LUZHOU BANK (01983.HK) released its 2025 financial report on the evening of March 23. The report indicates that in 2025, the bank achieved operating revenue of 4.861 billion yuan, a decrease of 6.69% year-on-year. Net profit attributable to the parent company was 1.541 billion yuan, an increase of 20.83% year-on-year, reflecting a scenario of profit growth despite revenue contraction.

By the end of 2025, the bank's total assets reached 202.462 billion yuan, an increase of 18.40% compared to the previous year, surpassing the 200 billion yuan threshold for the first time. Total deposits amounted to 156.556 billion yuan, up 15.70% year-on-year, while total loans stood at 124.830 billion yuan, an increase of 20.11% year-on-year.

Additionally, LUZHOU BANK announced its 2025 dividend plan. The board of directors proposed a dividend distribution of 1.3 yuan per 10 shares (tax inclusive), totaling 353 million yuan (tax inclusive). Based on the net profit attributable to the parent company of 1.541 billion yuan, the dividend payout ratio is approximately 25%. From 2022 to 2024, the bank's dividend payout ratios were 26.92%, 24.60%, and 25.57%, respectively.

On the same day as the annual report release, LUZHOU BANK also issued several personnel announcements, including changes in core management positions. Veteran executive Liu Shirong resigned from his position as President due to approaching retirement age.

**Joining the 200 Billion Club** Established in September 1997, LUZHOU BANK's largest shareholder is Luzhou Laojiao Group. Other major shareholders include Sichuan Jiale Enterprise Group and the Luzhou Municipal Finance Bureau, with state-owned shares accounting for over 50% of the total. The bank was listed on the Main Board of The Stock Exchange of Hong Kong Limited in 2018, becoming the first listed bank from a prefecture-level city in Western China.

By the end of 2025, LUZHOU BANK's total assets exceeded 200 billion yuan for the first time, increasing by over 30 billion yuan within the year. The 18.40% year-on-year growth represents the fastest expansion rate in nearly five years. This also marks the second time since 2022 that the bank's total asset growth rate has exceeded 10%.

Regarding performance, the net profit attributable to the parent company in 2025 was 1.541 billion yuan, a year-on-year increase of 20.83%. Over a longer period, LUZHOU BANK's net profit growth has exceeded 20% for three consecutive years. In 2023 and 2024, the bank achieved net profits of 994 million yuan and 1.276 billion yuan, representing year-on-year increases of 23.12% and 28.31%, respectively.

In contrast to the profit growth, the bank's operating revenue for 2025 was 4.861 billion yuan, a decrease of 6.69% year-on-year, highlighting the contradiction of increasing profits while revenue declined.

Specifically, the decline in operating revenue was primarily driven by a decrease in non-interest net income. In 2025, the bank's non-interest net income was 787 million yuan, a decrease of 53.44% year-on-year. Within this, net fee and commission income was 86.007 million yuan, down 50.43% year-on-year. Income from wealth management business fees was 83.677 million yuan, a decrease of 58.09%, mainly attributed to the reduction in wealth management scale and the generally weaker trend in the bond market.

Furthermore, in 2025, the bank's combined net gains from trading activities, net financial investment income, and other operating revenue totaled 701 million yuan, a decrease of 816 million yuan compared to the previous year, representing a 53.78% decline. Specifically, net gains from trading activities decreased by 371 million yuan, and other operating revenue decreased by 275 million yuan, primarily due to reduced income from the disposal of assets received in debt settlement.

Regarding asset quality, LUZHOU BANK's non-performing loan (NPL) ratio continued its downward trend. By the end of 2025, the bank's NPL ratio was 1.18%, a decrease of 0.01 percentage points from the end of the previous year, marking the third consecutive year of decline. The provision coverage ratio was 415.24%, a decrease of 19.95 percentage points from the end of the previous year.

However, the bank continues to face pressure regarding capital adequacy. By the end of last year, the bank's capital adequacy ratio was 13.08%, a slight decrease of 0.04 percentage points from the end of the previous year. The tier-1 capital adequacy ratio was 10.04%, down 0.11 percentage points from the previous year-end, but still 1.54 percentage points above the regulatory requirement. The core tier-1 capital adequacy ratio remained at 8.27%, unchanged from the end of the previous year, but is now approaching the regulatory minimum threshold.

LUZHOU BANK stated that the changes in capital adequacy ratios were primarily due to strong internal capital generation centered on net profit. The increase in net core tier-1 capital was essentially in line with the growth of risk-weighted assets, resulting in a stable core tier-1 capital adequacy ratio compared to the beginning of the year. However, the growth rate of risk-weighted assets slightly exceeded the increases in net tier-1 capital and total net capital, leading to minor declines in the tier-1 capital adequacy ratio and the overall capital adequacy ratio compared to the start of the year.

**President Resigns Approaching Retirement Age** On the same day as the 2025 annual report release, LUZHOU BANK also disclosed several changes in senior management. An announcement indicated that the bank's board of directors received a written resignation from President Liu Shirong on March 23, 2026. Liu Shirong resigned from his position as President due to nearing retirement age.

Following his resignation as President, Liu Shirong will be reassigned as a non-executive director (employee director) effective immediately, and will retain his positions as a member of the Board's Connected Transactions Control Committee and the Risk Management Committee.

Liu Shirong is 59 years old and a veteran of LUZHOU BANK, having joined the bank at its inception in October 1997. He has held various positions including branch president, department head, board secretary, and executive vice president. He has served as President of LUZHOU BANK since June 2022, a tenure of nearly four years.

In the announcement, the bank expressed gratitude to the outgoing president, stating that his "three decades of dedicated service made him not only a witness and builder of the bank's development but also a core force guiding its steady progress."

The 2025 annual report shows that Liu Shirong received a pre-tax remuneration of 631,000 yuan for the year, matching that of the bank's Chairman, You Jiangping. In 2024, Liu Shirong's pre-tax compensation was 1.393 million yuan, which included a discretionary bonus of 1.1 million yuan.

Regarding the selection of a new president, inquiries were made to LUZHOU BANK, but no response had been received by the time of reporting.

According to the announcement, to ensure the orderly progression of daily operational management, the board of directors reviewed and approved the delegation of presidential authority to Vice President Wang Chong. This delegation is effective from the date the bank submits the report on acting responsibilities to the financial regulatory authorities.

Wang Chong was born in 1985 and began his career at China Construction Bank in 2007, serving as a corporate and institutional business client manager and vice president, among other roles. He joined LUZHOU BANK in December 2016, holding positions such as General Manager of the Credit Expansion Department in the Joint Innovation Center, General Manager of the Key Account Management Department, and Vice President of the Key Account Business Division. He subsequently served as Vice President and then President of LUZHOU BANK's Chengdu Branch.

In January of this year, Wang Chong was appointed as a Vice President of LUZHOU BANK, and his appointment qualification was approved on March 9. Currently, besides Wang Chong, LUZHOU BANK has six other vice presidents: Yuan Shihong, Wu Ji, Han Gang, Ming Yang, Hu Jia, and Yang Bing.

An associate professor noted that according to common practice in the banking industry, when the president position is vacant and a successor has not yet been approved, the role is often temporarily assumed by a vice president or the chairman. This adjustment reflects both a retirement transition and the implementation of strategies focusing on younger leadership and regional development. Wang Chong's extensive experience in the Chengdu market, coupled with his familiarity with core business operations and regional resources, positions him well to maintain operational stability and strategic continuity.