Analysis of the Decline in Non-Interest Income of Bank of Jiangsu and Portfolio Adjustment Strategies Amid Bond Market Volatility

According to the latest financial data, Bank of Jiangsu’s non-interest income showed a significant decline in 2024 [0]:

• Net interest income maintained growth (+5.1%), showing certain resilience under net interest margin pressure
• Total assets expanded steadily by 7.5% to 3.5342 trillion yuan
• ROE remained at a relatively high level of 11.22%, with acceptable profitability [0]

• Significant decline in non-interest income (-15.99%), putting pressure on income structure
• Slight drop in operating income (-0.8%), insufficient growth momentum
• Financial analysis shows an “aggressive” accounting treatment model; need to pay attention to profit quality [0]

In 2024, the bond market experienced significant volatility, which directly affected banks’ investment income:

• Increased volatility in interbank market interest rates affected the fair value of trading financial assets
• Decline in bond investment income put pressure on non-interest income
• Increased difficulty in managing interest rate risk exposure

The decline in fee income mainly stems from:

• Bank Card Business
  : Intensified competition in the payment market, continuous decline in rates
• Wealth Management Business
  : Sustained impact of asset management regulations, slowing growth in wealth management scale
• Investment Banking Business
  : Slower bond issuance pace, reduced underwriting income

Capital market volatility has multiple impacts on banks’ non-interest income:

• Fund agency sales income is significantly affected by stock market conditions
• Insurance agency business income declined
• Wealth management business growth is weak

• Valuation is at a historical low with sufficient safety margin
• High dividend yield provides good cash returns
• Continuous expansion of asset scale and steady increase in market share

• Decline in non-interest income indicates business transformation pressure
• Sustained pressure on net interest margin
• Regional economic risk exposure

The current bond market shows the following characteristics [1][2]:

• Downward shift in interest rate center
  : Expectations of monetary policy easing increase
• Differentiation in credit spreads
  : Performance gap between high-rated and low-rated bonds widens
• Increased volatility
  : Coexistence of interest rate risk and credit risk
• Allocation value remains
  : Despite narrowing spreads, bonds still have investment value

• The banking sector’s overall valuation is at a historical low
• Valuation recovery space is large under economic recovery expectations
• High dividend strategy continues to be favored in a low-interest rate environment

• Bond Category (60%)
  : Interest rate bonds (40%) + High-rated credit bonds (15%) + Bank wealth management (5%)
• Stock Category (20%)
  : Bank stocks (15%) + Utilities (5%)
• Cash Category (20%)
  : Money market funds, bank deposits

• Mainly allocate to treasury bonds and policy financial bonds
• Choose high-dividend, low-valuation targets for bank stocks
• Maintain sufficient liquidity to cope with market volatility

• Bond Category (45%)
  : Interest rate bonds (25%) + Credit bonds (15%) + Convertible bonds (5%)
• Stock Category (35%)
  : Bank stocks (15%) + Consumer leaders (10%) + Tech growth (10%)
• Cash Category (20%)

• Moderately increase allocation to equity assets
• Focus on high-quality targets such as Bank of Jiangsu and Bank of Ningbo for bank stocks
• Convertible bonds as flexible instruments with downside protection and upside potential

• Bond Category (30%)
  : Interest rate bonds (15%) + Credit bonds (10%) + Convertible bonds (5%)
• Stock Category (50%)
  : Bank stocks (15%) + New energy (15%) + Semiconductors (10%) + Consumption upgrade (10%)
• Cash Category (20%)

• Seize valuation recovery opportunities for bank stocks
• Moderately allocate to growth sectors
• Maintain flexible adjustment space

1. Dividend Compounding
   : A dividend yield of approximately5.5% provides stable cash returns
2. Valuation Recovery
   : Bank stocks are expected to be revalued under economic recovery expectations
3. Asset Quality
   : Pay attention to changes in provision coverage ratio and non-performing loan ratio

The15.99% decline in Bank of Jiangsu’s non-interest income reflects common challenges faced by the banking industry currently: bond market volatility, sluggish capital markets, pressure on fee income, etc. [0] However, the company’s net interest income maintains growth, asset scale expands steadily, and valuation is at a historical low, providing a good safety margin for long-term investors.

1. For conservative investors
   : Maintain a high bond allocation, use bank stocks as a supplement to obtain dividend income
2. For steady investors
   : Moderately allocate to low-valuation bank stocks such as Bank of Jiangsu to bet on valuation recovery
3. For aggressive investors
   : Pay attention to rebound opportunities of bank stocks under controlled positions

• 2025 net interest margin trend
• Whether non-interest income can stabilize and rebound
• Changes in asset quality
• Economic recovery progress and policy orientation

[0] Jinling AI Financial Database - Bank of Jiangsu (600919.SS) Financial Data and Valuation Analysis

[1] Yahoo Finance - Schroder’s2025 Investment Strategy: Choose4 ‘Excellences’ for Layout (https://hk.finance.yahoo.com/news/川普2-0重磅來襲-施羅德2025投資策略-擇定4-優-034653111.html)

[2] Yahoo Finance - Pictet’s2025 Bond Market Strategy: Short Duration Wins (https://hk.finance.yahoo.com/news/還-債-等嗎-百達2025年債市攻略-短存續期勝出-120307854.html)