China's four largest state-owned lenders reported third-quarter profit growth of 6.4% to 10.8%, with Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China together earning about 370.7 billion yuan for shareholders in the three months through September, according to filings with the Hong Kong stock exchange on Oct. 30.

The squeeze on lending margins that has weighed on Chinese bank earnings for several years paused this quarter. For investors in Hong Kong, where the four banks are among the most widely held dividend stocks, steadier margins matter more than the headline profit figure, because net interest income still produces most of their revenue and funds their payouts.

ICBC and Agricultural Bank Lead the Gains

ICBC, the world's largest bank by assets, said profit attributable to shareholders rose 9.97% from a year earlier to 111.96 billion yuan in the third quarter. Agricultural Bank grew 10.84% to 90.17 billion yuan, and China Construction Bank rose 9.84% to 104.66 billion yuan.

Bank of China lagged. Its quarterly profit attributable to shareholders rose 6.36% to 63.89 billion yuan. Reuters, which reported that the big state banks posted their fastest quarterly growth since 2021 or 2022, attributed Bank of China's slower pace to trade tensions and currency swings.

Over nine months the gains were smaller, reflecting a weak first half. ICBC's nine-month profit attributable to shareholders rose 5.83% to 285.64 billion yuan. CCB's rose 6.55% to 274.23 billion yuan, Agricultural Bank's rose 7.10% to 236.55 billion yuan, and Bank of China's attributable profit rose 5.53% to 187.48 billion yuan.

The main engine was interest income from a larger loan book. ICBC's third-quarter net interest income rose about 11% to 177.82 billion yuan, while CCB's climbed about 13% to 159.45 billion yuan. Agricultural Bank and Bank of China each reported increases of close to 11%.

Net Interest Margins Stop Falling

ICBC said its annualized net interest margin for the first nine months was 1.29%, up 1 basis point from a year earlier. CCB reported a margin of 1.36%, unchanged from the same period of 2025. Agricultural Bank reported 1.28% and Bank of China 1.27%; neither gave a year-earlier comparison in its quarterly report.

Analysts told Reuters that the benefit from repricing expensive deposits, which began at the start of the year, is fading in the second half, but that recent monetary easing and mortgage interest subsidies should still lower funding costs and support margins. Elaine Xu, a director at Fitch Ratings, told the news agency that an earlier-than-expected margin recovery, combined with broadly stable credit costs, puts the large banks on course for a faster profit rebound than smaller lenders.

Bond and equity gains also helped. CCB said higher gains on bond and equity investments lifted its non-interest income. Xing Zhaopeng, a senior China strategist at ANZ, cautioned that such gains will not last, telling Reuters that "the support cannot be lasting as bond yields are very low now."

Fee income remained soft. Agricultural Bank's net fee and commission income fell 10.44% over nine months, which the bank attributed to a high prior-year base from one-off gains on wealth management products. Bank of China's fee income was flat.

Bad Loans Edge Down, Provisions Rise

Asset quality held steady on paper. ICBC and CCB each reported a nonperforming loan ratio of 1.29% at the end of September, down 0.02 percentage point from the end of 2025. Agricultural Bank's ratio fell 0.04 point to 1.23%, and Bank of China's slipped 0.01 point to 1.22%.

The banks set aside more money anyway. ICBC said impairment losses on loans rose 9.78% to 150.92 billion yuan for the nine months, and Agricultural Bank's credit impairment losses rose by 19.92 billion yuan to 147.33 billion yuan. Moody's analyst Nicholas Zhu told Reuters that lending to technology and innovation companies remains high and that asset risks there are emerging gradually, because those borrowers have not been through a full business cycle.

Capital buffers stayed well above regulatory minimums. CCB reported a common equity tier 1 ratio of 14.39%, ICBC 13.07% and Bank of China 12.04%. Agricultural Bank, the thinnest of the four, reported a CET1 ratio of 10.90% and a total capital adequacy ratio of 18.05%.

The results land against a mixed economic backdrop. China's economy grew 4.5% in the third quarter, beating forecasts, but analysts told Reuters that the targeted support policymakers stepped up in September is unlikely to spark a significant lending recovery.