Bank of Qingdao Co., Ltd. (002948.SZ) reported a slight 0.22% year-on-year decline in Q3 2025 revenue to RMB 3.351 billion, casting a shadow over its otherwise positive nine-month results. While the bank achieved dual growth in revenue and net profit for the first three quarters, with total revenue reaching RMB 11.013 billion (up 5.03% YoY) and net profit attributable to shareholders climbing 15.54% to RMB 3.992 billion, the Q3 dip exposes structural vulnerabilities.
The bank's non-interest income fell sharply by 10.72% YoY to RMB 2.874 billion in the first nine months, dragging down overall performance. This decline stemmed from multiple factors: bond market weakness reduced valuation gains (investment income and fair value changes down RMB 152 million), shrinking wealth management fees (net commission income down RMB 45 million), and plummeting precious metals sales (other business income down RMB 129 million). These figures reveal over-reliance on volatile non-interest income streams.
Interest income remained the backbone, with net interest income growing 12% YoY to RMB 8.139 billion, supported by expanding interest-earning assets and lower funding costs. However, the net interest margin continued narrowing—down 5bps from 2024 year-end to 1.68%—reflecting industry-wide pressures.
Asset quality showed improvement with the NPL ratio dropping 4bps to 1.10% and provision coverage rising to 269.97%. Yet capital adequacy ratios deteriorated across all tiers (total CAR down 66bps to 13.14%), lagging behind the industry average of 15.8%. The bank recently issued RMB 2 billion perpetual bonds at 2.45% to bolster capital.
Significant governance changes accompanied these financial developments. Qingdao Guoxin Group plans to increase its stake to 19.99%, cementing state-owned capital's control. Meanwhile, a management reshuffle saw rotations across headquarters and branches, including the appointment of Du Jie as president of BQD Wealth Management after a two-year vacancy.
BQD Wealth Management's struggles mirror the bank's non-interest income challenges. Its AUM fell 4.94% to RMB 189.48 billion by mid-2025, with H1 revenue and profit plunging 30.98% and 35.68% respectively—continuing a downward trend since 2021's peak performance.
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