On October 30, Jiangsu Zijin Rural Commercial Bank Co., Ltd. (hereinafter referred to as "Zijin Bank") released its third-quarter financial report for 2025. The report revealed a 33.73% year-on-year decline in net profit for Q3, making it the only bank among nine listed banks in Jiangsu Province with a net profit drop exceeding 10%.
**Declining Performance Amid Asset Quality Pressure** The quarterly report showed that Zijin Bank achieved operating revenue of RMB 3.273 billion in the first three quarters, down 5.42% year-on-year, while net profit attributable to shareholders fell 10.90% to RMB 1.204 billion. Notably, Q3 performance deteriorated sharply, with revenue dropping 18.44% to RMB 881 million and net profit plummeting 33.73% to RMB 291 million. In contrast, the other eight A-share listed banks in Jiangsu reported positive revenue and profit growth, with Jiangyin Bank and Changshu Bank posting double-digit net profit increases of 13.38% and 12.82%, respectively.
Asset quality remains critical for bank operations. By the end of September 2025, Zijin Bank's non-performing loan (NPL) ratio rose to 1.35%, up 0.11 percentage points from year-end 2024. Notably, its "special mention" loans grew from RMB 2.667 billion to RMB 3.094 billion, with the ratio climbing from 1.41% to 1.61%. More alarmingly, loss-category loans surged 516% from RMB 106 million to RMB 653 million, now accounting for 0.34% of total loans versus 0.05% at year-start.
Concurrently, the bank's risk resilience weakened, with its loan loss provision coverage ratio falling 16.63 percentage points to 184.81% by end-Q3. This lagged significantly behind peers—other Jiangsu-listed banks maintained NPL ratios below 1%, while Changshu Bank, Wuxi Bank, and Suzhou Bank reported provision coverage ratios of 462.95%, 427.87%, and 420.59%, respectively.
**NIM Squeeze: Can Non-Interest Income Compensate?** The profit slump appears driven by narrowing net interest margins (NIM). Zijin Bank's NIM contracted from 1.42% in 2024 to 1.17% in Q3 2025, while net interest spread shrank from 1.23% to 1.00%, both declining over 20 basis points. Consequently, net interest income fell 17.34% year-on-year to RMB 2.38 billion, with interest income dropping from RMB 6.668 billion to RMB 5.848 billion while interest expenses only decreased from RMB 3.789 billion to RMB 3.467 billion.
Amid this decline, non-interest income emerged as a rare bright spot. Fee and commission income rose 41.55% to RMB 197 million, while investment income surged 72.64% to RMB 698 million. However, such volatile income streams—though temporarily offsetting total revenue gaps—raise sustainability concerns and may amplify earnings volatility risks.
**Regulatory Challenges Compound Troubles** Beyond financial pressures, Zijin Bank faces compliance issues. In July 2025, the People's Bank of China's Jiangsu branch fined the bank RMB 2.4 million for violations including flawed financial statistics, account management, and merchant oversight. This followed an earlier RMB 500,000 penalty in January 2025 by Yangzhou regulators for inflating deposits through improper loan practices.
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