As the first city commercial bank listed on both the A-share and H-share markets, Bank of Zhengzhou Co.,Ltd. appeared to deliver a strong performance in 2025, with slight increases in revenue and net profit and asset growth hitting a seven-year high, suggesting the regional bank was accelerating its development.
However, a deeper look beyond the surface of "steady progress" reveals that the bank's non-performing loan ratio, capital adequacy ratio, and dividend payout ratio have consistently ranked at the bottom among A-share listed banks for multiple years.
The bank's income structure remains undiversified, and it has reported losses in the fourth quarter for eight consecutive years. For the full year 2025, Bank of Zhengzhou Co.,Ltd. reported total assets of 743.674 billion yuan, up 9.95% year-on-year, marking the highest growth rate since 2018 and indicating strong expansion capabilities. In terms of profitability, annual operating revenue reached 12.921 billion yuan, a slight increase of 0.34%, while net profit attributable to shareholders rose 1.03% to 1.895 billion yuan.
Breaking down quarterly financial metrics, structural issues emerge clearly. In the first three quarters of 2025, the bank accumulated a net profit of 2.279 billion yuan, but a net loss of 384 million yuan in the fourth quarter alone wiped out nearly 17% of the profits earned earlier in the year.
This marks the eighth consecutive year that Bank of Zhengzhou Co.,Ltd. has reported profits in the first three quarters followed by a loss in the fourth. The sharp reversal is primarily due to substantial credit impairment losses booked at year-end. In 2025, total impairment losses amounted to 7.282 billion yuan, with 2.923 billion yuan, or over 40%, recognized in the fourth quarter.
This practice effectively concentrates annual risks into a single year-end clearance, artificially enhancing the profitability shown in earlier quarters. It highlights the bank's reliance on profit smoothing and adjustment techniques, raising serious doubts about the sustainability of its earnings.
Moreover, the bank's net profit after extraordinary items fell 1.86% to 1.824 billion yuan in 2025, reversing the brief recovery seen in 2024. This indicates that the core profitability of its main business is deteriorating rather than improving.
At the same time, the bank's revenue structure shows significant imbalance. Net interest income accounted for 84.08% of total revenue in 2025, while the net interest margin dropped by 11 basis points to 1.61%. Non-interest income declined by 18.13%, contributing only 15.92% to total revenue. Fee and commission income fell by 13.95%, reflecting a contraction in capital-light businesses such as wealth management. The heavy reliance on interest income leaves the bank highly vulnerable amid ongoing interest rate liberalization.
Rapid asset expansion is rapidly depleting Bank of Zhengzhou Co.,Ltd.'s capital reserves. By the end of 2025, the core tier-1 capital adequacy ratio dropped to 8.45%, down 0.31 percentage points from a year earlier. The tier-1 capital ratio fell to 10.44%, and the overall capital adequacy ratio declined to 11.71%. All three ratios have decreased for three consecutive years, indicating that internal capital generation is insufficient to support the pace of expansion.
The direct consequence of continuous capital erosion is the long-term absence of shareholder returns. For 2025, the board once again recommended no cash dividend. Over the past five years, the bank has been notably conservative in dividend payments—it paid no cash dividends from 2020 to 2023, despite cumulative net profits exceeding 10 billion yuan. Although dividends resumed in 2024 with a payout of 0.2 yuan per 10 shares, totaling approximately 182 million yuan, the payout ratio of 9.69% and a dividend yield of 1.05% remained the lowest among A-share listed banks, far below the average payout ratio of over 30% seen in peers such as Bank of Suzhou, Bank of Shanghai, and Xiamen Bank.
For a listed bank that remains profitable on paper, opting for zero dividend typically signals two concerns: internal cash flow constraints, requiring retained earnings to bolster core capital under regulatory pressure, and management's caution over potential asset quality risks, necessitating reserves for future bad loan write-offs.
In terms of asset quality, although the non-performing loan ratio slightly improved to 1.71%, the NPL ratio for property-related loans stood as high as 9.75%, indicating that regional real estate risks have not yet been fully resolved. The loan loss provision coverage ratio improved marginally to 185.81%, but it remained 19.4 percentage points below the national average for commercial banks, reflecting weak risk resilience.
Weak financials, asset quality pressure, and low dividend willingness have led to negative sentiment in the secondary market. As of April 16, Bank of Zhengzhou Co.,Ltd.'s A-share price closed at 1.82 yuan per share, consistently trading below 2 yuan and making it the only bank stock among 42 A-share listed banks with a share price under 2 yuan. Its price-to-book ratio of about 0.38 times is near historic lows and significantly below the industry average, indicating that the market values its net assets at less than 40% of their book value.
If weak financial data represent surface-level issues, underlying human resource challenges point to deeper problems. In 2025, the bank saw 20 changes in directors and senior management, with 12 departures in total, signaling a major leadership overhaul. Among those who left were non-executive directors Wang Dan and Wang Shihao, independent non-executive directors Li Yanyan, Li Shuxian, and Song Ke, whose terms expired. Also departing were three assistant presidents—Li Hong, Liu Jiuqing, and Li Lei—and three vice presidents—Fu Chunqiao, Guo Zhibin, and Sun Haigang. Notably, Li Hong, who officially assumed the role of president in January 2025, left after just over a year in February this year.
This marks the third consecutive year of large-scale executive turnover at the bank. The current management team consists of only five members: Board Secretary Han Huili, Vice President Sun Runhua, Assistant President Zhang Houlin, Chief Risk Officer Pan Feng, and Assistant President Gao Rui. With such a lean team, questions arise about its ability to oversee core business lines effectively and ensure strategic continuity and execution.
The most visible impact of management instability is a sharp decline in total executive compensation. In 2025, total compensation for senior executives plummeted 53.11% to 7.616 million yuan. Chairman Zhao Fei's annual pay was only 781,000 yuan, among the lowest for listed banks. While cost reduction is a common theme in the banking sector, a halving of executive pay coupled with widespread personnel changes may signal issues beyond mere cost control.
At the grassroots level, the number of employees fell by 128 to 6,052 by the end of 2025. The number of staff with master's degrees or higher declined, indicating an outflow of highly qualified talent. Against this backdrop, profit per employee was only 315,400 yuan in 2025, significantly lower than peers such as Bank of Jiangsu and Bank of Ningbo, which reported figures around twice as high. Average employee compensation fell 1.7% to 345,400 yuan, also uncompetitive within the industry.
For a regional bank in a critical transition phase, a stable and professional management team is a scarce asset—precisely what Bank of Zhengzhou Co.,Ltd. currently lacks. With Zhao Fei at the helm for nearly three years, whether he can steer the bank toward a breakthrough in 2026 remains to be seen.
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