Bank of China 2024 net profit increased by 2.6% year-on-year, credit quality improvement offsets narrowing of negative news | Financial Report Insights
In 2024, net interest income was CNY 448.934 billion, a year-on-year decrease of 3.77%. The net interest margin fell from 1.59% to 1.40%, mainly affected by adjustments in existing mortgage rates and other factors. Credit quality improved, with a total provision for credit impairment losses of CNY 102.463 billion for the year, a year-on-year decrease of 4.03%
Bank of China’s net profit slightly increased in 2024, with a significant decline in impairment losses, which partially offset the negative impact of the narrowing net interest margin.
On the 26th, Bank of China announced its 2024 performance report, with the following key points:
Revenue Performance: In 2024, revenue reached CNY 632.771 billion, a year-on-year increase of 1.38%; among them, net interest income was CNY 448.934 billion, a year-on-year decrease of 3.77%, and non-interest income was CNY 183.837 billion, a year-on-year increase of 16.65%, accounting for 29.05% of total operating income.
Profitability: In 2024, the after-tax profit attributable to shareholders was CNY 237.841 billion, a year-on-year increase of 2.56%; the net interest margin decreased from 1.59% to 1.40%, a decline of 19 basis points, mainly affected by adjustments in existing mortgage rates and other factors.
Asset Quality: The non-performing loan ratio was 1.25%, a year-on-year decrease of 0.02 percentage points; the non-performing loan provision coverage ratio was 200.60%, a year-on-year increase of 8.94 percentage points.
Impairment Situation: The total credit impairment losses for the year were CNY 102.463 billion, a year-on-year decrease of 4.03%.
Capital Adequacy Ratio: The capital adequacy ratio was 18.76%, an increase of 1.02 percentage points from the end of the previous year, significantly higher than regulatory requirements.
Shareholder Returns: The board of directors proposed a final cash dividend of CNY 1.216 per 10 shares (pre-tax), with a total annual cash dividend of CNY 2.424 per 10 shares (pre-tax), including the interim cash dividend, resulting in a payout ratio of 30%.
Narrowing Net Interest Margin but Slight Decline in Impairment Losses
Bank of China’s operating performance in 2024 showed a steady improvement. The group achieved an after-tax profit of CNY 252.719 billion for the year, a year-on-year increase of 2.58%, with total assets reaching CNY 35.06 trillion, a year-on-year increase of 8.11%. Operating revenue was CNY 632.771 billion, a year-on-year increase of 1.38%.
It is noteworthy that net interest income was CNY 448.934 billion, a year-on-year decrease of 3.77%, with a net interest margin of 1.40%, down 19 basis points from the previous year, mainly affected by the LPR reduction and adjustments in existing mortgage rates. According to statistics, by the end of last year, the overall net interest margin of the Chinese banking industry had fallen to a record low of 1.52%.
However, non-interest income saw significant growth, reaching CNY 183.837 billion, an increase of CNY 26.244 billion year-on-year, or 16.65%, with net trading income increasing by 27.04% and net gains from financial asset transfers significantly rising. Non-interest income accounted for 29.05% of total operating income, an increase of 3.8 percentage points year-on-year.
Positive signals emerged regarding asset quality. The non-performing loan ratio was 1.25%, down 0.02 percentage points from the end of the previous year; the non-performing loan provision coverage ratio was 200.60%, up 8.94 percentage points from the end of the previous year, further enhancing risk resilience.
The total credit impairment losses for the year were CNY 102.463 billion, a year-on-year decrease of 4.03%. This also explains why net profit was able to grow despite a significant narrowing of the interest margin—the decline in credit impairment losses played a key buffering role
Outstanding Performance in Overseas Business
Bank of China, leveraging its unique global layout advantages, continues to enhance its cross-border financial service capabilities, aiding the internationalization of the Renminbi.
Significant Contribution from Overseas Business. The total assets in Hong Kong, Macau, and Taiwan amount to 5.71 trillion yuan, achieving a pre-tax profit of 60.686 billion yuan, a year-on-year increase of 13.07%, contributing 20.52% to the group's pre-tax profit; assets in other countries and regions total 2.59 trillion yuan, with a pre-tax profit of 18.352 billion yuan, a year-on-year increase of 35.11%.
Improved Overseas Network Layout. The global network layout continues to be enhanced, with 543 overseas branches established in 64 countries and regions, including 45 countries participating in the "Belt and Road" initiative, providing strong support for cross-border trade