Recently, the People's Bank of China's Jiangxi Branch disclosed that Jiangxi Bank Co., Ltd. (hereinafter referred to as "Jiangxi Bank") was fined 1.06 million yuan for multiple violations in credit-related operations, including "violating regulations on credit information collection, provision, inquiry, and related management." At the same time, Xu, the General Manager of the Inclusive Finance Department at Jiangxi Bank's Ganjiang New Area Branch, and Zhou, a client manager at the same branch, were each fined 10,000 yuan for their responsibility in these violations.

This fine reveals the shortcomings in Jiangxi Bank's compliance management and adds uncertainty to the bank's already challenging operational landscape in recent years.

01 Performance Declining Amidst Fluctuations, Revenue and Net Profit Declining in the First Half of the Year Jiangxi Bank, originally known as Nanchang Commercial Bank, was established in 1997 and is one of the earliest urban commercial banks in Jiangxi Province. It completed its shareholding system reform in 2015 and was renamed Jiangxi Bank, initiating a provincial layout and strategic upgrade. In 2018, it was successfully listed on the Main Board of the Hong Kong Stock Exchange, becoming the first provincial-level legal city commercial bank in Jiangxi Province and was once regarded as a benchmark for local financial reform, solidifying its market position.

Currently, Jiangxi Bank has 22 first-tier branches, 27 functional departments, and 232 business outlets, achieving full coverage across cities in Jiangxi Province, as well as establishing branches in Guangzhou and Suzhou. It has also initiated Jiangxi Province's first financial leasing company and five village and town banks, forming a service network that is core within the province and extends beyond.

Despite an increasing market position, Jiangxi Bank's operational performance has faced sustained pressure in recent years, with profitability fluctuating downwards. According to publicly available financial reports, Jiangxi Bank achieved operating income of 12.714 billion yuan in 2022, representing a year-on-year growth of 14.08%, indicating that it was still in a growth phase. However, in 2023, revenue fell to 11.297 billion yuan, a year-on-year decline of 11.15%. While there was a slight rebound to 11.559 billion yuan in 2024, representing a year-on-year increase of 2.32%, by the first half of 2025, the situation dramatically worsened, with revenue totaling only 4.604 billion yuan, a 19.91% decline year-on-year, marking the largest drop in recent years and halting recovery momentum.

Net profit showed even more significant fluctuations. In 2022, Jiangxi Bank's net profit attributable to shareholders peaked at 1.550 billion yuan but plummeted to 1.036 billion yuan in 2023, a year-on-year decline of 33.13%. Though it slightly increased to 1.057 billion yuan in 2024, reflecting a mere 2.00% growth, by the first half of 2025, the net profit attributable to shareholders was 558 million yuan, a decrease of 10.53% year-on-year. Thus, in the first half of 2025, Jiangxi Bank faced the dual challenges of revenue and net profit both declining by double digits.

At the same time, Jiangxi Bank's asset scale has continued to expand slowly, increasing from 515.573 billion yuan at the end of 2022 to 580.297 billion yuan by the end of June 2025, a growth of approximately 12.5% over three and a half years. However, annual growth is lackluster, with only 2023 seeing a growth rate above 5%. Notably, the growth rate for the first half of 2025 was just 1.16%, indicating insufficient business expansion momentum.

The reasons for Jiangxi Bank's performance decline can primarily be attributed to the dual pressures of narrowing net interest margins and deteriorating asset quality. In recent years, with multiple reductions in LPR, the banking sector has generally faced pressure from declining interest income. Jiangxi Bank’s rigid deposit costs have led to a drop in net interest margin from a relatively high level of 1.98% in 2022 to 1.40% in the first half of 2025, severely squeezing profitability. According to the National Financial Regulatory Administration's 2025 commercial bank's key regulatory indicators, the net interest margin for commercial banks in the second quarter was 1.42%, which is below the average level for commercial banks.

02 High Real Estate Risks, 200% Surge in Consumer Loans Over Three and a Half Years In addition to hidden hazards in its operational status, Jiangxi Bank's asset quality is not optimistic. In recent years, due to changes in the macroeconomic environment and industry cycle adjustments, the quality of the bank's credit assets has been under sustained pressure, particularly as risks in the real estate area have gradually become evident, becoming a core challenge to the bank's stable operation.

According to the mid-2025 report, as of the end of June 2025, Jiangxi Bank's total loans and advances amounted to approximately 364.903 billion yuan, increasing by only 1.16% compared to the end of 2024, indicating weak expansion. However, the non-performing loan ratio has risen to 2.36%, an increase of 0.21 percentage points from the end of 2024, significantly above the industry average of 1.49%.

At the same time, Jiangxi Bank's provision coverage ratio has decreased from 160.05% at the end of 2024 to 154.85%, a drop of 5.2 percentage points, indicating a decline in its risk resistance capability. Additionally, the non-performing loan balance reached 8.617 billion yuan by the end of the first half of 2025, increasing by 1.029 billion yuan quarter-on-quarter, with particularly noticeable growth in substandard loans, which rose by 1.335 billion yuan from the end of the previous year to 5.057 billion yuan, indicating a rapid accumulation of potential risks.

Moreover, analyzing the non-performing loan structure reveals that personal loans and real estate have become high-risk areas for Jiangxi Bank. Despite a quarter-on-quarter decrease of 3.51% in personal loan balances to 79.192 billion yuan in the first half of 2025, mainly due to weakened housing demand, personal non-performing loans increased counter-trend to 2.352 billion yuan, a quarter-on-quarter increase of 18.13%; the non-performing loan rate for individuals rose to 2.97%, up by 0.54 percentage points from the end of 2024, highlighting an upward trend in credit risk on the consumption side.

The risks in the real estate sector are even more severe. As of the end of the first half of 2025, Jiangxi Bank's non-performing loan balance for the real estate sector was 6.793 billion yuan. Although this represents a slight decrease from the end of 2024, the non-performing loan ratio has surged to 19.07%, up 1.26 percentage points from the end of 2024. The numbers reflect a continuously deteriorating industry fundamental, with the ratio only being 3.29% at the end of 2023, which surged to 16.61% by mid-2024 and further jumped to 17.81% by the end of 2024, almost quintupling in one year. Despite the bank emphasizing "proactive control of real estate risks" in its annual report, it is evident that issues such as delayed risk handling and imprudent asset classifications persist.

In terms of capital adequacy, Jiangxi Bank's level has also been declining year by year. As of the end of the first half of 2025, its core Tier 1 capital adequacy ratio decreased by 0.29 percentage points from the end of 2024 to 9.01%; its Tier 1 capital adequacy ratio dropped by 0.30 percentage points to 12.01%; and its total capital adequacy ratio fell by 0.39 percentage points to 13.08%, all below the industry average for the same period.

It is worth noting that Jiangxi Bank’s overdue loans have also been accumulating rapidly. By the first half of 2025, its overdue loan balance had reached 13.170 billion yuan, an increase of 3.188 billion yuan compared to the end of 2024, reflecting a double-digit percentage increase of 32.1%. Among these, loans overdue for less than three months surged from 2.143 billion yuan to 4.837 billion yuan, an increase of over 125%; overdue loans ranging from one year to three years increased from 2.532 billion yuan to 4.819 billion yuan, nearly doubling. The significant growth in short-term overdue loans implies that pressure from potential non-performing conversions will increase further.

Additionally, regulators have also paid attention to the compliance issues in the bank's risk disposal processes. In April of this year, the Pingxiang Financial Regulatory Bureau imposed a fine of 400,000 yuan on Jiangxi Bank for "violating procedures in the disposal of non-performing loans," exposing persistent weaknesses in the bank's internal control mechanisms for asset recovery.

These risks have led credit rating agencies to take notice. On July 25 of this year, a tracking rating report for Jiangxi Bank in 2025 issued by China United Credit Ratings pointed out that "credit risks related to the real estate and associated industries have started to emerge, necessitating monitoring of corresponding industry concentration risks; credit asset quality still faces downward pressure, while declining net interest margins are placing strain on profitability; the core capital will also face certain pressures for replenishment."

These concerns are further evidenced in Jiangxi Bank's loan distribution. Presently, the bank continues to focus on corporate loans and advances, maintaining a proportion above 60% over the past three years. However, in the personal loan and advance sector, consumer loans have significantly increased, rising from 3.414 billion yuan in 2022 to 10.361 billion yuan in the first half of 2025. Over the span of three and a half years, this marks an outstanding increase of 203.49%.

Furthermore, in the past three and a half years, the growth rate of personal consumer loans has notably exceeded that of other personal loans. In 2023, Jiangxi Bank’s consumer loans reached 8.643 billion yuan, growing by 153.16% compared to the end of the previous year, while personal housing loans declined by 10.68% during the same period, and personal operating loans grew by 20.91% to 20.293 billion yuan. In 2024, personal consumer loan balances amounted to 9.704 billion yuan, a growth of 12.28% year-on-year, whereas personal housing mortgage loans decreased by 9.07% and personal operating loans saw a marginal increase of 0.41%.

03 Consecutive High-Level Executives Fall, Urgent Needs to Address Internal Control Gaps In addition to its performance decline, Jiangxi Bank has also experienced ongoing incidents involving the dismissal of high-ranking officials in recent years, revealing deeper governance issues within the institution.

In December 2022, the discipline inspection commission of Jiangxi Province issued a major announcement stating that Jiangxi Bank's former Party Secretary and Chairman, Chen Xiaoming, was expelled from the Party and dismissed for serious violations of discipline and law. The announcement reported that Chen exhibited a lack of political awareness, publicly expressing serious political issues, thereby severely violating the central government's major decisions regarding financial work. Shockingly, he treated Jiangxi Bank as a "private domain," forming an "autocratic" governance style, setting private rules for himself, and engaging in family-style corruption, securing improper benefits for relatives regarding employment in the financial sector, obtaining business, and acquiring loans, significantly disrupting the ecological and industry order of Jiangxi's financial system.

In May 2022, Xu Jihong, the then Vice President and Board Secretary of the bank, was investigated for serious violations of discipline and law. Following this, the former president of the Pingxiang branch, Feng Liang, former Vice President of Nanchang Bank, Huang Wenjie, and former Vice President, Yu Jian, were successively investigated.

In the 2025 rating report provided by China United Credit Ratings, it explicitly mentioned that "some former board members and executives of Jiangxi Bank are involved in unlawful and irregular situations, with related transactions exhibiting bad and overdue characteristics. Corporate governance and internal control management need further enhancement."

According to incomplete statistics, since 2022, Jiangxi Bank and its branches have received more than 15 regulatory fines, totaling over 9 million yuan, for various violations encompassing credit management, data reporting, and non-performing asset handling, which fully exposes weaknesses in compliance culture.

In response to this daunting situation, Jiangxi Bank launched a "Compliance Reconstruction" project starting in 2022. Under the leadership of the newly appointed Chairman, Zeng Hui, the bank has prioritized "rebuilding the risk control system and purifying the political ecology" as core tasks, promoting comprehensive audits, institutional reconstruction, and personnel adjustments. By June 2025, Jiangxi Bank successfully completed its board of directors' re-election, with Zeng Hui re-elected as chairman and Luo Xiaolin appointed as vice chairman and president, stabilizing the management team. The new leadership has a generally more professional financial background and a younger age structure, which is expected to address previous strategic disruptions and execution weaknesses caused by frequent leadership changes.

Currently, the new management has clearly stated its intention to enhance efforts in recovering non-performing assets, strictly control the emergence of new risks, and optimize the business structure, focusing on transitioning toward inclusive finance and green finance, which are light-capital and sustainable directions. However, resolving historical legacy issues is a long-term endeavor; the erosion of organizational culture by corruption cases will also take time to rectify. In the context of a pressured macroeconomic environment and increasing regional competition, whether Jiangxi Bank can truly revitalize itself will test the wisdom and determination of the new management, and will largely depend on its ability to establish an independent and effective corporate governance system. The road ahead is long; rebuilding trust will still require both time and actual performance verification.