Slight decline in revenue and net profit: why is Huaxia Bank still considered highly resilient?

Listing | China Visit Network

Audit | Li Xiaoyan

Against the backdrop of ongoing deepening of interest rate marketization, macroeconomic pressures, and widespread narrowing of banks’ net interest margins, Huaxia Bank released its 2025 annual performance brief in early 2026. Data shows that the bank achieved operating income of 91.914 billion yuan for the year, a decrease of 5.39% year-on-year; net profit attributable to shareholders of the listed company was 27.2 billion yuan, down 1.72% year-on-year. Although two core profitability indicators declined slightly compared to the previous year, the profit decline was significantly lower than the revenue decline. Coupled with steady expansion of asset scale, continuous improvement in asset quality, and steady enhancement of capital strength, this fully demonstrates Huaxia Bank’s operational resilience and strategic resolve amid industry cycle adjustments. Overall, in 2025, Huaxia Bank focused on “stabilizing scale, controlling costs, improving quality, and strengthening capital,” maintaining its basic operations under multiple pressures and laying a solid foundation for future transformation and development.

The slight decline in revenue is a result of industry-wide pressures and the “volume increase, price decrease” pattern. In 2025, multiple cuts to the Loan Prime Rate (LPR) combined with rigid deposit interest rates led the banking industry to face ongoing compression of interest margins, making net interest margin narrowing the main factor dragging down operating income. Huaxia Bank was also affected by this industry trend, with total operating income down 5.39% year-on-year. However, this is not an isolated case but a normal reflection of joint-stock banks offering concessions to the real economy and stabilizing financing costs. Notably, even under margin pressure, Huaxia Bank’s asset and liability scale continued to expand steadily, demonstrating a strong business foundation: by the end of 2025, total assets reached 4.74 trillion yuan, up 8.25%; total loans were 2.57 trillion yuan, up 8.47%; total deposits were 2.38 trillion yuan, up 10.71%. Deposit growth significantly outpaced loan growth, with the liability side organizational capacity continuously strengthening, providing stable funding support for credit issuance and business operations. Although scale growth could not fully offset the revenue drag from price factors, the “volume to compensate for price” strategy effectively buffered revenue decline and reflected the bank’s responsibility to serve the real economy and maintain credit extension.

Profit resilience was evident, with cost control and tax optimization achieving notable results, acting as “stabilizers” for profits. Comparing data, Huaxia Bank’s operating income in 2025 decreased by about 5 billion yuan, while net profit attributable to the parent only decreased by about 476 million yuan, with the profit decline far smaller than the revenue decline. This difference directly reflects the bank’s refined management capabilities. During the reporting period, Huaxia Bank controlled non-interest expenses, optimized operational processes, and improved internal management efficiency, resulting in a year-on-year decline in operating profit and total profit of between 4.6% and 4.75%, demonstrating effective cost and expense management. Additionally, reasonable tax optimization strategies further smoothed profit fluctuations and effectively hedged the profit pressure caused by narrowing interest margins. Moreover, the bank’s basic earnings per share remained stable at 1.62 yuan, not decreasing with the slight drop in net profit, mainly due to optimized accounting treatment of perpetual bond interest payments; the weighted average return on equity (ROE) slightly declined to 8.32%, though still within a reasonable range for commercial banks, reflecting stable net asset profitability and no significant fluctuation in shareholder returns.

Asset quality continued to improve, and risk management capabilities steadily enhanced, marking one of the biggest highlights of 2025. Despite rapid growth in credit scale, Huaxia Bank’s non-performing loan (NPL) ratio declined against the trend, ending 2025 at 1.55%, down 0.05 percentage points from the previous year, achieving a healthy “loan increase, NPL decrease” trend. This fully demonstrates strict risk control in new lending and substantial progress in resolving existing non-performing assets. In terms of risk buffers, the provision coverage ratio was 143.30%, slightly lower than at the end of the previous year but still within regulatory safety thresholds. This adjustment does not indicate weakened risk coverage but reflects a cautious release of some provisions based on macroeconomic recovery expectations and asset quality improvement trends, balancing risk prevention with profit stability. Overall, asset quality optimization provides a solid risk cushion for Huaxia Bank to cope with future uncertainties and continue serving the real economy.

Capital strength has also been enhanced simultaneously, with good endogenous accumulation capacity, leaving room for long-term development. By the end of 2025, Huaxia Bank’s shareholders’ equity attributable to the parent reached 395.746 billion yuan, up 9.33% year-on-year; net asset value per share increased from 18.97 yuan to 19.84 yuan, a 4.59% rise. Steady growth in core Tier 1 capital and equity benefits from the bank’s robust profit accumulation and capital management, with equity growth outpacing asset growth, indicating effective internal capital growth supporting asset expansion without excessive reliance on external financing. The capital structure continues to optimize. Sufficient capital not only meets regulatory requirements but also provides ample buffer for digital transformation, asset-liability structure optimization, and expansion of intermediary businesses, enhancing long-term sustainability.

Objectively, Huaxia Bank in 2025 still faces challenges such as continued narrowing of net interest margins and sluggish growth in non-interest income. Revenue pressure also highlights the urgent need to optimize the traditional interest income-driven profit model. In the context of accelerating industry transformation, over-reliance on interest margin-based profitability is vulnerable to macro policies and market environment changes. Increasing the proportion of non-interest income and promoting diversified profit structures will be key to future development. Meanwhile, the reduction in the provision coverage ratio requires continued prudence, with ongoing monitoring of asset quality changes and dynamic adjustment of risk buffers to maintain risk bottom lines.

Looking ahead, as macroeconomic recovery progresses and signs of stabilization in banks’ net interest margins emerge, Huaxia Bank’s operating environment is expected to continue improving. At this new starting point, the bank needs to accelerate its transformation: first, continuously optimize the asset-liability structure, reduce high-cost deposits, improve loan pricing ability, and ease margin pressure; second, vigorously develop wealth management, investment banking, transaction banking, and other intermediary businesses to increase non-interest income contribution and reshape profit models; third, deepen digital transformation by leveraging technology to reduce costs and improve efficiency, enhancing operational capabilities and customer service; fourth, strengthen risk management to consolidate asset quality improvements and keep provisioning at reasonable levels.

The 2025 performance is a steady response from Huaxia Bank during the industry adjustment period. Slight declines in revenue and profit are short-term responses to external pressures, while maintaining scale, optimizing quality, strengthening capital, and enhancing resilience are the core supports for long-term development. Under the dual approach of steady growth and risk prevention, Huaxia Bank is gradually adapting to the new industry normal, using refined management to hedge external pressures and strategic transformation to cultivate new growth drivers. In the future, as transformation results become evident, Huaxia Bank is expected to achieve both profit recovery and high-quality development in the next wave of industry competition.