Bank of China H1 Profit Rises 5.1% on Strong Overseas Performance, Boosts Dividend

Bank of China (601988.SH, 03988.HK) reported a 5.10% year-over-year increase in first-half net profit, driven by robust performance from its global operations and a rare stabilization in its net interest margin. The state-owned lender also announced an increased interim dividend to mark the 20th anniversary of its public listing.

Key Financials and Shareholder Returns

In its semi-annual report for 2026 released on August 28, Bank of China disclosed solid growth metrics and a commitment to shareholder returns. The bank has distributed over ¥1 trillion in cumulative cash dividends since its initial public offering.

• Operating Income: ¥356.90 billion, an increase of 8.48% year-over-year.
• Net Profit (attributable to shareholders): ¥123.59 billion, up 5.10%.
• Total Assets: ¥40.19 trillion, a 4.77% increase from the end of the previous year.

To commemorate its 20th listing anniversary, the bank's board proposed raising the interim dividend payout ratio to 31%, up from its long-standing level of 30%. This translates to a cash dividend of ¥1.19 per 10 shares.

Overseas Operations Drive Profitability

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International business remains a significant pillar of the bank's earnings, with overseas institutions contributing over 27% of its pre-tax profit in the first half. Bank President Zhang Hui noted at a press conference that this contribution is particularly noteworthy as overseas assets account for just over 20% of the group's total, indicating superior profitability abroad.

Zhang described globalization as part of the bank's "innate DNA" and a core competitive advantage. During the period, the bank saw its offshore commercial loan growth reach a five-year high, while offshore yuan-denominated loans maintained double-digit growth, underscoring its role in supporting Chinese enterprises' global expansion.

Margin Resilience and Asset Quality

Against a backdrop of industry-wide margin compression, Bank of China's net interest margin (NIM) showed resilience, rising by 1 basis point from the previous quarter to 1.27%. Vice President Liu Chenggang attributed this to the fading negative impact of LPR (Loan Prime Rate) re-pricing on existing loans and the continued positive contribution from wider interest spreads on foreign currency assets.

Asset quality remained stable. As of the end of June, the bank's non-performing loan (NPL) ratio edged down by 0.01 percentage points from the end of 2025 to 1.22%. The provision coverage ratio, a measure of its buffer against bad loans, improved slightly to 200.85%.