After revenue rebounds driven by cost reduction, Chongqing Rural Commercial Bank’s retail asset quality faces a test.

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During a cycle where the entire banking industry faces narrowing interest margins and insufficient effective demand, Chongqing Rural Commercial Bank’s 2025 and 2026 first quarter financial reports released on April 29 present a strong sense of contrast.

The most direct expectation gap manifests in the rebound of scale expansion and revenue growth rate.

By the end of 2025, Chongqing Rural Commercial Bank’s total assets surpassed 1.66 trillion yuan, with growth hitting a four-year high; by the end of the first quarter of 2026, this figure further climbed to 1.76 trillion yuan.

In the same period, the bank achieved revenue of 28.648 billion yuan in 2025, a slight increase of 1.37%. With a year-on-year decrease of 8.61% in credit impairment losses and strict cost control, net profit attributable to shareholders grew by 5.35%. Entering the first quarter of 2026, revenue growth rate surged to 8.39%, and net profit attributable to shareholders remained stable at 5.07%.

In an environment where industrywide revenues are generally under pressure, a quarterly revenue growth rate of over 8% stands out, mainly driven by a year-on-year increase of 15.08% in net interest income.

Behind the surge in net interest income, Chongqing Rural Commercial Bank demonstrates strong capability for defending its interest margin. Under the backdrop of multiple LPR cuts and lower mortgage rates, its net interest margin (NIM) in 2025 only decreased by 1 basis point to 1.60%, and rebounded to 1.69% by the first quarter of 2026.

The key to victory in this battle to defend the interest margin lies in aggressive cost-cutting on the liability side.

In 2025, the bank’s client deposit interest payment rate was sharply reduced by 28 basis points to 1.45%. With the average deposit scale increasing by more than 80 billion yuan, interest expenses actually decreased by 1.373 billion yuan.

By strictly controlling high-interest deposits, leveraging branch advantages to absorb more than 25% of demand deposits, and significantly optimizing interbank liability costs, Chongqing Rural Commercial Bank managed to lower its overall interest-bearing liability cost rate to 1.55%.

However, beneath the strong profitability and interest margin data, structural differentiation in asset quality is becoming a concern.

Overall, by the end of 2025, the bank’s non-performing loan (NPL) ratio dropped to 1.08%, with a high provision coverage ratio of 367.26%, providing a solid safety cushion. However, breaking down the structure shows that corporate and retail businesses are heading in radically different directions.

Corporate asset quality has significantly improved.

In 2025, the corporate NPL ratio dropped sharply from 1.04% to 0.55%, with credit resources clearly tilted toward major infrastructure and local key manufacturing industries that have government credit backing or policy support. The shift in risk appetite has effectively eased enterprise-side risks under policy dividends.

The retail side is currently bearing micro-level pressures from the macroeconomy.

In 2025, the bank’s retail loan NPL ratio rose by 0.47 percentage points to 2.07%, with the "other loans" category—mainly consumer loans and credit cards—reaching an NPL ratio of 2.61%.

Constrained by residents’ income expectations and employment pressure, Chongqing Rural Commercial Bank, which holds a large county and inclusive retail base, faces the challenge of deteriorating retail asset quality. This has directly led to a 16.21% year-on-year increase in credit impairment losses in the first quarter of 2026.

Meanwhile, weakness in non-interest business also presents challenges to overall transformation.

In 2025, the bank’s net non-interest income dropped sharply by 23.92% year-on-year, with significant declines in fee and commission income as well as investment income. By the end of the first quarter of 2026, its financial investment portfolio had climbed to 722.947 billion yuan.

Given expected fluctuations in future interest rate levels, an investment portfolio exceeding 700 billion yuan may bring notable fair value fluctuation risks.

To reduce excessive reliance on traditional interest margin, Chongqing Rural Commercial Bank is actively seeking new growth engines.

Currently, its technology company loans and inclusive small-micro loans both rank first in Chongqing. The recently approved qualification for securities investment fund custody is also expected to help gradually fill the gap left by declining intermediary business income in the future.

Overall, Chongqing Rural Commercial Bank currently presents a composite profile of high safety margin, strong interest margin management, and retail risk yet to be resolved.

The key expectation gap for the future lies in that when macroeconomic recovery reaches the household sector and retail NPLs hit a turning point, combined with its liability costs now at rock bottom, this rural commercial bank may release significant profit elasticity.

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