BBVA – China Banking Monitor, 2025

The main theme of the report is the analysis of the state of China's banking sector in 2025.

Key findings include a weak economic environment putting pressure on the banking sector, slowed asset growth, and significantly worsened bank profitability. There is an improvement in NPL indicators due to aggressive policies addressing bad loans, but rising special mention loans and new US tariffs increase credit risks. Capital buffers have improved for banks with high mortgage loan shares, but the implementation of TLAC in 2025 creates new capital adequacy pressures, especially for smaller lenders. The local government debt swap program provided short-term relief, but major fiscal and structural risks remain unresolved. There is increased interconnectedness with the shadow banking sector as smaller banks rely on interbank funding.