Nanhai Rural Commercial Bank, which has been awaiting listing on the Shenzhen Stock Exchange for several years, recently released its annual report for 2025. The report indicates that the bank achieved operating revenue of 5.904 billion yuan, a decrease of 8.16% year-on-year, and a net profit of 2.336 billion yuan, down 4.80% from the previous year. However, the bank's asset quality showed some improvement, with the non-performing loan (NPL) ratio dropping from 1.55% at the end of June 2025 to 1.39% by year-end.
Concurrently, there have been new developments regarding the bank's IPO process. On March 31, the Shenzhen Stock Exchange website showed that Nanhai Rural Commercial Bank's IPO review status was changed from "accepted" to "suspended" because the financial documents in its application had expired and required supplementary materials. This marks the fifth time since March 2024 that the bank's IPO process has been suspended for the same reason. The bank initiated its IPO辅导 in 2018 and submitted its listing application in 2019, but no substantial progress has been made to date.
Both revenue and net profit declined in 2025, though the fluctuation in net profit has narrowed. Over a longer period from 2023 to 2025, the bank's operating revenue fell by 1.79%, 6.30%, and 8.16% year-on-year, respectively, indicating a widening decline. In contrast, the fluctuation in net profit narrowed, with changes of -12.68%, +2.99%, and -4.80% over the same period.
The bank stated that during the reporting period, it focused on developing new quality productive forces and prioritized key areas, industries, and projects, steadily increasing credit support to promote loan growth. However, interest income was adversely affected by the repricing of existing loans and lower rates on new loans due to LPR cuts, combined with market conditions, leading to a continued decline in loan yields.
A recent report from United Credit Ratings also pointed out that accelerated net interest margin compression and significant provisions for impairment losses contributed to a decline in the bank's profitability indicators, though they remain above the industry average. Specifically, interest income for 2025 was 8.531 billion yuan, down 6.54%, primarily due to reduced income from loans and bond investments. Net interest income fell 6.21% to 3.490 billion yuan, and the net interest margin decreased by 0.19 percentage points to 1.17% compared to the end of 2024.
Non-interest net income declined by 10.84% to 2.414 billion yuan, mainly due to a decrease in fair value changes. Net fee and commission income rose 15.27% to 231 million yuan, while investment income reached 2.582 billion yuan, an increase of 20.58%, accounting for 106.96% of non-interest net income. Notably, the bank also saw a significant rise in investment income in 2024, which grew 16.20% to 2.141 billion yuan.
In terms of income structure, net interest income, net fee and commission income, and other non-interest income accounted for 59.12%, 3.91%, and 36.97% of total revenue, respectively. Compared to 2024, the proportion of net interest income increased by 1.23 percentage points, net fee and commission income rose by 0.79 percentage points, while the share of non-interest income decreased by 2.02 percentage points. Additionally, the bank's average return on assets (ROA) was 0.68%, and the average return on equity (ROE) was 8.35% for 2025.
The bank's asset scale and loan balance continued to grow. By the end of 2025, total assets reached 351.069 billion yuan, up 4.84% from the end of the previous year, while total loans increased 8.62% to 183.050 billion yuan. Total liabilities grew 5.07% to 322.757 billion yuan, and total deposits rose 5.77% to 247.967 billion yuan.
Structurally, corporate loans amounted to 108.984 billion yuan, an increase of 12.29%, accounting for 59.54% of total loans. Personal loans grew 5.77% to 47.831 billion yuan, representing 26.13% of the total loan portfolio.
Regarding asset quality, the bank's NPLs continued the trend from the previous year with "one increase and one decrease": the NPL balance increased by 143 million yuan to 2.549 billion yuan, while the NPL ratio decreased by 0.04 percentage points to 1.39%. Corporate NPLs constituted the majority, accounting for 62.42% of the total. NPL balances and ratios in the manufacturing, wholesale, and retail sectors remained relatively stable, while declines were observed in the real estate, leasing, business services, and construction industries.
Furthermore, the bank's loans to the largest single borrower ratio increased by 0.76 percentage points to 5.35%, and the ratio for the top ten borrowers rose by 3.08 percentage points to 29.37%. The balance of special mention loans and the corresponding ratio also increased. The special mention loan balance grew 34.18% to 8.325 billion yuan, and the ratio rose by 0.87 percentage points to 4.55%, primarily due to weakened corporate repayment capacity amid a slowing macroeconomic environment.
Despite operational pressures, the bank announced a cash dividend distribution of 2.08 yuan per share (before tax) based on a payout ratio of 20.8%, totaling 820 million yuan. Although the annual cash dividend ratio remained above 35%, and cumulative dividends over the past four years amounted to approximately 3.6 billion yuan, the dividend per share has declined for three consecutive years.
In its annual report, Nanhai Rural Commercial Bank stated that at the start of the 15th Five-Year Plan period, it will focus on balancing development and security, with operational priorities centered on promoting reform, enhancing services, improving quality and efficiency, and controlling risks. The bank aims to win "four battles" – improving asset quality, breaking through in customer base and innovation, upgrading digital integration, and sustaining cost control – to achieve coordinated development in quality, scale,效益, and efficiency.
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