Nation's 'Big Six' banks upgrading consumer credit business

Guided by policies aimed at expanding domestic demand and stimulating consumption, the personal credit business of China's six largest State-owned commercial banks has undergone notable structural changes.

Personal consumer loans and personal business loans at several banks have achieved double-digit growth, becoming key drivers of overall personal lending expansion, while personal mortgage loans and credit card businesses have contracted to varying degrees.

By the end of 2025, the outstanding balance of personal consumer loans at China's "Big Six" lenders totaled approximately 3.34 trillion yuan ($491.3 billion), an increase of 569.71 billion yuan from the previous year-end, up 20.56 percent year-on-year. Outstanding personal business loans reached 9.36 trillion yuan, increasing by 1.26 trillion yuan from the previous year-end, up 15.63 percent year-on-year.

This trend broadly aligns with the People's Bank of China's statistical report on the credit structure of financial institutions. By the end of the fourth quarter of 2025, outstanding household loans in renminbi and foreign currencies totaled 83.28 trillion yuan. Specifically, outstanding operating loans grew by 4 percent year-on-year to 25.11 trillion yuan, recording an increase of 937.8 billion yuan. Outstanding consumer loans excluding personal housing loans totaled 21.16 trillion yuan, up 0.7 percent year-on-year, marking an increase of 180.2 billion yuan.

In contrast, outstanding RMB property loans fell to 51.95 trillion yuan by the end of the fourth quarter, down 1.6 percent year-on-year. Among them, outstanding personal housing loans totaled 37.01 trillion yuan, down 1.8 percent year-on-year, with a full-year decline of 676.8 billion yuan.

Yang Haiping, a nonresident research fellow with the Beijing Wealth Management Industry Association, said that despite continued policy support for the property market and signs of recovery in housing sales, the share of residential mortgages in banks' asset allocation is still likely to trend downward.

By the end of 2025, the outstanding balances of personal consumer loans and personal business loans at the "Big Six" banks had both recorded strong year-on-year growth. In personal consumer lending, with the exception of Postal Savings Bank of China, the other five largest banks all achieved double-digit growth. China Construction Bank posted the fastest growth rate at 29.41 percent, followed by Bank of China and Agricultural Bank of China at 28.35 percent and 26.95 percent, respectively.

In personal business lending, four of the "Big Six" banks achieved double-digit growth. CCB again recorded the fastest growth rate at 28.77 percent, followed by ABC and Industrial and Commercial Bank of China at 19.92 percent and 15.03 percent, respectively.

Notably, the growth rates of personal consumer loans and personal business loans at the six largest State-owned commercial lenders were significantly higher than the average growth rate for financial institutions disclosed by PBOC, China's central bank.

Dong Ximiao, chief economist at Merchants Union Consumer Finance, said that large banks, backed by extensive branch networks and strong brand recognition, are able to attract deposits at relatively low costs. This gives them a competitive advantage in offering consumer and business loans at interest rates that small and medium-sized banks struggle to match.

Since 2024, large banks have seen a marked acceleration in personal consumer lending growth, while some small and medium-sized banks have experienced sharp declines in consumer and business lending due to factors such as new regulations on loan facilitation. This reflects the growing divergence in the retail credit structure across China's banking sector, Dong said.

In terms of asset quality, the nonperforming loan ratios for personal consumer loans among the "Big Six" banks showed mixed trends last year. By the end of 2025, CCB's nonperforming personal consumer loan ratio had fallen from 1.09 percent at the end of 2024 to 1.07 percent, while ABC's ratio had declined from 1.55 percent to 1.46 percent, indicating improved asset quality. Meanwhile, the nonperforming personal consumer loan ratios at Bank of Communications, ICBC, BOC and PSBC all increased. BOCOM recorded the largest increase, rising 0.65 percentage point to 1.77 percent.

During the same period, except for CCB, whose nonperforming personal business loan ratio edged down from 1.59 percent to 1.58 percent, the other five large State-owned commercial lenders all reported increases in their nonperforming personal business loan ratios. BOCOM saw the sharpest rise, climbing 0.73 percentage point to 1.94 percent.

Li Jianjiang, executive vice-president and chief risk officer of CCB, said that in response to rising risks in the retail banking sector in recent years, CCB has significantly optimized its retail credit risk management mechanisms, strengthened risk controls at key stages of the lending process and advanced centralized retail risk management practices. These measures began to show results in 2025, with the pace of increase in nonperforming personal loans narrowing year-on-year.

Li added that risk prevention and control in the retail segment will remain one of the bank's key priorities going forward. As various control measures are further implemented and refined, the bank's asset quality is expected to remain generally stable.

Wang Jingwu, senior executive vice-president and chief risk officer of ICBC, said that with the implementation of policies such as trade-in programs for consumer goods and interest subsidies for personal consumer loans — along with the accelerated rollout of broader policy support measures — the market foundation for personal lending is expected to gradually improve, and the asset quality of personal loans should return to more reasonable levels.

Wang said ICBC has adjusted its internal organizational structure and functions by establishing a dedicated personal credit business department, promoting greater centralization and specialization in personal lending operations. The bank has also strengthened digital and intelligent risk management tools, expanded product innovation and supply in consumer and business lending, actively resolved hidden risks and intensified efforts in the disposal of nonperforming assets.

Through coordinated efforts, the deterioration trend in the bank's personal loans has already begun to slow, he said.

Leading national joint-stock commercial lenders are also stepping up risk management for consumer loans. China Merchants Bank, known for its strong retail banking business, reported a nonperforming loan ratio of 1.22 percent for its small and micro business loans as of the end of 2025, up 0.43 percentage point from the previous year-end. In its 2025 annual report, the bank stated that it will closely monitor market developments, improve its ability to assess risk trends, continuously enrich risk monitoring data dimensions, and iteratively upgrade quantitative risk control models to enable early identification, early warning and early resolution of risks in high-risk businesses.

At the same time, CMB has actively responded to consumption-boosting policies and adopted multiple measures to support consumer spending, resulting in steady growth in its consumer lending business with risks remaining generally manageable.

By the end of last year, the bank's consumer credit business, including credit card loans and consumer loans, had outstanding nonperforming loans totaling 20.72 billion yuan, an increase of 46 million yuan from the previous year-end. However, the NPL ratio declined by 0.02 percentage point to 1.52 percent.

Xu Mingjie, executive vice-president of CMB, said risks in retail lending are still on the rise in 2026, and the asset quality of credit card loans continues to face certain pressures.

CMB emphasized in the report that it will continue to improve its refined risk management strategy for the consumer credit business. The bank will maintain differentiated customer selection standards before loan issuance, focusing on quality customers with stable long-term incomes while continuously expanding data sources and rapidly upgrading risk assessment strategies. It will also strengthen post-loan monitoring, enrich monitoring dimensions, upgrade its models to improve the accuracy of risk identification and closely track changes in customer risk profiles through big data-driven quantitative risk control technologies. (source: China daily)