Operational resilience is highlighted: the logic behind Zhongyuan Bank's simultaneous growth in revenue and net profit

Ask AI · How can Bank of Zhongyuan stabilize and improve its net interest margin against the trend?

On March 30, Bank of Zhongyuan disclosed its 2025 annual performance report. Against the backdrop of persistent industry pressure in which domestic banks’ interest margins keep narrowing, this provincial-level legal entity bank rooted in Henan delivered an answer sheet of “steady progress with improvements in the middle of progress.”

Throughout the year, business operations achieved steady progress with simultaneous improvements in both quality and efficiency, delivering a solid and impressive annual performance.

As of the end of 2025, Bank of Zhongyuan’s total assets reached RMB 1414.293 billion, up RMB 49.096 billion from the end of the previous year, an increase of 3.6%. During the reporting period, operating income was RMB 26.507 billion, and net profit was RMB 3.576 billion, up 2.1% and 3.1% year-on-year respectively; the non-performing loan ratio was 1.96%, down 0.06 percentage points from the end of the previous year. Overall operating strength and risk-absorption capacity continued to strengthen steadily.

Behind the sustained improvement in key operating indicators is the deep implementation and tangible results of Bank of Zhongyuan’s strategic plan to “improve government banking, solidify industrial banking, strengthen urban resident banking, and expand rural revitalization banking.” Looking ahead, Bank of Zhongyuan will earnestly implement the work arrangements of the Provincial Party Committee and the Provincial Government, accelerate the development of distinctive, differentiated operations, and contribute financial strength to help write a new chapter in Chinese modernization on the Central Plains.

Net interest margin stabilizes and rebounds; both revenue and net profit grow

China’s banking industry is currently facing common pressures, including sustained narrowing of industry interest margins and slowing growth momentum. How can regional banks break out of homogeneous competition and build differentiated core barriers has become the key question for steady operations.

As a leading financial force serving the local economy, in recent years Bank of Zhongyuan has anchored itself to four strategic positioning: “improve government banking, solidify industrial banking, strengthen urban resident banking, and expand rural revitalization banking.” It has continued to deepen internal mechanism reforms, intensively develop the track of Henan’s local real-economy sectors, and gradually build a distinctive business model tailored to regional development. Its 2025 annual report performance also provides direct proof of the effectiveness of this strategy’s execution.

From the full-year operating picture, Bank of Zhongyuan’s operating resilience in 2025 stood out. It achieved “double growth” in revenue and net profit. According to the financial report, the bank’s full-year operating income reached RMB 26.507 billion, up 2.1% year-on-year; net profit was RMB 3.576 billion, with a year-on-year increase of 3.1%. Against the backdrop of industry cycle pressure, it delivered a steady answer.

Of these, net interest income—serving as the core “anchor” of bank revenue—remained solid for Bank of Zhongyuan, becoming a key support for performance growth. In 2025, the bank’s net interest income was RMB 22.519 billion, up RMB 0.976 billion year-on-year, an increase of 4.5%. This reflects a significant improvement by Bank of Zhongyuan in asset pricing capability and cost control on liabilities.

During the reporting period, Bank of Zhongyuan took multiple measures to continuously promote improvement in the net interest margin, achieving a year-on-year increase of 7 basis points to 1.68%. The stabilization and rebound of the net interest margin stem from the bank’s systematic adjustments to its asset-liability structure. On one hand, it actively reduced long-tenor, high-interest fixed deposits and continued to optimize the overall deposit structure. On the other hand, it cut liability costs, made efforts to expand sources of low-cost liabilities, and used policy tools such as relending to obtain low-cost funding, thereby optimizing the proportion of interbank liabilities and payable bonds in the liability mix.

In 2025, Bank of Zhongyuan’s asset quality and risk-absorption capability improved in parallel, laying a solid safety baseline for high-quality development. The data show that its non-performing loan ratio fell from 2.04% at the end of 2023 to 1.96% at the end of 2025, achieving three consecutive declines, with asset quality continuing to improve. The allowance coverage ratio increased from 154.06% to 165.75%, with the risk buffer continuing to thicken, further strengthening the bank’s ability to withstand counter-cyclical risks.

Regarding capital adequacy ratios, Bank of Zhongyuan strengthened retention of internally generated profits and steadily advanced capital replenishment. As of the end of the reporting period, its core tier-one capital adequacy ratio, tier-one capital adequacy ratio, and capital adequacy ratio were 8.89%, 11.38%, and 13.52%, respectively, up 0.43, 0.45, and 0.50 percentage points from the end of the previous year. With capital adequacy ratios rising across the board, Bank of Zhongyuan’s capital strength was further solidified, and the financial momentum to support the real economy was further released.

Anchoring the “Four Banks” initiative to empower regional economic development

Finance is the lifeblood of the national economy. A stable financial sector is an important foundation for the economy to remain steady and healthy. A strong financial sector is also an important guiding force for economic transformation. As a provincial legal entity bank rooted in the Central Plains and covering the whole province, Bank of Zhongyuan accurately grasps the overall trend of development and embeds its own development deeply into the broader picture of regional development, fulfilling the mission and responsibility of provincial financial institutions through specialized financial services.

In 2025, Bank of Zhongyuan implemented major requirements of “Four-Highs and Four-Firsts,” focused on the “1+2+4+N” target task framework, and aimed to build a first-class city commercial bank and serve as the “front-runner” of Henan’s financial forces. It promoted the construction of the “Four Banks,” turned the strategic plans of the Provincial Party Committee and the Provincial Government into concrete practices of financial services, and delivered a responsibility answer sheet aligned in rhythm with Henan’s development.

Strengthen government-bank collaborative cooperation and deeply integrate into the overall picture of local economic development. Government-bank cooperation is a “strong alliance” of resources, information, policies, and markets, exerting positive influence in multiple levels and in an all-round way for promoting economic and social development. During the reporting period, Bank of Zhongyuan used “government banking” construction as an important leverage point. Centering on major decisions and deployments of the Henan Provincial Party Committee and the Provincial Government, it actively connected with financial needs from governments at all levels and deepened cooperation between the bank and the government. As of the end of the reporting period, the bank provided local government special bond issuance services to all 18 prefecture-level cities and 176 counties/districts in the province, with its market share firmly ranked among the industry’s first echelon; the volume of funds under the treasury centralized payment agency business ranked among the top tier within the province, and its core business competitiveness continued to lead.

Using technology finance as the main lever to build the moat of an industrial bank. Bank of Zhongyuan treats technology finance as an important lever to solidify industrial banking. It closely follows Henan’s “1+2+4+N” target task framework, focusing on three directions: upgrading traditional industries, nurturing emerging industries, and planning for future industries. It intensively serves customer groups in the technology domain and implements “one household, one policy” customized solutions for key customer groups such as high-end equipment, new materials, new energy, and biopharmaceuticals, solving enterprise financing difficulties.

As of the end of the reporting period, the bank’s total number of corporate customers reached 499.1 thousand, up 21.4 thousand from the end of the previous year; during the reporting period, it opened 53.3 thousand new accounts. Corporate loans were RMB 421.838 billion, up RMB 12.014 billion from the end of the previous year, an increase of 2.9%. With further optimization of the technology-finance mechanism and resource allocation, technology loan balance reached RMB 70.095 billion.

Strengthen urban resident banking and implement the working mechanism for coordinating financing for small and micro enterprises. Retail business is one of Bank of Zhongyuan’s core business pillars. It has always adhered to policy guidance of serving people’s livelihoods and supporting the real economy. In 2025, through measures such as expanding credit supply for small and micro enterprises, deepening and implementing the coordinated financing work mechanism for small and micro enterprises, and improving a multi-tier inclusive product system, Bank of Zhongyuan continued to promote the steady development of consumer loan business and enhance the coverage of financial services to the small and micro market.

As of the end of the reporting period, Bank of Zhongyuan’s personal loan balance was RMB 272.967 billion, up RMB 7.588 billion from the end of the previous year, an increase of 2.86%. Its inclusive small and micro loan balance was RMB 96.155 billion, up RMB 6.058 billion from the end of the previous year; its loan growth rate was 6.72%, higher than the growth rates of various loans at the bank. During the reporting period, it provided inclusive small and micro loans totaling RMB 88.352 billion to small and micro customers.

Grow rural revitalization banking and connect the “last mile” of financial services. As a major agricultural province, Henan’s county-level market has broad room for growth.

Bank of Zhongyuan seizes opportunities in building an agricultural powerhouse province, and around its strategic positioning of serving urban and rural residents it pushes resources downward and enhances its county-level market service capability. On one hand, it focuses on financial needs for rural industrial revitalization and builds a county-level dedicated product and service system. As of the end of the reporting period, the bank’s county-level general loan balance was RMB 167.011 billion; cumulative disbursements under industrial inclusive loans were RMB 8.523 billion, and cumulative disbursements under YuNong loans were RMB 2.487 billion, precisely supporting the development of county-level distinctive industries.

On the other hand, it advances channel penetration, continuously optimizing a four-in-one county-level channel service system of “county-town outlets + township outlets + rural inclusive financial payment service points + online platforms,” thereby connecting the “last mile” of financial services. As of the end of the reporting period, the bank had set up more than 170 county-level branches and more than 90 township outlets, serving more than 10 million county-level customers. Its Mobile Banking (Rural Online version) served 4.6344 million users, up 1.2069 million from the end of the previous year, achieving deep extension of financial services to rural grassroots areas.

Looking ahead, Bank of Zhongyuan will earnestly implement the major requirements of “Two Highs and Four Focuses,” deeply focus on the “1+2+4+N” target task framework, accelerate the development of distinctive, differentiated operations, and continuously solidify its leading position among Henan’s financial forces, injecting a steady stream of financial momentum into the development of the real economy.

This article is for reference only and does not constitute investment advice