Amid a banking sector grappling with narrowing interest margins and a scarcity of quality assets, Bank of Nanjing has delivered superficially impressive results. By the end of 2025, its total assets reached 3.02 trillion yuan, a significant increase of 16.61% year-on-year. This figure further climbed to 3.21 trillion yuan by the end of the first quarter of 2026. On the revenue front, the bank achieved operating income of 55.542 billion yuan in 2025, up 10.48% year-on-year. Revenue for Q1 2026 reached 16.111 billion yuan, with a growth rate of 13.54%.
The core driver of this strong performance was explosive growth in net interest income. In 2025 and Q1 2026, the year-on-year growth rates for net interest income were as high as 31.08% and 39.44%, respectively. However, this does not indicate that Bank of Nanjing has defied the trend by securing superior pricing power. In fact, the bank's net interest margin for 2025 was 1.82%, a decrease of 0.12 percentage points from the previous year. This represents a classic "volume-for-price" strategy, heavily reliant on aggressive corporate loan issuance. By the end of Q1 2026, its corporate loan balance approached 1.2 trillion yuan, with growth rates exceeding 9% in areas like green finance and technology finance.
Compared to the double-digit revenue growth, Bank of Nanjing's profit growth appears notably restrained. The year-on-year growth rates of net profit attributable to parent company shareholders were stable at 8.08% for 2025 and 8.05% for Q1 2026. Behind this stable fluctuation lies a rapid increase in credit impairment losses and the strategic release of provisions from the "reserve pool." In 2025 and Q1 2026, the bank recognized credit impairment losses of 13.884 billion yuan and 4.442 billion yuan, surging by 31.91% and 40.09% year-on-year, respectively. To ensure profit stability while digesting these substantial impairments, management precisely utilized accumulated provision buffers. The provision coverage ratio decreased from 335.27% in 2024 to 313.62% at the end of 2025, and further declined to 306.81% by the end of Q1 2026. While this ratio still indicates a strong risk absorption capacity, this model of "rising impairments coupled with provision replenishment" has, to some extent, diluted the quality of profits.
Beneath the impressive aggregate data, structural differentiation in asset quality and weak non-interest income are also concerns. Financial market volatility significantly dragged down the bank's non-interest income. In 2025, its net non-interest income decreased by 12.71% year-on-year. The primary reason was a substantial contraction in fair value change gains, which recorded a loss of 2.512 billion yuan in 2025 compared to a gain of 7.377 billion yuan in the same period last year, exposing the vulnerability of its trading book to market fluctuations.
Simultaneously, asset quality in the retail and real estate sectors faces pressure. Although the overall non-performing loan (NPL) ratio remained stable at 0.83%, the NPL ratio for personal loans at the parent company rose to 1.49% in 2025, up 0.20 percentage points from the end of the previous year. The NPL ratio for corporate loans directed towards real estate also reached 1.81%. Influenced by market adjustments, NPL ratios for housing mortgages, consumer loans, and business operating loans showed signs of increase. Furthermore, the net cash flow from operating activities in Q1 2026 decreased significantly by 67.03% year-on-year, indirectly reflecting restructuring pressures on the interbank liability side.
Overall, Bank of Nanjing's current fundamentals exhibit distinct "spear and shield" characteristics. On one hand, its capital replenishment and cost control execution are strong. The early market-driven conversion of the 20 billion yuan "Nanyin Convertible Bonds" two years ahead of schedule boosted the core tier 1 capital adequacy ratio to 9.17% by the end of Q1 2026, preparing ample ammunition for future balance sheet expansion in core regions. Concurrently, the cost-to-income ratio for the first quarter dropped to 20.90%, a significant decrease of 5.17 percentage points from the start of the year, demonstrating immediate results from expense management.
On the other hand, the underlying risk lies in the actual rate of asset quality consumption. Rapid balance sheet expansion masks the surge in credit impairment losses. As long as the pace of scale expansion does not slow, the safety cushion of provisions can still support the current profit commitments. However, facing structural changes in macroeconomic credit demand and marginal increases in retail NPLs, this financial model of smoothing profits by drawing down existing provisions may encounter more substantial stress tests in the future.
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