In the first half of this year, the combined non-interest income of the six largest state-owned commercial banks reached 564.076 billion yuan, marking a year-on-year increase of 10.3%, with China Construction Bank (CCB), Agricultural Bank of China (ABC), and Postal Savings Bank of China (PSBC) all achieving double-digit growth rates. During the same period, the aggregate non-interest income of the nine A-share listed joint-stock banks totaled 261.699 billion yuan, a mere 0.23% increase. However, a closer examination of these two sets of figures reveals that the driving forces behind their growth are exactly opposite.

For joint-stock banks, their modest non-interest income growth was underpinned by fee-based businesses but dragged down by fluctuating investment returns. For the Big Six, the situation was inverted: investment gains fueled the double-digit expansion, while fee-based business remained virtually stagnant. In the first half of the year, the combined net fee and commission income of the Big Six was approximately 267.1 billion yuan, essentially flat year-on-year. The real driver was other non-interest income, totaling around 296.9 billion yuan, which surged by over 20% annually. Historically, fee and commission income was the primary engine of non-interest revenue. By this year's first half, however, fee income accounted for less than half of the Big Six's total non-interest income. Among the six banks, only Postal Savings Bank of China achieved double-digit fee income growth at 12.20%, while the other five either saw minimal gains (none exceeding 3.3%) or outright declines.

Looking at the overall picture, none of the Big Six reported a decline in total non-interest income for the first half. CCB led with a 16.74% increase, followed by ABC at 12.76% and PSBC at 12.25%. ICBC grew by 9.78%, Bank of China by 5.24%, and Bank of Communications by 3.39%. The disconnect between non-interest income growth and fee income performance is most pronounced at CCB. Despite its 16.74% growth in total non-interest income, its net fee and commission income actually fell by 1.42% to 64.289 billion yuan, dragged down by declines in consulting fees and asset management business revenue. The growth was driven primarily by gains from the disposal of bond and equity investments. The half-year report shows the bank's net gains on investment securities reached 20.167 billion yuan, an increase of 8.476 billion yuan year-on-year, while gains from the derecognition of financial assets measured at amortized cost totaled 18.321 billion yuan, up 8.921 billion yuan. Together, these two items contributed an additional 17.397 billion yuan, more than offsetting the 929 million yuan decline in fee income.

Across all six banks, the conclusion is clear. Total net fee and commission income was roughly 267.1 billion yuan, flat year-on-year. The combined non-fee components of non-interest income reached approximately 296.9 billion yuan, up 22% year-on-year, meaning nearly all the incremental non-interest income came from these investment-related areas. Breaking down by institution, ICBC's fee income grew 3.3% to 69.235 billion yuan, retaining its top position in the market. Bank of China saw a 0.89% increase to 47.209 billion yuan, and Bank of Communications edged up 0.07% to 20.473 billion yuan. PSBC reported a robust 12.20% growth to 18.982 billion yuan, while ABC and CCB saw declines of 8.7% and 1.42% respectively. Of the six, four recorded positive fee income growth, but apart from PSBC, none exceeded 3%. The fee-based business segment itself failed to keep pace with the double-digit expansion of overall non-interest income.

The approximately 296.9 billion yuan in other non-interest income largely stemmed from realized gains on bond sales. With bond yields trending downward and equity market valuations recovering in the first half, banks saw significant unrealized gains accumulated on their bond books, opening a window to realize disposal profits. Many banks pointed to the same source in their earnings calls: increased gains from the disposal of bond and equity investments. The differences lie in the scale of each bank's investment portfolio and how much profit they could crystallize. Industry-wide, this market rally had an uneven impact. Five of the Big Six reported positive investment income growth, with combined gains rising 17.11% year-on-year. In contrast, the combined investment income of 17 city commercial banks fell 16.83%, and that of 10 rural commercial banks dropped 20.18%. An exception was Bank of China, whose investment income declined 56.44% to 6.962 billion yuan, with its non-interest income growth driven mainly by fair value gains of 23.732 billion yuan, the highest among listed banks. While the big banks reaped the benefits of the bond market rally, smaller lenders were left navigating the downturn.

ABC offers the clearest example among the Big Six. As of the end of June, its financial investment balance stood at 17.85 trillion yuan, up 9.4% from the end of last year, with bond additions of 1.52 trillion yuan in the first half. A relatively high proportion of bonds with maturities of five years or longer, combined with favorable timing and bond selection strategies, kept its holding costs relatively low, further boosting unrealized gains as yields declined. In the first half, ABC's investment income and fair value changes together increased by 15.928 billion yuan year-on-year.

ICBC showed a more diversified source of non-interest income growth. Its other non-interest income rose 19.1% to 55.387 billion yuan, with equity and fund investment income surging approximately 140%, precious metals agency income growing 103%, and fund distribution fees rising 60%. PSBC accelerated the trading turnover of bonds and bills, resulting in a 14.89% increase in investment income and fair value gains. This diversification is precisely what joint-stock banks have been unable to achieve. During the same period, Shanghai Pudong Development Bank saw its other net income (including investment gains and fair value changes) drop 14.30%, dragging its total non-interest income down 9.63%. Several other listed banks also saw their investment income shrink year-on-year. The trillions of yuan in investment portfolios and cross-asset trading capabilities represent a significant competitive barrier.

However, income earned from the market is fundamentally different from fees collected from customers. Among the Big Six, only PSBC achieved double-digit fee income growth. In the first half, PSBC's fee income grew 12.20% to 18.982 billion yuan, with wealth management product fees up 36.66% to 3.743 billion yuan and investment banking fees rising 16.41% to 4.2 billion yuan. The bank also reported a 23.57% increase in personal wealth management clients compared to the end of last year. The other three banks with positive growth remained in the 0-3.3% range: ICBC at 3.3%, Bank of China at 0.89%, and Bank of Communications at 0.07%. The two decliners had specific reasons. ABC's fee income fell 8.7% to 46.959 billion yuan, mainly due to the high base effect from one-time gains on existing wealth management products in the prior year period. The bank noted that on a comparable basis, excluding this factor, fee income actually grew positively, with custody and other trustee services up 11.5% and settlement and clearing business up 3.9%. CCB's fee income declined 1.42% to 64.289 billion yuan, despite an 18.73% increase in agency business fees, which was largely offset by declines in consulting fees and asset management business revenue. The wealth management recovery is evident among the big banks, but relative to their massive scale, these isolated bright spots are insufficient to support a 10-percentage-point surge in overall non-interest income. Industry-wide, fee income as a percentage of total operating revenue for the Big Six stands at 13.32%, notably lower than the 15.51% for joint-stock banks.

Breaking down the three revenue streams provides a clearer picture. In the first half, net interest income for the Big Six grew 9% annually. Fee-based business income totaled approximately 267.1 billion yuan, essentially flat year-on-year. Meanwhile, non-fee non-interest income grew approximately 22%, primarily driven by realized gains from bond and equity investments. For this round of double-digit non-interest income growth among the Big Six, the contribution from fee-based businesses proved to be quite limited.