Bank Of Qingdao Co.,Ltd. (03866) announced its financial results for the first quarter of 2026. The bank achieved a net profit attributable to shareholders of the parent company of RMB 15.24 billion, an increase of RMB 266 million, or 21.16%, compared to the same period last year. Operating income reached RMB 43.42 billion, rising by RMB 300 million, or 7.43%, year-on-year. The annualized weighted average return on equity was 14.63%, an improvement of 1.40 percentage points from the previous year.
During the reporting period, the bank proactively addressed operational challenges, including declining asset returns, by aligning with financial policy directives and integrating its specialized business strategies. It steadily expanded its business scale, continuously optimized its business structure, and deepened cost reduction and efficiency enhancement efforts. This led to steady growth in operating income, which in turn drove faster profit growth and improved profitability.
Regarding operating income, the bank increased the scale of higher-yielding assets such as loans and financial investments while reducing its liability cost ratio. This resulted in growth in interest income, while interest expenses remained relatively stable, leading to sustained growth in net interest income. In the first quarter, net interest income was RMB 30.21 billion, an increase of RMB 371 million, or 14.00%, year-on-year. This consisted of interest income of RMB 60.27 billion, up by RMB 416 million, and interest expenses of RMB 30.06 billion, which increased by RMB 45 million.
Net non-interest income was RMB 13.20 billion, a decrease of RMB 71 million compared to the prior year. Within this, net fee and commission income was RMB 6.52 billion, an increase of RMB 215 million, primarily due to the bank leveraging its multi-license advantages to vigorously develop low-capital businesses such as transaction banking, wealth management, and underwriting, leading to a corresponding rise in fee income. Net trading gains and losses amounted to RMB 174 million, an increase of RMB 150 million, mainly driven by higher investment income from financial assets held for trading. Net investment income was RMB 485 million, a decrease of RMB 420 million, largely due to reduced gains from price differentials.
Furthermore, the bank deepened refined management in procurement and expenses, keeping operating expenses largely stable. It also strengthened the control of credit risk costs, resulting in a year-on-year decrease in credit impairment losses. The increase in total profit, coupled with a reduction in tax-exempt income, led to a corresponding rise in income tax expenses. Specifically, for the first quarter, operating expenses were RMB 10.20 billion, a slight increase of RMB 9 million year-on-year. Credit impairment losses were RMB 13.88 billion, a reduction of RMB 245 million. Income tax expenses were RMB 3.62 billion, an increase of RMB 267 million.
As of the end of March 2026, the bank's non-performing loan ratio stood at 0.96%, down by 0.01 percentage points from the end of the previous year. The provision coverage ratio was 305.61%, an improvement of 13.31 percentage points. The core tier 1 capital adequacy ratio was 8.70%, up by 0.03 percentage points from the year-end figure, while the total capital adequacy ratio was 12.43%, a decrease of 0.94 percentage points.
Throughout the reporting period, the bank continued to implement refined capital management and accelerated its transition to a capital-efficient development model. This enhanced the effectiveness of capital utilization and steadily strengthened internal capital generation, leading to the improvement in the core tier 1 capital adequacy ratio. The total capital adequacy ratio decreased due to the redemption of RMB 4 billion in tier 2 capital bonds; however, all levels of capital adequacy ratios remained in compliance with regulatory requirements.