Amid intensifying market interest rate competition and deposit competition, traditional lending spreads continue to compress, making investment income an important supplement to the performance of small and medium-sized banks.
Jiangsu Jiangyin Rural Commercial Bank Co.,Ltd. (002807.SZ) recently released its interim report. In the first half of 2025, the bank achieved operating revenue of 2.401 billion yuan, up 10.45% year-on-year, and net profit attributable to shareholders of 846 million yuan, up 16.63% year-on-year.
Notably, while both net interest income and intermediate business income declined, Jiangsu Jiangyin Rural Commercial Bank once again relied on investment income to achieve rapid growth in operating performance, with investment income's contribution to the bank's performance significantly increasing.
In the first half of 2025, the bank realized net interest income of 1.409 billion yuan, down 0.23% year-on-year, marking a decline for two and a half consecutive years. Fee and commission income was 50.085 million yuan, down 35.18% year-on-year. During the same period, the bank achieved investment income of 882 million yuan, up 81.44% year-on-year, with its proportion of current operating revenue rising substantially from 10.32% in 2022 to 36.7%.
As of the end of June 2025, Jiangsu Jiangyin Rural Commercial Bank's total assets were 207.577 billion yuan, with financial investment assets totaling 65.034 billion yuan, remaining flat compared to the end of 2024. Among these, the bank's debt investment scale was 23.709 billion yuan, down 6.827 billion yuan from the end of 2024, a decrease of 22.36%. Meanwhile, the bank significantly increased its allocation to trading financial assets, which reached 25.335 billion yuan at period-end, up 28.58% from the end of 2024.
In the bond bull market, investment income has become important performance support for small and medium-sized banks coping with narrowing interest spreads. However, with increasing bond market volatility, how to balance returns and risks, and whether bond investments can continue to contribute high profits, has become a real challenge for small and medium-sized banks.
**H1 Net Profit of 846 Million Yuan, Investment Income of 882 Million Yuan**
The interim report shows that in the first half of 2025, Jiangsu Jiangyin Rural Commercial Bank achieved operating revenue of 2.401 billion yuan, up 10.45% year-on-year, and net profit of 846 million yuan, up 16.63% year-on-year.
In the first two quarters of 2025, the bank achieved operating revenues of 1.127 billion yuan and 1.275 billion yuan respectively, up 6% and 14.7% year-on-year; net profits of 357 million yuan and 489 million yuan respectively, up 2.22% and 30.03% year-on-year. Particularly in the second quarter, the bank's net profit growth rate reached its highest level since the first quarter of 2023.
As of the end of June 2025, total assets were 207.577 billion yuan, up 3.67% from year-end; total deposits were 162.176 billion yuan, up 6.82% from the beginning of the year; total loans were 131.42 billion yuan, up 5.87% from the beginning of the year.
However, under the backdrop of continuously declining interest rates, Jiangsu Jiangyin Rural Commercial Bank increased investment income through bond trading, smoothing operating profit fluctuations and driving rapid performance improvement across the institution.
In the first half of 2025, the bank achieved investment income of 882 million yuan, up 81.44% year-on-year, accounting for 36.7% of current operating revenue and becoming an important driver of the bank's performance growth. The bank attributed this mainly to increased investment income from disposing of financial investments.
From 2022 to 2024, Jiangsu Jiangyin Rural Commercial Bank achieved investment income of 390 million yuan, 796 million yuan, and 878 million yuan respectively, up 27.75%, 104.18%, and 10.23% year-on-year, accounting for 10.32%, 20.6%, and 22.16% of operating revenue in respective periods.
Indeed, the bond bull market has made investment income important support for small and medium-sized banks' operating performance under narrowing spread pressure. According to central bank data, as of the end of June 2025, small and medium-sized banks' bond investment scale reached 46.44 trillion yuan, accounting for 22.42% of total assets.
On the other hand, since 2025, bond market volatility has intensified. How to balance investment returns and risk undertaking, and whether bond investment income can continue to make high contributions to performance, are challenges that financial institutions, especially small and medium-sized banks, need to face.
As of the end of June 2025, Jiangsu Jiangyin Rural Commercial Bank's total financial investment assets were 65.034 billion yuan, flat compared to the end of 2024. However, trading financial assets totaled 25.335 billion yuan, up 28.58% from the end of 2024; debt investment totaled 23.709 billion yuan, down 22.36% from the end of 2024.
This means the bank significantly increased its allocation proportion to trading financial assets and reduced its debt investment scale by 6.827 billion yuan within half a year.
The interim report also shows that in the first half of 2025, Jiangsu Jiangyin Rural Commercial Bank purchased 18.426 billion yuan in trading financial assets and sold 10.572 billion yuan. During the same period, the bank purchased 22.955 billion yuan in other debt investments and sold 23.584 billion yuan, with other debt investments totaling 15.612 billion yuan at period-end.
Additionally, in the first half of 2025, due to reduced fair value changes in trading financial instruments, the bank's fair value change gains were only 20.409 million yuan, down 84.01% year-on-year.
**Both Net Interest Income and Intermediate Income Decline**
While investment income surged, Jiangsu Jiangyin Rural Commercial Bank still faces pressure from core business growth.
The interim report shows that in the first half of 2025, the bank achieved net interest income of 1.409 billion yuan, down 0.23% year-on-year. Interest income was 2.894 billion yuan, down 3.72% year-on-year. During the reporting period, net interest margin and net interest yield were 1.37% and 1.54% respectively, down 0.17 and 0.22 percentage points year-on-year.
This marks the bank's net interest income decline for two and a half consecutive years. From 2022 to 2024, net interest income was 3.193 billion yuan, 2.982 billion yuan, and 2.803 billion yuan respectively. In 2023 and 2024, net interest income declined 6.63% and 6% year-on-year respectively. However, compared to the previous two years, the decline in the first half of 2025 has narrowed significantly.
Furthermore, in the first half of 2025, the bank's net fee and commission income was 50.085 million yuan, down 35.18% year-on-year, declining again.
From 2021 to 2024, net fee and commission income was 138 million yuan, 92.688 million yuan, 80.065 million yuan, and 96.6774 million yuan respectively, with year-on-year changes of 37.84%, -32.87%, -13.62%, and 20.74% respectively.
However, Jiangsu Jiangyin Rural Commercial Bank's asset quality remains at a relatively good level. As of the end of June 2025, the non-performing loan ratio was 0.86%, flat from year-end; special mention loans accounted for 1.1%, down 0.12 percentage points from the beginning of the year; loan loss provision ratio was 3.26%, up 0.08 percentage points from the beginning of the year; provision coverage ratio was 381.22%, up 11.90 percentage points from the beginning of the year.
According to bank disclosures, in the first half of 2025, the bank disposed of 17 on-balance-sheet non-performing loans through third-party transfers, with total loan principal of 144 million yuan. In the same period last year, the bank disposed of 1 on-balance-sheet non-performing loan through third-party transfer, with loan principal of 50 million yuan.
Notably, while traditional business income growth remains weak, Jiangsu Jiangyin Rural Commercial Bank continues to reduce operating costs, further expanding profit margins. From 2023 to the first half of 2025, the bank's cost-to-income ratio was 30.87%, 30.15%, and 23.74% respectively.
In the first half of 2025, business and management expenses were 570 million yuan, down 0.76% year-on-year. Business expenses and staff costs were 166 million yuan and 332 million yuan respectively, down 3.11% and 0.04% year-on-year.
As of the end of June 2025, capital adequacy ratio, Tier 1 capital adequacy ratio, and core Tier 1 capital adequacy ratio were 14.89%, 13.75%, and 13.74% respectively, compared to 15.22%, 14.1%, and 14.09% at the end of last year.
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