Multiple major banks commit to credit growth not less than last year, and bill balance may continue to grow rapidly.

What capital support underpins the steady growth of big banks’ credit expansion?

Reporter | Yang Zhijin

Editor | Wang Shu

As of April 3, many listed banks have held their 2025 performance briefing sessions.

Based on the performance reports, many large banks aim to ensure their credit growth this year is not less than last year, with two planning higher growth than last year, three planning roughly the same, and the deployment pace being “moderately ahead.”

Considering that small and medium-sized banks, especially joint-stock banks, have slower credit growth, the market share of state-owned large banks will continue to rise. To meet this year’s credit growth targets, the balance of bank bill discounts for large banks may continue to increase significantly.

It is worth noting that the credit deployment plans set by commercial banks at the beginning of the year are not fixed and can be adjusted based on actual conditions.

For example, in the first half of last year, many banks exceeded their public credit growth targets, while retail credit growth was far below expectations, leading some banks to reallocate retail quotas to the corporate sector in the second half.

Several large banks anchor growth based on last year’s increase

Generally, commercial banks prepare their next year’s credit deployment plans at the end of the year or early the next year (mostly in the fourth quarter of the previous year).

According to the information compiled by the reporter, several state-owned large banks recently disclosed their credit plans for this year during their earnings releases. For instance, Agricultural Bank of China (601288.SH) President Wang Zhiheng stated at the performance meeting that the bank will maintain its support for the real economy, with an expected credit growth rate roughly the same as last year.

Annual report data show that in 2025, Agricultural Bank’s net loans and advances increased by 2.2 trillion yuan, a 9.2% growth. This indicates that the bank’s credit growth target for this year is about 9.2%, with a corresponding credit increase of approximately 2.4 trillion yuan, higher than last year.

Based on the performance briefing and annual report, China CITIC Bank’s figures are based on general loan categories.

It is noteworthy that last year’s credit increase for Agricultural Bank already surpassed that of the “Big Four” Industrial and Commercial Bank of China (601398.SH), and Agricultural Bank’s balance sheet expansion is accelerating.

In 2023, Agricultural Bank’s total assets exceeded China Construction Bank (601939.SH); by the end of 2025, total assets are projected to reach 48.8 trillion yuan, about 91% of ICBC’s, with this ratio increasing by 10 percentage points compared to 2020.

ICBC has not disclosed its credit deployment plan, but considering Agricultural Bank’s high credit growth, the asset size gap between Agricultural Bank and ICBC is expected to narrow further.

Like Agricultural Bank, Bank of China (601988.SH) also targets similar loan growth this year as last year. Vice President Liu Chenggang said that the bank’s loan growth this year will remain stable compared to last year, with domestic RMB loans expected to outperform the market, and foreign bank loans maintaining steady growth, with offshore RMB loans growing faster.

Construction Bank, Postal Savings Bank (601658.SH), and Bank of Communications (601328.SH) aim for credit increases roughly equal to last year’s. Due to the base effect, their credit growth targets will be lower than last year.

For example, Vice President Zhou Wanfu of Bank of Communications stated at the performance meeting that the bank’s total credit deployment target for 2026 will be set according to the needs of serving the real economy, with an annual loan increase not less than last year.

The bank’s annual report shows that by the end of 2025, the loan balance was 9.123571 trillion yuan, an increase of 22k yuan from the previous year, a 6.64% rise. Based on this year’s credit increase target of 570 billion yuan, the bank’s credit growth goal for this year is about 6.2%, slightly lower than last year.

Overall, the five major banks’ credit growth requirements this year tend to be greater than or equal to last year’s. This is because state-owned large banks are the main force serving the real economy, and their credit must continue to grow at a certain pace. Additionally, these six large banks plan to raise 800 billion yuan in capital this year, providing “ample ammunition” to support credit expansion.

Furthermore, China CITIC Bank (601998.SH) also disclosed its credit plan, aiming for a 5.5% growth in general loans this year.

General loans exclude bill financing. Currently, CITIC Bank is reducing bill assets, and after normalization, the overall loan growth rate will be below 5.5%, which is lower than the growth targets of the other state-owned banks mentioned earlier.

Large banks boost volume through bills

Not only CITIC Bank, but in recent years, many small and medium-sized banks, especially joint-stock banks, have seen their credit growth significantly below that of state-owned large banks, leading to a continuous increase in the market share of large banks’ credit.

Data from the People’s Bank of China show that in 2025, large banks added 10.66 trillion yuan in new RMB loans, accounting for 56.6% of all new credit from various bank types, reaching a record high. This proportion has increased by 22 percentage points compared to 2018.

The reporter learned that this is mainly driven by three factors: first, since 2019, state-owned large banks have accelerated their inclusive finance initiatives, squeezing out the traditional space for small and medium-sized banks; second, after some small and medium-sized banks exposed risks, market preference for their credit risk has waned, and their bond issuance channels for capital replenishment have been blocked, while the big banks have added 800 billion yuan in capital in recent years; third, more structural monetary policy tools are flowing to large banks, creating resource concentration effects.

This year, the credit increase of large banks remains at or above last year’s level, and their market share may further rise, although the impact of business downscaling on smaller banks might decrease.

“A while ago, big banks’ loan rates were relatively high, so they could lower prices to attract customers, but now their rates have fallen to low levels, and deposit costs are hard to reduce further. Their room to lower loan rates is limited, while our interest costs and loan rates still have room to decrease,” said a finance officer from a listed city commercial bank in an eastern province.

Data also support this view. The reporter’s review shows that by 2025, the average yield on corporate loans at Construction Bank, Agricultural Bank, and ICBC has fallen to around 2.8%, a historic low, while city and rural commercial banks still have rates above 3.5% or even 4%.

“The pressure from big banks on small and medium-sized banks feels somewhat better than before. They won’t squeeze us across the board like in the past; now they mainly compete for key clients and major enterprises,” said the finance officer from a city commercial bank in an eastern province.

In the context of overall weak credit demand across the industry, why can large banks maintain high credit growth, and where are their loans being deployed?

Based on the performance meetings, the focus of large banks’ credit deployment remains in the corporate sector, including the “Five Major Articles,” “Two Heavy” projects, and manufacturing.

Yin Jiuyong, Vice President of Bank of Communications, said that this year, the bank’s corporate loan plan will maintain year-on-year growth, with a focus on supporting new quality production capacity, mainly in key areas like the Five Major Articles.

It is noteworthy that in recent years, many state-owned large banks have also used bills to boost growth.

According to the statistics, the bill discount balances of the four major banks—ICBC, ABC, BOC, and CCB—are expected to increase by about 30% in 2025, far exceeding the credit growth rate. To meet this year’s credit growth plan, the bill discount balances of these banks may further increase.

Data compiled by Tonghuashun iFind

In contrast, some joint-stock banks have reduced their bill assets by about 50%. For example, CITIC Bank’s bill discount balance at the end of 2025 was 24k yuan, down 55.1% from the previous year.

The reason is that current bill assets’ yields have fallen to around 1.2%, unable to cover the cost of liabilities, leading many small and medium-sized banks to sharply cut these low-yield assets.

Moderate early credit deployment

Commercial banks traditionally follow the “Four, Three, Two, One” rule for credit deployment, with 40%, 30%, 20%, and 10% of annual credit issued in each quarter respectively.

Data from the central bank show that from 2015 to 2022, the proportion of new credit in the first quarter remained between 30% and 40%, but since 2023, it has continued to rise, surpassing 60% in 2025, indicating a clear “front-loaded” effort. However, this also leads to weak credit growth in the subsequent three quarters.

Perhaps due to last year’s overly front-loaded deployment, many large banks stated at their performance meetings that this year’s credit issuance should be “moderately ahead.” Construction Bank requires that the pace of credit deployment be appropriately ahead to support the steady improvement of the real economy.

Zhou Wanfu, Vice President of Bank of Communications, said that in terms of deployment rhythm, the bank balances the need to be moderately ahead with sustainable and balanced growth. Under this plan, about 40% of the deployment is scheduled for the first quarter, with the goal of reaching over 60% by mid-year.

In practice, large state-owned banks have performed well in their first-quarter credit deployment, with many achieving year-on-year increases: Postal Savings Bank’s first-quarter credit increased by over 1 trillion yuan; by the end of February, Agricultural Bank’s real loan growth was also positive year-on-year.

Among these, corporate loans remain key to supporting credit growth. A vice president of a state-owned bank in an eastern city told the reporter that this year, the bank’s main focus is on small micro loans, urban investment loans, etc.

“We hold a major project promotion meeting every month to track project progress. The main targets are state-owned enterprises and urban investment projects, while small micro loans are mainly promoted through industry associations,” said the vice president.

“Looking at this year’s loan growth so far, Bank of Communications’s total loan increase is roughly comparable to last year. Structurally, corporate loans are up year-on-year, retail loans are down,” Zhou Wanfu said at the bank’s performance meeting on March 27.

This reflects a common challenge across the banking industry. Due to deteriorating household income and employment expectations, retail loan growth has been sluggish over the past three years, with some banks even seeing retail loan balances decline.

Zhou Wanfu analyzed that the decline in retail loans year-on-year is due to two main reasons: first, mortgage loans have shifted from positive to negative. Last year’s first quarter saw a “small spring” in the real estate market, with mortgage loans growing positively; this year, the real estate sector remains in adjustment, with repayments exceeding new loans, leading to negative growth in mortgage loans compared to the same period last year.

Second, regulatory restrictions on high-interest, high-return practices have impacted auto loans. Industry order rectification has affected bank auto loan growth.

However, Zhou Wanfu pointed out that there are positive signals in retail credit. Since March, mortgage loan applications have significantly rebounded, increasing about 15% compared to the previous two months and the third and fourth quarters of last year, indicating signs of stabilization in the real estate market. If this trend continues, housing loans are expected to gradually exit negative growth and achieve positive growth, helping retail loans meet their targets.