As the year-end approaches, Bank of Changsha (601577.SH) has accelerated its disposal of non-performing assets. On November 18, the bank announced the approval of a batch transfer plan for seven non-performing assets totaling 652 million yuan.
A bank representative confirmed that these assets consist entirely of corporate loans, which had already been classified as non-performing under the five-tier loan classification system.
While Bank of Changsha has maintained a relatively stable non-performing loan (NPL) ratio in recent years, its asset quality has shown signs of pressure in the first half of this year. Overdue loans, special-mention loans, substandard loans, and loss loans have all increased in both volume and proportion.
**Rising NPL Balance** The bank’s board approved the transfer of seven non-performing assets with a total claim amount of 695 million yuan. A staff member clarified that the disposal process—including write-offs and collections—is part of routine risk management. These loans had been classified as non-performing at different times, not all within this year.
Despite the sizable disposal, Bank of Changsha’s overall asset quality remains sound. Its NPL ratio has stayed between 1.15% and 1.18% since 2022. By the end of Q3 2025, the ratio stood at 1.18%, slightly higher than the 1.17% at the end of 2024 but still below the industry average (1.52%) and the city commercial bank average (1.84%).
However, underlying risks are emerging. In H1 2025, the bank’s NPL balance reached 7.046 billion yuan, up 662 million yuan from the previous year-end. More notably, overdue loans surged by 3.602 billion yuan to 13.405 billion yuan, a 36.74% increase, accounting for 2.22% of total loans.
**Diverging Risk Across Loan Categories** Corporate loans, making up 67.19% of total loans, had an NPL ratio of just 0.59%. In contrast, personal loans (31.86% of total loans) recorded a 2.20% NPL ratio, while bill financing (0.95%) saw a sharp 7.82% NPL ratio. Personal loan NPLs rose 33 basis points from 2024.
The five-tier classification data also revealed growing risks. Special-mention loans jumped 39.49% to 19.971 billion yuan, while substandard and loss loans increased by 41.27% and 22.58%, respectively.
This upward trend in special-mention loans has persisted since 2023, rising from 1.48% of total loans in 2022 to 2.63% by 2024. Overdue loans similarly climbed from 6.386 billion yuan (1.50% of total loans) in 2022 to 9.803 billion yuan (1.80%) by 2024.
**Industry-Specific Risks** The transferred non-performing assets were all corporate loans. The bank’s top three lending sectors were leasing and business services, water/environment/public facilities management, and construction. However, manufacturing had the highest NPL ratio at 2.34%, despite accounting for only 11.57% of total loans (46.865 billion yuan).
**Revenue Growth Challenges** The broader banking sector has ramped up non-performing asset transfers in Q4. Analysts note that such disposals help banks clear capital-intensive, illiquid assets, thereby improving asset quality and freeing up resources for future expansion.
For Bank of Changsha, narrowing net interest margins (NIM) remain a drag on revenue. Its NIM fell 24 basis points to 1.87% in H1 2025, leading to a 1.74% drop in net interest income. By Q3, net interest income declined further by 2.94% year-on-year.
To offset margin pressures, the bank has prioritized financial investments, which contributed significantly to revenue growth in 2023. However, a 24.18% drop in investment income in 2024 slowed revenue growth to 4.57%, the lowest in a decade.
**Shareholder Activity** In mid-October, Hunan Sanli Information Technology, the bank’s fourth-largest shareholder, sold approximately 12.0259 million shares for 117 million yuan—its first divestment since the bank’s 2018 IPO.
Founded in 1997 and listed in 2018, Bank of Changsha is Hunan’s largest city commercial bank and the first in the province to go public. Its assets exceeded 1 trillion yuan for the first time in 2023.
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