Once the testing ground for financial reform, joint-stock banks now find themselves squeezed from both sides—lacking the scale advantages of the biggest state-owned lenders while facing stiff competition from nimble regional players. During the first half of the year, the ten listed joint-stock banks collectively posted net profits attributable to shareholders of RMB 271.4 billion, a decline of 2.41% year-on-year—making them the only banking segment to experience profit contraction across the four major categories. Yet this average masks a dramatically divergent reality: CM BANK alone captured RMB 76.445 billion, representing 28% of the total profits among these ten institutions, while China Everbright Bank saw its net profit attributable to shareholders fall to RMB 18.711 billion, a steep decline of 24.01%. The era of shared prosperity among joint-stock banks is long gone, and each institution is now charting its own course through the low-margin landscape.

In a climate where most joint-stock banks are under pressure, CM BANK delivered a steady performance. For the first half of the year, it reported operating revenue of RMB 178.181 billion, up 4.83% year-on-year, with net profit attributable to shareholders reaching RMB 76.445 billion, an increase of 2.02%. Its net interest margin narrowed to 1.83%, down 5 basis points from a year earlier—while the pace of contraction has slowed, the pressure remains unresolved. The real growth driver came from non-interest income: net fees and commission income rose approximately 6% year-on-year to RMB 39.855 billion. Within this, wealth management fees and commissions surged 26.53% to RMB 16.192 billion, emerging as the core engine of fee growth. By the end of June, retail client assets under management at CM BANK reached RMB 18.44 trillion, up 7.96% from the end of the previous year, with a half-year increase exceeding RMB 1.36 trillion. Asset quality remained solid: the non-performing loan ratio stood at 0.94%, with a provision coverage ratio of 385.75%, the strongest risk buffer among joint-stock banks. Annualized return on equity reached 13.42%, down 0.43 percentage points year-on-year but still leaving peers far behind. However, concerns persist. The high growth in fee income is heavily reliant on the capital market rebound in the first half, which boosted distribution income—fund agency fees climbed 61.4%, trust intermediary income rose 43.8%, and securities trading commissions increased 46.1%, all tightly correlated with market conditions. Moreover, the continued decline in ROE underscores that even a relatively successful shift toward a lighter-asset model cannot fully offset the long-term erosion from narrowing interest margins.

At the other end of the spectrum, China Everbright Bank is enduring a painful adjustment. In the first half, its operating revenue fell 4.32% year-on-year to RMB 63.068 billion, while net profit attributable to shareholders dropped 24.01% to RMB 18.711 billion. On the surface, its fundamentals appear to be stabilizing: the net interest margin recovered 2 basis points year-on-year to 1.42%, and net interest income grew 3.17% to RMB 46.871 billion—figures that look respectable amid a margin winter. But a closer look raises doubts about the quality of that recovery. The average yield on interest-earning assets fell from 3.31% to 3.00%, down 31 basis points year-on-year, while the overall cost of interest-bearing liabilities dropped from 2.00% to 1.64%, a decline of 36 basis points. The stabilisation of net interest margin was driven almost entirely by liability-side cost reductions. Behind the profit slump lie two simultaneous pressures. First, investment income faded sharply: investment gains fell to RMB 2.613 billion from RMB 10.377 billion a year earlier, a plunge of 74.82%, as the high base effect from bond market gains dissipated and floating profits on trading financial assets narrowed significantly. Second, impairment provisions increased substantially: credit impairment losses rose to RMB 20.879 billion, an increase of RMB 4.977 billion or 31.30% year-on-year, with loan impairment charges growing to RMB 22.024 billion, up RMB 6.625 billion. These opposing forces—declining income and rising provisions—squeezed profits significantly. The bank's annualized ROE has now fallen to 6.6%, down 2.6 percentage points year-on-year. The deterioration in asset quality further illustrates the bank's predicament: as of the end of June, its non-performing loan ratio rose to 1.44%, up 17 basis points from the start of the year, while the balance of non-performing loans increased by RMB 7.897 billion to RMB 58.639 billion. The provision coverage ratio dropped to 150.02%, down 24.12 percentage points from the beginning of the year, now hovering dangerously close to the 150% regulatory minimum. Real estate remains the primary concern: at the end of June, non-performing real estate loans reached RMB 10.701 billion, accounting for 18.25% of total non-performing loans, up 3.07 percentage points from the end of last year.

Joint-stock banks have reached a crossroads. Looking upward, the state-owned mega-banks enjoy advantages in funding costs, branch coverage, and policy support. The six largest banks generated combined operating revenue of RMB 2,004.987 billion in the first half, up 9.38% year-on-year, with aggregate net profits attributable to shareholders of RMB 712.598 billion, an increase of 4.41%—scale and resources that joint-stock banks simply cannot match. Looking downward, city commercial banks possess regional resource endowments, deep local government connections, and the flexibility of shorter decision-making chains. Leading players such as Bank of Ningbo and Bank of Jiangsu have already surpassed some joint-stock banks in scale and strength. To a significant degree, joint-stock banks occupy an uncomfortable middle ground—unable to compete with the giants above or the specialists below. In the years ahead, the sector will witness accelerating divergence: leading institutions with strong shareholder backing and established client bases are well-positioned to consolidate market share, while smaller players will likely enter risk-disposal cycles, face sustained profit pressure, and possibly undergo strategic retrenchment—industry consolidation cannot be ruled out. Of course, joint-stock banks are not without options. Compared with the institutional constraints of mega-banks and the regional limitations of city commercial banks, market-oriented mechanisms and nationwide licences remain distinct advantages. Yet realising these advantages depends on building genuine moats in more niche segments—a process that demands both time and the right timing. From being the testing ground of financial reform to enduring the low-margin elimination contest, the gap among joint-stock banks is set to widen even further.