Zhongyuan Bank's stock price remains sluggish in the long term, with rising risks in real estate and personal consumer loans

（Source: Economic Information Daily）

Recently, Central Plains Bank Co., Ltd. (hereinafter referred to as “Central Plains Bank,” 01216.HK) released its 2025 annual report. The bank’s total asset scale and key operating indicators showed slight growth. Its non-performing loan ratio declined. However, risks in some specific business areas—such as real estate, personal consumer loans, and credit cards—are still rising. At the same time, the bank’s stock price has remained sluggish for a long time, and its price-to-book ratio is also at a low level within the banking sector.

Real estate and personal consumer loan risks are rising

The annual report shows that as of the end of 2025, Central Plains Bank’s total assets were RMB 1,414.293 billion, up 3.6% year over year. It achieved operating income of RMB 26.51B, up 2.1% from the end of the previous year. Net profit attributable to shareholders was RMB 3.59B, up 4.1% from the end of the previous year, reversing the trend of the bank’s operating income and net profit attributable to shareholders declining in tandem in the first half of 2025.

Over the past year, Central Plains Bank’s asset quality has also improved to some extent. As of the end of 2025, its balance of non-performing loans was RMB 14.39B, down RMB 68M from the end of the previous year. The non-performing loan ratio was 1.96%, down 0.06 percentage points from the end of the previous year. However, this level still remains higher than the 1.50% average non-performing loan ratio of commercial banks in the same period, and higher than the 1.82% non-performing loan ratio of city commercial banks in the same period.

Although the overall asset quality shows an improving trend, some risk indicators at Central Plains Bank still need to be closely monitored. In 2025, the bank’s loans classified as “watchlist” showed an upward trend. As of the end of 2025, they reached RMB 24.04B, up about RMB 1.0 billion from the end of the previous year. The proportion reached 3.28%, up 0.06 percentage points from the end of the previous year.

In addition, consistent with most listed banks that have already disclosed their 2025 performance, Central Plains Bank also faces risk challenges arising from retail business. Both the non-performing loan ratios for personal consumer loans and credit cards are trending upward. In 2025, the bank continued to increase support for social consumption growth. As of the end of the reporting period, its balance of personal loans was RMB 7.59B, up RMB 55.87B from the end of the previous year, representing growth of 2.9%.

Central Plains Bank’s personal loan risk is mainly concentrated in personal consumer loans, credit cards, and other such businesses. The non-performing loan ratios for these two businesses are both trending upward and remain at relatively high levels in the industry. The annual report shows that the bank’s balance of personal consumer loans was RMB 4.45B, up RMB 229M from the end of the previous year. The non-performing loan ratio was 3.39%, up 0.15 percentage points from the end of the previous year. Other personal loans, mainly credit-card-based, had a non-performing loan ratio as high as 5.31%, up 0.1 percentage points year over year. The bank’s non-performing loan ratio for personal operating loans, although trending downward, is still at a high level of 3.82%. In addition, the bank’s non-performing loan amount for personal loans reached RMB 7.65 billion, accounting for 53.16% of the bank’s total non-performing loans.

Industry insiders believe that among the banks whose annual reports have been released, the main reasons for the rise in non-performing loan ratios in personal loans—especially consumer loans and credit cards—are the impact of macroeconomic adjustments. These include insufficient effective demand, fluctuations in housing prices, and the weakening of repayment capacity and willingness among some small and micro enterprises and individual customers, leading to continued risk exposure.

Among Central Plains Bank’s corporate-type loans, both the non-performing loan amount and non-performing loan ratio for the real estate industry also show double-digit growth, and the risk in this area is still rising. The annual report shows that as of the end of 2025, the bank’s non-performing loan balance to the real estate industry increased by RMB 0.229 billion from the end of the previous year to reach RMB 1.47B. The non-performing loan ratio rose by 1.47 percentage points to 5.89%, which is the highest non-performing loan ratio among all business categories of the bank.

Regarding the increase in risk in the real estate business, Central Plains Bank explained that the main reason is the downturn in real estate market demand, which has increased repayment pressure as some corporate debts come due. In addition, the bank said it will stabilize loan quality by pushing for credit-structure adjustments, strengthening credit risk management, optimizing credit granting processes, strengthening post-loan management, and increasing the efforts to recover and dispose of non-performing loans.

Sluggish stock price and frequent compliance issues

Central Plains Bank was established in December 2014. It listed on the Hong Kong Stock Exchange in July 2017. In 2022, after it achieved a significant increase in asset scale by absorbing and merging Luoyang Bank, Pingdingshan Bank, and Jiaozuo Zhonglv Bank, it is now a provincial-level legal entity bank whose branch network covers the entire province of Henan.

However, since its listing, Central Plains Bank’s stock performance has been relatively weak. The initial offering price at listing was HKD 2.45 per share. After that, it followed a downward trend and in recent years has remained in the “penny stock” range (share price below HKD 1). It also lacks liquidity, with average daily trading volume of less than HKD 0.5 million. Meanwhile, its price-to-book ratio has also remained in a below-book value state for a long time. The latest figure is only 0.11 times, which is at a low level within the banking sector. As of the close on March 31, Central Plains Bank’s share price was HKD 0.32 per share, down 1.52% from the previous trading day. Compared with the initial offering price at listing, the decline has already exceeded 85%.

A Hong Kong stock analyst told the reporter that Central Plains Bank is not included in the Hong Kong Stock Connect program, which means that investors in Mainland China cannot directly participate in trading. In the Hong Kong stock market, institutional funds focusing on Mainland China’s small and mid-sized city commercial banks are limited, and individual investors’ participation is also lower. As a result, stocks of Mainlands banks similar to Central Plains Bank have not attracted much attention, and their liquidity is also poor.

In addition, in terms of compliance building, multiple branches under Central Plains Bank were penalized by regulators on multiple occasions in 2025 for related violations of regulations and laws. In December of the same year, Central Plains Bank’s Luohe branch was penalized for failing to truly and accurately reflect the risk level of credit assets. Also, the bank’s Xinyang branch was penalized for adding conditions beyond the contract, infringing consumers’ right to independent choice. In July of the same year, Central Plains Bank’s Nanyang branch was fined for two violations: employees’ improper handling of fund-related matters and serious dereliction of duty in credit underwriting.

The above violations reflect that during the scale expansion of Central Plains Bank’s branches and front-line credit staff, compliance management and risk controls were not implemented in practice, and not every transaction was made to adhere to the compliance bottom line.

Regarding questions such as how to continue to optimize asset quality, improve the overall valuation and stock price, strengthen compliance management, and enhance risk control construction, the reporter repeatedly called Central Plains Bank’s investor relations department but did not get through. The reporter then sent an interview request. As of the time of publication, the bank has not responded yet.

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