Net profit growth accelerated with first interim dividend declared
In the first half of 2025, Bank of Changsha Co.,Ltd. achieved operating revenue of RMB 13.25 billion, up 1.6% year-on-year, with growth rate declining 2.2 percentage points compared to Q1. Net profit attributable to shareholders reached RMB 4.33 billion, up 5.1% year-on-year, with growth rate improving 1.2 percentage points from Q1. The company's interim dividend payout ratio was 18.6%.
Net interest margin declined significantly but absolute level remains competitive among peers
Net interest income in H1 2025 fell 1.7% year-on-year, with growth rate dropping 3.5 percentage points from Q1. The company's net interest margin for the first half was 1.87%, down 25bps year-on-year. Loan yield was 4.56%, down 75bps year-on-year. As the company's existing loan portfolio yields remain at high levels, the repricing impact upon maturity and reinvestment was substantial. Additionally, the declining proportion of high-yield retail loans created pressure. Deposit cost was 1.61%, down 27bps year-on-year, benefiting from reduced deposit benchmark rates and the company's proactive deposit structure optimization.
Corporate loans achieved strong growth, retail segment increased consumer lending
As of end-June 2025, total assets reached RMB 1.25 trillion and total loans RMB 0.60 trillion, up 8.8% and 10.6% respectively from year-beginning. In terms of credit sectors, new credit extension in the first half totaled RMB 57.6 billion, with corporate, retail and bill financing contributing RMB 58.5 billion, RMB 2.5 billion and negative RMB 3.4 billion respectively. Consumer loans increased by RMB 5.7 billion, up 7.5% from year-beginning, accounting for 42% of retail loans, up 2 percentage points from year-beginning. Mortgage and personal business loan balances declined slightly, while credit card loan balances decreased by RMB 2.3 billion under proactive risk appetite reduction, down 12.5% from year-beginning. Geographically, credit exposure to Hunan Province outside Changsha city reached 55.0% at period-end, up 4.2 percentage points from year-beginning.
Deep county-level presence with broad growth potential in county finance
As of end-June 2025, county-level loan balances reached RMB 229.2 billion, representing 38.0% of total loans, with 48.3% of new credit in the first half directed to county areas. County-level deposit balances totaled RMB 248.5 billion, accounting for 32.7% of total deposits.
Asset quality under pressure, actively responding with increased disposal efforts; provision coverage ratio stable at approximately 310%
NPL ratio stood at 1.17% at end-June 2025, flat from year-beginning and down 1bp from end-March. Personal loan NPL ratio was 2.20%, up 33bps from year-beginning. Special mention ratio was 0.69% and overdue ratio 2.22% at period-end, up 69bps and 43bps respectively from year-beginning. Facing pressure on retail credit quality, the company actively responded with write-offs and disposals totaling RMB 3.26 billion in the first half, an increase of RMB 1.05 billion year-on-year. Retail credit NPLs continue to be exposed but remain controllable and within expectations. Provision coverage ratio stood at 310% at period-end with adequate provision coverage.
Risk Warning: Macroeconomic recovery falling short of expectations could drag down the company's net interest margin and asset quality.
Comments