Xiamen Bank’s revenue and net profit both increased, with loans rising by over 18%.

```

The growth logic of city commercial banks is undergoing changes, and the recently disclosed 2025 annual performance report from Xiamen Bank is a highly representative example.

On January 27, Xiamen Bank delivered a “quantity over price” report card—

By the end of 2025, the bank’s total assets reached 453.099 billion yuan, an increase of 11.11% year-on-year, with loans and advances growing even more aggressively, up 18.39% year-on-year;

At the same time, the bank’s total operating income in 2025 reached 5.856 billion yuan, a year-on-year increase of 1.69%, and net profit attributable to the parent company reached 2.634 billion yuan, up 1.52%.

In contrast to the double-digit expansion in asset size is the single-digit growth in revenue and profit.

From the perspective of scale indicators, Xiamen Bank’s expansion intent remains strong. In the current macro environment where overall credit demand is relatively weak, a credit growth rate of nearly 20% is rare among listed banks, demonstrating the bank’s strong asset-side investment.

However, the rapid expansion of the balance sheet has not proportionally translated to the income statement.

When asset growth is more than six times revenue growth, the trend of declining asset returns is obvious, which confirms the industry's common predicament of narrowing interest margin spreads. Xiamen Bank has to maintain weak profit growth by increasing the denominator (asset size).

Meanwhile, the bank’s provision coverage ratio has seen a significant decline.

By the end of 2025, Xiamen Bank’s provision coverage ratio was 312.63%. While this absolute value is still at a high level within the industry, it has dropped sharply by 79.32 percentage points compared with the same period last year.

Generally speaking, banks lower their provision coverage ratio in two situations: first, when asset quality has significantly improved, so not only is no additional provision needed, but some can even be released to boost profits; second, when there is too much pressure on the revenue side, so in order to maintain positive net profit growth, banks have to reduce provisions or make provision reversals for adjustment.

Considering asset quality, Xiamen Bank’s situation seems closer to the latter.

At the end of 2025, the bank’s non-performing loan ratio was 0.77%, up 0.03 percentage points from the end of last year. With the non-performing loan ratio not improving and even rising slightly, the sharp drop in provision coverage ratio may mean that, under the common industry pressure of narrowing interest spreads, the bank has chosen to accelerate the consumption of its internal “reserves.”

In addition, the “scissors difference” between deposit and loan growth at Xiamen Bank is widening.

During the reporting period, the bank’s total deposits increased by 13.75%, nearly 5 percentage points lower than the loan growth rate, and the proportion of loans to total assets increased by 3.31 percentage points compared with the end of last year;

This model of expanding asset size by consuming liquidity, in the long term, will test capital adequacy and liquidity management.

Overall, Xiamen Bank’s 2025 performance update reveals the typical struggles of small and medium-sized banks during a cycle of narrowing interest margins:

On the one hand, they must rely on rapid expansion of asset size to hedge against declining interest margins; on the other hand, they have to utilize provision resources to maintain profit growth.

For investors, attention should be paid to the trend of net interest margin and the composition of non-interest income when the annual report is officially released.

Risk Warning and DisclaimerThe market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situations, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Investing based on this is at your own risk.

```