Income and profit return to double-digit growth! Chongqing Bank's stock price rises, and mid-term business experiences "fluctuations"

Source: Institutional Home

On March 24, for Chongqing Bank (601963.SH), it was inevitably a day to lift one’s eyebrows in pride. After years of operational adjustments and trials, this city commercial bank rooted in western China has already turned in a strong performance report yesterday. And as the annual scorecard is made public, Institutional Home has noticed that Chongqing Bank’s share price has also rebounded to a historic interim high. This striking stock performance also implicitly reflects the market’s optimistic expectations for the bank’s future development.

Double-digit growth in both revenue and profit—first time since 2020

Overall: In 2025, Chongqing Bank recorded operating income of 15.11 billion yuan and attributable net profit of 5.65 billion yuan, with year-over-year growth rates of 10.5% for both. This year’s performance shows double-digit growth, which is the first time in the past seven years. In fact, since 2020, affected by public health events, the downward shift in market interest rates, fee reductions and other factors, Chongqing Bank’s revenue side has undergone years of adjustment and at one point fell into negative growth (for example, in 2022 and 2023, operating income year over year declined by 7.2% and 1.9% respectively; in 2024, revenue growth was only 3.5%). On the profit side, performance did not see as dramatic volatility as the revenue side, but the growth rate has always been “creeping” in the low single digits (for example, attributable net profit growth in 2023 was only 1.3%).

An image shows Chongqing Bank’s revenue and net profit growth performance since 2020; Source: Wind

“Growth in both volume and price” is the key theme running through Chongqing Bank’s operations in 2025. As net interest income—which accounts for more than 70% of its share of net profit—already reversed the contraction trend of the past three years, it turned to strong growth of 22.4% to 12.46 billion yuan, further strengthening its role as the backbone of the revenue side. Looking at the details, in 2025 the bank’s average earning assets balance was 895 billion yuan, up significantly 18.4% year over year, contributing the main portion to the growth in net interest income; improvements in the net interest margin also played a positive role. In 2025, this indicator was 1.39%. Although it improved by only 4 bps year over year, it was the first annual rebound since 2020.

Behind this, Chongqing Bank’s liability-side management is an important variable—its interest-bearing liabilities’ cost ratio fell sharply by 40 bps to 2.18% in that year. This decline is even greater than the contemporaneous change in the earning assets’ yield, thereby “saving” for positive returns. Further, as deposits—the core liability—its cost ratio declined by 37 bps year over year; the cost ratios of interbank liabilities and financial bonds fell by 50 bps and 38 bps, respectively. This clearly reflects the bank’s efforts to push forward its structural optimization project on the liability side. As it said in its annual report, it “strengthened the deposit-taking at our institution philosophy, actively expanded funding sources with strong stability and relatively lower costs, and controlled the overall cost of liabilities.”

An image shows the changes in Chongqing Bank’s earning assets yield and interest-bearing liabilities cost ratio in 2025; Source: The company’s financial report

The “visible” improvement in asset quality is yet another operating highlight from Chongqing Bank over the past year. By the end of 2025, the bank’s non-performing loan ratio was 1.14%, down 0.11 percentage points from the end of the previous year. Loans under watch accounted for 1.94%, down 0.70 percentage points from the end of the previous year. Past-due loans accounted for 1.36%, down 0.37 percentage points from the end of the previous year. With the simultaneous decline of the “three ratios,” the underlying drivers are the bank’s continued strengthening of credit risk prevention and control, enhancing risk screening, early-warning tracking, and post-loan management, as well as increasing efforts in risk disposal. From the perspective of industry credit cycle positioning, risk “clearing” in the three major industries—manufacturing, wholesale and retail, and construction—has become evident. Correspondingly, non-performing ratios fell by 28 bps, 146 bps, and 52 bps respectively.

An image shows changes in Chongqing Bank’s non-performing loan ratio by industry; Source: The company’s annual report

Beta market tailwinds helped, with the stock rebounding to near the historic peak

For the banking sector, over the past few years—led by large banks and some smaller-to-mid banks—it has already emerged from a hot and vigorous rally. Behind this is the further reflection of changes in the competitive landscape within the industry, and even more so the “high dividend payout” characteristics supported by earnings stability, making it a coveted “favorite” among many institutional investors. For Chongqing Bank, under the push of industry beta opportunities, it also went through a period of strong upward momentum. As of yesterday’s close, the bank’s share price was 10.93 yuan per share, having risen more than 50% since November 2023.

An image shows Chongqing Bank’s stock price performance since November 2023; Source: Wind

In addition to tailwinds from the broader industry rally, this strong performance is also a positive response to the bank’s generous returns to investors in the past. Of note, in this annual report, Chongqing Bank jointly disclosed its annual dividend plan: cash dividends of 0.2918 yuan per share, with total proposed cash dividends of 1.01B yuan. If considering profit pre-distribution from the first three quarters, then for the full year the bank plans to pay 0.4602 yuan per share, with total proposed cash dividends of 1.6B yuan. The amount once again reached a record high, corresponding to a cash dividend payout ratio as high as 30%. And this dividend stability has also been demonstrated over many years. Looking back, over the past three years, Chongqing Bank’s annual dividend amount has reached 4.46B yuan, accounting for as much as 90% of the average net profit over the prior three years—highlighting a clear “cash cow” characteristic.

An image shows Chongqing Bank’s dividend distribution over the past three years (in thousand yuan); Source: The company’s annual report

However, for Chongqing Bank, this year’s scorecard is not “smooth sailing.” For example, the bank’s renewed adjustment to net fee and commission income points to the bank’s “ups and downs” along the path of fee-related business. After this income surged 116% to 888 million yuan in 2024, in 2025 it fell 32.7% year over year to 598 million yuan—an amount that is the lowest within three years. In addition, the “tightening spell” on capital brought by rapid balance-sheet expansion is gradually becoming apparent. As of the end of 2025, the bank’s core tier-one capital adequacy ratio was 8.53%, down as much as 135 bps year over year, leaving only a 1% buffer from the regulatory red line. Going forward, further capital replenishment plans should be put on the agenda.

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责任编辑：秦艺