CZBANK recently held its 2025 performance briefing in Hangzhou. This marked the capital market debut of the bank's new senior management team. Chairman Chen Haiqiang, President Lu Linhua (designate), and other executives directly addressed market concerns by responding to eight questions on site.
In the previous year, the bank reported operating revenue of 62.51 billion yuan and net profit attributable to the parent company's shareholders of 12.93 billion yuan, representing a year-on-year decline. Total assets stood at 3.48 trillion yuan at year-end, while the non-performing loan ratio decreased for the fourth consecutive year to 1.36%. "We have achieved the budget targets set by the board of directors," stated Chen Haiqiang.
He pointed out that in an environment of persistently narrowing interest margins, intensifying industry competition, and pressure on risk prevention, CZBANK has avoided an obsession with pursuing scale, has not overemphasized short-term performance for "quick profits," and has steered clear of the old path of "concentrating loans on large clients." Instead, the bank adheres to a long-term philosophy, focusing on strengthening its foundation, adjusting its structure, enhancing compliance, and controlling risks.
Simultaneously, Chen Haiqiang expressed the confidence and determination of the new leadership team to guide the bank through economic cycles by highlighting "three certainties": the certainty of continuous marginal improvement in asset quality, the certainty of growth momentum, and the certainty of improving capital returns.
Addressing the decline in operating performance for 2025, where operating revenue and net profit fell by 7.6% and 14.8% year-on-year respectively, President Lu Linhua attributed this primarily to two factors. Firstly, the current economy remains in a phase of weak recovery, with effective credit demand gradually picking up, while the trend of narrowing net interest margins in the banking sector persists. "Last year, our net interest margin decreased by 11 basis points, generally aligning with the industry trend," he said. Secondly, compared to the one-sided market trend in 2024, the bond market experienced wide fluctuations and increased volatility in 2025, significantly impacting the returns on the bank's financial assets held for trading. "Our non-interest income declined by nearly 20% last year," Lu added.
He also mentioned that the "low-risk, average-return" asset allocation strategy adopted by CZBANK for the new cycle has also exerted temporary pressure on the net interest margin and, consequently, the bank's overall revenue in the short term. "In a non-boom cycle, high returns often fail to cover high risks. Therefore, we proactively adjusted and optimized our approach, conducting comprehensive customer management based on overall returns to achieve the 'low-risk, average-return' goal," Lu explained. He emphasized that, from a long-term perspective, this strategy will benefit the bank's stable development. The annual report shows that the bank's corporate customer base grew by 11.8% last year, its retail customer foundation was consolidated, and the NPL ratio declined for the fourth consecutive year.
Looking ahead, Lu Linhua believes that as some previously acquired high-yield assets are gradually phased out, and combined with the new "low-risk, average-return" strategy, the yield on newly deployed assets will decrease, keeping net interest margins under pressure in the short term. "We will exert efforts on both the asset and liability sides to stabilize net interest margins and increase intermediate business income, ensuring stable and sustainable operating revenue. At the same time, we will continue to advance comprehensive risk and cost management, eliminating unnecessary costs to ensure satisfactory profits," he stated.
Deputy President Luo Feng emphasized the strategic importance of Zhejiang Province for CZBANK. "Zhejiang is the ballast and strategic pivot for CZBANK. One-third of our branches, personnel, and business are in Zhejiang. Serving Zhejiang, serving Zhejiang merchants, and serving the people of Zhejiang are the foundation of our bank's development," Luo noted. The year 2025 marked the beginning of a new three-year action plan for CZBANK to deepen its presence in Zhejiang. According to the annual report, the bank provided nearly 1.2 trillion yuan in total financing services to the province last year, with two-thirds of its new credit allocated within Zhejiang. Furthermore, the bank's deposits in Zhejiang exceeded 630 billion yuan, ranking first among joint-stock banks. Its supply chain finance business already covers 14 characteristic industrial clusters in the province, each with an output value exceeding 100 billion yuan, and its cumulative underwriting of non-financial corporate bonds and local government bonds ranks among the top peers.
Luo Feng outlined the next steps to focus on developing replicable and scalable differentiated service models in three areas: actively integrating into Zhejiang's overall development, with a focus on high-quality development and the common prosperity demonstration zone; prioritizing services for Zhejiang merchants by enhancing coordination between domestic and international branches and leveraging advantages in supply chain finance, cross-border finance, and tech-finance; and enhancing wealth management services for residents, particularly targeting the needs of the middle-class, including small business owners, doctors, teachers, and high-level talents.
"We must build our home base well, deepen and thoroughly penetrate the Zhejiang market, while steadily extending successful practices nationwide. We will strengthen coordination and mutual empowerment between institutions inside and outside Zhejiang to form a development pattern where deepening our roots in Zhejiang and serving the whole country advance synergistically," Chairman Chen Haiqiang stated.
Regarding technological advancement, Chen Haiqiang expressed that entering the Bank 4.0 era, technology investment is no longer merely a cost but should also become a contributor to cost reduction and efficiency gains. "The ultimate goal of promoting technological transformation is not to possess the most advanced systems, but to achieve the most powerful empowerment—using technology to reshape the customer experience, enhance operational efficiency, strengthen risk control defenses, and empower frontline employees," he said.
President Lu Linhua detailed the "Three Major Projects" underway in the tech domain. The first, "Renewal and Strengthening the Foundation," involves a new core system, developed over two years and set for launch by year-end, which will support concurrent transaction processing capacity more than five times that of the old system. The second focuses on data governance, with the bank having initiated enterprise-wide standardization and the collection of over 20,000 data dictionary entries in the first batch. A digital middle platform has been established with eight major data marts. The third project is AI empowerment, featuring a completed knowledge engineering platform and intelligent agent platform supporting unified knowledge access and personalized agent development.
"In the next phase, we hope to actively embrace digital reform and artificial intelligence, aiming to maintain a modest leading position among our peers," Lu said. He outlined three key tasks for CZBANK this year: building a secure, multi-active data center architecture; intensifying the development of vertical models in retail and risk management to move towards intelligent decision-making and human-machine collaboration; and deepening cooperation with leading internet companies and academic institutions to enhance capabilities in scenario creation and comprehensive customer service.
Comments