Private banks, who will be the last "catfish"?

Can AI · Can the Catfish Effect Continue to Activate the Industry During the Regulatory Cycle?

Attached are statistics on the revenue, net profit, and interest spread of 18 private banks

Author | Mr. Zhou

Editor | Zhou Dafu

As of now, 18 out of 19 private banks have disclosed their 2025 performance (excluding Zhongbang Bank). Merely using “differentiation” is no longer sufficient to describe the situation; it can be said that the “All Beings” are gathering: “roller coaster” profits are frequent; there are industry “only” ones still in losses with ongoing expansion; and there are still “dual giants” leading by a wide margin.

Private banks, bearing the mission of inclusive finance, were once regarded as the “catfish” of the banking industry when they emerged over a decade ago. However, during subsequent development, with changes in regulatory environment, diverse shareholder backgrounds, rapid narrowing of interest spreads, relatively simple business structures, and other comprehensive impacts, the “All Beings” phenomenon has begun to appear.

Previously, in 【Are there too many private banks?】, we discussed the issue, and under the new round of regulatory cycles, the challenge seems to have reached a new level: how long can the industry’s “high interest spread” dividend last? Besides being taken over by state-owned capital, do most private banks with governance issues still have other possibilities?

After the interest spread broke “4” in the first quarter last year, according to Wind data, the average interest spread in 2025 has narrowed to 3.78%. More than half of private banks’ net interest spreads have fallen below this average, but there are 9 private banks whose net interest spreads in 2025 have increased instead of decreasing.

Since the issuance of the “new regulations on online lending,” private banks, city commercial banks, consumer finance companies, and others with high internet loan proportions have begun stress testing their annualized comprehensive costs at different levels of 12%, 20%, and 24%.

As credit business accelerates into the “thin profit” zone, among the many private banks, who will still be the last “catfish”?

Some private banks’ performance resembles a “roller coaster”

Interestingly, despite the common belief that private banks are in a counter-cyclical environment, their “roller coaster”-style performance includes both sharp declines and “surges.”

For example, Fumin Bank’s net profit in 2025 reached 733 million yuan, a 76.20% increase year-on-year. Notably, this was achieved on the basis of a relatively modest revenue growth—its 2025 revenue was 2.67B yuan, only a 27.22% increase year-on-year.

Similarly, Yumin Bank’s 2025 revenue was 534 million yuan, up 14.66%, but net profit surged by 355.61%, jumping from 3.41 million yuan in 2024 to 15.54 million yuan in 2025.

It is reported that Yumin Bank was established relatively recently, only beginning to turn a profit in 2021, with performance fluctuations being quite large: net profits from 2021 to 2025 were 61.82 million yuan, 50.06 million yuan, 340,980 yuan, and 15.54 million yuan, respectively, showing a clear “roller coaster” pattern.

Compared to the surging few, the members experiencing sharp declines are evidently more numerous.

For example, Lanhai Bank’s revenue and net profit both declined in 2025, with net profit “sliding” nearly 40% to 253 million yuan, down 39.04% year-on-year.

Another example is Xishang Bank, which saw its revenue grow in 2025, but its net profit nearly halved, falling to 215 million yuan, down 48.81% year-on-year. Interestingly, Xishang Bank’s interest spread in 2025 was as high as 7.68%, up from 5.85% in 2024.

Additionally, Sānxiāng Bank in Hunan saw its net profit plummet from 132 million yuan in 2024 to 15.8 million yuan in 2025, a decline of 87.88%. Over the past ten years, its profit performance has also been a typical “roller coaster” curve:

Furthermore, private banks with significant profit declines in 2025 include Xin’an Bank in Anhui and Yilian Bank in Jilin. Among them, Yilian Bank is the “only” private bank still in loss, with losses 2.5 times those of 2024. To some extent, this is also influenced by the obvious shrinkage in revenue scale—the smaller base resulting from reduced income.

Some members’ interest spread performance is unusual

Besides performance fluctuating like a “roller coaster,” the “net interest spread” of private banks is also worth noting.

Some private banks’ interest spread in 2025 can be described as unusual:

According to Wind data, among 17 private banks that disclosed their net interest spreads in 2025, although the industry average interest spread has declined, 9 private banks (mostly smaller members) saw their net interest spreads “not decrease but increase” in 2025. These 9 are Xishang, Xinwang, Huazhong, Zhongguancun, Zhenxing, Fumin, Keshang, Huatong, and Xin’an.

However, I couldn’t find much supporting explanation from the financial reports. Industry insiders who understand the situation are welcome to share insights. For reference, some private banks’ performance indicators are summarized below:

Performance of 18 private banks in 2025

Source: Wind, financial reports

Overall, after the first quarter of last year where the interest spread broke “4,” the average net interest spread of the 17 private banks mentioned above in 2025 has narrowed to 3.78%, with more than half of them below this average.

Since the issuance of the “new regulations on online lending,” private banks, city commercial banks, consumer finance companies, and others with high internet loan proportions have begun stress testing their annualized comprehensive costs at different levels of 12%, 20%, and 24%.

Therefore, the net interest spread level may face unprecedented challenges this year, making 2023 potentially a year of a significant “watershed.”

Looking at the top two performers, MYbank’s net interest spread has fallen below the industry average. WeBank’s net interest spread remains significantly higher than MYbank’s and also exceeds the industry average. Moreover, their revenue and net profit gaps are quite large.

Although both are called industry “dual giants,” their profitability levels are not on the same scale. WeBank, with hundreds of billions in net profit, stands out uniquely among peers.

However, even so, WeBank’s recent “interest income from lending business” scale and proportion have been declining. Despite increases in other interest income (investment interest income, interbank interest income) and overall interest expenses decreasing, its 2025 net interest income still decreased by 5.27% year-on-year, totaling 28.61B yuan.

On the positive side, its “agency business fee income” has been growing in recent years, and its proportion within “fee and commission income” is also increasing. Unfortunately, due to the reduction in “loan platform fee income,” after deducting various expenses, its 2025 “fee and commission income” still declined by 6.15% year-on-year, narrowing from last year’s 17.96% decrease.

Overall, its efforts to boost non-interest income are evident, but the current effect remains limited. In comparison, WeBank’s “fee and commission income” components have all declined compared to 2024, with no highlights.

Under the new round of stress testing on loan interest rates, maintaining a “catfish” role in consumer finance and inclusive finance services remains the main task.

Curiously, how many “catfish” will the market finally retain?