Continuous negative growth, the six major banks' personal mortgage balances decreased by 1.9 trillion yuan over three years

As the core participants in the real estate financial market, the six major state-owned banks are the main force in the personal housing loan market, accounting for over 75% among the 42 listed banks.

According to statistics from Yicai, by 2025, the total balance of personal housing loans at the six major state-owned banks will be 25 trillion yuan, a year-on-year decrease of about 2.7%, continuing the negative growth trend since 2023. As of last year, the housing loan balance of the six major banks had decreased by 1.88 trillion yuan from the peak in 2022.

“The reduction in personal housing loan balances is essentially a natural result and an objective reflection of the real estate cycle adjustment process,” said Xue Hongyan, a special researcher at Su Commercial Bank, analyzing that behind this are both weak new housing loan demand and the loss of existing loans.

Less than the peak by 1.88 trillion yuan

According to Wind data compiled by Yicai, in 2025, the total personal housing loan balance of the six major state-owned banks reached 25.07 trillion yuan, a decrease of 693.1 billion yuan from 2024, a 2.69% decline year-on-year. From the perspective of the year-on-year decline rate, the decrease in 2025 compared to 2024 slightly widened to 2.52%.

Since 2020, the scale of personal housing loans at the six major banks has experienced a cycle of “rapid growth - slowdown - continuous negative growth.” From 2020 to 2021, the housing loan scale still maintained double-digit growth, marking the end of the single-sided rise in the real estate market.

2022 was a significant turning point, when the growth momentum of the real estate sector noticeably weakened, and the growth rate of housing loan balances at the six major banks sharply declined to 1.78%, reaching a historical high of nearly 27 trillion yuan.

From 2023 to 2025, as the real estate industry entered a deep adjustment phase, the housing loan scale at the six major banks has experienced negative growth for three consecutive years, with the rate of decline increasing each year: 1.92%, 2.52%, and 2.69%. Last year, the housing loan balance of the six major banks was already 1.88 trillion yuan less than the peak in 2022.

“The reduction in personal housing loan balances is essentially a natural result and an objective reflection of the real estate cycle adjustment process,” said Xue Hongyan. Behind the shrinking volume, firstly, weak demand for new housing loans, as the real estate market continues to adjust, has led to a significant decline in the sales area and sales volume of commercial housing, weakening residents’ willingness to buy homes, and the addition of new medium- and long-term loans remains low; at the same time, banks are strengthening risk control and raising approval standards, with some high-priced housing regions seeing residents’ leverage ratios already quite high, both factors limiting new loan issuance.

“Secondly, existing loans are accelerating their loss, as some residents choose to repay early during the interest rate decline cycle to reduce interest burdens; thirdly, normal principal and interest repayments, where the principal part of monthly mortgage payments also naturally lowers the balance when new loans are insufficient to cover the repayments,” he explained.

Li Yong, an analyst at Dongwu Securities, believes that China’s real estate market is currently in a critical stage of transitioning from old to new momentum and seeking a new dynamic balance. By the end of 2025 and early 2026, the market environment will show new characteristics: on one hand, the simultaneous reduction of mortgage interest rates and housing provident fund loan rates has pushed residents’ home purchase costs to a recent low; on the other hand, stabilizing market confidence still requires more precise, effective, and sustainable policy support.

Two major banks’ non-performing loan ratios exceed 1%

Looking at the mortgage scales of various banks, last year, China Construction Bank maintained the top position with nearly 5.99 trillion yuan in mortgage balances. At the 2025 annual performance briefing, CCB President Zhang Yi stated that the bank seized structural opportunities in the real estate market last year, implemented city-specific policies, improved strategies for first- and second-hand homes, supported reforms of the commercial housing sales system and housing provident fund system, and strengthened its competitiveness in personal housing finance services.

Industrial and Commercial Bank of China (ICBC) ranked second with a scale of 5.88 trillion yuan. Historically, the combined personal housing loan balances of CCB and ICBC account for about 36%-37% of the 42 listed banks.

Next are Agricultural Bank of China and Bank of China, with last year’s personal housing loan balances of 4.82 trillion yuan and 4.57 trillion yuan, respectively; while Postal Savings Bank and Bank of Communications have smaller scales, at 2.37 trillion yuan and 1.44 trillion yuan last year.

In terms of growth rate, all six major banks experienced negative growth in their mortgage balances in 2025, but the decline rates varied. The smallest decline was at Postal Savings Bank (-0.37%); followed by Bank of Communications (-1.65%) and Bank of China (-1.89%), with declines within 2%. Larger declines included ICBC (-3.41%), Agricultural Bank (-3.38%), and CCB (-3.18%), all exceeding 3%, indicating more significant adjustments at leading banks. Notably, ICBC’s personal housing loan scale decreased by over 200 billion yuan year-on-year.

Regarding non-performing loan ratios, affected by macroeconomic conditions and the downward cycle in real estate, the non-performing rates of bank housing loans generally increased.

Last year, except for Bank of China, whose non-performing rate slightly decreased by 0.01 percentage points, the other five major state-owned banks saw their non-performing rates rise to varying degrees. The non-performing rates at Bank of Communications and ICBC increased by 0.43 and 0.33 percentage points respectively, both surpassing 1%, reaching 1.01% and 1.06%.

At the 2025 performance briefing, many listed bank executives reviewed last year’s housing loan issuance, non-performing asset disposal, and their strategies and progress for this year.

The management of Bank of China stated that last year, the bank helped stabilize the real estate market, with personal housing loans exceeding 500 billion yuan for the year. This year, they plan to steadily expand personal housing loans and non-housing consumer loans, promote product, customer, and scenario integration, and build a complete scenario-based consumption ecosystem.

Zhou Wanfu, Vice President of Bank of Communications, mentioned when discussing mortgages that last year’s first quarter saw a small spring in real estate, with mortgage loans increasing year-on-year, but this year’s first quarter still sees deep adjustments in real estate, with bank mortgage repayments exceeding new disbursements, showing negative growth. However, he also noted that since March, the volume of mortgage applications has significantly increased. Compared to the first two quarters last year or the third and fourth quarters, growth is about 15%.

Zhou Wanfu believes this is a sign of the real estate market stabilizing. He is confident that, following this trend, this year’s mortgage loans can gradually emerge from negative growth to positive growth, driving retail loans to meet the expected growth targets.