulatory Administration on key regulatory indicators for the banking and insurance sectors in Q2 2026 showed that the net interest margin (NIM) of commercial banks stood at 1.41%, up 0.01 percentage point from 1.4% in Q1, marking the first quarter-on-quarter increase since Q1 2022. This ended the continuous one-way decline in NIM that had persisted since 2022.

By bank type, the NIMs of large state-owned banks, city commercial banks, private banks, and rural commercial banks rose by 2, 2, 1, and 1 basis points quarter on quarter, respectively. Joint-stock banks were flat, while foreign banks fell by 2 basis points. Specifically, the NIMs were 1.31% for large state-owned banks, 1.4% for city commercial banks, 3.63% for private banks, 1.59% for rural commercial banks, 1.54% for joint-stock banks, and 1.28% for foreign banks.

The NIM rebound was mainly driven by improvements on the liability side. The concentrated repricing of maturing high-cost deposits and banks' proactive optimization of liability structures effectively reduced interest expenses. The interest rate self-discipline mechanism helped curb irrational price-cutting competition in lending rates, supporting stable asset-side pricing. The weighted average interest rate on new loans was 3.1%, down 0.2 percentage points year on year.

On asset quality, the non-performing loan (NPL) ratio of commercial banks stood at 1.52% at end-Q2, up 0.01 percentage point from the previous quarter. The share of special-mention loans rose 0.04 percentage points to 2.21%. By type, the NPL ratio of state-owned banks fell 0.01 percentage point to 1.21%, while those of joint-stock banks, city commercial banks, and rural commercial banks rose 0.01, 0.02, and 0.04 percentage points to 1.23%, 1.87%, and 2.83%, respectively. The NPL balance was RMB 3.7 trillion, up RMB 52.3 billion from the previous quarter.

On asset growth, total assets of commercial banks grew 7.5% year on year in Q2, down from 8.9% in Q1, marking a second consecutive quarter of slowdown. By type, asset growth for large state-owned banks, city commercial banks, and rural commercial banks was 8.5%, 7%, and 3.5%, respectively, compared with 10.6%, 9.2%, and 4.3% in Q1. Joint-stock banks saw a slight pickup from a low base. Loan growth continued to decelerate, making 'slower but higher-quality credit' the new norm.

On profitability, commercial banks recorded net profit of nearly RMB 1.24 trillion in H1 2026, down 0.57% year on year. At end-Q2, the average return on capital was 7.72%, and the average return on assets was 0.58%.