A significant shareholder has divested its entire stake in Yunnan Hongta Bank Co., Ltd. (Hongta Bank). On May 29, Kunming Industrial Development and Investment Co., Ltd. (Kunming CIDI) announced it had sold its entire 14.52% shareholding in Hongta Bank via the Kunming United Property Rights Exchange. CITIC Bank was confirmed as the final buyer, with the transaction valued at 981 million yuan.
This deal concludes Kunming CIDI's multi-year investment and marks its complete exit from Hongta Bank. CITIC Bank will now become the fourth-largest shareholder of Hongta Bank with its newly acquired 14.52% stake.
As a bank with strong ties to the tobacco industry, Hongta Bank has a prominent state-owned background, with state-owned entities holding over 85% of its shares. However, this major divestment by a local state-owned investor comes amid fluctuating operational performance and business scale for the bank in recent years.
Financial data shows that in 2025, Hongta Bank achieved operating revenue of 1.812 billion yuan, a decrease of approximately 16% year-on-year, while net profit was 529 million yuan, a slight increase of 1.77%. Compared to 2022 figures, the bank's operating revenue and net profit have contracted by 20.25% and 43.5%, respectively, over the three-year period.
After a period of halted balance sheet expansion in previous years, Hongta Bank's total assets rebounded to 161.475 billion yuan by the end of Q1 2026.
Fourth-Largest Shareholder Sells Stake at a Discount
In April 2026, Kunming CIDI initially listed its 14.52% stake in Hongta Bank for sale with a reserve price of approximately 1.021 billion yuan, equating to 1.116 yuan per share. This price represented a discount of about 49.5% compared to the bank's net asset value per share of 2.21 yuan at the end of 2025.
This initial listing failed to attract a buyer. The stake was relisted on May 19 and the transaction was completed on May 26 for a final price of 981 million yuan, which was 40 million yuan lower than the initial listing price.
Kunming CIDI's announcement on May 29 confirmed CITIC Bank as the buyer. The relevant agreements have been signed, and the parties are proceeding with the share transfer procedures.
Kunming CIDI had been a significant shareholder since Hongta Bank's transformation from Yuxi Commercial Bank. In July 2016, following a capital increase and share expansion that introduced major shareholders including China Tobacco Yunnan Industrial Co., Ltd. and Yunnan Hehe (Group) Co., Ltd., the bank was renamed Yunnan Hongta Bank.
As of the end of 2025, Kunming CIDI directly held a 14.52% stake, making it the fourth-largest shareholder, behind Yunnan Hehe (Group) Co., Ltd., China Tobacco Yunnan Industrial Co., Ltd., and Yunnan Construction Investment Holding Group.
Notably, Lian Zhaoju, a current director and CFO of Kunming CIDI, also serves as a director of Hongta Bank, indicating deep involvement in the bank's governance.
Combined, Hongta Bank's top ten shareholders hold 87.84% of its shares. Seven of these are state-owned legal person shareholders, with total state-owned holdings reaching 85.04%, underscoring its strong state-owned character.
It is worth noting that 275 million of the 915 million shares held by Kunming CIDI were pledged, accounting for 30% of its holdings. Similarly, 323 million of the 924 million shares held by the third-largest shareholder, Yunnan Construction Investment Holding Group, were pledged, representing 34.96% of its stake.
Fluctuating Performance and Business Scale
Leveraging resources from its core tobacco-industry shareholders, Hongta Bank has established a presence centered on Kunming and Yuxi, gradually expanding within the central Yunnan urban economic circle. By the end of 2025, it operated 41 branches across nine prefectures and cities in Yunnan, including Yuxi, Kunming, Dali, and Qujing.
The decision by the local state-owned entity to divest coincides with a period of volatility in the bank's operational performance and business scale.
Data from year-end 2022 to 2025 shows Hongta Bank's total assets were 151.923 billion yuan, 156.112 billion yuan, 148.243 billion yuan, and 151.407 billion yuan, respectively. Total loans and advances also showed a general declining trend, standing at 67.29 billion yuan, 65.9 billion yuan, 63.093 billion yuan, and 66.11 billion yuan for the same periods.
By the end of March 2026, total assets had recovered to 161.475 billion yuan, with loans and advances at 64.069 billion yuan.
A breakdown of the loan portfolio at the end of 2025 reveals corporate loans of 50.092 billion yuan, an increase of 4.903 billion yuan from the previous year-end, indicating steady growth in corporate business. However, personal loans decreased by 534 million yuan to 11.741 billion yuan. Within this, personal housing loans contracted noticeably, dropping by 137 million yuan to 4.212 billion yuan.
On the liabilities side, Hongta Bank reported total deposit balances of 116.13 billion yuan at the end of 2025. The average daily balance of deposits was 126.821 billion yuan, an increase of 12.946 billion yuan or 11.37% from the previous year-end. The proportion of core deposits with maturities under one year increased by 3 percentage points, while the proportion of three-year deposits decreased by 2.42 percentage points. This shift contributed to a year-on-year decrease of 39 basis points in the average interest payment rate. The bank stated that its overall asset-liability structure was further optimized while maintaining stable growth in scale.
From a profitability perspective, the contraction is more pronounced. From 2022 to 2025, operating revenue was 2.272 billion yuan, 1.91 billion yuan, 2.16 billion yuan, and 1.812 billion yuan, respectively. Net profit was 936 million yuan, 502 million yuan, 520 million yuan, and 529 million yuan for the same period. In 2025, operating revenue fell by about 16% year-on-year, while net profit saw a marginal increase of 1.77%, exhibiting a "revenue decline, profit increase" characteristic. Compared to 2022, operating revenue and net profit shrank by 20.25% and 43.5%, respectively, over three years.
The bank's 2025 annual report indicates that amid a continued decline in market interest rates and pressure on banking net interest margins, Hongta Bank's net interest margin was 1.10%, up 1 basis point from the previous year-end. Net interest income was 1.465 billion yuan, down 3.3% year-on-year, but its contribution to operating revenue significantly increased from 70.13% to 80.83%, showing heightened reliance on interest income.
A sharp decline in impairment losses was the primary reason for the slight net profit growth despite falling revenue in 2025. The bank recorded asset impairment losses of 370 million yuan, down 48.4% year-on-year, which bolstered profit margins.
In the first quarter of 2026, Hongta Bank showed signs of recovery, with operating revenue of 499 million yuan and net profit of 180 million yuan, representing year-on-year increases of 16.05% and 12.1%, respectively.
During this period, net interest income was 365 million yuan, up 2.27% year-on-year. Net fee and commission income was 13.6948 million yuan, down 3.5%. Investment income reached 116 million yuan, a significant increase of 17.9%, indicating that investment business became a key driver of revenue growth.
Regarding asset quality, from 2022 to 2024, Hongta Bank's non-performing loan (NPL) ratio was 0.96%, 1.03%, and 1.39%, respectively, while its provision coverage ratio was 290.2%, 280.15%, and 244.32%.
By the end of 2025, the balance of non-performing assets was 3.165 billion yuan, of which non-performing loans accounted for 754 million yuan, a decrease of 121 million yuan from the previous year-end. The NPL ratio improved to 1.14%, down 0.25 percentage points. The provision coverage ratio recovered significantly to 282.03%, an increase of 37.71 percentage points year-on-year, indicating enhanced risk buffer capacity.
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