Non-performing loan ratio 0.97%! Will Qingdao Bank's asset quality create a historic best by 2025?

(Source: Zhongfang Network Finance)

While rapidly expanding, Qingdao Bank adheres to its risk bottom line, achieving a “dual reduction” in asset quality, reaching historically optimal levels.

Produced by | Zhongfang Network

Reviewed by | Li Xiaoyan

On March 26, Qingdao Bank (002948) released its 2025 annual report, showcasing impressive results with total assets exceeding 800 billion, net profit growth of over 21%, and a non-performing loan ratio breaking 1% for the first time, successfully concluding its three-year strategic plan and delivering a high-quality report card of “coordinated improvement in quantity, quality, and efficiency.” In the context of narrowing interest margins and intensified regional competition in the banking industry, the bank demonstrates strong operational resilience and regional competitiveness through a path of deep local cultivation, distinctive breakthroughs, and proactive risk control, providing a replicable model for high-quality development of urban commercial banks.

In 2025, Qingdao Bank achieved leapfrog growth, with total assets reaching 814.96 billion yuan, a year-on-year increase of 18.12%, successfully breaking through the 800 billion yuan mark. Customer loans and deposits amounted to 397.008 billion yuan and 502.899 billion yuan, respectively, with year-on-year growth of 16.53% and 16.41%. All three core scale indicators maintained balanced double-digit growth, showcasing its solid customer base and strong growth momentum in the Shandong regional market.

The performance on the profitability front is even more remarkable, achieving counter-cyclical high growth against the backdrop of industry pressure on interest margins: operating income reached 14.573 billion yuan (+7.97%), net profit attributable to the parent company was 5.188 billion yuan (+21.66%), with the net profit growth rate exceeding revenue by 13.69 percentage points, significantly improving profit conversion efficiency. The weighted average return on net assets was 12.68% (+1.17 percentage points), ranking the bank among the top tier of urban commercial banks; basic earnings per share were 0.85 yuan (+23.19%), providing substantial returns for shareholders.

The effectiveness of refined management is evident, with business and management expenses at 4.608 billion yuan (-2.31%), and the cost-to-income ratio at 31.62% (-3.33 percentage points), reinforcing profit resilience through efficient cost control, achieving a virtuous cycle of “scale expansion, efficiency enhancement, and cost optimization.” The three-year strategic plan concluded impressively, with a compound annual growth rate of 18.94% in net profit attributable to the parent company, fully achieving strategic goals and laying a solid foundation for future development.

While rapidly expanding, Qingdao Bank adheres to its risk bottom line, achieving a “dual reduction” in asset quality, reaching historically optimal levels. By the end of the year, the non-performing loan ratio was 0.97% (-0.17 percentage points), falling below 1% for the first time and 0.53 percentage points lower than the average level of commercial banks; the balance of non-performing loans was 3.841 billion yuan (-0.032 billion yuan), with the proportion of substandard, doubtful, and loss loans declining simultaneously, continuously improving the purity of credit assets.

The bank’s risk resistance capability has significantly strengthened, with a provision coverage ratio of 292.30% (+50.98 percentage points), far exceeding regulatory requirements, with nearly 3 yuan in provisions corresponding to every 1 yuan of non-performing loans, providing a sufficient safety cushion against potential risks. The bank strictly implements the standard of “all loans overdue by more than 60 days are classified as non-performing,” ensuring the authenticity and reliability of asset quality data while firmly upholding the risk bottom line during scale expansion.

Aligning with the requirements of the Central Financial Work Conference’s “Five Major Articles,” Qingdao Bank deeply cultivates regional endowments, building core competitive businesses such as blue-green finance and transaction banking, breaking free from homogenized competition. In the field of green finance, the balance of green loans reached 58.813 billion yuan, a year-on-year increase of 57.47%, with growth far exceeding the average loan growth rate of the bank, and the influence of the “Green Finance Qingyin” brand remains at the top among urban commercial banks. Blue finance, leveraging the advantages of Qingdao as a marine city, precisely serves the marine economy, forming a distinctive financial pattern driven by “blue and green.”

At the same time, the bank continues to enhance its transaction banking and wealth management businesses, optimizing its income structure and reducing reliance on interest margin, seizing opportunities in the industry’s transformation. This specialized layout not only enhances market competitiveness but also deeply integrates into local development, achieving a synchronous resonance between finance and the real economy.

Behind the impressive results, Qingdao Bank is also acutely aware of the challenges and potential risks in its development. Capital replenishment pressure, continued pressure on net interest margins, and intensified regional competition pose three major challenges, common issues during the industry’s transformation period. Additionally, credit risks triggered by regional economic fluctuations and compliance and performance risks from high concentrations of related parties need continued attention.

However, the bank has developed a mature response pathway: accelerating capital replenishment through diversified channels to alleviate capital constraints; continuously optimizing the profit structure to increase the proportion of non-interest income; strengthening the advantages of specialized businesses, deepening regional cultivation; and improving the risk control system, strictly regulating related party transaction management to address uncertainties with a prudent strategy.

Overall, Qingdao Bank’s comprehensive breakthroughs in 2025, characterized by “stepping up in scale, innovating in efficiency, achieving optimal quality, and highlighting advantages,” demonstrate strong operational resilience and regional competitiveness. As a high-quality urban commercial bank deeply rooted in Shandong, the bank is accelerating its transformation from “scale expansion” to “high-quality development” by leveraging its geographical advantages, solid operational foundation, and clear strategic layout.

In the future, with the advancement of the 14th Five-Year Plan and accelerated construction of a strong financial nation, Qingdao Bank is expected to leverage its differentiated advantages in blue-green finance and transaction banking, continue to deepen its local groundwork, serve the real economy, further break through in regional banking competition, and achieve continuous coordinated enhancement of scale, efficiency, and quality, creating greater value for shareholders, customers, and society.

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