Live Coverage of the Earnings Conference | "Changing the Path Dependence on Scale Benefits and Resource Investment," Qingdao Bank Management Responds to Hot Topics Such as Net Interest Margin, Dividend Distribution, and Asset Quality

Each Daily Reporter｜Li Yuwen Each Daily Editor｜Liao Dan

“In the new strategic period, we have realized that we must change the path dependency of the past on scale dividends and resource investment. We need to shift to specialized, digital-and-intelligent, precise, and system-based development, and build core competitiveness.” On April 2, Wu Xianming, President of Qingdao Bank, said at the bank’s 2025 annual performance briefing.

By the end of 2025, Qingdao Bank’s total assets exceeded 800 billion yuan to 814.9 billion yuan, up 18.12% year over year. In 2025, the bank achieved operating income of 14.57B yuan, up 7.97%; net profit attributable to the parent company was 5.19B yuan, up 21.66%.

Zhang Qiaowen, the board secretary of Qingdao Bank, said that for 2025, the bank plans to distribute 1.8 yuan in cash dividends for every 10 shares, with a total dividend amount of about 1.05B yuan. This is also the first time the bank’s annual dividend exceeds 1.0 billion yuan.

At the meeting, management also responded to hot-button issues such as net interest margin (NIM) control and the reduction of non-performing assets.

Achieve the goal of exceeding 1 trillion yuan in total assets in the new strategic period

“In January 2025, we began the formulation of our new three-year strategic plan. We spent one year and basically completed the final draft.” Wu Xianming elaborated in detail on the plan’s four strategic objectives at the performance briefing.

The first is capability-driven. Relying solely on consuming capital and expanding scale makes it difficult to achieve long-term high-quality development. Therefore, we consider shifting to specialized, digital-and-intelligent, precise, and system-based development to build core competitiveness and follow a capability-driven development model.

The second is organizational agility. “As a medium-sized and small bank, we hope to have agile, fast, and high-efficiency responses—this is the advantage we want to establish in competing with peers.” Wu Xianming also mentioned that with the development of artificial intelligence technology, Qingdao Bank’s existing organizational structure will change in the future.

The third is improvement in both quantity and quality. “In the new strategic period, we will continue to maintain a reasonable pace of growth in scale to achieve the goal of exceeding 1 trillion yuan in total assets. We will also continue to maintain good profitability, keeping the return on net assets at a level that is around the middle to slightly above the middle among listed city commercial banks.”

The fourth is healthy and sustainable development. “We will resolutely hold the lifeline of asset quality, firmly establish a development philosophy of capital conservation, actively develop fee-based businesses, and comprehensively promote a transition to a light-capital model. Only with controllable risk and capital-intensive efficiency can we weather cycles and truly achieve healthy and sustainable development.”

Take multiple measures to stabilize the NIM, and strengthen performance assessments of indicators such as the deposit-loan spread and fee-income contribution

In 2025, Qingdao Bank’s net interest margin was 1.66%, down 0.07 percentage points from the previous year.

“Against the backdrop of an overall decline in market interest rates and policy efforts to pass benefits to the real economy, the narrowing of the interest spread is also a common issue facing the banking industry at present.” Qingdao Bank’s Chief of Planning and Finance, Li Zhen guo, explained that the bank will mainly take measures from several aspects to stabilize the NIM.

The first is assessment of resource allocation. Emphasize the weight of benefit-based indicators such as operating revenue, and strengthen the assessment of indicators including the deposit-loan spread, fee-income contribution ratio, and returns on economic capital.

The second is asset management. Put emphasis on structural optimization, increase the proportion of high-yield assets within interest-earning assets, step up loan origination, and promote an increase in investment scale.

The third is liability management. Actively expand the sources of deposits, encourage marketing efforts such as low-cost demand deposits and other peer-bank current deposits, and increase the use of borrowed funds such as re-lending. At the same time, actively adjust pricing strategies, strengthen market-oriented adjustments of deposit interest rates, and do a good job in controlling the cost rate of liabilities.

Regarding the future trend of the NIM and influencing factors, Li Zhen guo said that from an external environment perspective, there is still some uncertainty. Loan demand remains weak, and industry competition is intensifying; the situation of falling loan interest rates and low-range fluctuations in bond yields will continue to exist. The yield on the asset side will continue to decline, and bank operations will still face pressure from NIM narrowing. However, judging from the overall trend of NIM performance in commercial banks, signs of NIM stabilization across the industry have also begun to emerge. Going forward, Qingdao Bank will continue to do a good job in NIM management and maintain NIM performance that is better than that of peers.

Cumulative cash dividends since A-share listing exceed 6.4 billion yuan

According to Qingdao Bank’s 2025 profit distribution proposal, the bank will distribute 1.8 yuan in cash dividends per 10 shares (including tax). The total distribution amount is about 1.05B yuan, accounting for 21.15% of the net profit attributable to ordinary shareholders of the parent company in the consolidated financial statements.

In terms of the dividend amount, this is the first time the bank’s annual dividend total exceeds 1.0 billion yuan, up 12.5% from the previous year.

Zhang Qiaowen said that since Qingdao Bank was listed on the A-share market in 2019, including the 2025 cash dividend, the cumulative amount of dividends has already exceeded 6.4 billion yuan. The average dividend amount as a proportion of net profit attributable to ordinary shareholders is about 30.91%.

Generally, a bank’s dividend decision needs to take into account many factors comprehensively, including regulatory requirements, the level of capital adequacy ratio, profitability, strategic planning, and shareholder returns. Among these, the capital adequacy ratio is one of the core regulatory indicators for the banking industry. At the end of 2025, Qingdao Bank’s capital adequacy ratio was 13.37%, and its core tier-one capital adequacy ratio was 8.67%, both down year over year.

Zhang Qiaowen mentioned that in recent years Qingdao Bank has put a great deal of effort into capital management. The new three-year strategic plan clearly states that it will continue to increase support for the real economy, maintain growth in business scale, enhance profitability, and improve risk resilience. “All of this requires more robust capital support. At present, there are still some restrictions on replenishing capital from external sources, so the importance of internal capital replenishment to Qingdao Bank is even more prominent.”

Zhang Qiaowen said that the bank is also striving to build a stable, timely, and sustainable investment return mechanism. “Through our articles of association and shareholder return plans, we commit to investors that each year we will distribute profits in cash to ordinary shareholders of no less than 20% of the distributable profits for ordinary shareholders of the bank attributable to the current year.”

Non-performing rate declines for eight consecutive years

By the end of 2025, Qingdao Bank’s non-performing loan ratio was 0.97%, down 0.17 percentage points from the end of the previous year. “The non-performing rate has been declining for eight consecutive years,” Zhang Qiaowen noted when introducing the performance.

Qingdao Bank’s Vice President Zhang Meng introduced the bank’s asset-quality control measures, including strengthening substantive risk management, optimizing the post-lending management system for credit approvals, and deepening the construction of risk monitoring systems.

Zhang Meng also responded to the issue of asset quality in the bank’s corporate real estate portfolio. By the end of 2025, Qingdao Bank’s corporate real estate loans were about 23.7 billion yuan. The overall non-performing loan ratio for corporate real estate was 1.61%, down 0.46 percentage points from the end of the previous year. The amount of non-performing loans was about 382 million yuan, down 95 million yuan from the end of the previous year. “Our corporate real estate loan share is relatively small, accounting for less than 6% of total loans, so it has a limited impact on the overall loan asset quality. In 2025, we did not add any new non-performing loans in our corporate real estate lending.”

Cover image source: Economic Daily News