Everbright Bank "Explosive Incident": Quarterly profit plummets by 44.9%, with real estate-related loans becoming a major bad debt hotspot

Why did AI · Why did Everbright Bank’s credit impairment losses surge in the fourth quarter?

Everbright Bank, whose total assets have surpassed 7 trillion yuan, delivered a yearly report in 2025 showing both operating profit and net profit declined.

But what truly caused widespread market shock was the “deep squat” in quarterly profit: net profit attributable to parent company shareholders for the quarter was only 70k yuan, a plunge of 44.91% year-on-year, driven by a credit impairment loss provision of as much as 1.81B yuan in the quarter.

The mystery of Everbright Bank’s “blood loss” in Q4: credit impairment losses reach 17.5 billion

In 2025, Everbright Bank achieved operating income of 126.31B yuan, down 6.72% year-on-year. Net profit attributable to the parent was 38.83B yuan, down 6.88%. Data shows its revenue has fallen into a “four consecutive declines” dilemma, and net profit has not continued the rebound seen in 2024.

However, the most surprising aspect for the market was the sharp decline in net profit in the fourth quarter. In the first three quarters of 2025, Everbright Bank’s quarterly net profit attributable to the parent exceeded 12 billion yuan each quarter. In contrast, in the fourth quarter, net profit attributable to the parent was only 1.81B yuan, a 44.91% drop year-on-year.

In Q4 2025, Everbright Bank’s net interest income remained at over 20 billion yuan, indicating that its lending profit-making ability was intact. But then, credit impairment losses reached 17.59B yuan, nearly six times the 2.94B yuan in Q3, accounting for nearly half of the total provisions for the year. This huge “risk reserve” like a beast devoured most of the profits that should have belonged to shareholders, causing net profit to plummet from hundreds of billions to just 1.8 billion yuan.

According to the earnings briefing, Everbright Bank increased its provisioning efforts in Q4 2025, mainly focusing on retail banking. The current real estate market remains sluggish, and as a result, retail loans, especially those related to real estate, face significant risk pressure.

Asset quality warning sounded: provisioning coverage ratio drops below 175%

Another side of the performance pressure is the quiet “deterioration” of asset quality.

By the end of 2025, Everbright Bank’s non-performing loan (NPL) balance exceeded 50 billion yuan, an increase of 1.49 billion yuan from the end of the previous year; the NPL ratio slightly rose to 1.27%, up 0.02 percentage points from the previous year.

Behind these figures are signals of comprehensive risk tightening: special mention loan ratio rose to 1.85%, overdue loan ratio increased to 2.13%, with both key risk indicators rising simultaneously, indicating ongoing risk exposure pressure.

More concerning is the provisioning coverage ratio, a key “risk buffer” for banks, which continued its decline since 2023, dropping 6.45 percentage points to 174.14%, indicating a weakening of risk resistance.

Looking at the industry distribution of Everbright Bank’s non-performing loans, both the real estate and manufacturing sectors saw significant increases in NPL balances, and retail loan NPLs also rose year-on-year, becoming major “water reservoirs” of risk. With existing risks yet to be cleared, Everbright Bank’s asset quality defense remains a long road ahead.

(Article serial number: 2039238464704221184/GJ)

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