Bank of China's 2025 Interim Earnings and Dividend: A Blueprint for Stability and Growth in a Shifting Macro Environment

The Bank of China’s 2025 interim results, released on August 29, 2025, present a compelling case for its resilience amid a fragile global economy. With a post-tax profit of RMB 117.6 billion and a robust ROE of 9.11% [3], the bank has demonstrated its ability to generate returns even as China’s property market struggles and geopolitical tensions persist. This performance, coupled with a 30% dividend payout ratio of RMB 35.25 billion [2], underscores its commitment to rewarding shareholders while maintaining operational flexibility.

Dividend Sustainability: A Balancing Act

The 30% payout ratio, though high, is underpinned by strong capital buffers. The bank’s core Tier 1 capital adequacy ratio stands at 12.57%, and its overall CAR is 18.67% [1], well above China’s regulatory minimums (7.5% for Tier 1, 10.5% including buffers) [2]. These figures suggest the bank has ample capacity to sustain dividends without compromising its ability to absorb shocks. Additionally, the NPL ratio of 1.24% [1]—a critical metric for assessing credit risk—remains low, supported by a provision coverage ratio of 197.39% [1]. This cushion ensures the bank can weather potential loan defaults without eroding capital.

Operational Resilience in a Shifting Macro Environment

The bank’s strategic focus on risk management and fintech innovation has bolstered its resilience. Its Pillar 3 Disclosure Report for H1 2025 highlights rigorous risk-weighted asset management and liquidity coverage [4], aligning with global prudential standards. While analysts caution that NPLs may rise due to the property market downturn and slowing economic growth [1], the bank’s proactive capital replenishment (RMB 165 billion in core Tier 1 capital [1]) positions it to navigate these challenges.

Macro Risks and Strategic Opportunities

The broader macroeconomic environment remains a wildcard. A protracted property slump and weak consumer demand could pressure credit quality, potentially pushing NPLs higher [1]. However, the bank’s global operations and digital transformation initiatives—such as AI-driven credit underwriting—offer growth avenues. Its overseas business, which contributes to net interest margins [2], could offset domestic headwinds.

Conclusion: A Buy for the Long-Term

Bank of China’s 2025 interim results reflect a disciplined approach to capital management and risk mitigation. While macroeconomic headwinds persist, its strong ROE, high capital ratios, and conservative dividend policy make it a compelling long-term investment. Investors should monitor NPL trends and the bank’s ability to adapt to regulatory changes, but for now, the fundamentals remain solid.

Source:
[1] BANK OF CHINA GLOBAL WEB SITE, [https://www.boc.cn/en/investor/ir2/]
[2] Bank Of China Limited (BACHF) Q2 2025 Earnings Call ..., [https://seekingalpha.com/article/4818002-bank-of-china-limited-bachf-q2-2025-earnings-call-transcript]
[3] Bank of China, Ltd. (BACHF) H1 FY2025 earnings call transcript, [https://finance.yahoo.com/quote/BACHF/earnings/BACHF-H1-2025-earnings_call-358397.html]
[4] Bank of China Releases 2025 H1 Pillar 3 Disclosure Report, [https://www.tipranks.com/news/company-announcements/bank-of-china-releases-2025-h1-pillar-3-disclosure-report]