Chongqing Rural Commercial Bank's Joys and Worries: Leading Chongqing in Multiple Indicators, but Retail Non-Performing Loans Surge and Loan Proportion Falls Short of Half

In 2025, Chongqing Rural Commercial Bank (渝农商行) set a record for the largest balance-sheet expansion in nearly four years: its total assets at year-end exceeded 1.66 trillion yuan, up 9.95% from the end of the previous year.

Its performance indicators were also strong. Operating income reached 28.648 billion yuan, up 1.37% year over year; net profit was 12.420 billion yuan, up 5.35%; and return on net assets was 9.18%.

However, when we further analyze the fundamentals of Chongqing Rural Commercial Bank, alongside these impressive performance indicators are concerns such as the loan-to-total-assets ratio still being below 50% and the rise in retail loan nonperforming loan (NPL) rates.

Multiple indicators rank first in its place of operation

Chongqing Rural Commercial Bank has consistently pursued the business orientation of “rooting in Chongqing and deeply developing county-level areas.” The fact that, last year, many of the bank’s subdivided indicators ranked first among local corporate banks can be seen from this.

In the chairman’s remarks in its 2025 annual report, Chairman Liu Xiaojun said that last year, the bank’s services to real-economy development showed a “54321” pattern: it provided nearly one-fifth of the city’s manufacturing loans, one-quarter of its inclusive small-and-micro loans, one-third of its agriculture-related loans, and one-half of its loans to farmers. Key indicators supporting real-economy development all ranked first in Chongqing.

The reporter reviewed the bank’s annual report and compiled its leading metrics in various sub-sectors; all of these leading indicators ranked first in the banking industry in Chongqing.

First, in terms of technology finance, technology lending achieved a new breakthrough. The balance of loans to technology-based enterprises was 90.906 billion yuan, ranking first among local corporate banks.

Second, in green finance, the balance of green loans was 82.817 billion yuan, and Chongqing’s first carbon-footprint-linked loan was successfully implemented.

Third, in elderly-care finance, the scale of inclusive small-and-micro loans and agriculture-related loans remained firmly at the top across the city’s banks, with the number of social security card issuances and the number of elderly-care customers served also ranking first across the city’s banks.

Fourth, closely aligned with Chongqing’s “33618” modern manufacturing cluster system development requirements, the balance of manufacturing loans reached 78.385 billion yuan, with market share maintained at the first position among all city banks.

Fifth, by stepping up measures to expand domestic demand and boost consumption as part of strategic deployments, the incremental scale of credit cards and consumer loans ranked first across the city.

Loan share in the asset mix is less than half

As of the end of 2025, Chongqing Rural Commercial Bank’s total asset size (total assets) was 1,665.744 billion yuan, up 150.802 billion yuan from the end of the previous year, an increase of 9.95%. Of this, the deposit balance was 1,028.728 billion yuan, up 86.781 billion yuan, an increase of 9.21%; and the loan balance was 797.287 billion yuan, up 83.014 billion yuan, growing 11.62%. Assets, deposits, and loans all continued to rank first among peers in Chongqing.

Next, look at financial investments. At the end of 2025, Chongqing Rural Commercial Bank’s total financial investment amount was 643.629 billion yuan, up 15.626 billion yuan from the end of the previous year, an increase of 2.49%.

At this point, two important focal points regarding the asset structure emerge: first, the bank’s loan-to-total-assets ratio has increased from the end of the previous year, but it is still below half—47.86%; second, financial investments account for about 38.64% of its assets, nearing 40%.

What kind of asset structure is this? An asset structure with an excessively high share of financial investments.

In the industry, financial investments are also called “funds-related businesses.” They generally include investments in financial markets such as financial (bond) investment, interbank investment, trust and asset-management product investments, and other financial market investment business.

With sufficiently accessible data from the end of June last year as a reference point, according to data extracted by the reporter from the Enterprise Early Warning Tong database, there were more than twenty rural commercial banks that disclosed their financial investment situations at that time. At that point, Chongqing Rural Commercial Bank’s financial investment share was about 39.98%, only lower than Dongguan Rural Commercial Bank’s 41%, ranking second highest in financial investment share among listed (including H-share) rural commercial banks. And by the end of 2025, the bank’s financial investment share had fallen by less than 1.4 percentage points compared with mid-last year.

As for revenue indicators, in 2025 Chongqing Rural Commercial Bank’s interest income from financial investments was 14.970 billion yuan, down 0.815 billion yuan year over year, a decline of 5.16%. This was mainly due to the decline in interest rates in the funds market, which reduced the group’s financial investment yield.

Looking back historically, actually, starting in 2017, rural commercial banks began, under regulatory guidance, to “return to their core business” (i.e., increasing lending and deposit-loan operations). Their investment business gradually fell from nearly 60% previously. But in the past two years, amid weak effective demand for credit, many rural commercial banks have ramped up bond investment and allocated interbank assets again—especially buoyed by the prolonged “bond bull market” that gave banks more incentive to buy bonds.

In short, for many rural commercial banks, financial investment business indeed plays an important role in “expanding the balance sheet.” The growth in these banks’ asset size is not only driven by customer loans and advances; a significant portion is due to growth in investment business—i.e., considerations arising from passive choices under the broader environment.

A comment by the president of a listed bank at a shareholders’ meeting is very representative: “At present, effective demand for credit is insufficient, and increasing bond investments by the banking industry will be a long-term phenomenon. But banks must maintain a reasonable asset allocation structure. Loans have higher returns, can serve customers better, and generate comprehensive returns. Therefore, banks must maintain reasonable loan growth and cannot simply rely on bond investments.”

As the bank’s president, Sui Jun, said, the bank will coordinate development with a “balance between quantity, price, and risk.” While ensuring steady growth in scale, it will pay more attention to optimizing structure, stabilizing pricing, and managing risk costs, thereby promoting sustained improvement in profitability. So, reasonably inferred, for Chongqing Rural Commercial Bank, some key issues it will face next include, but are not limited to:

Whether it needs to put significant effort into adjusting its own asset structure? Because under the current asset structure, whether placed at a listed bank or compared with the rural commercial bank peer group, the financial investment share is likely still relatively high. If adjustments are to be made, and given that loan origination is difficult to increase, how can it achieve a balance in returns without sacrificing short-term profitability?

Retail NPLs rising at a faster pace

Now look at the bank’s asset quality. First, from the perspective of the bank’s overall loans, Chongqing Rural Commercial Bank’s NPL ratio is declining.

As of the end of 2025, Chongqing Rural Commercial Bank’s nonperforming loan balance was 8.589 billion yuan, up 0.169 billion yuan from the end of the previous year; the NPL ratio was 1.08%, down 0.1 percentage points year over year. Among them, the share of nonperforming loans from the main urban area was 44.73%, while the share from county-level areas was 55.27%.

But if we analyze finer details, Chongqing Rural Commercial Bank’s corporate loans show a “double decline” in nonperforming loans. As of the end of 2025, the bank’s corporate loans (including advances) were 434.974 billion yuan. Its nonperforming loan balance on corporate loans was 2.372 billion yuan, with an NPL ratio of 0.55%, which respectively decreased by 1.361 billion yuan and 0.49 percentage points from the end of the previous year.

Given that corporate loans saw a “double decline” in nonperforming loans and the NPL ratio fell by 49 basis points year over year, why did Chongqing Rural Commercial Bank’s overall loan NPL ratio only decline by 10 basis points compared with the end of the previous year? The answer certainly has to be found in retail loans.

As of the end of 2025, Chongqing Rural Commercial Bank’s retail loans (including advances) were 301.022 billion yuan. The retail loan NPL ratio was 2.07%, up 47 basis points from the end of the previous year. The balance of nonperforming retail loans increased by 1.53 billion yuan to 6.217 billion yuan from the end of the previous year.

Chongqing Rural Commercial Bank attributed the “double increase” in retail nonperforming loans to: “The complex and severe external environment, as well as insufficient domestic effective demand, among other factors, caused the balance of nonperforming retail loans and the nonperforming loan ratio to rise compared with the end of the previous year. However, it also emphasizes that overall risk remains controllable. Retail loans have a relatively strong secondary source of repayment. Within nonperforming loans, the proportion of loans covered by guaranteed loans is 77.92%. Of that, loans secured by collateral and pledged assets account for 68.00% of retail nonperforming loans. The ratio of collateral value to loan principal coverage is 1.68, indicating good risk mitigation capability.”

How Chongqing Rural Commercial Bank will roll out more effective measures, control the emergence of new nonperforming retail loans, and intensify loan recovery efforts, while also exploring long-term, forward-looking risk prevention and control—these are worth watching.