Ask AI · Why does Qingdao Bank’s high growth come with a decline in capital adequacy ratio?

With double-digit scale and net profit growth rates, Qingdao Bank has driven through the closing year of its three-year strategy at high speed.

The annual report recently released shows that in 2025, Qingdao Bank’s operating revenue was 145.73 billion yuan, up 10.75 billion yuan year over year, a growth rate of 7.97%; net profit was 53.57 billion yuan, up 9.52 billion yuan year over year, a growth rate of 21.61%; and net profit attributable to shareholders was 51.88 billion yuan, up 9.24 billion yuan year over year, a growth rate of 21.66%.

As of the end of 2025, the bank’s total assets were 8149.60 billion yuan, up 1249.97 billion yuan from the end of the previous year, a growth rate of 18.12%, with the growth rate improving by 4.64 percentage points compared with 2024; total customer loans were 3970.08 billion yuan, up 563.19 billion yuan from the end of the previous year, a growth rate of 16.53%; and total customer deposits were 5028.99 billion yuan, up 708.75 billion yuan from the end of the previous year, a growth rate of 16.41%.

As of the end of 2025, the bank’s non-performing loan ratio was 0.97%, down 0.17 percentage points from the end of the previous year; the allowance coverage ratio was 292.30%, up 50.98 percentage points from the end of the previous year.

Capital pressure

Behind the bank’s rapid scale expansion is a broad decline in the capital adequacy ratio.

In 2025, Qingdao Bank’s capital adequacy ratio, tier-one capital adequacy ratio, and core tier-one capital adequacy ratio were 13.37%, 10.48%, and 8.67%, respectively, down 0.43, 0.19, and 0.44 percentage points from the end of the previous year.

Meanwhile, in 2024, the bank’s capital adequacy ratio and tier-one capital adequacy ratio had just ended three consecutive years of declines, with growth turning positive again. According to information available, from 2021 to 2024, Qingdao Bank’s capital adequacy ratio was 15.83%, 13.56%, 12.79%, and 13.80%, respectively; and its tier-one capital adequacy ratio was 11.04%, 10.69%, 10.10%, and 10.67%, respectively.

In 2025, Qingdao Bank plans to distribute cash dividends of 1.8 yuan per 10 shares (including tax), with a total dividend amount of 1.048 billion yuan and a dividend payout ratio of 20.19%. Under regulatory requirements, the proportion of cash dividends distributed by listed companies should not be lower than 20% of profits. Regarding the dividend portion, the annual report explains, “Profit retention will further increase.”

In 2025, Qingdao Bank replenished capital through a series of measures. These include issuing A-share convertible bonds of no more than 4.8 billion yuan, applying to issue financial bonds of no more than 28 billion yuan, and issuing 2.0 billion yuan of perpetual bonds to supplement other tier-one capital; at the level of equity structure, from September 15 to November 5, Guoxin Chanrong Holdings increased its cumulative holdings of the bank’s H shares via the Hong Kong Stock Connect by 243 million shares, spending 957 million yuan, and after completion it became the bank’s largest shareholder.

High proportion of corporate business

The 2025 annual report states that, to further promote high-quality development, Qingdao Bank has formulated the “2026-2028 Strategic Plan.” In the plan, the bank positions its corporate business as the “keystone,” while retail is the “foundation for sustainable development.”

The data show that as of the end of 2025, the bank’s corporate loans were 2966.56 billion yuan, up 544.77 billion yuan from the end of the previous year, a growth rate of 22.49%; they accounted for 74.72% of total customer loans, up 3.64 percentage points from the end of the previous year.

In terms of the structure of corporate loans, the shares of traditional industries and infrastructure are relatively high. The top four sectors are wholesale and retail, manufacturing, leasing and commercial services, and construction, with proportions of 17.36%, 12.49%, 11.89%, and 10.72%, respectively; in total, they account for 52.46%.

During the reporting period, Qingdao Bank’s retail banking business achieved operating revenue of 3.559 billion yuan, accounting for 24.44% of operating revenue.

Personal loans were 740.01 billion yuan, down 43.35 billion yuan from the end of the previous year, a decrease of 5.53%; they accounted for 18.64% of total customer loans, down 4.35 percentage points from the end of the previous year.

Among them, the balance of personal business loans was 122.76 billion yuan; personal business loans accounted for 16.59% of retail loans, up 2.52 percentage points from the end of the previous year; the balance of personal consumption loans was 162.34 billion yuan, down 38.87 billion yuan from the end of the previous year, a decrease of 19.32%; and the balance of personal housing mortgage loans was 454.90 billion yuan, down 17.06 billion yuan from the end of the previous year, a decrease of 3.61%.