As one of the first city commercial banks to release its half-year results, Bank Of Ningbo Co.,Ltd. has posted the strongest year-on-year growth in both operating revenue and net profit among all listed banks that have disclosed earnings so far, despite a challenging environment for the sector.
On August 19th evening, the bank published its 2026 interim report, becoming the second city commercial bank to fully detail its first-half performance. In a period marked by intense pressure across the banking industry, the lender achieved rapid growth in both top-line and bottom-line metrics during the first six months of 2026.
Operating revenue reached RMB 41.45 billion, up 11.54% year-on-year, while net profit attributable to shareholders of the parent company climbed 12.12% to RMB 16.56 billion. Among listed banks that have already published earnings previews or interim statements, Bank Of Ningbo Co.,Ltd. leads the pack in terms of growth rates for both revenue and profitability.
Alongside steady earnings expansion, the bank's asset base also grew at a healthy clip during the period. As of the end of June 2026, total assets stood at RMB 3.95 trillion, up 8.81% from the start of the year. Loans and advances totaled RMB 1.95 trillion, a 12.5% increase from the beginning of 2026, representing 49.39% of total assets, up 1.62 percentage points from the beginning of the year.
Behind the impressive headline numbers, two key metrics deserve particular attention: the net interest margin contracted by 6 basis points year-on-year to 1.70% as of June end, while fee and commission income surged 57.92% to RMB 5.87 billion in the first half. The former reflects an aggressive loan expansion strategy anchored on corporate lending, while the latter has become a major driver behind the bank's robust revenue and profit growth.
New loans boost volume to offset pricing pressure, net interest margin narrows by 6 basis points
Recent data from the National Financial Regulatory Administration shows that the net interest margin for the commercial banking sector stood at 1.41% in the second quarter, a modest rebound of 1 basis point from the record low of 1.40% in the first quarter. This marks the first sequential quarterly improvement since the first quarter of 2022.
Against this backdrop of a broadly stable industry-wide net interest margin, Bank Of Ningbo Co.,Ltd. recorded a margin of 1.70% for the first half of 2026, still above the industry average but down 6 basis points year-on-year. This decline is largely the result of substantial loan book expansion.
On the asset side, the bank added RMB 216.6 billion in new credit during the first half, with corporate loans contributing RMB 207.3 billion of that figure, representing a 19.32% increase from the beginning of the year. Average daily loan balances grew 16.23% year-on-year, with corporate loan average daily balances up 25.69%. Interest income from loans reached RMB 36.29 billion, accounting for 67.03% of total interest income.
Looking at the structure of new credit extended in the first half, corporate loans made up 95.7%, bills accounted for 3.1%, and retail lending contributed just 1.2%, underscoring the dominance of corporate lending as the primary growth engine. During the reporting period, corporate loans were concentrated in leasing and business services, manufacturing, and wholesale and retail, representing 20.41%, 12.39%, and 10.56% of total loans, respectively.
Financial data shows that the average interest rate on corporate loans fell to 3.61% in the first half of 2026, down 0.38 percentage points from 3.99% in the same period last year. Beyond corporate lending, personal loan origination also showed signs of a turning point in the first half, with personal loan balances growing 0.47% from the start of the year, reversing the downward trend seen over multiple quarters in 2025.
According to estimates from China Securities, personal consumption loans account for 17.7% of total loans, residential mortgages for 5.3%, and individual business loans for 4.5%. Among sub-categories, mortgages grew 1.9% year-on-year and consumption loans rose 0.2%, with the stabilization of both segments driving the overall recovery in retail loan growth. This suggests that the bank's adjustments on the retail front are beginning to take effect.
Meanwhile, the bank has also been actively optimizing its liability structure. As of the end of June, deposit costs fell by 39 basis points, while overall interest-bearing liability costs declined by 36 basis points. Demand deposits grew 17.06% from the beginning of the year, outpacing the 11.37% growth in time deposits. The proportion of demand deposits rose to 35.57%, up 1.14 percentage points from the start of 2026.
By expanding corporate loans on the asset side and lowering deposit costs on the liability side, Bank Of Ningbo Co.,Ltd. achieved net interest income of RMB 29.39 billion in the first half, up 14.26% year-on-year, contributing 70.91% of total operating revenue. This one-up, one-down dynamic has been instrumental in sustaining the bank's earnings momentum.
Fee-based business accelerates sharply, diversified profit center model takes shape
In an industry environment where net interest margins remain under persistent pressure, expanding fee-based income has become a critical avenue for banks to transform their business models. In the first half of this year, Bank Of Ningbo Co.,Ltd. saw explosive growth in fee and commission income.
According to the financial report, the bank generated RMB 5.87 billion in fee and commission income during the period, a year-on-year increase of 57.92%. Net fee and commission income rose 53.90% to RMB 4.32 billion, accounting for 10.41% of total revenue, up 2.87 percentage points from the same period last year.
Structurally, the rapid growth in fee and commission income was primarily driven by increases in wealth distribution and asset management fee revenue. During the reporting period, agency business income reached RMB 4.99 billion, up 67.19% year-on-year.
While fee and commission income grew robustly, the corresponding increase in related expenses is also worth noting. The bank's fee and commission expenses totaled RMB 1.56 billion in the first half, up 70.24% year-on-year, outpacing the growth rate of income. Dong Ximiao, chief economist at Uloan, explained that this situation stems primarily from the cost-frontloading effect associated with business expansion and structural adjustments.
According to his analysis, the sharp increase in fee and commission income was largely driven by a surge in agency business such as fund and insurance distribution. These high-growth segments typically entail higher incentive fees and commission sharing paid to channel partners and third-party collaborators, leading to corresponding or even earlier increases in related expenses. Additionally, banks in the early stages of building their fee-based business often need to invest heavily in technology systems and optimize talent teams, and these fixed costs can temporarily inflate the expense base.
Despite the 70.24% growth in expenses appearing higher than the income growth rate, net income still expanded by a robust 53.90%, indicating that input-output efficiency remains solid. This is a normal phenomenon during a business expansion phase rather than a sign of declining operational efficiency.
In recent years, fee-based business has emerged as a key pathway for banks to break through earnings stagnation amid narrowing net interest margins. Beyond Bank Of Ningbo Co.,Ltd., Bank of Jiangsu also disclosed that its fee and commission expenses rose 73.74% year-on-year to RMB 1.04 billion in the first half. Guilin Bank's 2026 interim report showed a surge of nearly 290% in fee and commission income, partly due to a low base in 2025, yet it still reflects the growing emphasis across banks on developing fee-based revenue streams.
As net interest margins continue to compress, building a second growth curve and diversifying revenue sources has become a shared strategic priority for banks. Bank Of Ningbo Co.,Ltd. has established a "9+4" diversified profit center model, comprising nine core profit centers—including corporate banking, retail corporate banking, and wealth management—supplemented by four subsidiaries: Yongying Fund, Yongying Financial Leasing, Ningyin Wealth Management, and Ningyin Consumer Finance. These entities work in tandem to drive capital-light business as the bank's "second growth curve."
However, looking at overall non-interest income, the bank recorded RMB 12.06 billion in the first half, up a modest 5.44% year-on-year, dragged down by losses from changes in fair value. The financial report shows that fair value losses stood at RMB -963 million in the first half, compared with RMB -481 million in the same period last year.
Regarding the fair value losses, analysts at China Securities pointed out that they were primarily driven by changes in the fair value of foreign exchange derivative instruments. Bank Of Ningbo Co.,Ltd. serves a large client base of foreign trade enterprises, generating substantial demand for FX derivatives. Heightened exchange rate volatility amid the US-Iran conflict led to paper losses on these holdings.
Beyond growth in scale and business expansion, the bank's asset quality also merits attention. As of the end of June 2026, non-performing loan balances stood at RMB 14.79 billion, with an NPL ratio of 0.76%, unchanged from the beginning of the year. According to data from the National Financial Regulatory Administration, the industry-wide NPL ratio was 1.52% at the end of the second quarter of 2026, meaning the bank's ratio was 0.76 percentage points below the industry average. It is also the only A-share listed bank to have maintained an NPL ratio below 1% for 19 consecutive years.
The bank's provision coverage ratio reached 373.35% as of June end, up 0.19 percentage points from the start of the year. Loan loss reserves totaled RMB 55.24 billion, an increase of RMB 6.18 billion from the beginning of 2026. The capital adequacy ratio stood at 14.64%, up 0.34 percentage points from the start of the year, indicating solid risk-absorption capacity.
Nevertheless, the accumulation of risk on the retail side warrants continued vigilance. According to estimates from China Securities, the bank's retail NPL ratio rose 6 basis points from the beginning of the year to 2.00%, with the mortgage NPL ratio climbing to 1.20% and the business loan NPL ratio reaching 3.81%. "Retail asset quality is still in a phase of trend-based exposure, and the subsequent evolution of risk requires ongoing monitoring," noted an analyst at China Securities.
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