Breaking Down Postal Savings Bank of China Co., Ltd. Financial Health: Key Insights for Investors

From its roots in the 1919 postal savings system to a modern banking giant, Postal Savings Bank of China (1658.HK) has evolved into an institution with ~40,000 outlets serving over 660 million personal customers, backed by a majority stake held by China Post Group at 68.92%; key milestones include its formal incorporation in March 2007, a strategic RMB 45.1 billion investment round in December 2015, a Hong Kong listing on 30 September 2016 and a Shanghai listing in December 2019, all while pursuing a mission to serve agriculture, rural areas and SMEs through financial inclusion and digital innovation (AI, blockchain) - financially it reported total assets of RMB 18,605,653 million (up 8.90%) and total loans of RMB 9,655,891 million (up 8.33%) as of 30 September 2025, with net interest income of RMB 210,505 million and net profit of RMB 76,794 million for the nine months ended 30 September 2025, fee and commission income rising 11.48% to RMB 23,094 million, and plans to raise up to CNY 130 billion via A-share issuance in March 2025 to fuel further expansion and governance shifts that include new strategic investors and board changes - read on to explore PSBC's ownership, operations, revenue model and market positioning that earned it a Forbes Global 2000 #27 ranking as of 31 December 2024.

Postal Savings Bank of China Co., Ltd. (1658.HK): Intro

• 1919 - China's postal savings system established, laying the foundation for the future bank.
• March 2007 - Postal Savings Bank of China Co., Ltd. formally established as a joint-stock limited liability company.
• December 2015 - Strategic investments of RMB 45.1 billion attracted from investors including Temasek Holdings and Tencent, strengthening capital and strategic partnerships.
• 30 September 2016 - Listed on the Hong Kong Stock Exchange (1658.HK), at the time becoming the largest unlisted Chinese bank to float in HK.
• December 2019 - Listed on the Shanghai Stock Exchange, broadening its domestic investor base.
• 31 December 2024 - Network scale reached ~40,000 outlets and the bank reported serving over 660 million personal customers.

• Controlling shareholder: China Post Group (state-owned), which provides a strategic link to postal network and nationwide retail footprint.
• Strategic minority investors (notable): Temasek Holdings, Tencent - part of the RMB 45.1 billion strategic placement in 2015.
• Corporate structure: Joint-stock commercial bank with mixed ownership (state-majority + strategic private/sovereign investors), listed in Hong Kong and Shanghai.

• Mission focus: provide accessible, low-cost basic banking and financial services across urban and rural China, leveraging the postal network to promote financial inclusion.
• Target client segments: retail mass-market customers, small and micro enterprises, rural households and underbanked regions.
• Competitive edge: ubiquity of postal outlets, deep rural penetration, brand recognition and low-cost deposit gatherer.

• Net interest income - primary revenue driver: interest margin between interest earned on loans/securities and interest paid on deposits.
• Deposit-taking scale advantage - low-cost retail deposits gathered through the postal network reduce funding costs.
• Loan and fee income - consumer loans, small & micro enterprise lending, mortgage and working-capital financing plus account/transaction fees.
• Investment securities portfolio - interest and trading income from held-to-maturity and available-for-sale government and corporate bonds.
• Ancillary financial services - wealth management distribution, agency services, cross-selling of insurance and payment services (including partnerships with fintech players).

Postal Savings Bank of China Co., Ltd. (1658.HK): History

• Majority shareholder (31 Dec 2024): China Post Group - 68.92% ownership, retaining effective control and influence over strategic decisions.
• Strategic investors secured in December 2015 (collective stake as of 31 Dec 2024): Temasek Holdings, Tencent and others - combined 16.92% stake established during the bank's pre/post-IPO strategic placements.
• Capital plan (announced Mar 2025): intention to raise up to CNY 130 billion via new A-share issuance with strategic anchor investors including the Ministry of Finance, China Mobile Communications Group, and China Shipbuilding Group.
• Active governance (2025): extraordinary general meeting held Jan 2025 to elect new directors; third extraordinary general meeting convened in Dec 2025 addressing profit distribution and financial bond issuance.
• Ownership profile (31 Dec 2024): a mix of state-owned entities and private investors providing a broad, diversified capital base supporting retail and micro-lending expansion.

Postal Savings Bank of China Co., Ltd. (1658.HK): Ownership Structure

• Mission: Provide accessible, affordable financial services to underserved communities and support national rural development and poverty reduction initiatives.
• Core values: customer-centricity, inclusivity, technological advancement, and socio-economic contribution.
• Strategic emphasis: use postal branch footprint to sustain stable operations, maximize shareholder value, and facilitate SME and household access to credit and deposits.
• Innovation: deployment of digital tools (AI for credit scoring/operations, blockchain for trade finance and payment settlement, mobile/postal e-channels) to raise efficiency and inclusion.

• Alignment with national policy: actively supports targeted poverty alleviation, rural revitalization, agricultural financing and other central directives by channeling deposits and credit into priority sectors.
• Customer focus: expanded low-cost deposit services, microcredit, remittance and payment solutions tailored to remote and lower-income customers.

• How it makes money:
  • Net interest margin from mobilizing low-cost retail deposits and lending to households, agriculture and SMEs.
  • Fee and commission income from payments, remittances, agency banking and wealth-management distribution.
  • Service charges for government and postal financial services in rural/remote locations.

• Ownership snapshot (approximate, latest filings):
• State control via China Post Group (majority shareholder ~64.2%), with remaining free float held by institutional investors and retail shareholders (~35.8%).

Postal Savings Bank of China Co., Ltd. (1658.HK): Mission and Values

• Mission: Provide simple, secure, and affordable financial services to the broad public and underserved communities across China.
• Core values: accessibility, prudence, service-orientation, and innovation.

• Branch and outlet network: operates through approximately 40,000 outlets, including directly-operated branches and agency outlets embedded in the China Post network, enabling deep rural penetration and last-mile delivery.
• Product suite:
  • Savings deposits (retail demand and time deposits)
  • Personal loans and credit products (including consumer and mortgage lending)
  • Debit and credit card services
  • Payments and remittances (retail and government payments)
  • Wealth management products (fund distribution and structured savings)
  • Insurance agency services (third-party insurance distribution)
• Electronic channels: PSBC has implemented an integrated e-banking ecosystem that includes online banking, mobile banking (apps and mini-programs), self-service banking terminals, telephone banking, television banking, and community-level "micro-banking" solutions.
• Channel interconnection: the bank's model emphasizes seamless linkage between electronic channels and physical outlets so customers can initiate transactions digitally and complete or receive services through nearby outlets or post offices.

• Governance: PSBC maintains a corporate governance framework with a board of directors, supervisory board, and executive management aligned to regulatory standards and disclosure requirements.
• Key executives: President Lu Jiajin and Chairman Li Quohua (senior management providing strategic direction and operational oversight).
• Transparency: financial statements and annual reports are audited and prepared in accordance with domestic and international auditing standards and disclosed regularly to investors and regulators.

• Net interest income: primary source - earning spread between deposit funding (large retail low-cost deposits) and interest on loans and investments.
• Fee and commission income: fees from cards, payments, wealth product distribution, insurance agency services, and service fees collected through the postal outlet network.
• Investment income: returns from bond portfolios and other on-balance-sheet investments managed within banking book constraints.
• Agency and channel monetization: fees and commissions from third-party product distribution and cross-selling through the extensive outlet network and digital channels.

• Omni-channel servicing: integration of mobile/online transactions with in-person fulfillment at post offices and village outlets enhances convenience and trust for customers preferring cash or face-to-face interaction.
• Financial inclusion: targeted lending and deposit services for rural households and small-and-micro enterprises to support local economies and government financial inclusion goals.
• Cost structure: scale of outlets and retail deposit base supports low-cost deposit funding; ongoing investment in digitalization aims to improve efficiency and reduce unit costs over time.

Postal Savings Bank of China Co., Ltd. (1658.HK): How It Works

• Core revenue drivers: net interest income from loans and deposits; net fee and commission income from transactional and advisory services.
• Customer reach: vast branch network plus digital platforms to acquire retail, rural and SME customers.
• Strategic focus: rural finance, SME lending and basic financial inclusion, often supported by policy incentives and targeted capital initiatives.
• Capital strategy: periodic capital raising (including A-share issuances) to support balance-sheet growth and regulatory ratios.

• Interest spread: PSBC lends to households, SMEs and agri-related borrowers while funding via low-cost retail deposits (post office-based deposit franchise), producing net interest income - RMB 210,505 million for the nine months to 30 Sep 2025 illustrates scale.
• Fee income expansion: wealth management, bancassurance, payment processing, card and channel fees - net fee & commission income rose 11.48% to RMB 23,094 million in 2025, reflecting cross-sale and digital transaction growth.
• Distribution leverage: extensive branch network and digital channels lower marginal customer acquisition cost and increase wallet share, boosting both interest-bearing balances and non-interest fee streams.
• Policy alignment benefits: focus on rural and SME lending can attract subsidized funding windows, credit support programs and favorable allocation under development finance initiatives, improving margins and business volumes.
• Capital support for growth: equity issuances (including new A-shares) strengthen CET1 and total capital ratios, enabling balance-sheet expansion-more loans, product rollout and investment in tech-without breaching regulatory limits.

• Loan mix and pricing management - optimize retail mortgage, consumer and SME portfolios to sustain interest margins.
• Deposit franchise optimization - maintain sticky low-cost deposits through post-office network and targeted products.
• Cross-sell and fees - deepen wealth management and insurance distribution to grow fee income (demonstrated by 11.48% fee growth in 2025).
• Digital scale - use mobile and online platforms to increase transaction volumes and reduce unit servicing costs.
• Risk & capital management - maintain asset quality controls and raise capital when needed (e.g., A-share issuance) to support profitable growth.

Postal Savings Bank of China Co., Ltd. (1658.HK): How It Makes Money

• Net interest margin and loan growth: core income from interest spread on a loan portfolio that grew 8.33% to RMB 9,655,891 million (30 Sep 2025).
• Fee and commission income: payments, wealth management, agency services and digital financial services.
• Investment income and treasury operations: managing large securities and interbank portfolios within total assets of RMB 18,605,653 million (30 Sep 2025).
• Cost control and efficiency via digitalization: AI-driven underwriting and blockchain-enabled back-office processes to reduce unit costs and risk.

• Risk/Return drivers: retail deposit franchise (low-cost funding), regional SME lending exposure, credit costs management, and diversification into fee-generating digital products.
• Future outlook: capital raise plus digital initiatives expected to support credit growth, improve ROE and expand fee income share.