China Everbright Bank H1 Revenue Falls 4.32%, Net Profit Drops 24.01%

Banking stocks broadly rose on August 31, with the CSI Banking Index up over 1.67%, and only four of 42 A-share listed banks fell. China Everbright Bank (601818. SH) dropped 2%. On the evening of August 28, the bank released its 2026 interim report, showing first-half operating revenue of RMB 63.068 billion, down 4.32% year on year, and net profit attributable to parent shareholders of RMB 18.711 billion, down 24.01%. By quarter, second-quarter revenue was RMB 31.257 billion, down 4.8% year on year, and quarterly net profit attributable to shareholders was RMB 7.252 billion, down 40.35%.

On the income side, net interest income was the main support. In the first half, net interest income reached RMB 46.871 billion, up 3.17% year on year; net interest margin was 1.36%, up 5 basis points year on year; and net interest yield was 1.42%, up 2 basis points. As of end-June, the proportion of demand deposits rose 1.95 percentage points from the start of the year, and the deposit payout rate fell 26 basis points from 2025. Management said at the results briefing that the bank reduced high-cost deposits, improved capital turnover efficiency and low-cost deposit retention, optimized the deposit structure, and lowered liability costs. Since fiscal 2022, the bank's operating revenue has declined for four consecutive years, and the trend continued in the first half of 2026.

Non-interest income fell markedly. First-half net fee and commission income was RMB 9.676 billion, down 7.34% year on year; other income was RMB 6.521 billion, down RMB 3.522 billion, or 35.07%. Among these, investment income dropped from RMB 10.377 billion in the same period of 2025 to RMB 2.613 billion, down 74.82%, the main reason for the sharp decline in other income; at end-2025, the bank's investment income was RMB 15.398 billion. Fair value gains turned positive in the first half, from RMB -1.907 billion to RMB 3.14 billion. Chongqing Bank's first-half investment income fell 61.61% year on year.

Assets and liabilities continued to grow. At end-June, China Everbright Bank's total assets stood at RMB 7.25 trillion, up 1.20% from end-2025; gross loans and advances were RMB 4.07 trillion, up 2.21%; and deposits were RMB 4.19 trillion, up 2.20%. Corporate loans were RMB 2.547819 trillion, up 4.88% from the start of the year; retail loans fell 3.28%. Specifically, corporate loans increased by RMB 118.607 billion, while retail loans decreased by RMB 36.016 billion.

The bank booked credit impairment losses of RMB 20.879 billion in the first half, up RMB 4.977 billion, or 31.30% year on year; of this, loan and advance impairment losses were RMB 22.024 billion, up RMB 6.625 billion, a key reason net profit attributable to shareholders fell much more than revenue. At end-June, non-performing loan (NPL) balances were RMB 58.639 billion, up RMB 7.897 billion from end-2025; the NPL ratio was 1.44%, up 0.17 percentage points; the provision coverage ratio was 150.02%, down 24.12 percentage points; and the loan provision ratio was 2.16%, down 0.06 percentage points. Corporate loans were the main source of new NPLs, with real estate NPL balances rising to RMB 10.701 billion, accounting for 18.25% of total NPLs.

Vice President Qi Ye said at the results briefing that asset quality fluctuated and came under pressure in the first half, and that the bank is in a critical period of development transformation. It has taken multiple measures to mitigate risks, reasonably set aside provisions, and intensify disposal of non-performing assets. Operationally, the bank has moved risk controls forward, tightened admission standards for new customers, improved risk screening, strengthened risk prevention in key areas, and continued high-frequency early warning and dynamic monitoring, while advancing specialized, refined, and intensive management of special assets to promote resolution and disposal of risk assets.