The loss of profit in the banking sector indicates an all-round economic slowdown, even a stall, an analyst said.
China’s six largest banks have posted first-quarter reports with a significant drop in both earnings and profits.
Experts said the profit drop in China’s banking industry indicates a stalling economy that is likely to continue to worsen as the effects of the tariff war between China and the United States kick in.
The six Chinese major banks, which are all state-owned—Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and China Postal Savings Bank—released their first-quarter data on April 29. Taken together, their net profit attributable to parent companies fell by 7.3 billion yuan ($1 billion) compared with the same period in 2024—a decrease of about 2 percent.
Among them, Industrial and Commercial Bank of China (ICBC), the world’s largest lender by assets, saw a 4 percent net profit drop year-over-year. The Bank of China posted a 2.9 percent decrease from the year before.
The six banks reported a total revenue of 910.2 billion yuan ($125 billion) in the first quarter, a year-over-year decrease of 13.9 billion yuan ($1.9 billion).
ICBC is the only major Chinese bank with a single-quarter revenue of more than 200 billion yuan ($27.5 billion), although this still represented a 3.2 percent decrease from the same period in 2024.
China Construction Bank reported revenue of 190.07 billion yuan ($26.1 billion), falling by 5.4 percent year-over-year.
“In the first quarter of 2025, the global economy lacked strong growth momentum,” China Construction Bank said in its report.
Since January, China and the United States have been engaged in a tariff war that has hit China’s exports hard, worsening the Chinese economy, which had already been in a lasting slowdown.
Chinese media cited multiple agencies’ analyses, attributing the banking sector’s profit drop to a number of reasons: concentrated loan repricing that exacerbated interest rate spread pressure, a slowdown in the pace of asset expansion, an increase in the income tax rate, weakened support from provisioning, and increased volatility in non-interest income.
Henry Wu, a Taiwanese macroeconomist, told The Epoch Times on May 2 that mainland Chinese companies have stopped receiving export orders as a direct result of the tariff war, “and China’s economy and macro-economy have fallen into recession.”
By Alex Wu
