In-Depth Research Report on SPD Bank: Paths to Enhancing Profitability After Exceeding 10 Trillion Yuan in Assets

Based on the above in-depth analysis, we now present a comprehensive research report on SPD Bank:

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In 2025, SPD Bank achieved total assets of

, breaking the 10 trillion yuan mark for the first time, representing a 6.55% increase from the end of the previous year [0]. This milestone marks SPD Bank’s entry into a critical transformation period of “large but not strong”. As an institution in the second group of domestic systemically important banks, SPD Bank’s scale expansion provides a basic platform for business transformation, but how to improve profit efficiency while expanding scale has become an urgent core issue to be addressed.

Core Indicators	2025	2024	YoY Change
Operating Income (hundred million yuan)	1,739.64	1,707.48	+1.88%
Net Profit (hundred million yuan)	500.17	452.57	+10.52%
ROE (%)	6.76	6.28	+0.48pct
Basic EPS (yuan)	1.52	1.36	+11.76%

The 2025 performance showed a

trend in operating income and net profit, making SPD Bank the only one among the 9 A-share listed joint-stock commercial banks to achieve such growth [0][1]. The growth rate of net profit is significantly higher than that of operating income, indicating that the company has achieved results in cost reduction and efficiency improvement, and the provision release brought by improved asset quality is an important contributing factor.

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At the end of 2025, SPD Bank’s non-performing loan balance was 719.90 hundred million yuan, a decrease of 11.64 hundred million yuan from the end of the previous year; its

, a decrease of 0.10 percentage points from the end of the previous year, achieving a “double drop” [0]. The provision coverage ratio was 200.72%, a significant increase of 13.76 percentage points from the end of the previous year, significantly enhancing risk mitigation capabilities.

From a historical trend perspective, SPD Bank’s non-performing loan ratio has continuously decreased from 1.73% in 2020 to 1.26% in 2025, showing a steady improvement trend [1]. However, in horizontal comparison, the non-performing loan ratio is still relatively high in the industry:

Bank	2024 Non-Performing Loan Ratio	First Three Quarters of 2025
China Merchants Bank	0.94%	-
Industrial Bank	1.08%	-
China CITIC Bank	1.16%	-
SPD Bank	1.36%	1.29%

: SPD Bank’s non-performing loan ratio is 0.42 percentage points higher than that of China Merchants Bank and 0.28 percentage points higher than that of Industrial Bank [1]. This means that SPD Bank still needs to continue to catch up in terms of asset quality.

However, behind the improvement in asset quality, there are compliance shortcomings. In 2025, SPD Bank received 25 regulatory fines, 7 of which were large fines of millions of yuan, involving issues such as inadequate post-loan management, misappropriation of loan funds, and illegal disposal of non-performing loans [1]. Compliance loopholes not only bring direct economic losses, but also may bury new hidden non-performing risks, affecting the sustainable improvement of asset quality.

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In 2025, SPD Bank’s ROE was 6.76%, although it increased by 0.48 percentage points compared to the previous year, it still

among joint-stock commercial banks. Compared with industry benchmark China Merchants Bank, the gap is as high as 9.94 percentage points, only 38.7% of that of China Merchants Bank [0][1].

By decomposing ROE using the DuPont analysis method, we can clearly identify the core links where SPD Bank’s profitability is weak:

Decomposition Indicator	SPD Bank	China Merchants Bank	Gap
Net Profit Margin	2.65%	4.42%	-1.77pct
Asset Turnover Ratio	0.48%	0.80%	-0.32pct
Equity Multiplier	13.2	11.0	+2.2

:

• Largest gap in net profit margin
  : Reflects comprehensive disadvantages in net interest margin, intermediate business income ratio, cost control, etc.
• Significantly low asset turnover ratio
  : Indicates low income-generating efficiency of assets, with a large number of assets failing to be effectively converted into income
• High equity multiplier
  : A “fig leaf” for ROE, but also means higher financial leverage and risk exposure

Based on scenario analysis calculations, if SPD Bank can targetedly improve key indicators, there is significant room for ROE improvement:

Scenario	Assumptions	Calculated ROE	ROE Improvement
Baseline	2024 Actual	6.28%	-
Scenario 1	Net interest margin increased to 1.60%	7.08%	+0.80pct
Scenario 2	Non-interest income ratio increased to 36%	~6.59%	~+0.31pct
Scenario 3	Retail income ratio increased to 40%	~7.24%	~+0.96pct
Scenario 4	Comprehensive improvement	~8.48%	~+2.20pct

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At the end of the third quarter of 2025, SPD Bank’s single-quarter net interest margin rebounded to 1.44%, but it still fell short of the average level of 1.56% for joint-stock commercial banks, and was far lower than China Merchants Bank’s 1.98% [1]. As a core profitability indicator for banks, net interest margin directly determines the marginal contribution of interest income.

:

• Asset side
  : High proportion of corporate loans with low yields; insufficient proportion of high-yield retail loans (credit cards, consumer finance)
• Liability side
  : Poor control of deposit costs, high dependence on interbank liabilities

In 2024, SPD Bank’s net non-interest income was 560.30 hundred million yuan, accounting for

of operating income, which is lower than China Merchants Bank’s 37.4% and Ping An Bank’s 36.31% [1]. Non-interest income has the characteristics of light capital and strong stability, and is an important starting point for improving ROE. SPD Bank’s layout in high-value-added business areas such as wealth management and investment banking is relatively lagging.

Retail banking is a key engine for banks to weather economic cycles and achieve stable profitability. In 2024, SPD Bank’s net operating income from retail business was 544.35 hundred million yuan, a year-on-year decrease of 14.40%, accounting for only

of operating income, while this figure for China Merchants Bank was as high as , and Ping An Bank also reached 48.6% [1].

: SPD Bank’s retail income ratio is 26.44 percentage points lower than that of China Merchants Bank, a staggering gap. This means that SPD Bank has huge room for improvement in areas such as retail customer management, wealth management, and consumer finance.

From 2019 to the third quarter of 2025, SPD Bank’s core tier 1 capital adequacy ratio continued to decline from 10.26% to

, approaching the 8% regulatory red line [1]. As an institution in the second group of systemically important banks, SPD Bank also needs to meet the additional capital requirement of 0.5%.

: Pressure on capital adequacy ratio will restrict business expansion space, affect asset scale growth, and may also limit investment in high-yield businesses.

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:

• Asset side optimization
  : Increase the proportion of high-yield assets such as personal loans and credit card loans; increase the allocation of high-quality assets to policy-supported areas such as technology finance and green finance
• Liability side cost control
  : Expand core liability sources such as low-cost settlement deposits and demand deposits; optimize interbank liability structure to reduce comprehensive interest payment costs

: Increase the net interest margin from the current 1.44% to over 1.60%

:

• Wealth management
  : Build a diversified product system to increase customer AUM (Assets Under Management) scale
• Investment banking
  : Develop businesses such as bond underwriting, M&A financing, and asset securitization
• Transaction banking
  : Deeply engage in light capital businesses such as supply chain finance, cash management, and cross-border finance

: Increase the non-interest income ratio from 32.8% to over 36%

:

• Customer management
  : Deepen digital customer acquisition and operation capabilities to improve customer stickiness and activity
• Product innovation
  : Enrich the retail product matrix, focusing on breakthroughs in credit cards, consumer finance, and wealth management
• Channel upgrading
  : Promote online-offline integration and optimize outlet productivity

: Increase the retail income ratio from 31.88% to over 40%

:

• Timely promote equity financing to supplement core tier 1 capital
• Optimize capital allocation to improve the return on risk-weighted assets
• Develop light capital businesses to reduce capital consumption

: Increase the core tier 1 capital adequacy ratio to over 10%

• Improve the full-process risk management system for pre-loan, in-loan, and post-loan stages
• Increase efforts to dispose of existing non-performing assets
• Improve compliance management level to reduce regulatory fines

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1. Continuous improvement of asset quality
   : The trend of non-performing “double drop” has been established, and the provision coverage level has increased
2. Performance returns to growth track
   : In 2025, net profit growth rate reached 10.52%, and operating income growth rate turned positive
3. Scale advantages emerge
   : Assets exceed 10 trillion yuan, providing a foundation for business transformation
4. Valuation at historical low
   : The stock price has risen significantly from the 2024 low, but PB is still attractive

1. Profitability recovery progress falls short of expectations
   : ROE improvement requires systematic reform support
2. Net interest margin continues to narrow
   : In the interest rate liberalization environment, net interest margin still faces downward pressure
3. Risk of asset quality reversal
   : Economic downturn cycles may lead to a rebound in non-performing loan ratio
4. Pressure from capital adequacy ratio red line
   : Business expansion space is restricted
5. Compliance risk
   : Regulatory fines may affect reputation and business operations

SPD Bank is in a critical stage of transformation from “scale expansion” to “quality improvement”. The improvement of asset quality creates conditions for ROE recovery, but to catch up and surpass in the highly competitive joint-stock commercial bank sector, systematic reforms are still needed in areas such as net interest margin, non-interest income, and retail business. For investors focusing on the banking sector, SPD Bank has potential opportunities for a turnaround from distress, but it is necessary to closely track the actual progress of its profitability improvement.

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[0] SPD Bank 2025 Annual Performance Express Announcement (https://stockmc.xueqiu.com/202601/600000_20260114_87IY.pdf)

[1] Received Fines of Tens of Millions, Multiple Persons Barred from Industry, SPD Bank’s Compliance Shortcomings Highlighted - Sino-Manager (https://www.sino-manager.com/detail/16211)

[2] SPD Bank’s Net Profit Reached 50.017 Billion Yuan with 10.52% Growth Last Year, Non-Performing “Double Drop” - The Paper (https://m.thepaper.cn/newsDetail_forward_32376081)

[3] Jinling API Market Data [0]