Minsheng Bank H1 Revenue Up 4.2%, Net Profit Attributable to Parent Down 8.6% to RMB 19.5 Billion
nashnova research
China Minsheng Banking (民生银行, 01988.HK) posted H1 revenue of RMB 73.7 billion, up 4.23% year-on-year, yet net profit attributable to shareholders fell 8.62% to RMB 19.54 billion — revenue growth could not offset a surge in credit-impairment charges from aggressive bad-loan disposal.
Revenue rose — why did profit fall?
H1 revenue reached RMB 73.7 billion, roughly RMB 3 billion more than a year ago. Net profit, however, dropped RMB 1.84 billion, a decline of 8.62%.
This means → the bank genuinely earned more, but it also ramped up bad-loan write-offs in the same period. The resulting credit-impairment charges swallowed the revenue gains whole.
In plain terms = more water flowed in the front door, but even more leaked out the back — net profit shrank.
How much did the interest margin improve?
Net interest margin — the spread between what the bank earns on loans and what it pays on deposits — came in at 1.47%, up 8 basis points year-on-year.
Average interest-earning assets grew by RMB 78.1 billion (+1.10%). A wider margin plus a bigger asset base lifted net interest income to RMB 52.58 billion, up 6.87%.
Net fee and commission income was RMB 9.81 billion, up just 1.28% — non-interest income was essentially flat, making interest the real growth engine.
Total assets shrank — where did the money go?
Group total assets stood at RMB 7.79 trillion, down RMB 38 billion (−0.49%) from year-end. Yet general loans grew by RMB 71.18 billion, pushing their share of assets to 56.14%.
This means → the bank actively trimmed lower-yield assets (interbank, investment-type) and redirected resources to its core lending business.
Total liabilities fell RMB 52.4 billion, but customer deposits rose RMB 115.3 billion, lifting their share to 62.07%. Personal deposits alone added RMB 51.7 billion.
In plain terms = the overall balance sheet got a little smaller, but the funding mix got healthier — less expensive wholesale borrowing, more stable retail deposits.
How serious is the bad-loan pressure?
The non-performing loan (NPL) ratio — the share of loans that borrowers have stopped repaying on time — was 1.47%, down 0.02 percentage points from year-end. The provision coverage ratio (the bank's "safety cushion" against bad loans) edged up to 142.19%, a 0.15 pp increase.
Despite the slight improvement in the NPL ratio, total NPLs still rose by RMB 169 million, meaning fresh bad loans have not stopped forming.
This reflects a deliberate "clean up now, worry about earnings later" strategy — the bank prioritised clearing its balance sheet over protecting short-term profit.
What to watch in the second half?
Two questions matter most: can the net interest margin keep rising, and will the pace of bad-loan disposal slow down?
If the margin continues to widen while write-off intensity eases, profit could stabilise in H2. If not, the earnings decline may widen further.
In plain terms = the first half was spent paying to clean the house. The second half hinges on whether the house is clean enough to stop paying.
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