Chongqing Rural Commercial Bank's non-interest income is expected to drop nearly 24% in 2025, with increased risks in retail loans

Translated from: Economic Information Daily

As the first rural commercial bank in the country to list shares in both A+H markets, Chongqing Rural Commercial Bank Co., Ltd. (hereinafter referred to as “Chongqing Rural Commercial Bank,” 601077.SH) recently released the first A-share annual report from a rural commercial bank for 2025.

Over the past year, the bank’s overall operating performance showed a trend of steady growth in scale, improving profitability, and better non-performing loan ratios, but it also faced two major concerns: a sharp decline in non-interest net income and a rise in retail loan risk. This reflects the real challenges that leading rural commercial banks encounter during their transformation.

The annual report shows that as of the end of 2025, Chongqing Rural Commercial Bank’s total assets were approximately RMB 1.66 trillion, up 9.95% year over year, maintaining its position as the largest local financial institution in Chongqing; in 2025, the bank achieved operating revenue of RMB 28.648 billion, up 1.37% year over year; and net profit of RMB 12.420 billion, up 5.35% year over year.

Non-interest net income fell sharply by 23.92%

Over the past year, Chongqing Rural Commercial Bank encountered an imbalance in its revenue structure, relying too heavily on net interest income generated by traditional lending, while non-interest net income accounted for a relatively small share. In 2025, its net interest income was RMB 24.26 billion, up 7.85% year over year, accounting for nearly 85% of the bank’s operating revenue. This was mainly because the bank’s loan balance reached RMB 797.287 billion, up 11.62%; at the same time, its cost of liabilities fell significantly, with the interest expense rate on customer deposits at only 1.45%, down 28 basis points year over year.

In terms of non-interest net income, Chongqing Rural Commercial Bank performed poorly. In this segment, it generated revenue of RMB 4.387 billion, down 23.92% year over year. Of that, net fee and commission income was RMB 1.294 billion, down 19.71% year over year, mainly because income from business such as debit cards and agency wealth management and insurance declined; other non-interest net income was RMB 3.093 billion, also down sharply by 25.55% year over year. The bank said that the decline in non-interest net income was mainly due to market conditions, especially fluctuations in market interest rates, which led to lower yields from transaction-based financial assets such as fund investments.

In terms of credit deployment, one major business focus of Chongqing Rural Commercial Bank is to center on serving the “three rural areas”—agriculture, rural areas, and farmers. In 2025, the bank supported rural revitalization from multiple angles, including mechanism safeguards, digital enablement, featured industries, and consumption assistance. It carried out “village-by-village credit assessment” in 100% of the administrative villages across Chongqing, pre-approved credit for nearly 1.5 million farmers and households exceeding RMB 25.0 billion, and its balance of agriculture-related loans reached RMB 265.504 billion. In both total volume and incremental growth, it continued to rank first in Chongqing.

As of the end of 2025, Chongqing Rural Commercial Bank’s balance of corporate loans was approximately RMB 434.974 billion, up 21.46% year over year; in serving the local economy, the bank increased the rollout of county-level lending. County-level loans accounted for 50.78% of total loans, up 2.40 percentage points from the end of the previous year.

In improving asset quality, Chongqing Rural Commercial Bank advanced coordinated disposal of non-performing loans by establishing credit standards for key areas of business, conducting risk screenings in key areas, and carrying out special inspections in high-risk areas. As of the end of 2025, its non-performing loan ratio decreased by 0.1 percentage points year over year to 1.08%, and the allowance coverage ratio increased by 3.82 percentage points year over year to 367.26%, with asset quality continuing to improve in recent years.

Retail loan non-performing balances and ratios both increased

Chongqing Rural Commercial Bank said that since 2025, the bank has made thorough assessments of regulatory policies, formulated and strictly implemented guidelines on the direction of credit, tightly controlled credit entry, strengthened post-lending management, and enhanced risk monitoring for customers in key areas and key industries. As a result, the balance of non-performing corporate loans and the non-performing loan ratio both declined. However, due to factors such as a complicated and severe external environment and insufficient domestic effective demand, the balance of non-performing retail loans and the non-performing loan ratio both increased compared with the end of the previous year.

The annual report shows that in 2025, Chongqing Rural Commercial Bank’s balance of non-performing retail loans increased by RMB 1.53 billion from the end of the previous year to approximately RMB 6.216 billion. The non-performing loan ratio for retail loans was 2.07%, up 0.47 percentage points from the end of the previous year. In addition, the non-performing loan ratio for other loans mainly including personal consumption loans and credit cards reached 2.61%, up 0.61 percentage points, which is the highest non-performing loan ratio among all business types of the bank.

In retail lending, in 2025 Chongqing Rural Commercial Bank reduced the scale of personal mortgage loans and personal business loans, and then, through grid-based marketing, promoted the layout of scenarios such as community commerce and cultural tourism consumption, which led to a significant increase in the scale of other loans including personal consumption loans and credit cards. The annual report shows that in 2025, the bank’s total amount of other loans was RMB 94.948 billion, up RMB 14.722 billion from the end of the previous year, representing an increase of 18.35%. But while credit scale increased rapidly, risks also rose accordingly.

Regarding the reasons for the significant increase in retail loan risk, Chongqing Rural Commercial Bank said in its annual report that there is still pressure on the bank’s asset quality management and control for retail loans. Under the current domestic situation where supply is stronger than demand, some individual customers’ income does not meet expectations, and their debt repayment capacity declines. In addition, the weakening of credit demand has led to some business categories shrinking in scale.

However, Chongqing Rural Commercial Bank believes that the risk of its retail loans remains generally controllable overall. On the one hand, its retail loans have a relatively strong “second source of repayment.” In the non-performing loans, the proportion of loans with guarantees is 77.92%. Among them, collateralized and pledged loans account for 68% of non-performing retail loans. The coverage multiple of the value of collateral over the principal of the loans is 1.68, which provides a certain degree of risk mitigation.

Regarding how to improve the risk of retail loans and effectively lower the non-performing loan ratio for this business, a reporter called the office of the board of directors of Chongqing Rural Commercial Bank and sent an interview request letter. The recipient said it would be forwarded to the relevant departments. As of the time the reporter’s piece was filed on March 31, Chongqing Rural Commercial Bank had not responded.

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