Core Viewpoint - The overall operating conditions of the six major state-owned banks show a steady trend, with a decrease in the overall non-performing loan (NPL) ratio and a maintained provision coverage ratio at a safe level, indicating an improvement in asset quality. However, there are underlying concerns, such as the rising balance of special mention loans and the increasing individual loan NPL ratio, which presents challenges for future asset quality control [1][2][3]. Group 1: Asset Quality Indicators - The NPL ratio of the six major banks is trending downwards and remains below the regulatory red line of 5%. Specific NPL ratios include: Industrial and Commercial Bank of China (ICBC) at 1.34% (down 2 basis points), Agricultural Bank of China (ABC) at 1.30% (down 3 basis points), Bank of China (BOC) at 1.25% (down 2 basis points), China Construction Bank (CCB) at 1.34% (down 3 basis points), and Bank of Communications (BoCom) at 1.31% (down 2 basis points). Postal Savings Bank of China (PSBC) saw a slight increase of 7 basis points to 0.90%, still the lowest among the six banks [2]. - The provision coverage ratio for all six banks significantly exceeds the regulatory red line of 150%, ranging from 200% to 300%. ICBC (214.97%), BOC (200.60%), and BoCom (201.94%) showed increases compared to the previous year, while ABC and CCB experienced slight declines, with PSBC seeing the largest drop of 61.42 percentage points, yet still maintaining a high absolute value [3]. - The balance of special mention loans has increased for five of the six banks, indicating a potential risk of these loans converting into NPLs. The increases in special mention loans are as follows: ICBC up by 91.5 billion yuan, PSBC up by 29.3 billion yuan, ABC up by 27.5 billion yuan, BOC up by 26.2 billion yuan, and BoCom up by 10.7 billion yuan [3][4]. Group 2: Individual Loan NPL Trends - The individual loan NPL ratio has been quietly rising, with the total amount of personal NPLs increasing significantly. In 2024, the personal NPL amounts increased by 109 billion yuan for PSBC, 301 billion yuan for CCB, 421 billion yuan for ICBC, 143 billion yuan for BOC, 320 billion yuan for ABC, and 97 billion yuan for BoCom, totaling nearly 1.4 trillion yuan [6]. - The individual loan NPL ratios have also risen across the board, with ICBC's ratio increasing from 0.70% to 1.15% (up 0.45 percentage points), CCB from 0.66% to 0.98% (up 0.32 percentage points), ABC from 0.73% to 1.03% (up 0.30 percentage points), BoCom from 0.81% to 1.08% (up 0.27 percentage points), and PSBC from 1.12% to 1.28% (up 0.16 percentage points) [6][7]. - Notably, personal operating loans, primarily aimed at small and micro business owners, have seen a significant increase in NPL ratios, with ICBC's ratio rising from 0.86% to 1.27%, ABC from 0.93% to 1.39%, and CCB from 0.95% to 1.59% [7][8]. Group 3: Future Outlook and Strategies - In response to the rising risks in retail loans, banks are implementing various strategies. CCB plans to strengthen risk control throughout the retail loan process, while ABC emphasizes strict entry standards for inclusive retail business and optimizing the risk control system. BOC aims to enhance proactive risk management and post-loan management, and ICBC focuses on optimizing business entry and bad debt disposal processes. BoCom intends to balance business development with risk control to maintain retail loan quality within expected ranges [8][9].