The release of the 2026 interim report has drawn sharply contrasting reactions from the market regarding Bank Of Chongqing Co.,Ltd.'s latest financial results. On the surface, the figures are undeniably strong: total assets have surged past the 1.1 trillion yuan mark, both revenue and net profit are growing at over 10% year-on-year, the net interest margin has bucked the industry trend by rebounding, and asset quality continues to outperform the sector average. In stark contrast, however, certain metrics have fueled investor anxiety, including a dip in the contribution of fee-based income, a temporary decline in return on assets, pressure on capital adequacy, and a slight uptick in the retail non-performing loan ratio.

Peeling back the layers of short-term volatility to examine the operational strategy behind the financial report, it becomes clear that the divergence in Bank Of Chongqing Co.,Ltd.'s current indicators does not signal a weakening of its fundamental business. Instead, it represents a deliberate choice by the bank to actively adjust its business mix, refine its asset allocation, and fortify its risk defenses amid the industry's broader cycle of narrowing interest margins and risk clearance. Under the forward-looking stewardship of its management, this western China-based city commercial bank is navigating the industry's cyclical fluctuations with a distinctly long-term perspective.

Against a backdrop of sector-wide fee compression, the pressure on fee-based income is a common challenge confronting virtually all banks. The reduction in wealth management product fees and the implementation of policies aimed at lowering costs for the real economy have generally suppressed commission income from wealth management agency and bank card services, a trend that has not spared Bank Of Chongqing Co.,Ltd.. However, a closer inspection of the revenue structure reveals a silver lining: payment and settlement-related income has maintained double-digit growth, emerging as one of the few bright spots in the fee-based segment and underscoring the resilience of its foundational financial services.

The real anchor for the bank's revenue base has been the restoration of its net interest margin, achieved through meticulous liability-side management. Since assuming the role of President, Gao Song has consistently prioritized the optimization of the balance sheet structure as a core operational focus. By continuously deepening its presence in the local deposit market, Bank Of Chongqing Co.,Ltd. has seen deposit growth significantly outpace the expansion of its overall assets. This, coupled with a substantial reduction in customer deposit costs, has led to a year-on-year decline in the average cost of interest-bearing liabilities that outstrips the fall in the yield on interest-earning assets. The result has been a stabilization and rebound in the net interest margin. This substantial growth in net interest income has effectively cushioned the temporary softness in fee-based revenue, ensuring steady growth in both revenue and profit—an outcome of proactive management that is particularly noteworthy in an environment where industry margins are broadly shrinking.

Regarding market concerns about expenses and impairment losses growing faster than revenue, a closer look at where the funds are directed is necessary. The increase in operating and administrative expenses is primarily channeled into two areas: talent retention and financial technology. At a time when many banks are cutting back on personnel costs, Bank Of Chongqing Co.,Ltd. has chosen to stabilize compensation for its core team while simultaneously ramping up investment in digital transformation. The adoption rate for online services is approaching 97%, and AI technology has been deployed in multiple scenarios, including inclusive lending and mortgage services, demonstrating the tangible results of its digital intelligence upgrade. Meanwhile, non-essential expenditures such as consulting fees and right-of-use asset depreciation have been consistently reduced. The cost-to-income ratio remains in the lower echelons among listed banks, reflecting an increasingly refined approach to cost control.

The rise in credit impairment losses is likewise a proactive measure of forward-looking risk prevention. The leadership team, under Gao Song, adheres to a prudent principle of loss provisioning, seizing the window of robust profitability to increase loan loss reserves and actively bolster its risk buffer. Even as the industry witnesses a slight uptick in non-performing loan ratios, Bank Of Chongqing Co.,Ltd. has managed to see both its NPL ratio and the proportion of special-mention loans decline. Its provision coverage ratio remains elevated and significantly above the industry average. Combined with intensified efforts to write off and dispose of non-performing assets, the bank's asset quality safety cushion is being reinforced, laying a solid foundation for long-term stable operations.

The temporary dip in ROA is a consequence of strategic trade-offs. The bank has redirected a greater share of credit resources toward national strategic areas such as the Chengdu-Chongqing Economic Circle, manufacturing, inclusive small and micro businesses, and green finance. While these businesses generate lower returns in the short term, they serve to deeply embed the bank within regional economic development, cultivate a loyal, high-quality customer base, and secure sustainable growth opportunities for the future.

The two pressure points drawing the most market attention—the decline in capital adequacy and the rise in the retail NPL ratio—are direct manifestations of the management's deliberate adjustments to its business portfolio. The faster capital consumption stems from the rapid expansion of risk-weighted assets, as credit resources are continuously channeled into major real economy projects. This is a normal phenomenon accompanying a pro-cyclical expansion. Since Gao Song took office, he has steadily advanced capital replenishment efforts. Through the conversion of convertible bonds to bolster core Tier 1 capital and the issuance of tier-2 capital bonds at progressively lower interest rates—a sign of growing market confidence—the pace of decline in the capital adequacy ratio has significantly slowed. The core Tier 1 capital adequacy ratio has stabilized and begun to recover, and external capital replenishment channels for the future have been planned in advance.

The slight rise in the retail NPL ratio does not signify a loss of risk control but is rather a structural outcome of a deliberate shrinking of the balance sheet. In response to the sluggish pace of consumer spending recovery, Bank Of Chongqing Co.,Ltd. has proactively curtailed its high-risk retail lending portfolio. While the overall volume of retail loans has contracted, the absolute amount of retail NPLs has, in fact, declined rather than increased. With the denominator shrinking faster, the NPL ratio has been passively pushed higher. Concurrently, the asset quality of inclusive small and micro loans continues to improve, with the NPL formation rate falling to recent lows. There are no signs of risk contagion in the retail segment. Through the early exposure of risks and increased write-offs, the bank has proactively completed the risk clearance in its retail business, clearing the path for high-quality growth in this sector in the future.

As a financial executive with years of management experience at Bank of Communications and Chongqing Rural Commercial Bank, and having held a secondment position in state-owned asset supervision, Gao Song has, since becoming President of Bank Of Chongqing Co.,Ltd. in 2023, consistently anchored the bank to its "Five High" development strategy, promoting a balanced synergy between scale, quality, and efficiency. In terms of business layout, he has driven the bank to deepen its ties with the construction of the Chengdu-Chongqing Economic Circle, continuously increasing financial support for major regional projects, advanced manufacturing, and rural revitalization. Its inclusive small and micro loan portfolio ranks first among listed city commercial banks in western China, and its green credit volume has surpassed the 100 billion yuan mark, fulfilling the bank's responsibility as a local incorporated institution. In risk governance, he has led the refinement of a comprehensive risk management system, adhering to forward-looking judgment and penetrating, transparent oversight. This has resulted in two consecutive years of declines in both NPL and special-mention loan ratios, with risk control capabilities consistently proven in the market. Regarding shareholder returns, despite lingering capital replenishment pressures, the bank has maintained a stable dividend policy and even increased the frequency of payouts, fully safeguarding investor interests and demonstrating management's confidence in its operational fundamentals.

The banking industry is currently in a phase of structural adjustment and cyclical bottoming-out, and no bank can achieve a flawless performance across all indicators simultaneously. Evaluating a bank's true quality requires looking beyond short-term fluctuations to its strategic resolve, risk management capabilities, and long-term development planning. The short-term pressure on certain indicators visible in Bank Of Chongqing Co.,Ltd.'s interim report is the price paid for proactive transformation, strategic investment, and front-loaded risk management. Conversely, its stabilizing net interest margin, asset quality superior to the industry average, deep cultivation of strategic sectors, and accelerated digital transformation are the core strengths that will carry it through the cycle. Rooted in the fertile financial soil of western China, and backed by a clear strategic blueprint, prudent operational management, and forward-looking risk prevention, the bank is steadily alleviating its short-term operational pressures while continuously consolidating its long-term growth foundation in the service of the regional real economy. As fee-based business gradually stabilizes, capital replenishment takes effect, and the retail risk clearance reaches completion, this trillion-yuan regional bank is poised to unleash even greater operational momentum on its path toward high-quality development.