What makes Ningbo Bank the "Best Banking Model" in Morgan Stanley's eyes

What transformation directions in banking are revealed by AI · Morgan Stanley’s recognition?

Produced by｜Zhongfang Network

Reviewed by｜Li Xiaoyan

When the banking industry is trapped in a dilemma of homogenized competition, pressure on profit growth, and continued narrowing of net interest margins, a ranking list from an international top investment bank lights up a beacon for high-quality development for the whole industry. On March 30, 2026, Morgan Stanley officially released the research report “China’s Best Business Models V2.” From the three major markets of A-shares, Hong Kong stocks, and U.S. stocks, it selected 26 Chinese benchmark companies with durable moats, covering 16 core industries. Among this elite list that includes technology and industry giants such as Tencent, CATL, and Alibaba, Ningbo Bank is the only bank selected, and also the sole standout in the A-share banking sector.

Morgan Stanley’s evaluation goes straight to the core: it is a systemically important bank with outstanding risk-control barriers, strong digital capabilities, and a sound profit structure, having built an inimitable differentiated competitive advantage in the urban commercial bank track. This honor is not a reward for short-term performance, but an authoritative recognition of its long-term sound operations and its ability to weather cycles. Since the list was constructed in 2023, the selected portfolio has achieved a cumulative excess return of 83% versus the MSCI China Index, and is regarded as a “barometer of high-quality targets that can traverse cycles.” As the only bank sample among them, Ningbo Bank’s success is not only a personal accolade, but also reflects the breakthrough direction for China’s banking industry transformation.

“18 Years of Zero NPLs, Breaking Through the Defense,” Building the Firmest Credit Moat

The essence of banking is risk management, and asset quality is the lifeline of a bank. Against the backdrop of persistently high industry-average non-performing loan ratios, Ningbo Bank, with near-extreme risk-control capabilities, has built the industry’s most solid moat.

As of the end of 2025, Ningbo Bank’s non-performing loan ratio was only 0.76%, having held firmly below 1% for 18 consecutive years—far lower than the industry average of 1.49% for commercial banks . Even more striking is that its provision coverage ratio is as high as 373.16%, with its risk-reimbursement capacity ranking among the top in the industry . This “low NPL + high provisioning” golden combination means that the bank not only minimizes the probability of risk occurrence to the lowest level, but also has set aside a “safety cushion” several times larger than non-performing assets in advance—giving it risk-resilience far beyond its peers during periods of economic fluctuations.

This stability is not accidental; it comes from its core philosophy that “operating a bank means operating risk.” Ningbo Bank has established a vertical, full-process risk-control system, achieving digital closed-loop management across the entire risk lifecycle—from pre-loan big data-based precise profiling, to real-time AI monitoring during the loan process, to intelligent early-warning after loans are issued. At the same time, it proactively avoids highly cyclical and risk-concentrated areas such as real estate. Its asset portfolio has long focused on high-quality small and micro businesses and the manufacturing sector, and it has successfully withstood multiple rounds of economic cycle tests. In a time when market uncertainty is intensifying, this extreme ability in risk pricing and risk control is precisely its most core value moat.

A “9+4” Diversified Matrix—A New Growth Paradigm for Escaping Reliance on Net Interest Margins

For a long time, the industry’s “living by margins” reliance has been its common ailment. The core breakthrough of Ningbo Bank lies in being the first to build a diversified, synergized profit ecosystem—successfully freeing itself from the single constraint of traditional interest spread, forming a sustainable growth flywheel.

Currently, Ningbo Bank has built a “9+4” profit-center matrix consisting of “9 major core business segments + 4 wholly owned/controlled subsidiaries.” At the head office level, it covers nine profit units: corporate banking, retail corporate, wealth management, consumer credit, credit cards, financial markets, investment banking, asset custody, and bills business; and the subsidiaries include four professional platforms: Yongying Fund, Yongying Financial Leasing, Ningbo Bank Wealth Management, and Ningbo Bank Consumer Finance . With each segment competing in its own way and enabling synergy, the bank extends from single credit services to comprehensive financial solutions of “financing + providing insight + applying technology.”

Data confirms the success of this model. In 2025, Ningbo Bank achieved operating income of 71.968 billion yuan, and net profit attributable to shareholders of 29.333 billion yuan, with year-on-year growth of more than 8% for both. Among them, the proportion of non-interest income increased steadily, and intermediary business income grew by 30.72% year over year. On the liabilities side, by focusing on low-cost corporate settlement deposits, it effectively lowers funding costs; on the assets side, by precisely serving small and micro enterprises that have strong pricing-and-negotiation capability, it maintains a relatively high return on assets. This combination of “low-cost liabilities + high-yield assets + diversified fee income” keeps its long-term ROE stable above 15%, significantly higher than the industry average—while profitability resilience and sustainability are far ahead.

An In-Depth AI Practitioner—Reshaping Service and Risk Control Through Digitalization

In this Morgan Stanley V2 ranking list, digital and AI adaptability has become a newly added core evaluation dimension. Ningbo Bank did not leave financial technology at the conceptual level; instead, it was taken as a strategic core, defined by Morgan Stanley as a benchmark “AI application adopter.”

Each year, the bank invests about 5% of its revenue into financial technology R&D, building a technology team of over 800 people, and deeply applying big data and AI large models across the entire chain—intelligent risk control, digital operations, and enterprise services. Digital tools it develops independently, such as “Kunpeng Treasury,” “Treasury Big Manager,” and “AI Intelligent Bill Manager,” improve enterprise bill-processing efficiency by more than 80%, and compress loan approval turnaround times to the minute level. On the risk-control front, by connecting to more than 30 government data platforms, it builds a full-fidelity risk image of enterprises, enabling risk to be accurately pre-warned 30 days in advance.

This tri-in-one model of “technology + risk control + service” not only achieves cost reduction and efficiency improvements, but also converts risk-control capability into a service advantage . For example, the “Inclusive e-Loan” and other pure-credit products launched for small and micro businesses rely on big data to enable “online application, automatic approval, and borrow-and-repay as needed.” While greatly improving service efficiency, it keeps the non-performing loan ratio of inclusive loans stable at around 0.7%. Digital capability has become Ningbo Bank’s core weapon to strengthen its differentiated advantages and resist industry disruption in the AI era.

Dislocation Competition—Finding the “Golden Track” That “Big Banks Can’t Do Well and Small Banks Can’t Reach”

In the squeeze between national banks and local small and micro banks, Ningbo Bank has found its own golden track through precise differentiated positioning. Its strategic core is to focus on the Yangtze River Delta region, concentrate on specialized and innovative industries, and firmly secure the niche market of “where big banks can’t do well and small banks can’t reach.”

The Yangtze River Delta region accounts for over 20% of national GDP, with an active private economy, dense clusters of small and micro enterprises and manufacturing industries, providing fertile ground. More than 90% of Ningbo Bank’s credit resources are directed to the Jiangsu, Zhejiang, and Shanghai region, precisely meeting the financial needs of high-quality small and micro enterprises, advanced manufacturing, and tech-innovation enterprises. Compared with the “big-but-all-encompassing” approach of state-owned big banks, it focuses more on refined, meticulous services for small and micro clients; compared with small township and village banks, it has comprehensive advantages including cross-regional layout, integrated services, and technology-driven risk control.

This positioning perfectly aligns with the national strategies for industrial upgrading and economic recovery—it not only serves the real economy deeply, but also effectively avoids competition in homogenized “red oceans.” Through “regional deep cultivation + professional services + technology empowerment,” in the urban commercial bank track, Ningbo Bank has established location and customer-base barriers that are difficult to replicate, forming a unique core competitiveness.

From Scale Expansion to Value Deepening—The “Ningbo Bank Model” for Banking Industry Transformation

As the only representative in Morgan Stanley’s banking list, Ningbo Bank’s success provides a clear path for China’s banking industry to pursue high-quality development amid homogenized competition.

First, shifting from a scale orientation to value barriers. The core competitiveness of banking is no longer a contest of asset size, but a contest of asset quality, risk-control ability, and profitability quality. Ningbo Bank’s 18-year record of keeping the non-performing loan ratio below 1% proves that extreme risk control is the fundamental moat for traversing cycles.

Second, shifting from homogenized competition to differentiated deep cultivation. Small and micro banks do not need to blindly pursue “bigger and more comprehensive.” They should build on their regional resource endowments, deeply cultivate featured industries and specific customer segments, establish absolute advantages in the “specialized, refined, distinctive, and innovative” field, and achieve development through differentiation.

Third, shifting from a single net interest spread to diversified profitability. By getting rid of reliance on traditional interest spreads, it vigorously develops light-capital businesses such as wealth management, investment banking, and asset custody, building a synergized profit matrix and enhancing resistance to cyclical risks .

Fourth, shifting from extensive operations to technology-driven transformation. Using financial technology to reconstruct business processes and the risk-control system, and using digitalization to achieve precise service, refined management, and accurate risk control—realizing a win-win of “cost reduction and efficiency gains + risk controllability.”

From a regional urban commercial bank to the “China’s Best Banking Business Model” in the eyes of international investment banks, Ningbo Bank’s transformation path is, in essence, a victory of differentiated, high-quality, sustainable development logic. At a critical juncture in the industry’s transformation, this recognition from Morgan Stanley is not only an affirmation of Ningbo Bank, but also points the way for the entire banking industry to break through: only by giving up scale anxiety, deepening risk control, technology, differentiation, and diversified profitability can banks move steadily and far ahead amid the waves of change, and truly enter a new stage of high-quality development.