Commercial Bank Net Interest Margin at 1.41% in Q2 2026, First Rise Since 2022
China's commercial banks reported a net interest margin of 1.41% in the second quarter of 2026, up 1 basis point from 1.40% in the previous quarter, marking the first quarter-on-quarter improvement since 2022. The margin fell below 2% to 1.97% in early 2022 and had since trended lower. By institution, large state-owned banks widened to 1.31%, city commercial banks to 1.40%, rural commercial banks to 1.59%, and private banks to 3.63%. Joint-stock banks held at 1.54%, while foreign banks narrowed to 1.28%. City commercial banks led net profit growth.
The National Financial Regulatory Administration released key supervisory indicators for the banking and insurance industry in the second quarter of 2026 on August 14. The data showed a commercial bank net interest margin of 1.41% for the quarter, up 0.01 percentage point from 1.40% in the first quarter, the first quarter-on-quarter improvement since 2022.
Historically, the commercial banking net interest margin entered a downward channel after slipping below 2% to 1.97% in the first quarter of 2022. It held steady at 1.42% for three consecutive quarters in 2025 before easing further to a low of 1.40% in the first quarter of 2026.
By institution type, large state-owned banks widened their net interest margin by 2 basis points to 1.31%, city commercial banks by 2 basis points to 1.40%, and rural commercial banks by 1 basis point to 1.59%. Joint-stock banks held at 1.54%, private banks widened by 1 basis point to 3.63%, and foreign banks narrowed by 2 basis points to 1.28%.
On net profit, city commercial banks posted the fastest growth, large banks and rural commercial banks saw varying degrees of improvement, while joint-stock banks experienced a deterioration in net profit.