In recent years, leveraging the development momentum of the Chengdu-Chongqing economic circle, Bank Of Chongqing Co.,Ltd. (BCQ) has established deep roots in its local market, charting a distinctive development path for a city commercial bank. Its consistently rising revenue performance has steadily affirmed the strategic direction of this regional institution.

In 2025, Bank Of Chongqing Co.,Ltd. (BCQ) delivered a remarkable annual report showing growth in both revenue and net profit, a feat not seen in many years. A strong start to the first quarter of 2026 further suggests that this year could be another fruitful one for the bank. Against the backdrop of narrowing net interest margins and profit pressure across the banking sector, this performance is undoubtedly noteworthy.

However, as an ancient text reminds us, "In security, do not forget danger; in survival, do not forget ruin; in order, do not forget chaos." As Bank Of Chongqing Co.,Ltd. (BCQ) crosses the threshold of one trillion yuan in assets, the underlying risks beneath its growth surface could become stumbling blocks for its future development.

An examination of the bank's 2025 annual report reveals concurrent concerns: an imbalanced financial structure, pressure on capital liquidity, and multiple compliance shortcomings in corporate governance. Beneath the glory of reaching the trillion-yuan milestone lie structural contradictions that cannot be ignored.

Rise of a Local Trillion-Dollar Bank

Founded in 1996, Bank Of Chongqing Co.,Ltd. (BCQ) is the earliest local joint-stock commercial bank established in western China and the upper reaches of the Yangtze River. It was initially established as Chongqing City Cooperative Bank through the joint efforts of 37 urban credit cooperatives, a municipal credit union, 10 local finance bureaus, and 39 enterprises and institutions. In March 1998, with approval from the People's Bank of China, it was renamed Chongqing City Commercial Bank. In August 2007, with approval from the China Banking Regulatory Commission, it adopted its current name.

As the only city commercial bank in Chongqing listed on both the A-share and H-share markets, the bank's development trajectory has consistently moved in sync with the regional economy. For years, it has eschewed a strategy of blind cross-regional expansion, instead concentrating its credit resources, branch networks, and financial products on core local sectors such as manufacturing, urban renewal, rural revitalization, inclusive finance for small and micro businesses, and consumer finance. By leveraging local government and enterprise resources as well as a solid retail deposit base, it has built a competitive moat difficult for outside banks to replicate.

In 2025, the recovery of the regional economy drove simultaneous demand for corporate and retail credit. The bank demonstrated strong resilience, achieving improvements across three key dimensions: scale, profitability, and asset quality. It successfully entered the ranks of trillion-yuan banks and secured its position within the western region's tier of trillion-yuan city commercial banks.

As of the end of 2025, Bank Of Chongqing Co.,Ltd. (BCQ)'s total assets reached 1,033.726 billion yuan, an increase of 177.084 billion yuan or 20.67% from the end of the previous year. Operating revenue was 15.113 billion yuan, up 1.434 billion yuan or 10.48%. Net profit reached 6.105 billion yuan, a year-on-year increase of 10.58%.

By the end of the first quarter of this year, the bank's operating revenue was 3.995 billion yuan, a year-on-year increase of 11.57%. Net profit rose 11.22% year-on-year to 1.898 billion yuan, while total assets increased significantly by 18.94% year-on-year to 1,108.1 billion yuan.

Regarding lending, in 2025, the bank supported nearly 150 major projects within the Chengdu-Chongqing economic circle. Its financing balance for the New Western Land-Sea Corridor exceeded 55 billion yuan. Loans to technology-based enterprises grew by 60%, green credit increased by 40%, and both the increment and growth rate of manufacturing loans reached five-year highs. By the end of 2025, the bank's corporate loan balance stood at 409.867 billion yuan, a year-on-year increase of 30.95%, raising its proportion of total loans to 77.46%. Scale, increment, and growth rate all hit record highs.

In terms of asset quality, the bank's efforts yielded significant results. By the end of 2025, its non-performing loan ratio was 1.14%, a decrease of 0.11 percentage points from the end of the previous year. The provision coverage ratio was 245.58%, an increase of 0.50 percentage points.

Governance and Financial Concerns Emerge

However, beneath the glory of its trillion-yuan scale, some phenomena surrounding Bank Of Chongqing Co.,Ltd. (BCQ) are puzzling.

Firstly, while the bank's exceptionally high loan-to-deposit ratio raises concerns about its impact on liquidity, its asset quality metrics—both the five-category loan classification and the overall NPL ratio—show clear improvement and remain at low levels, seemingly not warranting significant asset quality worries. Yet, the bank maintains a notably high provision coverage ratio, and the credit impairment losses it has set aside have eroded over half of its net profit.

As of the end of 2025, the bank's loan-to-deposit ratio was as high as 93.92%, an increase of 0.99 percentage points from the end of the previous year. Moreover, this ratio has consistently remained above 90% for years, far exceeding the industry average. Additionally, the credit impairment losses provisioned by the bank in 2025 amounted to 3.858 billion yuan, an increase of 669 million yuan or 20.99% year-on-year.

More noteworthy is the across-the-board decline in the bank's capital adequacy ratios. By the end of 2025, its core tier 1 capital adequacy ratio was 8.53%, down 1.35 percentage points from the end of the previous year; its tier 1 capital adequacy ratio was 9.62%, down 1.58 percentage points; and its total capital adequacy ratio was 12.55%, down 1.91 percentage points. As the core tier 1 capital adequacy ratio fell to its lowest level in nearly five years, the bank's risk-weighted assets grew by 20.83% year-on-year. Although the core tier 1 ratio remains above the regulatory minimum, it is already at a relatively low level among listed city commercial banks.

All of the above indicates that the provisioning for credit impairment losses has significantly negatively impacted the bank's profitability. This may also have weakened its ability to replenish capital through internal generation, accelerating the expansion of risk-weighted assets. This situation, where capital is being consumed faster than it is being replenished, could substantially weaken the bank's overall risk resilience, placing it in a state of "expanding while digesting risk."

Furthermore, several aspects of the bank's corporate governance appear incongruent with its robust profit performance.

According to public enforcement information, in May 2026, Bank Of Chongqing Co.,Ltd. (BCQ) unusually appeared as a person subject to enforcement, with the subject matter of enforcement being a mere 5,042 yuan. It is relatively rare for a listed bank itself to have an enforcement record. As a licensed financial institution under strong regulatory oversight, the bank's involvement in an enforcement case could trigger multiple negative chain reactions, such as affecting its regulatory rating, damaging its market reputation, and subsequently imposing implicit restrictions on future interbank cooperation, bond underwriting, government project bidding, and bank-enterprise cooperation. For a trillion-yuan bank, taking such a risk for a few thousand yuan is indeed perplexing.

Regarding investors, according to the bank's annual report, Fude Life Insurance, a long-standing top-ten shareholder, reduced its holdings of the bank's H-shares by 11.06 million shares in 2025, lowering its stake to 5.94%.

Entering 2026, Fude Life Insurance continued its divestment. Reports indicate that on May 11th, it sold 298,000 shares of the bank at an average price of HK$8.16 per share. On June 24th, it sold another 30 million shares via a block trade. Over the past year, the "Fude" related entities have cumulatively reduced their holdings of the bank's H-shares by over 48 million shares, cashing out approximately HK$3.9 billion. After these sales, the combined shareholding of Fude Life Insurance and its subsidiaries fell to 4.67%, dropping below the 5% disclosure threshold for the first time.

A review of investment returns shows that, considering the cash-out of HK$3.9 billion, the remaining market value of the stake (estimated at HK$12.6 billion based on 169 million shares at HK$7.44 per share), and cumulative dividends of approximately HK$3.3 billion over the years, Fude Life Insurance's total investment return over ten years is about HK$19.8 billion. Compared to the cost of HK$16.6 billion, this represents a floating profit of about HK$3.2 billion, a gain of roughly 19%. However, the annualized return is only about 1.7%, which is not only lower than the funding costs under its previous "asset-driven liability" model but also underperforms the returns of bank wealth management products over the same period. The exit of this once-prominent investor from the earlier wave of "insurance capital stake-building" in this manner has drawn market sighs.

For potential new investors, the prolonged absence of an employee director at Bank Of Chongqing Co.,Ltd. (BCQ) presents another concern. According to the bank's articles of association published on December 31, 2025, its board of directors should include a seat for an employee director. Regulations stipulate that banking and insurance institutions should establish an employee director system to safeguard employees' rights to participate in corporate governance.

However, as of now, the bank has not announced any appointment or election for the employee director position. This gap in its governance structure not only deviates from regulatory requirements but also weakens the representation of employee rights and the completeness of corporate governance to some extent. In the current climate emphasizing ESG governance, the absence of an employee director at Bank Of Chongqing Co.,Ltd. (BCQ) is undoubtedly a shortcoming that needs to be addressed promptly.

Having cultivated its home market for decades, Bank Of Chongqing Co.,Ltd. (BCQ) has delivered a 2025 performance report that demonstrates both scale and quality, leveraging its deeply integrated development path with the regional economy. This fully validates the core value of local city commercial banks in serving the real economy. However, the stability of a financial institution cannot be judged solely by short-term growth figures. Beneath its trillion-yuan asset size, potential risks such as a singular and imbalanced profit structure, sustained pressure on capital and liquidity, and compliance vulnerabilities in corporate governance still await the bank's resolution.