Chongqing Bank has reported a striking 75% year-on-year jump in accrued short-term compensation, a figure that stands in sharp contrast to its more modest 12% increase in total labour costs.

On August 20, Chongqing Bank released its interim report for the first half of 2026. From a pure performance standpoint, the results appear impressive. Total assets reached RMB 1.11 trillion, up 7.27% from the start of the year; revenue grew 10.79% year-on-year to RMB 8.486 billion, while net profit attributable to shareholders rose 10.29% to RMB 3.518 billion. This "double-digit" growth has now been sustained for four consecutive quarters, a feat unmatched among the 42 A-share listed banks.

However, a closer look at the balance sheet reveals another notable liability — accrued employee compensation. On a consolidated basis, the ending balance stood at RMB 1.136 billion, representing a substantial 45.68% increase from RMB 779 million in the same period last year. Within this figure, short-term accrued compensation reached RMB 817 million, up 75.48% from RMB 466 million at the end of June last year.

Typically, accrued employee compensation peaks at year-end and gradually declines in the new year as annual bonuses are paid out, usually settling at a relatively low level by mid-year. But Chongqing Bank's RMB 1.136 billion at the end of June 2026 is nearly identical to the RMB 1.146 billion recorded at the end of 2025 — after six months, the accrued compensation balance had declined by less than 1%, indicating that "accrued but unpaid" remuneration was not effectively absorbed by the mid-year point.

At the end of Q1 2026, the bank's accrued compensation had indeed fallen to RMB 891 million — paying out the prior year's annual bonuses at quarter-end represents normal seasonal fluctuation. Yet by the end of Q2, the balance had rapidly climbed back to RMB 1.136 billion, adding approximately RMB 245 million in a single quarter, a rise of over 27%, and nearly 50% higher than the RMB 779 million recorded at the same point last year.

Unlike employee costs, which are typically recorded under operating expenses within administrative and business management fees, accrued employee compensation is a separate liability account. In essence, it represents money that has been provisioned but not yet disbursed — an obligation the company holds for future payments to its staff, recorded on the liabilities side of the balance sheet.

Looking back over the past three years, Chongqing Bank's accrued employee compensation has been on an upward trajectory, but the latest reporting period shows the largest year-on-year increase in the balance. At the end of June 2024, the figure stood at RMB 586 million; by December 2024, it had climbed to RMB 921 million; it then dipped to RMB 779 million at the end of June 2025; rose again to RMB 1.146 billion by December 2025; and settled at RMB 1.136 billion by June 2026 — nearly matching the year-end peak.

Breaking down the components, the substantial year-on-year growth in accrued compensation is primarily driven by short-term accrued pay. At the end of June 2026, the short-term accrued compensation balance was RMB 817 million, up 75.48% from RMB 466 million a year earlier, contributing RMB 351 million of incremental growth — a full 98.68% of the total increase. Short-term accrued compensation is composed of wages, bonuses, allowances and subsidies, employee welfare expenses, and social insurance contributions. Among these, the wages, bonuses, allowances and subsidies category posted a balance of RMB 798 million, nearly doubling year-on-year — the core driver behind the surge in short-term compensation.

This suggests that the sharp rise in accrued employee compensation reflects wages and bonuses provisioned at the half-year mark that, unlike in previous years, have not been effectively released by mid-year.

In stark contrast, the growth in labour costs as reflected in the income statement has been far more subdued. Unlike other listed banks that commonly label this item as "employee costs," Chongqing Bank separately reports it as "labour costs" in its income statement. In the first half of 2026, labour costs reached RMB 1.296 billion, up 13.25% year-on-year. Compared with the 45.68% surge in the accrued compensation balance over the same period, this indicates that the pace of compensation provisioning has accelerated more rapidly than actual pay increases.

The broader "administrative and business management fees" category grew at a similar rate, reaching RMB 2.063 billion in the first half, up 12.19% year-on-year — slightly below the 13.25% growth in labour costs. Notably, labour costs account for 62.8% of total management fees, meaning that for every RMB 100 in administrative expenses, nearly RMB 63 is allocated to employee-related management.

In terms of headcount, Chongqing Bank employed 5,431 people at the end of June 2026, a reduction of 23 from 5,454 at the end of last year, though still a net increase of 66 compared with the same period last year — overall, the workforce has remained relatively stable.

Worth noting is that over the past two years, compensation for Chongqing Bank's key executives has shown a clear downward trend. In 2025, Chairman Yang Xiuming's pre-tax compensation was RMB 568,700, down RMB 235,600 from RMB 804,300 the previous year. President Gao Song received RMB 615,800, a decline of RMB 188,500 from the prior year's RMB 804,300. Several vice presidents also saw their 2025 compensation fall to the RMB 500,000 range, a significant drop from the million-yuan levels recorded in 2024.