Two decades after pioneering the model of joint establishment among city commercial banks, Huishang Bank finds itself facing not only celebratory applause on its twentieth anniversary but also multimillion-yuan regulatory fines and a chairman's seat that has remained vacant for over five months. In the final month of 2025, Huishang Bank received three consecutive penalties from financial regulators, totaling 8.8 million yuan in fines. Two of these penalties targeted the head office level, amounting to 8.15 million yuan collectively. These represent just some of the substantial fines the bank has incurred throughout 2025.
One penalty, resulting in a fine of 6.65 million yuan, was primarily linked to two major issues: inadequate management of financial advisory services and non-compliant cross-regional business operations. Another penalty highlighted multiple deficiencies across loan management, credit card operations, and wealth management products, including irregularities in loan issuance, insufficient post-loan management, weak oversight of credit card business, and imprudent practices in wealth management activities. Since the latter half of 2025, Huishang Bank has been penalized repeatedly by regulators for various violations. On October 24, the bank was fined 2.4 million yuan by the Anhui Financial Regulatory Bureau for imprudent management of loan products and failures in the "three checks" loan review process. On the same day, a relevant senior executive was banned from working in the banking industry for ten years. Based on incomplete statistics, the bank's cumulative fines for the year have exceeded 15 million yuan. Amid the frequent penalties, the position of Chairman at Huishang Bank has been vacant for more than five months. On July 31, 2025, Huishang Bank announced that its Chairman, Yan Chen, had resigned from all positions due to a work reassignment. The previous day, he had been appointed as the Director of the Department of Industry and Information Technology of Henan Province. Public information indicates that as of December 2025, the chairman role at Huishang Bank had been unfilled for over five months. Against the backdrop of intensified banking supervision, the prolonged absence of the Chairman—the "first person responsible" for risk governance—could potentially impact the continuity of strategic decision-making and the effectiveness of the bank's risk control framework. Currently, Kong Qinglong, the bank's Deputy Party Secretary and President, is temporarily acting as the head of the Strategic Committee, while non-executive director Lu Hao is serving as the acting head of the Risk Management Committee. Such interim arrangements are a poor substitute for formal leadership under a permanent Chairman. While grappling with frequent fines and governance gaps, Huishang Bank's traditional profit model is also under strain. In the first half of 2025, the bank's net interest income was 14.53 billion yuan, a decrease of 1.06% year-on-year, signaling weak growth in its core deposit and lending operations. Although Huishang Bank reported operating revenue of 21.157 billion yuan, a 2.25% increase year-on-year, and a net profit of 9.328 billion yuan, up 3.81% year-on-year, in the first half, this growth was primarily driven by an increase in non-interest income, particularly net gains from financial investments. During the same period, the bank's net interest spread stood at 1.37% and its net interest margin at 1.55%, representing declines of 20 and 25 basis points respectively compared to the previous year, directly reflecting a weakening profitability in its traditional interest-based business. Regarding asset quality, risks have already surfaced in specific segments of Huishang Bank's portfolio. As of the end of June 2025, the bank's non-performing loan (NPL) balance in the real estate sector surged dramatically to 1.156 billion yuan from 398 million yuan at the start of the year, a staggering increase of 190%. Correspondingly, the NPL ratio for the real estate sector skyrocketed from 1.08% to 3.12%, far exceeding the bank's overall NPL ratio of 0.98%. Although the bank's overall NPL ratio remained at a relatively sound level of 0.98%, structural risks warrant attention. Beyond the real estate sector, the NPL ratio for personal loans reached 1.52%, which is higher than the 0.84% ratio for corporate loans. The bank's balance of overdue loans also increased. By the end of June 2025, Huishang Bank's overdue loan balance reached 13.346 billion yuan, an increase of 688 million yuan from the beginning of the year, representing a growth of 5.43%. With the rapid expansion of its asset base, Huishang Bank is facing pressure on its capital adequacy ratios. As of June 30, 2025, the bank's total assets amounted to 2.25 trillion yuan, an increase of 238.101 billion yuan from the start of the year, representing growth of 11.82%. The core tier 1 capital adequacy ratio decreased from 9.83% at the end of 2024 to 9.53%, the tier 1 capital adequacy ratio dropped from 11.41% to 11.02%, and the total capital adequacy ratio fell from 13.72% to 13.27%. All key capital adequacy metrics showed a consistent downward trend. Although these ratios still meet regulatory minimum requirements, they appear insufficient compared to industry averages. At the end of the first quarter of 2025, the average capital adequacy ratio for commercial banks was 15.28%, the average tier 1 capital adequacy ratio was 12.18%, and the average core tier 1 capital adequacy ratio was 10.70%. Since initiating its A-share listing tutoring process in 2019, Huishang Bank's journey "back to A-shares" has stretched to six years, with the bank still lingering in the preparatory phase. In October 2025, a progress report from the tutoring institution highlighted three major obstacles blocking the path forward. The first is a shareholding dispute. A legal battle between the second-largest shareholder, the "Zhongjing Group," and the prospective acquirer, the "Shanshan Group," over a stake in Huishang Bank valued at over ten billion yuan remains under review by the Supreme People's Court. The second obstacle involves corporate governance issues. Huishang Bank's fourth board of directors was originally scheduled to complete its term in January 2022, but as of the report date, the succession process remained unfinished. The current board has 13 members, which does not comply with the Articles of Association stipulating a requirement for 15 to 19 members. The third hurdle is a historical legacy issue concerning employee shareholding. The bank still has instances where individual employees hold more than 500,000 shares, a situation that requires rectification and standardization according to regulatory guidelines. During a recent board meeting, the bank reviewed and passed a proposal to abolish its board of supervisors, while also amending related documents such as its Articles of Association, rules for shareholders' meetings, and rules for board meetings. This structural change places higher demands on the bank's internal risk monitoring and compliance management, particularly under the current absence of a chairman, necessitating greater attention to checks and balances and the refinement of decision-making oversight mechanisms. Summary of Selected Major Penalties Against Huishang Bank in 2025
Key Performance and Risk Indicators for Huishang Bank in H1 2025
With its chairman's position vacant for over five months, Huishang Bank concurrently faces multiple challenges: cumulative annual fines exceeding 15 million yuan, a 190% surge in real estate NPLs, and a six-year delay in its A-share listing plans. This bank, which once pioneered the joint establishment model for city commercial banks, now stands at the milestone of its twentieth anniversary, critically examining whether it can find a sustainable balance between rapid scale expansion and effective risk control.
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