Core Viewpoint - Jiangsu Bank has achieved significant asset growth, reaching a total of 4.79 trillion yuan, making it the leading city commercial bank. However, concerns arise regarding the sustainability and quality of this growth due to declining profit margins, increasing reliance on non-core income, and regulatory pressures [1][2][22]. Financial Performance - In the first half of 2025, Jiangsu Bank reported operating income of 44.864 billion yuan, a year-on-year increase of 7.78%, and a net profit attributable to shareholders of 20.238 billion yuan, up 8.05% [2]. - The profit growth appears inflated due to a significant reduction in income tax expenses, which fell from 5.044 billion yuan to 2.384 billion yuan, a decrease of 26.6 billion yuan [2]. - The bank's revenue growth has shown a declining trend over the past three years, with operating income growth rates of 10.66%, 5.28%, and 8.78% from 2022 to 2024 [2]. Interest Margin and Income Structure - The net interest margin has decreased to 1.78% in the first half of 2025, down from 2.32% in 2022, indicating a shrinking profit space for interest income [4]. - Non-interest income has also declined significantly, with a 14.6% drop in the first half of 2025, primarily due to poor performance in investment income and fair value changes [4][5]. Asset Growth and Composition - Jiangsu Bank's total assets surged by 26.99% year-on-year to 4.79 trillion yuan, with loans and advances reaching 2.37 trillion yuan, a growth of 18.79% [5]. - The rapid asset expansion is largely driven by non-loan business, particularly financial investments, which increased by 35.66% [7]. - The bank's reliance on traditional credit business raises concerns about its ability to withstand market fluctuations, as non-interest income has not developed into a significant growth driver [5][12]. Capital Adequacy and Regulatory Compliance - As of June 30, 2025, Jiangsu Bank's core Tier 1 capital adequacy ratio was 8.49%, just above the regulatory minimum of 7.75%, indicating potential challenges in maintaining capital adequacy [13][15]. - The bank has issued perpetual bonds to supplement capital, but this approach does not effectively enhance core capital levels [15]. Asset Quality and Risk Management - The non-performing loan (NPL) ratio stood at 0.84%, but this figure may be misleading due to significant asset transfers and write-offs [16][18]. - The bank's provision coverage ratio has declined, indicating a weakening risk buffer, with a drop from 389.53% to 331.02% [19]. Governance and Compliance Issues - Jiangsu Bank has faced multiple regulatory penalties due to compliance failures, reflecting a culture that prioritizes business over compliance [20]. - The bank's ESG performance is notably low, with a score of 21 out of 100, ranking last among its peers [21]. Conclusion - Jiangsu Bank's rapid ascent to the top of the city commercial banking sector raises questions about the sustainability of its growth model, particularly in light of declining margins, capital pressures, and governance challenges [22].