China closed over 670 banks in 2025, mostly rural, in consolidation drive

October 5, 2026 at 02:01 AM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

China closed more than 670 banks in 2025, almost all in rural areas, as part of a consolidation drive to strengthen the financial system. The closures included mergers and liquidations, with another lender taking over obligations. The total number of banks in China fell 23% over four years to 3,139 by the end of 2025.

Key Facts

More than 670 banks were closed in China in 2025, almost all in rural areas, according to Financial Times citing the National Financial Regulatory Administration (NFRA).
The total number of banks in China fell 23% over four years to 3,139 by the end of 2025.
Fitch Ratings said small rural and urban banks control more than a quarter of China's banking assets, which FT estimates at about $64 trillion.
In Inner Mongolia, the number of credit institutions under Inner Mongolia Rural Commercial Bank dropped from more than 100 to 12 after last year's mergers.
Moody's estimated Z-Bank's assets at 124 billion yuan at the end of 2024 before it was taken under control by Wuhan authorities and merged into Hankou Bank.

Consolidation Scale

China closed more than 670 banks in 2025, almost all in rural areas, according to Financial Times citing data from the National Financial Regulatory Administration (NFRA) and a Fitch Ratings report based on that data. The closures included mergers and liquidations of banks as independent entities, with another lender taking over their obligations. Fitch estimated that such consolidation should strengthen supervision. The total number of banks in China fell 23% over four years to 3,139 by the end of 2025, FT reported.

Vulnerable Small Banks

Fitch considers small rural and urban banks the most vulnerable part of China's banking system due to low asset quality, insufficient capital, and governance shortcomings, especially in less developed regions. Together these institutions control more than a quarter of the country's banking assets, which FT estimates at about $64 trillion. Consolidation simplifies regulation and reduces the number of small institutions that could face liquidity problems, Jason Bedford, a visiting senior fellow at the East Asia Institute of the National University of Singapore, told FT. "We have never seen consolidation on this scale before," he said.

Regional Examples

In Inner Mongolia, after last year's mergers under Inner Mongolia Rural Commercial Bank, 12 credit institutions remained, down from more than 100 previously, according to FT. In July, Wuhan authorities took control of the struggling Z-Bank, which then became part of Hankou Bank. Moody's estimated Z-Bank's assets at 124 billion yuan at the end of 2024. Bank profits are under pressure from low interest rates, deflation, and the ongoing real estate downturn, FT wrote.