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Bank of Communications Co., Ltd.
Bank of Communications is one of China's big state-owned banks, taking deposits and lending money to households and businesses.
Bank of Communications is one of China's big five state-owned banks, and it does the basic job banks have done for centuries: it takes in people's savings, pays them a little interest, and lends that money out to households and companies at a higher rate. The gap between what it pays depositors and what it charges borrowers is its core profit engine. It also runs a sprawling set of side businesses — credit cards, wealth management products, insurance, and a leasing arm — but plain old lending is still the heart of the machine.
Its branches are everywhere in China, and it lends to everyone from big state-owned manufacturers to small shopkeepers and people buying their first apartment. A huge share of its loan book goes to infrastructure projects and state-linked companies, which makes it a quiet tool of government economic policy: when Beijing wants roads, bridges, or a property boost, banks like this one are told to lend more. It also has a genuine international footprint, with branches in Hong Kong, London, and elsewhere, and it owns a sizable life insurance joint venture, giving it more ways to make money than a pure lender. The bank makes money in the simplest way: interest. It pays savers a low rate, lends at a higher one, and pockets the difference on trillions of yuan of loans. Fees from credit cards, wealth products, and insurance add a layer on top. Because it is state-controlled and huge, it wins on trust and reach rather than cleverness — customers bank there because the government stands behind it and the branch is down the street. It competes with the other big state banks, Industrial and Commercial Bank of China, China Construction Bank, and Agricultural Bank of China, plus fast-moving private players like China Merchants Bank. The messy part is what any Chinese bank carries: a lot of lending tied to the property market and local government financing, both of which have been under strain. Bad loans and thin profit margins are the constant worry, and falling interest rates squeeze the spread the bank lives on. Even so, it remains highly profitable and pays a steady dividend, which is a big reason income investors hold it. It also sits at the center of China's push to make the yuan more usable abroad, a slow project that could matter a lot over time.
Like its peers, Bank of Communications is valued by the market at a deep discount to the accounting value of its assets — a sign investors are pricing in real risk from those loans. For a bank this size, the real story is not exciting new products but whether China's economy and property sector can heal, because that decides how many of those loans get paid back.
Saved answer · last researched 9 Nov 2026
BIG PICTURE
The Yangtze River Delta makes nearly 20% of China's GDP, and this bank is rooted there
- 20% Share of China's GDP made in the Yangtze River Delta
- 80% Rest of China's GDP
Bank of Communications built its home base in the Yangtze River Delta, the cluster of cities around Shanghai. That region produces nearly 20% of China's entire economic output, so the bank's branch network sits where a big slice of the country's business and household wealth is created. Loans made there earn most of the bank's interest income. Source: Morningstar, data from 2026