Chongqing Bank crosses the one-trillion threshold, credit structure remains "imbalanced"

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During a cycle when the banking industry is generally facing an “asset shortage” and narrowing interest margins, Bank of Chongqing has delivered a rather impressive set of results:

In 2025, the bank's total assets exceeded one trillion yuan, reaching 1.03 trillion yuan, an increase of more than 20% year-on-year; by the first quarter of 2026, this number continued to climb to 1.11 trillion yuan.

Accompanying this expansion in scale, both revenue and net profit attributable to shareholders maintained double-digit growth rates. Among city commercial banks, this expansion speed demonstrates a strong counter-cyclical expansion pattern.

However, analyzing the composition of this financial report reveals that the growth logic of the Bank of Chongqing did not stem from some structural transformation breakthrough.

The growth in net interest income is the core engine driving its high performance growth.

In 2025, the bank’s net interest margin rose by 4 basis points against the trend, boosting net interest income significantly. But in the context of the loan prime rate (LPR) declining, this expansion did not come from pricing premiums on the asset side.

Data shows that the average yield on interest-earning assets of Bank of Chongqing actually fell by 27 basis points in 2025.

The widening of the interest margin was thanks to lowering the cost on the liability side—its average interest-bearing liability cost fell by 40 basis points. This reflects the bank taking advantage of the deposit repricing cycle to squeeze liability costs and obtain short-term benefits.

In terms of asset quality, Bank of Chongqing shows a complex divergence.

On the surface, the non-performing loan (NPL) ratio continues to decline, dropping from 1.25% in 2024 to 1.12% in the first quarter of 2026. However, the pressure on risk exposure remains significant in specific sectors. In 2025, its real estate NPL ratio rose to 7.75%, and retail loan NPL ratio also climbed to 3.23%.

The overall decrease in NPL ratio is mainly due to the "denominator effect": through rapid expansion of corporate loans by over 30%, the bank mathematically diluted existing risk.

This strategy of “diluting stock with increments” is also reflected in the profit and loss statement.

In both 2025 and the first quarter of 2026, the bank’s credit impairment losses grew significantly, meaning that management is using profit retention from expansion to offset real bad debt pressure from the real estate and retail sectors.

The imbalance in business structure is another aspect behind the trillion-yuan scale.

While the whole industry is calling for a “retail transformation,” Bank of Chongqing’s credit resources are highly tilted toward corporate lending.

In 2025, its corporate loan balance exceeded 400 billion yuan, while retail loans saw negative growth. Meanwhile, with the shrinking of agency wealth management and other intermediary businesses, net income from fees and commissions saw consecutive declines of over 30%.

This indicates that Bank of Chongqing has encountered bottlenecks in its narrative of “light capital” business, and its business fundamentals are reverting to a traditional, heavy-asset path: namely acting as a leveraged channel for regional infrastructure and government projects.

The logic of relying on heavy asset driving inevitably brings rapid consumption of capital.

At the end of 2025, the bank's core tier-one capital adequacy ratio dropped sharply from 9.88% to 8.53%, which is already at a tight balance among peer city commercial banks. Even with subsequent profit retention replenishment, its capital buffer remains thin. Capital constraints have become a "tightening spell" restricting its continued high-speed expansion.

Currently, there remains a very high proportion of the 13 billion yuan “Chongqing Bank Convertible Bonds” that has not yet been converted to shares.

With core capital under urgent stress, whether it can guide bond conversion through market value management, and thus achieve external capital replenishment, will determine whether this “expansion machine” will be forced to slow down due to a lack of momentum.

Overall, Bank of Chongqing’s trillion-yuan path took advantage of temporary liability cost benefits and achieved apparent prosperity through corporate balance sheet expansion. But attention needs to be paid to the hidden leverage under this logic: when liability benefits run out, real estate risks take time to clear, and capital replenishment faces pressure, the sustainability of this high growth will face a real test.

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