Revenue and profit both grow; the non-performing loan ratio falls for six consecutive years—what kind of results has Shanghai Pudong Development Bank (“practicing internal skills”) delivered?

Ask AI · How does SPD Bank achieve double growth in net profit under industry interest margin pressure?

2025 net profit attributable to parent company increases by 10.52% year-on-year, with non-performing loan ratio at its ten-year best.

Author | beyond

Editor | Xiao Bai

In recent years, China’s commercial banks have experienced the most significant net interest margin adjustment phase since market-oriented reforms. From 2021 to 2024, the net interest margin of commercial banks has decreased by a total of 56 basis points.

Entering 2025, this pressure persists, with the entire industry’s net interest margin further declining to 1.42%. Under these circumstances, traditional scale expansion models face challenges, and relying on endogenous growth has become an inevitable choice for industry transformation.

SPD Bank (600000.SH, SPD) delivered an impressive report card in 2025. The full-year revenue reached 173.96B yuan, up 1.88%; net profit attributable to parent was 50.02B yuan, up 10.52%, maintaining double-digit growth for two consecutive years.

This performance growth is not an isolated event but a continuous trend throughout the year. SPD’s semi-annual report shows a 10.19% year-on-year increase in net profit in the first half, and the third quarter report shows a 10.21% increase, forming a growth curve with sustained acceleration.

(Source: SPD 2025 Annual Report)

Compared to most peers in the industry, SPD Bank is one of the few institutions to achieve “double increase” in both revenue and net profit. Given this “rare” dual growth within the sector, it is necessary to explore the performance growth mechanism.

Attribution of growth: endogenous or external factors

Profit attribution analysis shows that net interest margin, a core factor suppressing profitability across the banking sector, did not have a significant negative impact on SPD Bank’s performance.

(Data source: SPD financial report, Market Value Cloud APP calculation)

For SPD, the expansion of interest-earning assets did not become the main driver of profitability like in other peers; instead, it appears somewhat restrained. Provisioning to replenish profits has become the main driver of SPD’s profit growth. We should note that this usually requires solid asset quality as support, and we will learn about the specifics shortly.

Next, we analyze the three core factors driving SPD’s profit growth—interest-earning assets, net interest margin, and asset quality—one by one.

Asset structure optimization, reconstructing the growth engine

In 2025, SPD Bank’s interest-earning assets showed steady growth, increasing from 8.06 trillion yuan at the end of 2024 to 8.51 trillion yuan at the end of 2025, a 5.58% increase. Compared to peers whose interest-earning assets often grow by double digits, SPD has not blindly increased credit supply in terms of “volume.”

Strategic adjustment of business structure is a major highlight of SPD’s interest-earning asset-driven profit growth.

In recent years, SPD has focused on five major tracks: technology finance, supply chain finance, inclusive finance, cross-border finance, and financial assets, gradually reshaping the growth engine of assets.

In 2025, SPD actively responded to national policy guidance, focusing on key areas such as medium- and long-term manufacturing development and modern industrial systems, increasing credit supply, and promoting asset structure towards new growth.

The “five major tracks” have become the main growth poles for the bank’s loans, with medium- and long-term manufacturing loans totaling 80.6k yuan, up 12.86% from the end of the previous year, outperforming overall loan growth by 7 percentage points. Meanwhile, SPD adheres to the strategy of “improving quality and efficiency, dynamic adjustment,” tilting resources toward high-yield assets, and deepening asset structure optimization.

In 2025, SPD Group’s domestic and foreign currency loans (excluding bill discounting) increased their average daily share of interest-earning assets by nearly 2 percentage points, effectively alleviating the downward pressure on asset yields during the rate-cut cycle.

Technology finance, as SPD’s strategic main track, performed especially well. By the end of 2025, the balance of technology finance loans exceeded 1 trillion yuan, serving over 256k tech-based enterprises, including more than 80% of listed tech companies nationwide; in the People’s Bank of China’s first “Technology Finance Service Quality Evaluation,” SPD was rated “Excellent,” ranking first among joint-stock banks.

(Source: SPD 2025 Annual Report)

A noteworthy case in serving sci-tech innovation enterprises is the successful listing of Shanghai Tianshu Zhixin Semiconductor Co., Ltd. (HKEX stock code: 9903.HK), China’s first domestically produced general-purpose GPU enterprise with training and reasoning capabilities, on the Hong Kong Stock Exchange, making it another hard-core tech company from Shanghai to enter the international capital market.

Facing the challenges of high R&D investment and long return cycles in the chip industry, SPD Bank proactively engaged with enterprises, breaking away from the traditional “collateral and financial statement-based” credit model, and instead adopting a “look to the future” perspective—assessing growth potential, team strength, and technological prospects as core evaluation criteria, tailoring financing solutions for enterprises.

(Source: SPD official microblog)

Through “SPD New Loan,” addressing short-term operational needs, and providing multi-billion-yuan special support via long-term, low-cost “SPD Research Loan,” easing R&D funding pressures.

Additionally, SPD Bank leverages a comprehensive “bank + investment bank + ecosystem” service model, from resource docking and market expansion to investment and loan linkage, accompanying enterprises’ growth in all aspects—transitioning from traditional collateral financing to supportive, partnership-style financial support, continuously promoting independent innovation and industrial upgrading of tech companies.

Supply chain finance has become a benchmark for SPD’s corporate banking innovation. Relying on the “SPD Chain Link” digital supply chain system, it has served 37.4k upstream and downstream clients, with online supply chain transactions reaching 85.1k yuan in 2025, a year-on-year surge of 194.82%.

(Source: SPD 2025 Annual Report)

SPD management summarized the strategic value of the five major tracks: “SPD Bank, as a full-function bank, must excel in all types of questions, especially the high-value ones, where no mistakes are allowed.”

Net interest margin stabilization: a systemic project affecting the whole picture

Net interest margin is a key indicator of a bank’s profitability and an important measure of its asset-liability management capability. Despite widespread pressure on industry margins, SPD Bank’s net interest margin remained relatively resilient.

In 2025, SPD’s net interest margin was 1.42%, unchanged from the previous year, significantly outperforming the industry trend. The management in 2025 strengthened policy and market trend analysis, developing a scientific and agreeable asset-liability development strategy to improve asset-liability allocation efficiency.

On the asset side, SPD implemented the “improve quality and efficiency, dynamic adjustment” strategy, supported by the track operation mechanism, optimizing credit deployment to slow the decline of interest-earning asset yields. In 2025, the average daily share of general loans in interest-earning assets for both RMB and foreign currency increased by about 2.5 percentage points compared to 2024, continuously optimizing the asset structure.

On the liability side, SPD adhered to the principle of “deposit-based operation and refined management,” promoting effective growth of deposit business. By the end of the reporting period, the total domestic and foreign currency deposits increased by 8.48% compared to the end of the previous year; the average daily share of interest-bearing liabilities in RMB and foreign currency increased by nearly 3 percentage points compared to 2024.

Meanwhile, SPD timely diversified liabilities through bond issuance and improved the quality and efficiency of interbank liabilities, further enhancing liability stability. Overall interest expense rate on liabilities decreased by 46 basis points from the previous year. Under these mechanisms, SPD’s net interest margin management proved effective, laying a solid foundation for stable interest income.

This “active liability management + optimized deposit structure” model is a typical endogenous growth path, not relying on aggressive asset scale expansion but on improving funding efficiency through customer management and product innovation.

SPD further stated in its 2025 annual report: “Next, we will continue to adopt multiple measures, strengthen proactive asset-liability management to empower business development, and strive for better net interest margin performance.”

(Source: SPD 2025 Annual Report)

SPD Bank President Xie Wei explicitly stated at the earnings presentation: “Although net interest margin is a single indicator, improving it is a systemic project.” This systematic management thinking has helped SPD maintain strong profitability during the industry downturn.

Asset quality continues to improve, with non-performing loan ratio at its ten-year best

Asset quality is the foundation of prudent bank operation and a key dimension for measuring the quality of endogenous growth. SPD Bank achieved significant asset quality improvement and a sustained enhancement of risk absorption capacity in 2025.

By the end of 2025, SPD’s non-performing loan ratio dropped to 1.26%, down 0.1 percentage points from the previous year; non-performing loan balance and ratio continued to decline, with the NPL ratio falling for six consecutive years.

(Source: SPD 2025 Annual Report)

Meanwhile, SPD’s provisioning coverage ratio increased to over 200%, achieving four consecutive years of growth; key asset quality indicators reached their best levels in nearly a decade, with forward-looking risk indicators also improving, and risk absorption capacity continuously strengthening.

(Source: SPD 2025 Annual Report)

In 2025, SPD’s asset quality showed a systematic improvement trend, with the NPL ratio and provisioning coverage ratio forming a “dual excellence” pattern, laying a solid foundation for profit release. The improvement in asset quality is driven by a positive cycle of “risk reduction—provision release—profit growth—capital solidification—credit expansion,” supporting endogenous growth.

In 2025, SPD’s credit impairment losses decreased by 5.15% year-on-year, while non-performing loan ratio and NPL balance both declined, reaching the best levels in recent years.

The substantial improvement in SPD’s asset quality not only reduced the pressure of provisioning in the current period but also enhanced future profitability stability. This explains why, in attribution of performance growth, provisioning replenishment contributed most significantly to SPD’s profit increase.

From SPD’s solid asset quality, we see that its risk management is not only reflected in indicator optimization but also in innovative management models. 2025 was designated as the “Digital and Intelligent” strategic enhancement year, a strategy that has fully permeated all aspects of business operations from conceptual to practical levels.

SPD stated in its 2025 annual report: “As data becomes a new production factor, we use digital intelligence to connect links, achieve precise value matching, and create a series of flagship digital intelligence platforms, forging a strong engine of differentiated competition.”

In 2025, SPD built a digital service ecosystem through a super-platform, with mobile banking and “SPD Hui Lai” platforms steadily increasing in user scale and activity, achieving “one-click access, full online” financial services; flagship products like “SPD Chain Link,” “SPD Flash Loan,” “SPD M&A,” “SPD Hui Loan,” and “SPD Tech Loan” precisely meet customer needs, leveraging big data risk control and intelligent pricing models to improve service quality and safety.

Digital transformation not only enhances operational efficiency but also optimizes customer experience. Through the “SPD Hui Lai” platform and mobile banking, SPD has built an online user operation ecosystem. In 2025, “SPD Hui Lai” surpassed 2.6 million registered users, with nearly 70% of new corporate clients and over 60% of credit clients coming from the platform, continuously expanding the customer base and service scope.

SPD President Xie Wei summarized the digital transformation: “The digital intelligence strategy ensures good business growth and makes our growth more secure and reliable.” This deep understanding of technology-driven growth is a key foundation for SPD’s high-quality endogenous growth.

Looking ahead to 2026, the first year of the “14th Five-Year Plan,” SPD states it will firmly uphold its digital intelligence strategy, themed “Comprehensive Deepening Year,” focusing on value creation, advancing the digital strategy from “functional construction” to “ecosystem operation,” and building an integrated “high-quality value bank” that aligns its own value, customer value, shareholder value, ecological partner value, and social value.

SPD’s 2025 performance growth results from the combined effects of four “internal engines”: debt cost control, asset quality improvement, operational efficiency enhancement, and strategic focus. Its growth model is steady and sustainable, not relying on external stimuli, confirming the effectiveness of its endogenous growth approach.

In the future, with the deepening of the “digital intelligence” strategy and ongoing regional ecosystem development, this dual-driven model is expected to further unleash growth potential, becoming SPD’s core competitive advantage in navigating industry cycles.

As of March 31, 2026, SPD’s price-to-book ratio (LF) was 0.46 times, and its dividend yield (TTM) was 4.09%. Against the overall valuation pressure in the banking sector, SPD’s P/B ratio is significantly below the sector average of 0.5 times and at a historical low in the 10th percentile over the past five years.

In contrast, SPD’s 2025 net profit increased by 10.52% year-on-year, and its weighted average return on equity (ROE) rose to 6.76%, ranking among the top in joint-stock banks, with a clear recovery of internal growth momentum.

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