Revenue continues to decline, Qingdao Rural Commercial Bank is caught in a "battle to preserve profits"

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On April 29, Qingdao Rural Commercial Bank disclosed its financial reports for 2025 and the first quarter of 2026.

The new data reveals the complex undertone of a bank deeply rooted in the regional market under the heavy pressure of transformation—though the return to parent net profit showed positive growth on the books, anomalies in the income structure and subtle changes in asset quality still send out cautionary signals to the market.

From core financial indicators, Qingdao Rural Commercial Bank is currently caught in an obvious "income dilemma."

In 2025, the bank achieved operating income of 10.027 billion yuan, a year-on-year decrease of 9.12%; in the first quarter of 2026, the downward trend continued, dropping a further 8.69% year-on-year to 2.791 billion yuan.

Against the backdrop of the industry-wide narrowing of net interest margin, the continued contraction in operating income means the marginal effect of business expansion is diminishing; however, in stark contrast to the decline in income, the bank’s return to parent net profit for 2025 grew 9.51% year-on-year.

The divergence of "profit growth without income growth" is not driven by high business growth, but by a substantial reduction in the provision for credit impairment losses.

In 2025, credit impairment losses decreased by about 1.838 billion yuan year-on-year, a drop of 35.95%. Although utilizing provisions to boost profits is reasonable during the improvement period of asset quality, it also significantly weakens the gold content of profit growth. For investors, this is more an accounting balancing act than a fundamental leap in business capability.

Breaking down the income structure, Qingdao Rural Commercial Bank shows “steady interest income and chaotic non-interest income.”

In 2025, net interest income increased slightly by 1.95%, mainly relying on the control of liability costs—the average cost rate of deposits fell by 0.33 percentage points, offsetting the pressure of declining yield on the asset side;

But non-interest net income plummeted by 30.08% year-on-year, especially with gains and losses from changes in fair value shifting from gains to a loss of 915 million yuan, reflecting the bank’s severe impact from market interest rate fluctuations on the investment side, and the balance of risk control and trading capability still needs optimization.

In terms of asset quality, Qingdao Rural Commercial Bank presents “surface repair with partial pressure.”

Although the overall non-performing loan ratio dropped from 1.79% to 1.75%, and further to 1.74% at the end of the first quarter, risk exposure in segmented sectors is still striking;

At the end of 2025, the bank's non-performing public loans in the real estate sector surged to 23.00%, compared to 7.17% at the end of the previous year.

Although the bank actively reduced the scale of real estate loans (balance reduced by 2.61 billion yuan) to control risks, the clearance of risks in certain existing projects will obviously take a longer period.

Meanwhile, the "cushion" for risk resistance is also thinning.

At the end of the first quarter of 2026, the bank's provision coverage ratio was 234.71%, down 26.3 percentage points from the end of 2025. While credit issuance still grew (2.37% growth in the first quarter), the drop in provision coverage ratio implies shrinking redundancy for potential future risks.

Considering that current profit growth relies heavily on reduced provision charges, once asset quality deteriorates again in the future, or if regulators require increased provisioning, profit performance will face direct pressure.

Logically, Qingdao Rural Commercial Bank has bid farewell to its previous scale-driven model, and entered a stage of “stock optimization and risk disposal.”

By absorbing and merging village banks and strengthening the disposal of non-performing assets, the bank is attempting to accelerate the clearance of historical burdens. The plan to distribute 1.20 yuan for every 10 shares shows its willingness to maintain shareholder returns, but this cannot completely cover up the essential problem of shrinking revenue.

In summary, Qingdao Rural Commercial Bank is in a stage of adjustment.

During the process of regional economic recovery, whether net interest income can stabilize, and progress in clearing non-performing real estate assets, will determine whether the bank can truly shift from financial gains to business gains.

For the market, it is more important to focus on whether core revenue stabilizes, rather than just the profits on the books. Amid the dual test of declining interest rates and risk clearance, this local corporate bank’s battle to defend profitability has just entered the deep waters.

Risk Disclaimer and Exemption ClauseThe market has risks, investments need caution. This article does not constitute personal investment advice and does not take into account individual users' special investment objectives, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable to their particular circumstances. Investing accordingly is at your own risk. ```