Jiangyin Bank’s interest margin narrowed to 1.54%, with investment income becoming a key support.

April 29, Jiangyin Bank disclosed its results for the first quarter of 2026: operating income reached 1.219 billion yuan, up 8.18% year-on-year; net profit attributable to the parent company was 366 million yuan, up 2.50% year-on-year. In the previous year, 2025, the bank’s operating income and net profit attributable to the parent company grew by 4.11% and 0.62%, respectively. Behind the positive growth in revenue and profit recorded on the books, Jiangyin Bank’s profit structure is undergoing substantive changes. As the traditional interest margin between deposits and loans continues to shrink, the financial market investment business has become the main driver of revenue growth during the current stage. The trend of net interest margin is the key indicator reflecting this change. According to historical data, Jiangyin Bank’s net interest margin was 2.06% in 2023, fell to 1.76% in 2024, and further narrowed to 1.60% in 2025. In the first quarter of 2026, this figure hit 1.54%. Over three years, the net interest margin declined by more than 50 basis points. Under the macro environment of LPR adjustments and declining financing costs in the real economy, pressure on asset-end yields is an industry-wide occurrence. To mitigate the impact of narrowing interest margin on net interest income, Jiangyin Bank has adopted stricter cost control measures on the liability side. In the first quarter of 2026, by adjusting deposit structure and fine-tuning pricing, the bank lowered its deposit interest payment rate by 17 basis points compared to the beginning of the year. This defensive liability management has slowed the decline in net interest margin to some extent, but also indicates that the traditional model of relying on deposit-loan interest margin to drive profits is changing. The revenue growth for Jiangyin Bank in 2025 and the first quarter of 2026 was mainly driven by increased investment income. In 2025, Jiangyin Bank achieved investment income of 1.18 billion yuan, up 34.39% year-on-year, accounting for more than a quarter of the total annual revenue. The financial report explains the change in this indicator primarily as an increase in investment income from disposing of financial investments during the period. This trend continued into 2026. In the first quarter of the year, the bank's gains from changes in fair value reached 56.61 million yuan, compared to a loss of 28.64 million yuan in the same period last year, representing a significant year-on-year increase. This means that, during the cycle of declining credit yields, Jiangyin Bank increased its allocation of assets in financial markets, especially the bond market, seizing capital gains from trading bonds during the falling interest rate cycle. However, this growth in non-interest income is subject to market cyclicality. If bond market yields stabilize or rebound in the future, the valuation and disposal income of related assets will face uncertainties, and the bank’s profit elasticity will be tied to macro interest rate trends. In terms of asset quality, Jiangyin Bank maintained relatively stable indicator performance. The non-performing loan ratio dropped from 0.98% in 2023, to 0.86% in 2024, and stabilized at 0.82% at the end of 2025 and in the first quarter of 2026. Meanwhile, the proportion of loans from the top ten clients relative to net capital fell from 27.51% to 25.74%. Credit extensions feature small amounts and high dispersion, making on-balance-sheet credit risk relatively manageable. Additionally, the bank's provision coverage ratio remains high. At the end of 2025, the provision coverage ratio stood at 330%, and at 330.16% in the first quarter of 2026. Adequate provisions not only cover potential risks but also provide room for profit adjustment in the future. If investment income fluctuates in subsequent periods, management may moderate provisions to smooth net profit on the income statement. Looking at cash flows and the balance sheet, in the first quarter of 2026, Jiangyin Bank recorded a net cash flow from operating activities of -1.6 billion yuan, a year-on-year decrease of 157.11%. The financial report shows this was mainly due to the net increase in deposit and loan scale, as well as structural adjustments in interbank financing. By the end of the quarter, the bank’s total loans grew 5.52% from the beginning of the year, reaching 141.047 billion yuan. During the peak credit extension season at the start of the year, the bank accelerated asset deployment to obtain high-quality interest-bearing assets, leading to an outflow of operating cash flow from the books. In summary, Jiangyin Bank’s current business logic centers on: stabilizing the base of net interest margin by lowering liability costs, supporting revenue through investment gains from fixed-income assets, and using high provisions and dispersed credit extension as a risk buffer. In the future, the bank’s performance may depend on two variables: first, whether recovering regional credit demand can stabilize asset-side pricing; second, whether its investment business can maintain relatively steady income contribution amid fluctuations in financial market interest rates. Risk Warning and Disclaimer The market has risks; investment requires caution. This article does not constitute personal investment advice and does not take into account individual users’ special investment targets, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article fit their specific situation. Any investment based on this is at the investor's own risk.