Analysis of Trillion-Level Western City Commercial Bank Annual Report: How Did Chongqing Bank's "Net Interest Margin" Recover?

In an era when the banking industry is facing the dual challenges of “slowing growth” and “narrowing interest spreads,” how to break through and resolve issues early is a topic every bank is contemplating.

Recently, Chongqing Bank disclosed its 2025 annual report, providing an exploratory answer.

The annual report shows that in 2025, Chongqing Bank achieved operating income of 15.113 billion yuan, a 10.48% increase compared to the previous year; net profit of 6.105 billion yuan, a 10.58% increase; net profit attributable to shareholders of 5.654 billion yuan, a 10.49% increase; with both operating income and net profit growth rates exceeding 10%.

So, how was this growth rate achieved?

Focus, Adjust, Promote, Improve

Summarizing Chongqing Bank’s 2025 annual report, its double-digit performance growth can largely be attributed to the company’s business and risk control transformation efforts. Specifically, it boils down to the four key strategies: “Focus on reform, adjust structure, promote transformation, and improve quality.”

During the reporting period, the bank focused on advanced manufacturing and new productive forces, enhancing the “science and technology content” and “green content” of its business. It issued the first bank technology innovation financial bond in Western China, and loans to tech companies and green credit both grew by 60% and 40%, respectively.

At the same time, the bank’s manufacturing loans increased significantly, reaching a five-year high. Inclusive micro and small business loans increased by 15.695 billion yuan from the end of the previous year, and agricultural loans increased by 7.739 billion yuan.

Additionally, the bank focused on consumer credit and pension finance, leveraging its product system advantages. Self-operated online consumer loans, such as “Jie e Loan,” exceeded 10 billion yuan in balance, while loans in the elderly care industry grew by over 120%, and elderly clients increased by more than 10%.

Meanwhile, despite the rapid expansion of credit scale, the bank maintained its risk bottom line. As of December 31, 2025, the group’s non-performing loan ratio was 1.14%, down 0.11 percentage points from the end of the previous year; special mention loans accounted for 1.94%, down 0.70 percentage points; overdue loans accounted for 1.36%, down 0.37 percentage points; and the loan loss reserve coverage ratio was 245.58%, up 0.50 percentage points.

Net Interest Margin Rebounds Against the Trend

Chongqing Bank’s performance growth is largely related to an improvement in a key operating indicator.

Data shows that in 2025, the bank’s net interest margin increased by 13 basis points to 1.35%, and net interest income yield rose by 4 basis points to 1.39%.

In an environment where LPRs have been continuously lowered and the banking sector’s net interest margin is under pressure, Chongqing Bank’s interest spread performance is quite remarkable.

Why can Chongqing Bank achieve an upward trend against the market?

Refined Management.

Specific financial data indicates that although, influenced by macroeconomic factors, the bank’s average yield on interest-earning assets decreased by 27 basis points to 3.53%, the bank made significant efforts on the liability side—its average cost of interest-bearing liabilities dropped sharply by 40 basis points to 2.18%.

The reduction in liability costs not only offset the decline in asset yields but also widened the interest spread. Of course, this is not something that can be achieved just by wishing; it relies on the bank’s internal capabilities and management skills.

Assets Surpass 1 Trillion Yuan

In 2025, Chongqing Bank also achieved a notable milestone by officially entering the “trillion-yuan club” of total assets.

Data shows that by the end of 2025, the bank’s total assets, deposits, and loans reached 1,033.726 billion yuan, 565.704 billion yuan, and 531.285 billion yuan, respectively, representing increases of 20.67%, 19.32%, and 20.58% from the beginning of the year.

The data indicates that the bank’s asset growth is not one-sided but driven by both assets and liabilities, with both sides expanding rapidly.

Dividend Yield Near 4.5%

Regarding investor concerns about dividends, Chongqing Bank maintained its strong tradition of high payout ratios in 2025. The profit distribution plan for 2025 shows that the bank intends to distribute cash dividends based on the total A-share and H-share share capital registered as of the dividend record date, with each share paying 0.2918 yuan (tax included). Based on the closing price of 10.93 yuan on March 24, the dividend yield is close to 3%.

Considering that the bank had already implemented a third-quarter profit pre-distribution, with a cash dividend of 0.1684 yuan per share (tax included), the total dividends for the year exceed 0.46 yuan per share, making the annual dividend yield nearly 4.5%.

On this new starting point of surpassing a trillion yuan in scale, Chongqing Bank’s consistent and stable cash dividends send a strong message of confidence in future development to the market.

Risk Warning and Disclaimer

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