Bank of China Limited 2025 Third Quarter Report Summary
This report covers the financial performance of Bank of China (BOC) for the nine months ended September 30, 2025. Below are the key financial highlights and operational metrics:
Key Financial Indicators
- Total Assets: As of September 30, 2025, total assets reached RMB 34.76 trillion, an increase of 7.08% compared to the end of 2024.
- Operating Income: For the first three quarters of 2025, the Group achieved operating income of RMB 479.28 billion, up 1.74% year-on-year.
- Net Profit: Net profit attributable to equity holders of the Bank was RMB 175.76 billion, representing a slight year-on-year increase of 0.52%.
- Net Interest Margin (NIM): The NIM stood at 1.41%, continuing to face pressure due to LPR (Loan Prime Rate) adjustments and high deposit costs.
Asset Quality and Capital Adequacy
- Non-Performing Loan (NPL) Ratio: The NPL ratio was 1.26%, a decrease of 0.01 percentage points from the end of the previous year. Total NPLs amounted to RMB 270.04 billion.
- Allowance for Loan Impairment (Provision Coverage): The provision coverage ratio increased to 198.86%, up 7.20 percentage points from the end of 2024, indicating strengthened risk buffers.
- Capital Ratios:
- Core Tier 1 Capital Adequacy Ratio: 12.23%
- Tier 1 Capital Adequacy Ratio: 14.36%
- Capital Adequacy Ratio: 19.07%
Strategic Highlights
- Lending Growth: Domestic RMB loans increased by RMB 1.58 trillion (up 7.90%) from the end of 2024. The bank prioritized credit to strategic sectors including manufacturing, green development, and inclusive finance for small businesses.
- Non-Interest Income: While net fee and commission income faced downward pressure, net trading gains and investment income provided some support to the overall revenue mix.
Conclusion
BOC maintained steady asset growth and stable asset quality through the third quarter of 2025. Despite the industry-wide challenge of narrowing interest margins, the bank’s increased provision coverage and robust capital ratios demonstrate a resilient balance sheet.
Bank of China Limited Consolidated Income Statement Analysis
(For the nine months ended 30 September 2025)
Unit: RMB million
| Items | Jan-Sep 2025 | Jan-Sep 2024 | YoY | % of Total Rev (2025) |
| Net interest income | 350,604 | 352,903 | -0.65% | 73.15% |
| Net fee and commission income | 55,270 | 57,515 | -3.90% | 11.53% |
| Investment income | 28,143 | 14,068 | +100.05% | 5.87% |
| Net gains on changes in fair value | 11,048 | 6,559 | +68.44% | 2.31% |
| Net exchange gains | 4,249 | 3,115 | +36.40% | 0.89% |
| Other operating income | 29,969 | 36,926 | -18.84% | 6.25% |
| Operating income | 479,283 | 471,086 | +1.74% | 100.00% |
| Operating expenses | (169,471) | (167,422) | +1.22% | 35.36% |
| Impairment losses on assets | (85,571) | (83,303) | +2.72% | 17.85% |
| Operating profit | 224,241 | 220,361 | +1.76% | 46.79% |
| Profit before income tax | 224,964 | 221,121 | +1.74% | 46.94% |
| Income tax expense | (36,259) | (35,014) | +3.56% | 7.56% |
| Net profit | 188,705 | 186,107 | +1.40% | 39.37% |
| Profit attributable to equity holders | 175,763 | 174,858 | +0.52% | 36.67% |
Segment Revenue (Based on Jan-Sep 2025)
- Net Interest Income: RMB 350,604 million (73.15% of total revenue). The slight decline reflects the narrowing Net Interest Margin (NIM) under the LPR downward adjustment environment.
- Non-Interest Income: RMB 128,679 million (26.85% of total revenue). This segment was primarily driven by the significant surge in investment income and fair value gains, which compensated for the decline in fee-based income.
Key Observations:
- Revenue Drivers: While traditional net interest income slightly contracted, the bank successfully leveraged financial market opportunities, with investment income doubling compared to the same period last year.
- Cost Management: Operating expenses grew by only 1.22%, which is lower than the revenue growth rate, indicating improved operational efficiency.
- Resilience: Despite macroeconomic challenges, the bank maintained a stable bottom line with a 1.40% increase in total net profit, supported by disciplined impairment provisioning.
Bank of China Limited Consolidated Balance Sheet Analysis
(As at 30 September 2025)
Unit: RMB million
| Items | 30 Sep 2025 | 31 Dec 2024 | Change (vs. Year-end) | % of Total Asset (2025) |
| Assets | ||||
| Cash and balances with central banks | 2,130,429 | 2,236,773 | -4.75% | 6.13% |
| Due from/Placements with banks and OFIs | 2,544,952 | 2,196,413 | +15.87% | 7.32% |
| Derivative financial assets | 185,572 | 166,162 | +11.68% | 0.53% |
| Net loans and advances to customers | 21,173,732 | 19,578,160 | +8.15% | 60.91% |
| Financial investments | 7,651,556 | 7,105,420 | +7.69% | 22.01% |
| Other assets | 1,073,200 | 1,176,956 | -8.82% | 3.09% |
| Total Assets | 34,759,441 | 32,459,884 | +7.08% | 100.00% |
| Liabilities | ||||
| Due to/Placements from banks and OFIs | 3,363,330 | 3,138,623 | +7.16% | 9.68% |
| Due to central banks | 1,186,051 | 1,225,584 | -3.23% | 3.41% |
| Due to customers (Deposits) | 24,195,496 | 22,907,022 | +5.62% | 69.61% |
| Bonds issued | 1,939,520 | 1,770,268 | +9.56% | 5.58% |
| Other liabilities | 1,223,618 | 1,079,058 | +13.40% | 3.52% |
| Total Liabilities | 31,908,015 | 29,720,555 | +7.36% | 91.80% |
| Equity | ||||
| Share capital | 294,388 | 294,388 | 0.00% | 0.85% |
| Other equity instruments | 419,165 | 419,307 | -0.03% | 1.21% |
| Capital/Surplus reserve and others | 682,735 | 682,536 | +0.03% | 1.96% |
| Retained earnings | 1,208,011 | 1,108,187 | +9.01% | 3.48% |
| Equity attributable to Bank shareholders | 2,618,348 | 2,514,685 | +4.12% | 7.53% |
| Total Equity | 2,851,426 | 2,739,329 | +4.09% | 8.20% |
Key Observations:
- Asset Allocation: Net loans and advances remain the dominant asset class (60.91%), growing by 8.15% since the beginning of the year, reflecting the bank’s active role in supporting credit demand.
- Funding Source: Customer deposits continue to be the primary funding pillar, accounting for nearly 70% of the total assets, which ensures a stable liquidity base.
- Capital Position: Retained earnings grew by 9.01% over the nine-month period, contributing to a total equity increase of 4.09% and providing a solid buffer for risk absorption.
Bank of China Limited Consolidated Statement of Cash Flows Analysis
(For the nine months ended 30 September 2025)
Unit: RMB million
| Items | Jan-Sep 2025 | Jan-Sep 2024 | YoY |
| Net cash flows from operating activities | 676,575 | 459,411 | +47.27% |
| Net cash flows used in investing activities | (418,895) | (521,684) | -19.70% |
| Net cash flows from financing activities | 100,564 | 163,334 | -38.43% |
| Effect of exchange rate changes on cash | (3,311) | (1,577) | +109.96% |
| Net increase in cash and cash equivalents | 354,933 | 99,484 | +256.77% |
| Cash and cash equivalents at beginning of period | 1,770,394 | 1,911,105 | -7.36% |
| Cash and cash equivalents at end of period | 2,125,327 | 2,010,589 | +5.71% |
Free Cash Flow (FCF) Analysis
For the banking sector, Free Cash Flow is assessed by deducting Capital Expenditures (CAPEX) from the net cash flow from operating activities to evaluate the efficiency of cash generation relative to asset maintenance.
| Items | Jan-Sep 2025 | Jan-Sep 2024 | YoY |
| Net cash flow from operating activities (A) | 676,575 | 459,411 | +47.27% |
| Purchase of fixed assets/intangible assets (B) | (11,854) | (15,922) | -25.55% |
| Free Cash Flow (FCF = A + B) | 664,721 | 443,489 | +49.88% |
Key Observations:
- Strong Operating Cash Inflow: The 47.27% increase in operating cash flow was primarily driven by a steady increase in customer deposits and adjustments in placements from other financial institutions, providing robust liquidity for the bank.
- Investment Strategy: The net outflow from investing activities narrowed by 19.70%, suggesting a more balanced pace of financial investment acquisitions and disposals compared to the previous year.
- Exceptional FCF Growth: FCF rose by nearly 50% year-on-year. This indicates a high quality of earnings and strong internal capital generation, which supports future dividend payments and capital adequacy requirements without relying solely on external financing.
- Liquidity Position: The significant jump in net cash increase (256.77%) has bolstered the bank’s cash reserves, ensuring it is well-positioned to handle market volatility and regulatory liquidity ratios.
Bank of China Limited Five-Year Financial Ratio Analysis (2020–2024)
Based on annual financial reports and the latest 2025 Q3 interim data, here is the analysis of the core financial ratios over the past five years:
Profitability Ratios
| Ratio | 2024 (Est/Q3) | 2023 | 2022 | 2021 | 2020 |
| Return on Average Assets (ROAA) | 0.81% | 0.82% | 0.85% | 0.89% | 0.87% |
| Return on Average Equity (ROAE) | 10.12% | 10.12% | 10.81% | 11.28% | 10.61% |
| Net Interest Margin (NIM) | 1.41% | 1.59% | 1.76% | 1.75% | 1.85% |
| Cost-to-Income Ratio (CIR) | 25.80% | 25.56% | 25.10% | 26.35% | 26.73% |
Key Observations:
- NIM Compression: The Net Interest Margin has shown a persistent downward trend over five years, primarily due to global interest rate cycles and the downward adjustment of the Loan Prime Rate (LPR) in China.
- Stable Efficiency: Despite revenue pressure, the Cost-to-Income ratio has remained stable below 27%, reflecting the bank’s disciplined approach to operating expenses.
Asset Quality and Risk Coverage
| Ratio | 2024 Q3 | 2023 | 2022 | 2021 | 2020 |
| Non-Performing Loan (NPL) Ratio | 1.26% | 1.27% | 1.32% | 1.33% | 1.46% |
| Allowance for Loan Impairment (Coverage) | 198.86% | 191.66% | 188.73% | 187.05% | 177.84% |
Key Observations:
- Improving Asset Quality: The NPL ratio improved from 1.46% in 2020 to 1.26% in 2024 Q3, indicating effective credit risk management and successful disposal of legacy bad debt.
- Strengthened Buffers: The Provision Coverage ratio has steadily increased, nearing 200%, which provides a much stronger cushion against potential future credit losses compared to 2020 levels.
Capital Adequacy Ratios
| Ratio | 2024 Q3 | 2023 | 2022 | 2021 | 2020 |
| Core Tier 1 Capital Adequacy Ratio | 12.23% | 11.63% | 11.84% | 11.30% | 11.28% |
| Capital Adequacy Ratio (CAR) | 19.07% | 17.74% | 17.52% | 16.53% | 16.22% |
Key Observations:
- Capital Growth: Both Core Tier 1 and total Capital Adequacy Ratios have reached five-year highs. This strong capital position supports business expansion and ensures compliance with increasingly stringent regulatory requirements for Global Systemically Important Banks (G-SIBs).
Summary
The five-year trajectory of Bank of China demonstrates a resilient “Low Margin, High Quality” profile. While profitability (NIM) faces structural headwinds, the bank has successfully traded margin for stability by improving asset quality and building a robust capital base.
Source: https://pic.bankofchina.com/bocappd/report/202510/P020251028595836209416.pdf
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