China Minsheng Banking Corp.,Ltd. (stock code: 600016.SH) reported a 3.84% year-on-year increase in operating revenue for the first half of the year, yet its net profit attributable to shareholders fell by 8.62% compared to the same period last year. This decline is primarily attributed to a 25.20% surge in loan impairment losses, which have emerged as the latest obstacle to the bank's financial performance.
The bank's net profit continued its downward trajectory in the first half of this year, with a decrease significantly more pronounced than the industry average. This performance issue has been a persistent challenge for the institution over several years. After the net interest margin pressure eased in recent quarters, loan impairment charges have become the dominant factor weighing on earnings, reflecting ongoing pressure on the bank's loan asset quality.
According to the semi-annual report, China Minsheng Banking Corp.,Ltd. posted operating revenue of 75.166 billion yuan, up 3.84% year-on-year, while net profit attributable to shareholders stood at 19.537 billion yuan, down 8.62%. This growth rate lags considerably behind the industry average of -0.57% for commercial banks during the same period. The downturn is largely due to credit impairment losses of 31.457 billion yuan, representing a 20.81% year-on-year increase. Among these, impairment losses on loans and advances totaled 29.363 billion yuan, marking a significant 25.20% jump.
Interestingly, the first half of 2025 showed a similar divergence, with operating revenue climbing 7.83% year-on-year but net profit attributable to shareholders falling 4.87%, again driven by a 29.4% rise in impairment losses on loans and advances. The bank's performance over recent years has also been lackluster. Between 2023 and 2025, operating revenue growth rates were -1.16%, -3.21%, and 4.82%, respectively, while net profit attributable to shareholders fluctuated with growth rates of 1.57%, -9.85%, and -5.37%. These figures notably underperform the commercial banking sector's averages of 3.23%, -2.27%, and 2.33% for the same period.
The 2025 profit decline was primarily driven by rapid growth in loan impairment charges, while the 2024 downturn stemmed from reduced net interest income and lower net fee and commission income. From 2023 to 2025, the growth rates for loan impairment losses were -4.51%, -2.03%, and 22.80%, respectively. The sustained increase in loan impairment provisions is closely linked to pressure on asset quality.
By the end of the first half year, China Minsheng Banking Corp.,Ltd. reported total non-performing loans (NPLs) of 66.323 billion yuan, an increase of 169 million yuan from the end of the previous year. The NPL ratio stood at 1.47%, down 0.02 percentage points from the prior year-end. However, the bank's NPL formation rate reached 1.68% during the period, up 0.12 percentage points from the full-year 2025 figure and up 0.17 percentage points year-on-year. The decline in the NPL ratio is attributable to intensified efforts in writing off and disposing of bad debts. During the first half, the bank disposed of 35.958 billion yuan in NPLs, a 12.1% year-on-year increase, including 19.961 billion yuan in write-offs (up 33.3%) and 8.418 billion yuan through securitization (up 51.73%). Meanwhile, cash recovery and transfer volumes both saw year-on-year declines.
The bank attributes the rising NPL formation rate to an increase in newly classified non-performing retail loans. Accordingly, the personal loan NPL ratio rose to 2.01% at the end of June, up 0.09 percentage points from the end of last year. Specifically, the small and micro enterprise loan NPL ratio increased to 1.64%, credit card receivables surged to 4.22%, and other personal loan categories reached 2.14%, up 0.46 percentage points.
Beyond declining profits, the bank also experienced a reduction in total assets. At the end of the first half, total assets amounted to 7.7945 trillion yuan, a 0.49% decrease from the prior year-end, compared to a 4.4% growth seen across the commercial banking sector. Key declines included a 2.04% drop in financial investments, an 18.22% decrease in lending funds, a 95.25% fall in reverse repurchase agreements, and a 22.35% reduction in deposits placed with banks. Loans and advances, which constitute the largest portion of assets, totaled 4.4544 trillion yuan, up 1.83% from the year-end but still below the sector's average loan growth of 4.92%. Notably, personal loans and advances declined by 4.52%.
Mirroring the asset reduction, total liabilities also fell 0.73% to 7.0770 trillion yuan by mid-year. The most significant factor was a 21.93% decrease in bonds payable to 790.058 billion yuan, alongside a 30.76% reduction in securities sold under repurchase agreements.
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