Chongqing Rural Commercial Bank (3618) H1 2024 earnings summary

Executive summary

• Net profit for H1 2024 rose 6.18% year-over-year to RMB7.56 billion, with net profit attributable to shareholders up 5.33%.

• Total assets increased 4.77% from end-2023 to RMB1.51 trillion; deposit and loan balances grew 5.07% and 4.46%, respectively.

• Operating income declined 1.53% year-over-year to RMB14.64 billion, as net interest margin narrowed.

• Non-performing loan (NPL) ratio remained stable at 1.19%; provision coverage ratio at 360.29%.

• Capital adequacy ratio stood at 15.71%, with core tier 1 at 13.83%.

Financial highlights

• Net interest income fell 7.99% year-over-year to RMB11.08 billion due to lower market rates and asset repricing.

• Net non-interest income rose 26.03% to RMB3.56 billion, driven by a 45.24% increase in net other non-interest income.

• Operating expenses dropped 18.23% to RMB3.93 billion, reflecting cost control and lower staff costs.

• Credit impairment losses increased 33.18% to RMB2.46 billion, mainly due to higher provisions for loans.

• Effective income tax rate was 8.36%, below the statutory 25%, due to tax-exempt bond holdings and deferred tax asset remeasurement.

Outlook and guidance

• Management expects continued pressure on net interest margin in H2 2024 but aims to narrow the decline through asset-liability optimization and pricing improvements.

• Focus remains on expanding retail, rural, and inclusive finance, supporting major regional projects, and enhancing digital transformation.

• Asset quality is expected to remain stable, with risk indicators under control and sufficient provision buffers.