The performance reports of listed banks have always been the most sensitive thermometer for gauging the warmth and coldness of China's financial system.
As of March 9, 12 A-share listed banks have intensively disclosed their performance reports for 2025. In this preliminary list, the vast majority of banks still maintain positive growth in net profit attributable to shareholders.
When examining the report cards within a broader economic context, the contrast is extremely striking:
In 2025, the banking industry faces an unprecedentedly complex environment. Under the counter-cyclical adjustment of monetary policy, multiple reductions in the Loan Prime Rate (LPR) combined with concentrated adjustments in existing mortgage rates have continuously lowered financing costs for both the real economy and households. At the same time, the one-sided decline in bond market yields has greatly limited the return space for financial market operations.
On the asset side, local debts have entered a deep-water zone, with a large number of high-interest municipal investment non-standard assets facing interest rate cuts and extensions. The real estate sector is undergoing deep adjustments, and traditional balance sheet expansion paths are substantially obstructed. The rigid liabilities and sharply declining asset yields have also put widespread pressure on the net interest margin across the entire industry.
Amidst the chill, why do these &#34;early bird&#34; banks still present strong results?
The answer lies beneath the surface of the profit and loss statements.
The profitability logic of the banking industry has fundamentally shifted; the belief in scale has completely failed, and it has irreversibly entered a highly differentiated &#34;structural era.&#34;
These 12 performance reports are not a reflection of industry prosperity but rather micro-samples of banks seeking efficiency from regions, customer groups, and existing stocks.
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<h2>Regional Beta</h2>
The bank's balance sheet is essentially a mirror of the local real economy. In a cycle of weak credit demand, being located in a high-vitality economic area itself serves as a moat.
Xinfeng has noted that among the 12 listed banks that have disclosed their performance, city commercial banks have significantly outpaced others in profit growth: Qingdao Bank leads with a 21.66% year-on-year growth in net profit attributable to shareholders; Qilu Bank follows closely with a growth rate of 14.58%.

The high growth of these two Shandong-based banks is not merely a result of financial adjustments or base effects, but is built on an extremely solid foundation of the real economy.
Zeng Gang, chief expert at the Shanghai Financial and Development Laboratory, told Xinfeng that the impressive performance of small and medium-sized banks in economically vibrant areas is essentially a projection of regional industrial upgrades and structural economic dividends.
Liu Pengfei, a researcher at Postal Savings Bank, also pointed out: &#34;The outstanding performance of rural commercial banks in Shandong and the Yangtze River Delta is mainly due to the resilience of the regional economy. Rural commercial banks have a deep understanding of local industrial structures and customer needs, and policy support is also beneficial for their development.&#34;
In recent years, Shandong Province's GDP has maintained steady growth and, in 2025, it will surpass 10 trillion yuan for the first time, becoming the first major economic province in northern China to join the &#34;10 trillion club&#34; with a growth rate of 5.5%;
Xinfeng's analysis reveals that by the end of 2024, the five-year compound annual growth rate of net profit attributable to shareholders and the compound annual growth rate of total assets for the two banks mentioned are both among the top in northern listed banks.
Shifting focus southward, city commercial banks in the Yangtze River Delta have also demonstrated considerable performance resilience:
Among them, Hangzhou Bank is expected to achieve a net profit attributable to shareholders of 19.03 billion yuan in 2025, a year-on-year increase of 12.05%; Ningbo Bank is expected to achieve a net profit attributable to shareholders of 29.33 billion yuan, a year-on-year increase of 8.13%; Nanjing Bank is expected to achieve a net profit of 21.81 billion yuan, a year-on-year increase of 8.08%.
The dense concentration of specialized and innovative enterprises, as well as mature semiconductor and biopharmaceutical industry chains in Jiangsu and Zhejiang, provides a continuous flow of credit to local city commercial banks;
Whether it is the digital economy and intelligent manufacturing in Hangzhou or the specialized &#34;single champion&#34; enterprise clusters in Ningbo, both demonstrate order-taking and profitability capabilities that transcend economic cycles.
This high level of microeconomic activity offsets the contraction in traditional industries, leading to steady expansion of asset scales, and to some extent supports risk pricing on the asset side, allowing these local banks to have more strategic depth in the battle to defend interest margins.
A similar scenario is also reflected in joint-stock banks.
Xinfeng notes that among joint-stock banks, Shanghai Pudong Development Bank achieved a profit increase of 10.52%, while China CITIC Bank recorded a growth of 2.98%; in contrast, China Merchants Bank and Industrial Bank saw their growth rates fall to 1.21% and 0.34%, respectively, while Huaxia Bank experienced negative growth.
This internal folding also reflects that national banks are &#34;contracting their front lines&#34; towards high-growth regions:
One of the core actions for Shanghai Pudong Development Bank to regain growth is to continue emphasizing the importance of the Yangtze River Delta, such as strengthening top-level design and upgrading the &#34;Yangtze River Delta Integration Demonstration Zone Management Headquarters&#34; to &#34;Yangtze River Delta Integration Management Headquarters,&#34; coordinating differentiated resource allocation for branches in the Yangtze River Delta region;
At the same time, a blacklist and whitelist for corporate business will be established, with branches conducting industry and regional research, granting full authorization to whitelist clients, and gradually phasing out business with blacklist enterprises, planning to further improve the quality of credit assets over the next 3-5 years.
<h2>Joint-stock Banks' Downstream Expansion</h2>
Compared to city and rural commercial banks that can tap into regional dividends by focusing on a specific area, national joint-stock banks, which have larger asset scales and broader business reach, face more complex challenges.
If there is a lack of absolute industrial dividends in specific regions, where can large commercial banks seek profits?
The first answer reflected in the performance reports is: to seek benefits from historical stock.
With macroeconomic cycles changing and deleveraging deepening, the high-risk assets left over from earlier expansive balance sheet growth have burdened some banks heavily; today, the pace of clearing these historical burdens directly determines the elasticity of profit release in the current period.
Also noteworthy is the cleaning of retail asset stocks.
Against the backdrop of fluctuations in residents' income expectations, the credit card and consumer loan businesses that surged in recent years have seen a phase of rising non-performing rates, prompting some commercial banks to actively reduce high-risk retail exposures and intensify efforts to collect and write off existing non-performing assets
Taking Shanghai Pudong Development Bank as an example.
As a representative of joint-stock banks that have been in a deep transformation zone in recent years, the bank's performance trajectory has illustrated a typical logic of &#34;navigating risks to bottoming out and then rebounding&#34;;
In previous years, faced with the burden of non-performing assets left by early business expansion, Shanghai Pudong Development Bank entered a painful &#34;deep squat period,&#34; making drastic adjustments through strict asset quality classification.
For a long time, to cope with historical non-performing assets, Shanghai Pudong Development Bank had to make substantial credit impairment losses, which greatly consumed the current operating profit.
When the increment of non-performing assets slowed down and the existing risks were basically cleared, the bank no longer needed to use high current profits to fill the provision gap.
The excess provisions accumulated earlier then transformed into a &#34;water reservoir&#34; for profit adjustment; even if the interest margin was under pressure leading to flat revenue, the stabilization of net interest income could smoothly translate into a strong rebound in book net profit, presenting a very typical logic of cyclical bottom reversal.
The 10.52% profit surge is backed by a comprehensive solidification of asset quality, with the non-performing loan ratio of Shanghai Pudong Development Bank expected to drop to 1.26% by the end of 2025, and the provision coverage ratio rising to 200.72%.
The second answer is to continue seeking incremental growth in lower-tier markets.
For example, Shanghai Pudong Development Bank has explicitly proposed to moderately sink its operational network, with substantial actions reflected in the absorption and reform of its rural banks;
The risk control model and credit resource allocation capability of rural banks incorporated into the head office have significantly improved, becoming a more combat-effective business lever for the parent bank in county markets.
Wang Xianshuang, an analyst at China Merchants Securities, pointed out that the technology, supply chain, and inclusive finance sectors among the &#34;five major tracks&#34; currently promoted by Shanghai Pudong Development Bank all reflect the company's transformation strategy of sinking down and expanding small and medium-sized clients.
<h2>Local Banks &#34;Thoroughly Understand the Region&#34;</h2>
Joint-stock banks can stabilize their footing by shedding historical burdens and contracting to high-prosperity areas, but for more limited-sized city and rural commercial banks, the real survival crisis comes from the &#34;dimensionality reduction strike&#34; by large banks.
In the current environment where quality assets are scarce, regional dividends are being rapidly eroded by the expansion of large banks.
Zeng Gang believes that pure locational advantages are ephemeral and can easily be diluted by the cross-regional expansion of large financial institutions.
Especially in the credit allocation for provincial state-owned enterprises, quality urban investment projects, and large infrastructure, the price war has become intense;
In this context, large banks often offer very low loan rates in the competition for quality clients, relying on their low liability cost advantages. If small and medium-sized banks blindly follow in this price war, they will directly face the risk of their interest margins being breached.
In this regard, Lou Pengfei believes that &#34;thoroughly understanding the region&#34; is an inevitable trend for small and medium-sized banks. In the face of large banks sinking down with funding cost advantages, small and medium-sized banks must leverage their &#34; human connections and geographical advantages&#34; to deeply cultivate county markets.
Zeng Gang also stated that small and medium-sized banks need to systematically refine the non-standardized &#34;soft information&#34; obtained from long-term local roots into high-barrier local risk pricing models, upgrading from a single funding supplier to a comprehensive industrial financial ecosystem service provider.
Proactively abandoning head competition and solidifying the sinking client base has become a necessary option for breakthrough.
In 2025, the net profit attributable to the parent of Sunong Bank is expected to grow by 5.04% year-on-year, with the non-performing loan ratio reduced to 0.88%;
This is the result of the bank's promotion of a grid-based marketing strategy. By deeply penetrating the supply chains of local small and micro enterprises in textiles and equipment manufacturing, SuNong Bank accurately grasps the true operating conditions of enterprises, transforming long-tail customer groups that large banks cannot cover into quality assets.
While Qilu Bank maintains a profit growth rate of 14.58%, its low non-performing loan ratio is also controlled at 1.05%;
Behind this is the bank's focus on county-level finance as the core engine for driving scale and profit, creating exclusive credit products for modern agriculture and new urban residents in counties, with county-level loan growth rates continuously outperforming the entire bank.
However, Zeng Gang emphasized that downward expansion is by no means a rough expansion of the balance sheet.
&#34;Grassroots customer groups often lack standard collateral, which requires financial institutions to establish a product matrix that is highly aligned with local realities, a differentiated credit mechanism, and an agile post-loan management system to hedge against the credit risks associated with downward expansion,&#34; Zeng Gang stated.
<h2>Defense in Weak Regions</h2>
It must be acknowledged that the spotlight of the capital market always has a survivor bias.
Many listed banks that have not released performance reports may have actual performance far below market expectations;
Beyond the glamorous A-share stage, there are a large number of unlisted small and medium-sized banks, as well as grassroots financial institutions in weak regions, which are undergoing an extremely severe survival challenge.
When regional beta is no longer a dividend, small and medium-sized banks lacking endogenous blood-making capacity face not only profitability indicators but also the bottom-line defense of survival.
In this regard, Lou Pengfei believes that &#34;small and medium-sized banks in economically weak regions need to shift from pursuing scale expansion to a 'small but beautiful' community bank positioning, vigorously develop intermediary businesses, enhance risk control capabilities through technological means, and optimize resource allocation through regional integration.&#34;
On the operational level, these institutions are showing an extremely pragmatic defensive posture.
First, they completely abandon the fantasy of being a universal bank and focus on single penetration.
In areas with industrial decline, banks can only focus their limited credit resources on the remaining characteristic industries and supply chains; for example, city commercial banks in resource-rich provinces only serve large coal and non-ferrous enterprises, while agricultural provinces are fully bound to leading agricultural and animal husbandry enterprises.
Zeng Gang stated that the primary strategy for such small and medium-sized banks is to implement extreme market segmentation focus, accurately targeting specific advantageous industries or supply chain nodes, creating specialized financial service barriers in vertical fields, and forming a pattern of differentiated competition.
Second, extreme cost reduction to maintain the bottom line of survival.
To avoid interest margin inversion, banks forcibly reduce high-cost time deposits, refuse to absorb long-term expensive funds, and exchange for a lighter liability structure. On the operational side, they massively cut inefficient remote branches, streamline redundant personnel, and reduce the cost-to-income ratio.
In this regard, Zeng Gang suggested that small and medium-sized banks could leverage financial technology to achieve a lightweight leap in management models, compensating for shortcomings in technological investment and enhancing management and control efficiency.
Third, banding together for warmth to build the last line of defense.
When a single institution's size cannot absorb regional credit risk shocks, administrative reorganizations frequently occur. Nowadays, many provincial rural commercial banks are successively listed, and provincial associations are deepening reforms, forming unified legal entities from grassroots legal persons trapped in difficulties, using larger balance sheets to hedge against localized risk hotspots
Zeng Gang stated that actively seeking market-oriented mergers and acquisitions is an important option for mitigating risks and achieving breakthroughs. Through inter-institutional integration, &#34;reducing quantity and improving quality&#34; can be realized, completing the strategic transformation towards quality and efficiency-driven growth.
It is worth noting that the 12 reports are just the tip of the iceberg.
The era of relying solely on license monopolies to win effortlessly has completely come to an end. In the era of stock economy, the future of the banking industry will be extremely pure:
Either deeply bind with the real economy in strong regions to earn certain dividends;
Or undergo painful restructuring and rebirth in pressured areas, seeking survival space through extreme cost reduction and efficiency enhancement.
In the fierce competition of stock economy, refined asset pricing capabilities, sharp downward risk control models, and historical risk identification abilities that penetrate cycles will become the only pass that every financial institution can firmly hold in this folding era

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The performance map of banks: seizing strong regions, deepening county areas, and clearing existing stock