Bank of Qingdao Co., Ltd., the first "A+H" listed city commercial bank in Shandong Province, recently disclosed its 2025 annual report. Leveraging resources from its three major shareholders—Qingdao Guoxin Development Group, Haier Group, and Italy's Intesa Sanpaolo—along with the unique advantages of Qingdao's port economy, the bank delivered a strong performance in 2025.
According to the annual report, the bank's total assets exceeded 800 billion yuan, with net profit attributable to shareholders growing by over 20% year-on-year. Amid widespread operational pressures in the regional banking sector, Bank of Qingdao maintained a rapid pace of balance sheet expansion, emerging as a notable growth benchmark among northern city commercial banks.
However, behind the impressive figures, the bank faces several challenges: its cash dividend payout ratio hovered near the regulatory minimum, its core tier-1 capital adequacy ratio remained under pressure, and its retail business showed signs of contraction. The structural imbalances and capital constraints underlying its high growth trajectory remain critical issues to address.
Total Assets Surpass 800 Billion Yuan, But Dividend Payout Lags Bank of Qingdao traces its origins to a consortium of urban credit cooperatives established in November 1996. It listed on the Hong Kong Stock Exchange in December 2015 and on the Shenzhen Stock Exchange in January 2019, becoming the first bank from Shandong to go public and the second "A+H" listed city commercial bank nationwide.
Backed by a diversified equity structure and the advantages of a coastal port location, Bank of Qingdao has grown into a significant player in the regional financial market. In 2025, the bank's total assets reached a new milestone of over 800 billion yuan, reflecting robust operational growth.
The annual report shows that as of the end of 2025, Bank of Qingdao's total assets stood at 814.96 billion yuan, an increase of 124.997 billion yuan from 689.963 billion yuan at the end of the previous year, representing a year-on-year growth of 18.12%, ranking among the top performers of city commercial banks.
Both deposits and loans achieved double-digit growth. Total loans and advances reached 397.008 billion yuan, an increase of 56.319 billion yuan from the end of the previous year, up 16.53%. Total deposits absorbed amounted to 502.899 billion yuan, an increase of 70.875 billion yuan, up 16.41%.
Alongside the expansion in deposit and loan scales, Bank of Qingdao reported growth in both operating revenue and net profit. In 2025, the bank achieved operating revenue of 14.573 billion yuan, a year-on-year increase of 7.97%. Net profit attributable to shareholders was 5.188 billion yuan, a significant increase of 21.66% year-on-year.
Despite the strong earnings growth, which should ideally translate into richer returns for investors, the bank's dividend proposal disappointed the market. The 2025 profit distribution plan proposed a cash dividend of 1.80 yuan per 10 shares (before tax) for all ordinary shareholders, totaling approximately 1.048 billion yuan. This corresponds to a cash dividend payout ratio of only 20.20%, barely above the 20% minimum stipulated in the bank's articles of association and notably low among A-share listed banks.
Over a longer horizon, Bank of Qingdao's dividend payout ratio has shown a consistent downward trend. In its first year of A-share listing, the payout ratio was as high as 44.58%, demonstrating substantial commitment to investor returns. By 2023, the ratio had fallen below 30% to 26.24%, and it further declined to 21.84% in 2024.
The low dividend ratio has sparked dissatisfaction among investors. In early 2026, the bank received inquiries on the Shenzhen Stock Exchange's interactive platform regarding its dividend policy. Several investors directly addressed the board secretary, pointing out that Bank of Qingdao's dividend payout ratio lags behind industry peers. One investor noted that the industry average cash dividend ratio is generally above 25%, with an average dividend yield of about 4.5%, whereas Bank of Qingdao's ratio is only slightly above the 20% minimum and its dividend yield falls short of the industry average. Some investors suggested the bank adopt a combination of stock dividends, cash dividends, and share buybacks, along with introducing an equity incentive plan. They also urged the bank to temporarily slow the increase in provision coverage during periods of low stock price and issue preliminary earnings forecasts to stabilize market confidence.
In response, Bank of Qingdao stated that it determines the dividend level after comprehensive consideration of regulatory requirements, capital adequacy, profitability, and long-term stable development. The current dividend arrangement aims to provide shareholders with sustained, stable, and reasonable returns. For a dual-listed bank facing both domestic and international institutional investors as well as retail investors, a persistently low dividend payout ratio may struggle to meet the return expectations of long-term investors.
So, why has the dividend payout ratio continued to decline despite strong profit growth?
Rapid Profit Growth Strains Capital, Prompting Multi-Channel Fundraising In fact, the sustained rapid expansion of Bank of Qingdao's loan portfolio has led to accelerated capital consumption. The 2025 annual report indicates ongoing pressure on the bank's capital adequacy levels. At the end of the reporting period, the bank's capital adequacy ratio was 12.87%, down 0.49 percentage points from the end of the previous year. Its core tier-1 capital adequacy ratio was 8.06%, also down 0.49 percentage points, slightly above the regulatory minimum of 7.5% but at a relatively low level among listed banks.
As the final defense against risks for a bank, a declining core tier-1 capital ratio limits the bank's capacity for future credit expansion and business growth. This has compelled Bank of Qingdao to take measures to replenish capital, with reducing the dividend payout ratio to increase profit retention being the most direct method.
Beyond internal capital generation, Bank of Qingdao has initiated multiple external fundraising channels to bolster its capital. In August 2025, the bank announced a plan to issue A-share convertible bonds to unspecified investors, with a total proposed issuance of up to 4.8 billion yuan. The funds raised, after deducting issuance expenses, will be used to support the bank's future business development. Upon conversion by bondholders, the funds will supplement the bank's core tier-1 capital in accordance with regulatory requirements.
In October 2025, Bank of Qingdao issued 2025 perpetual capital bonds with a size of 2 billion yuan. The announcement stated that the initial coupon rate for the first five years is 2.45%, adjustable every five years. The proceeds will be used to supplement the bank's additional tier-1 capital, subject to applicable laws and regulatory approval.
Support from major shareholders has also been a key means of alleviating capital pressure. In November 2025, the bank announced the results of a major shareholder's share acquisition plan. Between September 15 and November 5, 2025, Guoxin Chanrong Holdings accumulated an increase of 243 million H-shares of Bank of Qingdao through the Stock Connect program, representing 4.18% of the bank's total shares, with a total investment of 957 million yuan. Following this acquisition, the combined shareholding of Guoxin Chanrong Holdings and its concert parties reached 19.17% of the bank's total shares.
According to Tianyancha, the sole shareholder of Guoxin Chanrong is Qingdao Guoxin Development (Group) Co., Ltd., which is wholly owned by the State-owned Assets Supervision and Administration Commission of the Qingdao Municipal People's Government. The local state-owned entity becoming the largest shareholder provides solid credit support for Bank of Qingdao and partially alleviates capital pressure.
However, judging from the 2025 annual report data, despite these significant capital-raising efforts, the tight situation regarding Bank of Qingdao's core tier-1 capital has not been fundamentally resolved. If the bank maintains its current expansion pace, capital consumption is likely to intensify further. What further measures will the bank take to replenish capital and support sustainable, healthy business development? Inquiries were made to Bank of Qingdao, but no response was received by the time of publication.
"Strong Corporate, Weak Retail" Divergence Widens, Retail Business Contracts and NPLs Rise Beyond escalating capital consumption, it is noted that Bank of Qingdao's revenue structure remains heavily reliant on traditional net interest income, with the "strong corporate, weak retail" divergence becoming increasingly pronounced.
The 2025 annual report shows that net interest income remains the mainstay of the bank's revenue. The bank achieved net interest income of 11.07 billion yuan, a year-on-year increase of 12.11%, accounting for 75.96% of total operating revenue. The net interest margin for 2025 narrowed by 7 basis points year-on-year to 1.66%.
In terms of non-interest income, the bank generated 3.503 billion yuan in 2025, a decrease of 3.34% year-on-year, accounting for 24.04% of operating revenue, indicating limited success in its light-capital transformation. Net fee and commission income was 1.452 billion yuan, accounting for only 9.96% of revenue, down 3.84% year-on-year. Fee income from wealth management business was 726 million yuan, a decrease of 203 million yuan from the previous year, down 21.87%, primarily due to bond market volatility and structural constraints at its subsidiary, Qingyin Wealth Management, where fixed-income products dominate, leading to a contraction in wealth management fees. Other non-interest income was 2.051 billion yuan, a decrease of 63 million yuan from the previous year, down 2.97%, mainly due to reduced revenue from precious metals sales.
Evidently, against the industry-wide trend of narrowing interest margins, Bank of Qingdao has relied on large-scale credit expansion and rapid asset growth to maintain revenue increases, rather than optimizing its structure and boosting non-interest income.
In terms of loan types, corporate business has been the core engine of the bank's scale expansion, dominating its portfolio. At the end of 2025, corporate loans amounted to 323.008 billion yuan, an increase of 60.654 billion yuan from the end of the previous year, up 23.12%. They accounted for 81.36% of total customer loans, an increase of 4.35 percentage points from the end of the previous year. The bank stated in its annual report that during the reporting period, it comprehensively upgraded its strategic customer group management model, increasing credit allocation to green finance, blue ocean economy, technology, high-quality manufacturing, and inclusive finance, leading to rapid growth in corporate loans.
However, looking at the industry distribution, the bank's corporate loans are highly concentrated in traditional sectors such as wholesale and retail, manufacturing, leasing and business services, and construction, indicating a high reliance on traditional industries.
In stark contrast, Bank of Qingdao's retail business has contracted. At the end of 2025, personal loans stood at 74.001 billion yuan, a decrease of 4.335 billion yuan from the end of the previous year, down 5.53%. They accounted for 18.64% of total customer loans, a decrease of 4.35 percentage points. Core retail credit businesses, including personal housing loans and consumer loans, experienced varying degrees of contraction. Over a longer period, Wind data shows that the bank's personal loans have declined for two consecutive years, standing at 790.84 billion yuan in 2023 and 783.36 billion yuan in 2024.
In terms of revenue contribution, the retail banking business generated operating revenue of 3.571 billion yuan in 2025, a decrease of 4.19% year-on-year. It accounted for 24.51% of total operating revenue, down 3.1 percentage points from 27.61% the previous year.
Furthermore, the decline in the asset quality of Bank of Qingdao's retail loans highlights the weakness in its business structure. The annual report shows that the non-performing loan (NPL) ratio for retail loans rose to 2.58% at the end of 2025, up 0.56 percentage points from the beginning of the year, significantly higher than the bank's overall NPL ratio of 0.97%.
Regarding geographical concentration, Bank of Qingdao's business development is deeply tied to the regional economy. All loans are concentrated within Shandong Province, with loans in Qingdao accounting for 48.47%.
Typically, a singular business structure combined with high geographical concentration can lead to concentrated risks and weaken a bank's ability to withstand economic cycles. Should the regional economy downturn or traditional优势 industries face cyclical adjustments, the bank's asset quality, revenue, and profitability could be directly impacted.
The annual report mentions that to further promote high-quality development, Bank of Qingdao has formulated the "Bank of Qingdao 2026-2028 Strategic Plan." The plan positions retail business as the cornerstone for sustainable development, focusing on account-based management models and enhanced branch efficiency to solidify the foundation. It also emphasizes deepening specialized and refined operations and strengthening cross-business synergies between private and corporate banking.
In summary, amid the industry-wide trend of narrowing interest margins, Bank of Qingdao, with its assets surpassing 800 billion yuan and NPL ratio narrowing to 0.97%, is undoubtedly a "top growth performer" among regional banks. However, challenges such as low dividends, tight capital adequacy ratios, and the ongoing contraction of its retail business remain to be addressed. Whether Bank of Qingdao can resolve the "growing pains" associated with its rapid expansion and strengthen its retail business短板 will be closely watched.
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