A glance at Minsheng Bank's 2025 report might initially appear positive. Operating revenue reached 142.865 billion yuan, marking a 4.82% year-on-year increase—a notable achievement in the current economic climate. However, a deeper look reveals a net profit of only 30.6 billion yuan, representing a 5.37% decline. The report presents a paradox from the outset: while the bank has "stabilized its scale," its "profits are declining."
More intriguingly, despite the profit drop, the net interest margin slightly increased to 1.40%. Now in its fifth year of transformation, Minsheng Bank has made progress in areas like green finance and technology finance, yet its return metrics continue to weaken. These combined signals create a nuanced impression—Minsheng Bank seems to be changing, but the transformation is incomplete. This seemingly contradictory financial report is, in fact, a key to understanding the bank's current state.
**1. Higher Earnings, Lower Retained Profits** The core paradox is that revenue is growing while profits are shrinking. The 4.82% growth in operating revenue to 142.865 billion yuan is supported by factors including an expansion in scale, with general loans increasing by 72.9 billion yuan from the start of the year, a rise of 1.7%, accounting for 54.95% of total assets, up 0.8 percentage points. Furthermore, structural shifts are occurring, with green loans growing by 20.29% and loans to technology-based enterprises increasing by 9.66%, indicating that new business lines are beginning to contribute to growth.
From an operational perspective, Minsheng Bank's actions are not passive; they demonstrate a degree of aggressiveness. The fundamental issue, however, is that the money earned is not being fully retained. A key variable is the rising credit cost. In 2025, the bank's credit impairment losses reached approximately 53.9 billion yuan, a significant increase of 18.64% year-on-year. This expenditure essentially represents payment for risks accumulated over past years.
A closer examination reveals more specific pressure points. The non-performing loan ratio for retail credit cards increased from 3.28% to 3.87%, indicating that the previously rapid expansion in consumer finance is now entering a risk realization phase. Meanwhile, the balance of special-mention loans stood at 121.195 billion yuan, an increase of 69 basis points year-on-year. Total overdue loans grew by 3.05%, and restructured loans increased by 9.9%, underscoring that the pressure to resolve risks remains substantial.
This creates a typical scenario: superficially, the bank appears to be operating normally, even growing, but in reality, current profits are being continuously eroded by past risks. Consequently, management has chosen to proactively increase provisions and accelerate disposal efforts, writing off 72 billion yuan in non-performing assets for the year and recovering 8.8 billion yuan in cash from previously written-off assets. This is essentially a strategy of "bringing problems forward." While this approach negatively impacts short-term results, it signifies a crucial shift: Minsheng Bank is no longer attempting to delay but is instead confronting issues head-on. Nevertheless, this process is inevitably challenging and will not be concluded within a single year.
**2. The Counter-trend Rise in Net Interest Margin: A Defensive Maneuver** The second key contradiction is the declining profit alongside a stabilized net interest margin. In 2025, Minsheng Bank's net interest margin was 1.40%, a slight increase of 1 basis point from the previous year. While the change itself is minor, the key point is that it stabilized and did not decline further amidst a complex environment.
A detailed look shows that the bank did not undertake aggressive actions on the asset side but instead focused on the liability side. The most direct evidence is the decline in the average cost rate of liabilities from 2.27% to 1.81%, a drop of 46 basis points. Specifically, the deposit interest payment rate fell by 40 basis points to 1.74%, which was the key reason for the stability in the net interest margin.
This change stemmed from adjustments in the deposit structure. The balance of demand deposits increased by 32.6 billion yuan from the end of the previous year, with their share in total deposits rising by 0.5 percentage points. Personal deposits grew by 91.8 billion yuan, with their share increasing by 1.9 percentage points. Increasing the proportion of low-cost demand funds while reducing reliance on high-interest time deposits was crucial for lowering liability costs.
Concurrently, the bank made fine-tuning in its loan allocations, directing more funds towards relatively stable-yield areas like green and technology finance. The result is that the bank, by "spending less" and "endeavoring to secure returns," managed to support the interest margin. However, extending this logic reveals a less optimistic reality: this appears more as a "defensive achievement" resulting from refined management rather than a clear improvement in profitability.
In other words, the 1.40% net interest margin is not due to a sudden enhancement in the bank's money-making ability, but rather stems from more meticulous cost control. This is certainly commendable, but it also indicates that the bank remains highly dependent on the external environment.
**3. Shifting Direction, But Not Yet the Engine** Extending the timeline makes the issues clearer. Minsheng Bank's transformation direction over recent years has been very clear: gradually shifting away from its previous focus on real estate and large corporate clients towards green finance, inclusive finance, and technology enterprises. This path aligns with both regulatory guidance and industry trends.
Data confirms that the bank is indeed advancing this shift. The balance of green loans grew by 20.29%; loans to technology-based enterprises increased by 9.66%; the balance of inclusive loans to small and micro enterprises rose by 2.25%; the proportion of non-interest income reached 29.92%, with non-interest net income growing 13.67% year-on-year, and net fee and commission income increasing by 0.42%.
These figures demonstrate执行力 in "changing direction." The core problem, however, is that a change in direction does not instantly translate into renewed momentum. The most direct reflection of this is the return on equity (ROE). Minsheng Bank's ROE was 6.59% in 2021 but had declined to 4.93% by 2025. This change is highly indicative: old profit sources are weakening, while new ones are not yet strong enough. This explains why the bank appears to be transforming, yet overall profit quality has not improved correspondingly.
From this perspective, the current Minsheng Bank is in a transitional phase: it has begun dismantling the old growth model reliant on high-risk assets, but the new, more robust profit engine is still under cultivation.
Changes in the business structure also reflect this. The number of retail customers grew by 6.46%, with private banking clients surging by 20.24%. However, the rise in the credit card NPL ratio and the active scaling back of consumer credit indicate that risk release in the retail segment is not yet complete. On the corporate side, the loan balance for the real estate sector decreased by 7.996 billion yuan from the end of the previous year, with its NPL ratio dropping by 1.40 percentage points to 3.61%. The balance of financing platform business fell by 23% year-on-year, indicating that debt resolution work is still ongoing.
**Conclusion** Stringing these clues together, Minsheng Bank's 2025 financial report is not particularly complex; it simply overlays issues from different stages. On one hand, the bank is still paying the price for risks accumulated in previous years, reflected in the profit decline. On the other hand, it is striving to stabilize current operations, such as supporting the net interest margin through liability management. Simultaneously, it is attempting to find new growth paths for the future, though these have not yet fully matured.
For investors, the key points to watch are twofold: first, how long the risk cleanup process will take, and second, when the new business lines will be able to genuinely support profits. If the former proceeds smoothly, Minsheng Bank will become a cleaner entity. If the latter materializes, it will truly gain growth potential. Until then, Minsheng Bank is likely to remain in its current state—simultaneously undergoing repair and exploration.
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