The year 2025 marks the critical final stage for Bank of Qingdao Co.,Ltd. to fully implement its three-year strategic plan spanning from 2023 to 2025. The bank operates on a three-year development cycle. The past three years represent the first complete cycle under the leadership of Chairman Jing Zailun.
Jing Zailun assumed the role of Chairman at Bank of Qingdao Co.,Ltd. starting in 2022, and has now held the position for over three years. His annual compensation for the years 2023, 2024, and 2025 was 2.524 million yuan, 2.498 million yuan, and 2.119 million yuan respectively, showing a year-on-year decline. According to the 2025 annual report, Jing Zailun was the only member of the board and senior management with an annual salary exceeding 2 million yuan, making him the highest-paid executive.
In his statement within the 2025 annual report, Jing Zailun expressed pride in the bank's performance. He stated that during the 2023-2025 strategic period, the bank achieved a compound annual growth rate of 7.77% in operating revenue and 18.94% in net profit attributable to the parent company. The weighted average return on equity improved from 8.95% to 12.68%, while the non-performing loan ratio continued to decline, reaching 0.97%. By the end of 2025, the bank's total assets had broken through the 800-billion-yuan threshold, reaching 814.960 billion yuan. Its market share for both deposits and loans within Shandong province increased. The bank was also listed among the Fortune China 500 for the first time.
However, for Chairman Jing, there remain some unfulfilled objectives. Bank of Qingdao Co.,Ltd. once steadily held the top position among city commercial banks in Shandong, leading in both asset size and profitability within the province. However, since 2017, Qilu Bank's net profit attributable to the parent company began to surpass that of Bank of Qingdao Co.,Ltd., a situation that persists. Throughout the three years from 2023 to 2025, Qilu Bank's net profit attributable to the parent company consistently exceeded that of Bank of Qingdao Co.,Ltd., with gaps of 685 million yuan, 722 million yuan, and 525 million yuan respectively.
Bank of Qingdao Co.,Ltd. is accelerating its efforts to catch up. In 2025, the bank achieved operating revenue of 14.573 billion yuan, a year-on-year increase of 7.97%, and a net profit attributable to the parent company of 5.188 billion yuan, surging 21.66% compared to the previous year. Both revenue and net profit maintained high growth rates, placing the bank among the top performers listed on the A-share market.
The bank's profit growth can be attributed to efforts in two key areas. The first is the expansion of its business scale. Analysis of the revenue structure shows that growth was primarily driven by net interest income. In 2025, the bank's net interest income reached 11.07 billion yuan, up 12.11% year-on-year, mainly due to the continuous expansion of interest-earning assets, which steadily boosted interest income. The average balance of interest-earning assets for the period was 665.215 billion yuan, an increase of 96.002 billion yuan, or 16.87%, from the previous year.
Conversely, the bank was not immune to the industry-wide trend of narrowing interest margins. In 2025, the bank's net interest spread was 1.68%, a decrease of 0.08 percentage points from the previous year, and its net interest margin was 1.66%, down 0.07 percentage points. Net interest income constituted 75.96% of operating revenue, an increase of 2.81 percentage points from the previous year, while non-interest income declined. The bank's non-interest income in 2025 was 3.503 billion yuan, down 3.34% year-on-year. Within this, net fee and commission income was 1.452 billion yuan, a decrease of 3.84% compared to the previous year. The contribution from its subsidiary, Qingyin Wealth Management, also diminished, reporting a net profit of 187 million yuan for 2025, a significant decline of 37.04% year-on-year.
The second area of focus was strict cost control. The bank's business and management expenses in 2025 totaled 4.608 billion yuan, down 2.31% year-on-year. This reduction was primarily achieved by establishing and implementing a long-term mechanism for cost reduction and efficiency improvement, alongside comprehensive and precise cost control measures. Notably, employee compensation expenses were 2.608 billion yuan, an increase of 100 million yuan compared to the previous year.
Despite cost control efforts, the bank's network and total workforce expanded. By the end of 2025, the bank operated 206 business outlets in Shandong province, an increase of 6 from the previous year. The total number of employees reached 5,571, up by 259 from 5,312 the previous year. A rough calculation based on the total employee compensation expenses suggests an average monthly salary of approximately 39,000 yuan per employee in 2025, inclusive of wages, bonuses, social security, housing fund, benefits, and allocated costs. Meanwhile, the total compensation for key management personnel was 15.546 million yuan, a decrease of 19.17% compared to the same period last year.
The past year saw zero changes in the bank's senior management team. There were no instances of directors leaving their posts during their terms, nor were any senior managers dismissed during their tenure. This stability in the leadership team has both advantages and disadvantages. It suggests stable development along the established path but also carries the risk of path dependency, potentially leading to insufficient innovation and breakthrough initiatives.
From a business perspective, the bank continues to face a noticeable decline in its retail banking operations. As of the end of 2025, the bank's personal loans stood at 74.001 billion yuan, a decrease of 4.335 billion yuan, or 5.53%, from the end of the previous year. Personal loans accounted for 18.64% of total customer loans, down 4.35 percentage points from the end of the previous year. The retail banking segment experienced negative profit growth in 2025, with operating revenue of 3.571 billion yuan, down 4.18% year-on-year, and total profit of 629 million yuan, a decrease of 6.67%.
Regarding loan quality, the bank's non-performing loan ratio within Qingdao city was relatively high, rising from 1.48% in 2024 to 1.53% in 2025. Over recent years, the bank has been actively working to reduce its non-performing loans. By the end of 2025, the bank's overall non-performing loan ratio was 0.97%, a decrease of 0.17 percentage points from the end of the previous year. During the same period, the bank's capital adequacy ratio was 13.37%, down 0.43 percentage points, and its core tier 1 capital adequacy ratio was 8.67%, down 0.44 percentage points from the end of the previous year.