Bank of Zhengzhou Posts H1 2026 Profit Growth Amid Margin Pressure

Bank of Zhengzhou (002936.SZ, 06196.HK) reported growth in both revenue and net profit for the first half of 2026, demonstrating resilience in a sector facing pressure from narrowing interest margins. The bank's performance was underpinned by an expanding deposit base and continued improvement in its asset quality, according to its mid-year results filing.

Key Financials

In its report, the city commercial bank disclosed steady growth across key metrics for the period ending June 30, 2026.

• Total Assets: Reached 790.70 billion yuan, a 6.32% increase from the end of the previous year.
• Operating Revenue: Grew by 1.04% year-over-year to 6.76 billion yuan.
• Net Profit (Attributable to Shareholders): Increased by 3.03% year-over-year to 1.68 billion yuan.
• Total Deposits: Climbed 11.02% from year-end to 514.13 billion yuan.

Navigating Margin Pressure

The bank's earnings growth was primarily driven by a 3.29% rise in net interest income to 5.53 billion yuan, which accounted for nearly 82% of total operating revenue. This was achieved by successfully managing its funding costs in a declining rate environment.

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Bank of Zhengzhou expanded its total liabilities by 6.57%, largely through attracting deposits. The average cost of its deposits fell by 26 basis points year-over-year to 1.79%, helping to offset lower yields on its assets. The bank also enhanced efficiency, with its cost-to-income ratio improving by 1.33 percentage points to 20.73%. However, non-interest income declined by 7.96% to 1.23 billion yuan, which the bank attributed to lower returns on bond investments.

Asset Quality and Capitalization

Bank of Zhengzhou reported a sustained improvement in its asset quality. The non-performing loan (NPL) ratio stood at 1.68% as of the end of June, down 0.03 percentage points from the end of 2025 and a notable improvement from 1.87% at the end of 2023.

Furthermore, the bank's ability to absorb potential losses strengthened, with its provision coverage ratio increasing by 7.80 percentage points to 193.61%. All capital adequacy ratios, including a core tier 1 ratio of 8.20%, remained in compliance with regulatory requirements.