A few days ago, New Dazhou Holdings disclosed a litigation announcement involving its wholly-owned subsidiary Zhejiang Commerce and Trade in a loan dispute with Hua Xia Bank's Ningbo branch. The claimed amount is approximately 81.34 million yuan, including principal, interest, penalty interest, and compound interest.
According to the announcement, from September 18 to September 20, 2023, Hua Xia Bank's Ningbo branch disbursed loans totaling 80 million yuan to Zhejiang Commerce and Trade for operational purposes, with daily amounts of 30.6 million yuan, 31.8 million yuan, and 17.6 million yuan, respectively. These loans had a one-year term. Upon maturity in September 2024, the bank extended the repayment period by one year to September 10, 2025.
However, by the extended due date, Zhejiang Commerce and Trade failed to repay the 80 million yuan principal and approximately 1.0438 million yuan in interest. Consequently, Hua Xia Bank filed a lawsuit against the company and its guarantors to recover the debt.
This default may impact Hua Xia Bank's asset quality. As of June 2025, the bank's overdue loans stood at 40.976 billion yuan, with an overdue loan ratio of 1.7%, indicating significant credit pressure. Of these, loans overdue for less than 90 days totaled 11.039 billion yuan (0.46%), while those overdue for more than 90 days amounted to 29.937 billion yuan (1.24%).
Market participants have raised concerns about Hua Xia Bank's risk management capabilities, particularly as Zhejiang Commerce and Trade had been reporting consecutive losses in prior years, yet still received substantial loans from the bank. This suggests room for improvement in the bank's risk control measures.
Previously, Hua Xia Bank lacked a dedicated Chief Risk Officer (CRO). In January 2025, Liu Xiaoli was approved as CRO but resigned after just nine months. Her successor, Fang Yi, previously held leadership roles at Bank of Beijing, including deputy general manager of the investment management department and branch president. Yang Shujian, Hua Xia Bank's leader, has high expectations for Fang Yi, given the bank's persistently high non-performing loan (NPL) ratio among listed joint-stock banks.
In the first half of 2025, Hua Xia Bank's NPL balance reached 38.67 billion yuan, up 756 million yuan from year-end 2024, with an NPL ratio of 1.6%—higher than peers, which generally maintain ratios below 1.5%. The bank relies on corporate loans to offset its higher personal loan NPL ratio.
By Q3 2025, Hua Xia Bank intensified efforts to address NPLs. Its NPL ratio improved slightly to 1.58%, down 0.02 percentage points from year-end 2024, while the provision coverage ratio declined to 149.33%. As of September 30, 2025, the bank's NPL balance stood at 38.456 billion yuan, a 1.43% increase from year-end 2024 but a 214 million yuan decrease from mid-2025.
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