BANKCOMM (Bank Of Communications Co.,Ltd.) (601328.SH) has recently received multiple regulatory fines totaling 2.35 million yuan from its branches, citing reasons including inadequate loan management. So far this year, the bank's cumulative fines and confiscations have surpassed 220 million yuan.
According to information released on April 30 by the National Financial Regulatory Administration (NFRA), the Hainan bureau of the NFRA imposed a combined fine of 1.95 million yuan on BANKCOMM's Hainan branch and three of its sub-branches, primarily due to inadequate loan management. On the same day, the Shuozhou bureau of the NFRA fined BANKCOMM's Shuozhou branch 400,000 yuan.
Since the beginning of this year, BANKCOMM has been penalized by national financial regulators no fewer than 13 times, with fines and confiscations amounting to at least 165.987 million yuan. Violations related to loan business constituted the majority of the reasons for these penalties. Additionally, the bank has been penalized by the People's Bank of China no fewer than 6 times this year, with cumulative fines and confiscations of at least 56.272 million yuan.
Information released on May 7 by the Central Commission for Discipline Inspection and the National Supervisory Commission also revealed that Hou Weidong, former Party committee member and vice president of BANKCOMM, was expelled from the Party for serious violations of discipline and law. Specific issues included leveraging his authority over financial technology resource allocation for personal gain, engaging in trading power for money, using his position to secure benefits for others in project contracting and loan financing, and illegally accepting substantial amounts of money and property. Hou Weidong retired from BANKCOMM in April 2020.
At the end of the first quarter, BANKCOMM's non-performing loan (NPL) ratio stood at 1.30%, an increase of 0.02 percentage points from the end of the previous year, reversing a multi-year downward trend. In the first quarter, the bank's operating income grew by 4.89% year-on-year, the slowest growth rate among the six major state-owned banks. Notably, its net fee and commission income decreased by 3.04% year-on-year, while the other five major state-owned banks all reported positive growth in this income category.
So far this year, BANKCOMM's cumulative fines and confiscations have reached at least 222.259 million yuan.
The recent fines bring the total penalties imposed on BANKCOMM's branches by financial regulators since the start of the year to at least 142.487 million yuan across no fewer than 11 instances. Reasons for penalties include imprudent loan business management, issuing credit loans to related parties, serious violations of prudent operation rules in personal business loan replacements, imprudent issuance of fixed-asset loans, granting working capital loans exceeding the borrower's actual needs, and inadequate post-loan management for project loans.
BANKCOMM's first-quarter report shows a rise in its NPL ratio and a reversal in the previous upward trend of its provision coverage ratio. At the end of the first quarter, the NPL ratio was 1.30%, up 0.02 percentage points from the end of the previous year, while the provision coverage ratio was 202.80%, down 5.58 percentage points.
From the end of 2023 to the end of 2025, the bank's NPL ratios were 1.33%, 1.31%, and 1.28%, respectively, while its provision coverage ratios were 195.21%, 201.94%, and 208.38%, respectively.
The increase in BANKCOMM's NPL ratio in the first quarter was foreshadowed. Although the overall NPL ratio declined by the end of 2025, the personal loan NPL ratio increased year-on-year. Specifically, NPL ratios for housing loans, credit cards, personal business loans, personal consumption loans, and others all rose year-on-year. Furthermore, both the loan delinquency rate and the proportion of special-mention loans increased year-on-year by the end of 2025.
Related to loan quality is loan impairment. In the first quarter, BANKCOMM's credit impairment losses on loans increased by 9.30% year-on-year.
Penalties from the People's Bank of China this year, totaling at least 56.272 million yuan across no fewer than 6 instances, were due to violations including non-compliance with payment and settlement business regulations, financial statistical management regulations, credit information management regulations, account management regulations, data security management regulations, failure to conduct customer due diligence as required, and failure to report suspicious transactions as required.
In the first quarter, although BANKCOMM achieved growth in both revenue and net profit, its operating income growth rate ranked last among the six major state-owned banks.
Specifically, BANKCOMM's operating income grew by 4.89% year-on-year. In comparison, China Construction Bank, Agricultural Bank of China, Bank of China, Industrial and Commercial Bank of China, and Postal Savings Bank of China reported year-on-year revenue growth rates of 11.15%, 10.49%, 8.44%, 8.27%, and 7.61%, respectively.
The primary factors dragging down BANKCOMM's first-quarter performance growth were net fee and commission income and exchange gains. Its net fee and commission income decreased by 3.04% year-on-year, contrasting with the performance of other major state-owned banks.
During the same period, Postal Savings Bank of China, Agricultural Bank of China, China Construction Bank, Bank of China, and Industrial and Commercial Bank of China reported year-on-year growth rates in net fee and commission income of 16.83%, 7.85%, 6.72%, 5.58%, and 5.24%, respectively.
A recent research report from China International Capital Corporation (CICC) noted that the year-on-year decline in BANKCOMM's net fee income in the first quarter was mainly related to one-time factors from wealth management product consolidation and a decrease in bank card income.
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