Chengde Bank's Fee Income Remained Negative for Seven Consecutive Years: In-Depth Analysis of the Plight of Intermediate Business Transformation

Based on the collected data and industry information, I will conduct a systematic and comprehensive analysis for you.

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According to the annual report data of Chengde Bank from 2018 to 2024, the bank’s net fee and commission income has remained negative, with accumulated net losses exceeding RMB 3 billion [1].

Year	Net Fee and Commission Income	Remarks
2018	-RMB 35.68 million	Turned negative for the first time
2019	-RMB 241 million	Loss expanded
2020	-RMB 471 million	Loss worsened
2021	-RMB 658 million	Loss peak
2022	-RMB 701 million	Loss continued
2023	-RMB 599 million	Slightly narrowed
2024	-RMB 321 million	Significant improvement

• The loss peaked in 2021-2022, with an average annual loss exceeding RMB 700 million
• The loss showed a narrowing trend in 2023-2024, but it is still in a state of severe loss overall
• The accumulated loss over seven years exceeds RMB 3 billion, which is extremely heavy for a city commercial bank with total assets of approximately RMB 230 billion

Looking at Chengde Bank’s income structure in 2024:

• Net interest income
  : RMB 2.009 billion, down 24.7% year-on-year [1]
• Investment income
  : RMB 1.8 billion, up 60% year-on-year [1]
• Net fee and commission income
  : -RMB 321 million

This structure reveals the core problem:

. In contrast, although the high growth of investment income has temporarily made up for the income gap, investment income is highly volatile and cannot form a stable income support.

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is the primary obstacle for regional city commercial banks to expand intermediate business. As a regional bank deeply rooted in Hebei Province, Chengde Bank lags far behind state-owned banks and joint-stock banks in terms of brand awareness and customer trust. This directly leads to:

• Loss of high-end customers: High-quality enterprises and high-net-worth customers tend to choose banks with stronger brand influence
• Weak product pricing power: Lack of discourse power in businesses such as wealth management product agency and fund custody
• Restricted intermediate business pricing: Unable to charge fees at the same level as large banks

further exacerbate this predicament. Chengde Bank’s capital cost is significantly higher than that of large banks. Against the background of continuous narrowing of net interest margins in the industry, its interest margin space has been further compressed [1].

is the core obstacle to Chengde Bank’s transformation. For a long time, the bank has relied on a single customer structure and scale expansion model for profit, forming a deep path dependence [1]:

• Qualification sinking of corporate business customers: Loss of high-quality customers, increased risk exposure of retained customers
• Weak foundation of retail business: Lack of a complete retail banking product system and customer reach capabilities
• Insufficient investment in financial technology: Unable to support the online operation of intermediate businesses such as wealth management and payment settlement

According to KPMG’s 2025 China Banking Survey Report, the net fee and commission income of listed banks in 2024 was RMB 700.5 billion, down 9.4% year-on-year, recording negative growth for three consecutive years [2]. This industry trend has a more severe impact on regional banks like Chengde Bank.

is a key shortcoming in Chengde Bank’s governance. As of the end of 2024, the bank’s largest shareholder, Chengde Municipal Finance Bureau, holds only 8.84% of the shares, with no actual controller, and the overall shareholder background is weak [1]. The problems brought by this equity structure include:

• Low decision-making efficiency: Difficulty in quickly formulating and implementing effective response strategies in the face of market changes
• Insufficient strategic resolve: Frequent changes in management, with as many as ten positions changed in 2024, affecting operational stability
• Limited resource investment: Shareholders are unable to provide sufficient capital support and business collaboration

further restrict the space for business innovation. In 2025, the Tangshan Branch was punished for occupying financial funds, indicating that the internal compliance system still needs to be strengthened [1].

are important external factors for the decline in intermediate business income:

• Bank-insurance channel “unified reporting and execution”
  : Insurance companies are not allowed to pay additional commissions to banks in the name of policy issuance fees, information fees, etc., resulting in a significant decline in bank agency insurance business income [2]
• Public fund fee reduction
  : The reduction of custody fees has weakened the profitability of bank custody business
• Fee reduction and profit concession policies
  : The banking industry continues to increase efforts to transfer profits to the real economy

comes from multiple dimensions:

Source of Competition	Affected Areas	Specific Performances
Leading internet institutions	Payment and settlement	Scenario internalization, accelerated disintermediation
Joint-stock banks	Wealth management	Strong product innovation capabilities, obvious brand advantages
State-owned large banks	Full business lines	Cost advantages, wide channel coverage

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In 2024, the performance of net fee and commission income of various types of banks showed significant differentiation [2]:

Bank Type	Amount (RMB 100 million)	Year-on-Year Change	Ranking of Decline
Six major state-owned banks	4,287	-7.9%	Most resilient
Joint-stock banks	2,244	-12.5%	Largest decline
City commercial banks	413	-7.9%	Obvious pressure
Rural commercial banks	61	-9.3%	Small scale

As an unlisted city commercial bank, Chengde Bank’s fee income performance is far lower than the industry average.

Taking leading city commercial banks such as Bank of Ningbo and Bank of Beijing as examples, their intermediate business transformation paths can be used as references:

:

• Net fee and commission income ranks among the top among city commercial banks
• Significant growth in wealth management business
• Continuous increase in financial technology investment

(Q3 2025 report):

• Net fee and commission income increased by 16.91% year-on-year
• Tech-finance loans grew by 20.16%
• Green finance loans grew by 26.20% [3]

In contrast, Chengde Bank lacks a clear strategic main line and implementation results in intermediate business transformation.

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is a fundamental problem. Seven consecutive years of losses indicate that Chengde Bank may not have formed a systematic intermediate business development plan:

• Lack of clear product innovation paths
• Imperfect customer hierarchical management system
• Lagging investment in digital transformation

restricts the development of high-value-added businesses. Intermediate businesses such as wealth management, investment banking, and transaction banking require teams with professional capabilities, and regional banks have obvious shortcomings in talent attraction and training.

limit service efficiency and customer experience. In the digital era, competition in intermediate business is largely a competition of technological capabilities, and Chengde Bank’s investment in this area is obviously insufficient.

form natural constraints on the development of banking business:

• Relatively limited economic aggregate
• Industrial structure dominated by traditional industries
• Limited scale of high-net-worth population
• Volatile financing demand of the real economy

These factors limit the market space for local intermediate business.

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is the top priority:

• Sort out the existing intermediate business product lines, and evaluate businesses that continue to lose money
• Optimize the cost structure and improve operational efficiency
• Strengthen compliance management to avoid additional costs caused by regulatory penalties

:

• Consolidate regional deposit and loan market share
• Improve customer service quality
• Strengthen in-depth cooperation with local enterprises

:

• Supply chain finance
  : Rely on local industrial characteristics to develop businesses such as accounts receivable financing and inventory financing
• Government affairs finance
  : Deepen cooperation with local governments to undertake businesses such as fiscal agency and social security payment agency
• Micro and small enterprise finance
  : Leverage the information advantages of regional banks to develop loans and supporting services for micro and small enterprises

:

• Build digital channels to improve service efficiency
• Introduce intelligent risk control systems to reduce operational costs
• Develop mobile banking to expand service reach

:

• Gradually reduce dependence on capital-consuming businesses
• Develop light-capital, high-value-added intermediate businesses
• Explore comprehensive operations and lay out areas such as consumer finance and financial leasing

:

• Introduce strategic investors to enhance capital strength
• Stabilize the management team and enhance strategic execution
• Improve incentive and restraint mechanisms to enhance organizational effectiveness

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Chengde Bank’s fee income has remained negative for seven consecutive years, which is by no means a problem of a single business line, but a concentrated manifestation of deep-seated structural contradictions. From the industry perspective, this is a microcosm of the transformation predicament generally faced by small and medium-sized banks against the background of deepening interest rate liberalization and continuous narrowing of interest margins. From the individual perspective, the superposition of multiple factors such as brand disadvantages, scale shortcomings, governance flaws, and insufficient capabilities makes Chengde Bank struggle in intermediate business transformation.

:

1. Intermediate business transformation is not a “multiple-choice question”, but a “must-answer question” related to the long-term survival and development of the bank
2. Transformation requires strategic resolve; seven consecutive years of losses indicate major deviations in strategic execution
3. Differentiated paths are the key for regional banks; blindly copying the model of large banks is difficult to succeed
4. Technological capability building is the underlying support for transformation and cannot be bypassed

For Chengde Bank, it is currently in a transition period where “the old path is not feasible, and the new path has not been taken”. The narrowing of fee losses in 2024 may be a positive signal, but there is still a long way to go before real business structure optimization. Only by basing itself on the region, deeply cultivating the local area, and developing in a differentiated manner can it find a foothold in the fierce market competition.

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[1] Huxiu.com - Profit, Assets, Transformation: Three Challenges for Chengde Bank (January 2026)
[2] KPMG - 2025 China Banking Survey Report (June 2025)
[3] Weikehao - Bank of Beijing Under the Leadership of Dai Wei: The Battle to Defend the Top Tier of City Commercial Banks (December 2025)