New team’s debut! Live coverage of Zhejiang Commercial Bank’s earnings conference: they don’t chase quick profits, using three major certainties to navigate the cycle

Source: The Times Weekly — Times Online

“Under an industry environment where the net interest margin continues to narrow, competition intensifies, and risk control faces mounting pressure, we have not blindly pursued the obsession with scale, nor have we overemphasized short-term performance or chased quick money. We have not taken the old path of building big-account operations. Instead, we have adhered to long-termism—strengthening the fundamentals, adjusting the structure, strengthening compliance, and controlling risks—to achieve generally steady overall performance.” On March 31, at the bank’s 2025 annual performance briefing, Chen Haiqiang, Chairman of CCB Credit Zhejiang Co., Ltd., said.

This was the first time that, after Chen Haiqiang officially took over as Chairman of CCB Credit Zhejiang Co., Ltd. and Lü Linhua assumed (to be appointed) as President of the bank, they appeared together at a performance briefing and spoke to the public for the first time.

In 2025, CCB Credit Zhejiang Co., Ltd. completed a reshuffle of top management in the new term, with a clear trend toward younger executives; many executives are “post-1970s.” At this performance briefing, Chen Haiqiang said the new leadership team overall demonstrates the characteristics of professional deep cultivation, a rational structure, and vigorous capabilities, with solid professional foundations, extensive experience in operating and managing a commercial bank, and also passion and resilience for getting things done and starting new initiatives.

According to the bank’s 2025 annual report released earlier by CCB Credit Zhejiang Co., Ltd., as of the end of 2025, the bank’s total assets exceeded 3.4 trillion yuan. During the year, operating income and net profit attributable to the parent company both declined. However, the bank’s dividend payout ratio continued to remain at more than 30%. Cash dividends per share were 0.131 yuan, and it plans to distribute cash dividends of 3.598 billion yuan.

In his address in the annual report, Chen Haiqiang emphasized that CCB Credit Zhejiang Co., Ltd. will always anchor to the vision of building “a first-class commercial bank,” and will adhere to managing the bank, serving the best, invigorating the bank through technology, and strengthening it through talent—being a firm long-termist.

CCB Credit Zhejiang Co., Ltd.’s 2025 annual performance briefing. Photo by a reporter from Shidai Zhoubao

On performance: strive to stabilize the net interest margin—continue to “live tight”

In 2025, CCB Credit Zhejiang Co., Ltd.’s total assets reached 34810.92 billion yuan, an increase of 1555.53 billion yuan from the end of the previous year, up 4.68%. In 2025, operating income and net profit attributable to the parent company were 625.14 billion yuan and 129.31 billion yuan, respectively. In terms of revenue structure, net interest income and net non-interest income were 444.59 billion yuan and 180.55 billion yuan, respectively.

Regarding the bank’s 2025 performance, the management of CCB Credit Zhejiang Co., Ltd. stated that, overall, it met the targets. Lü Linhua, when explaining performance fluctuations, said that from the perspective of interest income, the current economy is still in a weak recovery stage; effective credit demand is gradually recovering, and the industry’s trend of a narrowing net interest margin continues. From the perspective of non-interest income, in 2025, the bond market saw wide-range volatility and increased fluctuations, which affected the returns on the bank’s trading financial assets.

In 2025, CCB Credit Zhejiang Co., Ltd.’s net profit spread and net interest margin were 1.46% and 1.60%, respectively, down by 6 basis points and 11 basis points year over year. In the annual report, the bank stated that it has continued to promote reducing the financing costs for enterprises, and that the average yield on interest-earning assets decreased by 46 basis points compared with the previous year. To actively respond to the pressure of narrowing spreads in the low interest rate era, it improved the level of liability quality management; the average interest rate on interest-bearing liabilities decreased by 40 basis points year over year.

Lü Linhua said that in 2025, CCB Credit Zhejiang Co., Ltd.’s spread narrowed significantly. Currently, each bank’s asset-liability structure and the respective repricing cycles differ, resulting in different net interest margin performance and operating patterns. From a short-term perspective, CCB Credit Zhejiang Co., Ltd.’s net interest margin still faces certain pressure. However, based on measures already taken now and in the future, the bank believes that its net interest margin will gradually stabilize.

For its operating outlook for 2026, Lü Linhua said that on the revenue side, CCB Credit Zhejiang Co., Ltd. needs to continue to work hard on developing both assets and liabilities, strive to stabilize the net interest margin, and on that basis also improve its fee income sources to ensure revenue remains sound and sustainable. On the other hand, it needs to continue advancing comprehensive cost controls, continue to “live tight,” squeeze out unnecessary “fat” from costs, and ensure profits are satisfactory.

“Right now, we are promoting a three-year fee-income enhancement plan and projects. What we consider is to change the previous phenomenon where fee income improvement was driven by asset deployment and credit expansion, and to strive to develop fee income that is light-asset and highly sticky, such as settlement business and distribution/agency services. Strengthen the linkage between income and expenses, figure out the expenditures behind each piece of fee income, and optimize the structure.” Lü Linhua said.

The annual report shows that in 2025, CCB Credit Zhejiang Co., Ltd.’s net fee and commission income was 3.752 billion yuan. Of this, fee income from agency and entrusted business was 2.791 billion yuan, up 0.526 billion yuan year over year. The bank said this was mainly due to growth in distribution/agency business revenue.

In terms of asset custody business, as of the end of 2025, CCB Credit Zhejiang Co., Ltd.’s custody scale was 2.72 trillion yuan, up 2098.36 billion yuan from the beginning of the year, an increase of 8.35%. During the reporting period, revenue from custody business was 662 million yuan, up 3.92% year over year. The custody scale for public funds was 581.91 billion yuan, up 58.143 billion yuan from the beginning of the year, an increase of 11.10%. During the reporting period, revenue from public funds was 389 million yuan, up 13.25% year over year, with the growth rate ranking third among joint-stock banks.

On strategy: deep cultivation in Zhejiang, serving more than 6,000 provincial tech and innovation enterprises

As a national joint-stock bank headquartered in Zhejiang, CCB Credit Zhejiang Co., Ltd. kicked off a new round of deepening its efforts in Zhejiang in 2025.

At the performance briefing, Luo Feng, Vice President of CCB Credit Zhejiang Co., Ltd., said that in 2025, two-thirds of newly added credit resources were allocated to Zhejiang, which aligns with the bank’s risk appetite of low risk and steady returns. Loan growth in deposits and lending within the province led among joint-stock peers, its cost of interest-bearing funds declined significantly, and its non-performing loan ratio was better than the provincial banking industry average.

Data show that as of the end of 2025, CCB Credit Zhejiang Co., Ltd.’s total financing services within Zhejiang amounted to 11755 billion yuan, up 1550 billion yuan from the beginning of the year. New financing for major projects reached 106 billion yuan. In the province, outstanding balances of loans and deposits were 6333 billion yuan and 6614 billion yuan, respectively—up 687 billion yuan and 465 billion yuan from the beginning of the year. The increment led among joint-stock peers. In the province, the bank’s number of corporate basic customers, micro and small business customers, and retail customers reached 65,000, 83,000, and 5.23 million households, respectively, up 21.35%, 30.02%, and 31.12% from the beginning of the year.

“Relying on a tech-innovation finance ecosystem with a talent bank as the foundation, we have already served more than 6,000 tech and innovation enterprises in the province and have accompanied 42 tech enterprises through their A-share listings.” Luo Feng said. Looking ahead, CCB Credit Zhejiang Co., Ltd. will, in accordance with the requirements of long-termism, build a differentiated service model that can be replicated and promoted in terms of serving the government, serving Zhejiang merchants, and serving people of Zhejiang. It will actively integrate into Zhejiang’s overall development, focus on providing services for Zhejiang merchants. At the same time, it will also do a good job in residents’ wealth management by building a customer service system and data system spanning the entire life cycle of customers within the province, and by improving residents’ income from assets.

Chen Haiqiang further emphasized that CCB Credit Zhejiang Co., Ltd. will remain committed to its Zhejiang-deepening strategy without wavering, leverage its licensing advantages as a national joint-stock bank and its own distinctive business advantages, build its “headquarters base” well, deepen and penetrate the provincial market, and continuously enhance its influence and competitiveness within Zhejiang.

On development: first selected as a systemically important bank, crossing cycles with three certainties

In February this year, the People’s Bank of China and the National Financial Regulatory Administration jointly released the assessment results for China’s systemically important banks for 2025. A total of 21 domestic systemically important banks were recognized, and CCB Credit Zhejiang Co., Ltd. was selected for the first time.

“Being selected this time is both regulators’ recognition of CCB Credit Zhejiang Co., Ltd.’s comprehensive strength and core competitiveness, and also sets higher standards and stricter requirements for our responsibility and our compliance-based operations,” Chen Haiqiang said.

Chen Haiqiang further said that in the future, the new leadership team will guide CCB Credit Zhejiang Co., Ltd. through the cycle with three certainties. First is the certainty of continuous marginal improvement in asset quality. It will define risk management as the lifeline of the bank’s operations, adhere to “risk first” and “compliance as the foundation,” continuously optimize its comprehensive risk management system, and improve an independent checks-and-balances vertical professional risk management mechanism. With a philosophy of low risk and steady returns, it will achieve long-term value compounded returns.

Second is the certainty of growth drivers. Moving from scale-driven to value-driven, it will no longer simply stack resources of personnel, capital, and outlets. Instead, by placing more emphasis on optimizing the management system, strengthening professional capabilities, promoting technology empowerment, and improving labor productivity across the entire workforce, it will achieve sustainable development characterized by internal growth.

Finally is the certainty of improved capital returns. CCB Credit Zhejiang Co., Ltd. will continuously expand and solidify its customer base, and steadily optimize asset-liability allocation. Through improvements in asset quality and the conversion of growth drivers, it will strive to bring ROE back steadily to the industry average level, giving the market greater confidence.

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