Listed Banks' NPL Ratios Stable in H1 2026; ICBC at 1.29%, PSBC at 1% with Watch-List Loans at 1.73%

Several listed banks have recently disclosed their first-half 2026 earnings reports, drawing market attention to asset quality. Non-performing loan (NPL) balances and ratios, as core indicators of commercial banks' risk management capabilities and the stability of the financial system, directly reflect the industry's overall risk profile. Since the start of 2026, asset quality across commercial banks has remained broadly stable, with large banks performing solidly and maintaining ample capital strength.

NPL ratios at major banks generally declined. Industrial and Commercial Bank of China (ICBC) saw its NPL ratio fall to 1.29%, with its provision coverage ratio rising 3.98 percentage points from end-2025. Agricultural Bank of China (ABC) reported an NPL ratio of 1.25%, down 0.02 percentage points from the start of the year, with loan loss reserves of RMB 1,043.3 billion and a provision coverage ratio of 290.10%. Bank of China's NPL ratio stood at 1.22%, down 0.01 percentage points from end-2025, with a provision coverage ratio of 200.85%, up 0.48 percentage points from end-2025. China Construction Bank (CCB) recorded an NPL ratio of 1.29%, down 0.02 percentage points from end-2025, with a provision coverage ratio of 238.69%, up 5.54 percentage points from end-2025. Bank of Communications reported an NPL ratio of 1.30% and a provision coverage ratio of 203.80%.

Small and medium-sized banks continued to improve asset quality. In the first half of 2026, the Zhejiang rural commercial banking system accelerated NPL recovery efforts, channeling more financial resources toward agriculture and small businesses. Within its jurisdiction, Kecheng Rural Commercial Bank leveraged an innovative "forest carbon option" mechanism and carbon-reduction tools to explore new pathways for financial support of regional ecological product value realization and low-carbon industrial transformation. Taishun Rural Commercial Bank increased credit supply to agricultural industries such as bayberry cultivation, building a differentiated credit framework to ease financing bottlenecks for micro-agricultural innovation projects. Shanghai Rural Commercial Bank achieved growth in both revenue and net profit in the first half, with its NPL ratio further declining from end-2025. Bank of Jiangsu reported an NPL ratio of 0.81%, down 0.03 percentage points from end-2025, with its provision coverage ratio maintained above 300%. Bank of Hangzhou posted an NPL ratio of 0.76% and a provision coverage ratio of 471.96%.

On retail asset quality management, Yao Hong, vice president and chief risk officer of Postal Savings Bank of China (PSBC), said that as of end-June 2026, the bank's NPL ratio stood at 1%, with an overdue ratio of 1.38% and a watch-list loan ratio of 1.73%, up 0.05, 0.08, and 0.16 percentage points respectively from the start of the year. However, the pace of increase narrowed, with all three indicators improving quarter-on-quarter in the second quarter by 0.03, 0.12, and 0.06 percentage points respectively. The corporate loan NPL ratio was 0.52%, down 0.02 percentage points from end-2025. The personal loan NPL ratio was 1.58%, with an annualized NPL formation rate of 1.67%. In the first half, the year-on-year increase in the annualized NPL formation rate for personal loans narrowed by 0.17 percentage points compared with 2025, and narrowed by 0.05 percentage points quarter-on-quarter in the second quarter. PSBC has responded to retail credit risks by reshaping processes, dynamically optimizing risk control strategies, and strengthening intelligent risk-control applications.

Agricultural Bank of China has strengthened asset quality control for inclusive retail lending, making risk prevention in this segment a priority. The bank has improved its inclusive retail credit risk prevention system, strictly controlled new NPL formation, and intensified efforts to resolve existing NPLs. Lin Li, vice president of ABC, said the bank has introduced a responsibility system for inclusive retail lending, standardizing principal responsibilities across all credit process stages, and reinforcing the management accountability of branch heads. The bank has made inclusive retail credit asset control a key indicator in evaluating branch heads' performance, with emphasis on the management responsibilities of second-tier branches and sub-branches, as well as the operational responsibilities of outlets, while clarifying a "negative list" for due-diligence exemptions.

Several banks have introduced specific risk prevention measures. Wu Jian, vice president of Bank of China, said the bank is holding the asset quality bottom line, focusing on "controlling increments" and "resolving existing stock," targeting key business lines, regions, sectors, and clients. The bank maintains full and prudent provisioning, accelerates intelligent risk-control development, and strengthens data-driven and new-technology applications. Qi Ye, vice president of China Everbright Bank, said the bank will further strengthen its risk management framework, moving risk control forward before lending, strictly controlling the quality of new customer admissions, improving review and approval efficiency during lending, and intensifying risk prevention in key areas after lending, with continuous high-frequency early warnings and dynamic monitoring. Li Jianjiang, vice president of China Construction Bank, said the bank is focusing on precise risk resolution in key areas, strengthening full-cycle, full-process, and full-time credit risk management, and dynamically optimizing long-term risk control mechanisms.