Jiangxi Bank faces further penalties for loan-related business, receiving regulatory fines multiple times within the past year, with internal control weaknesses intensifying operational pressure.

Securities Star Zhao Zixiang

Recently, the Jiangxi Regulatory Bureau of the China Banking and Insurance Regulatory Commission disclosed administrative penalty information showing that Jiangxi Bank and its branches were fined a total of 700,000 yuan for violations such as inadequate loan management and insufficient review of trade backgrounds in bill business.

Securities Star notes that this penalty is not an isolated case. Over the past year, Jiangxi Bank has frequently received regulatory fines, with compliance shortcomings continuously highlighted. Coupled with weak performance growth, deteriorating asset quality, and long-term low stock prices, this Jiangxi provincial state-owned listed bank is facing multiple operational difficulties. Its internal control system and transformation development are under severe test.

Frequent Penalties Highlight Compliance Shortcomings

On February 25, the Jiangxi Regulatory Bureau of the China Banking and Insurance Regulatory Commission disclosed that Jiangxi Bank and its Nanchang Yingbin Avenue branch were fined a total of 700,000 yuan for violations.

Specifically, Jiangxi Bank was fined 300,000 yuan for inadequate loan management, with responsible persons Ouyang Pinhua and Chen Yong receiving warnings; the Nanchang Yingbin Avenue branch was fined 400,000 yuan for not strictly verifying the authenticity of trade backgrounds in bank acceptance bill transactions, with responsible persons Wan Junying and Fan Bo warned and fined a total of 130,000 yuan.

In fact, over the past year, Jiangxi Bank has repeatedly been penalized by regulators. In 2025 alone, it received seven fines totaling approximately 4.45 million yuan, an increase of 1.37 million yuan (44%) compared to 2024’s 3.08 million yuan. The penalties involved the head office and branches in Ji’an, Suzhou, Nanchang Bayi, among others, covering core business areas such as credit, bill transactions, credit reporting, anti-money laundering, and financial expense management. The violations are highly concentrated and repetitive.

Specifically, in April 2025, Jiangxi Bank was fined 400,000 yuan by the Pingxiang Regulatory Bureau for mishandling non-performing loans, with responsible persons warned and fined 70,000 yuan.

In June 2025, the Ji’an branch was heavily fined 1.2 million yuan for multiple violations, including illegal handling of bank acceptance bills, unauthorized advances, and fictitious expenses, with six responsible persons fined a total of 540,000 yuan.

In October 2025, the Jiangxi branch of the People’s Bank of China was fined 1.06 million yuan for violating credit information management regulations, involving irregular operations in credit data collection and inquiries, with two responsible persons fined 10,000 yuan each. The Suzhou branch of the People’s Bank of China also issued a warning and fined Jiangxi Bank’s Suzhou branch 672,000 yuan for AML violations, account management issues, and credit inquiry irregularities.

In December 2025, the Nanchang Bayi branch was fined 300,000 yuan for poor loan management, with responsible persons facing a lifetime ban from banking industry activities.

Within just over a year, violations repeatedly appeared, indicating that Jiangxi Bank’s compliance reforms have not fully implemented. Its internal control system still requires long-term efforts. Frequent penalties not only erode profits but also impact its brand reputation.

Weak Performance and Deteriorating Asset Quality

Public information shows that Jiangxi Bank was established in December 2015. It is a Jiangxi provincial legal entity bank, a member of the China Banking Association, and listed in Hong Kong in June 2018. It has over 5,700 employees. The bank has 22 primary branches, 27 functional departments, and 225 outlets, covering all prefecture-level cities in Jiangxi Province. It also has two branches outside Jiangxi in Guangzhou and Suzhou, and initiated Jiangxi’s first financial leasing company and four rural banks.

In terms of performance, Jiangxi Bank’s profit growth has been weak and volatile in recent years. In the first half of 2025, both revenue and net profit declined year-on-year, further weakening its profitability base. According to its 2025 interim report, the bank achieved operating income of 4.604 billion yuan, down 19.91% year-on-year—the largest quarterly decline in recent years; net profit attributable to shareholders was 558 million yuan, down 10.53%.

Looking at a longer period, the bank’s profitability stability is poor. In 2023, net profit attributable to shareholders was 1.036 billion yuan, down 33.13% year-on-year. In 2024, it slightly recovered to 1.057 billion yuan, a mere 2.00% increase, showing limited recovery and no sustained profit growth.

Asset quality deterioration is another major risk, especially with concentrated risks in the real estate sector, which has become a primary drag on asset quality. According to the 2025 interim report, as of June 2025, non-performing loans (NPLs) totaled 8.617 billion yuan, up 1.029 billion yuan (13.67%) from the end of 2024. The NPL ratio was 2.36%, up 0.21 percentage points from the end of 2024, significantly higher than the 1.49% average for commercial banks and most peer city commercial banks, indicating faster risk exposure.

In terms of industry distribution, real estate is the most affected sector. As of June 2025, the NPL ratio in real estate was 19.07%, a sharp rise of 15.78 percentage points from 3.29% at the end of 2023. NPLs in real estate increased from 344 million yuan at the end of 2023 to 1.299 billion yuan, a 277.56% increase, making real estate the main driver of NPL growth.

Besides real estate, wholesale and retail sectors also have high NPL ratios, reaching 7.06% as of June 2025. These two sectors account for nearly half of total NPLs, highlighting sector concentration risks and adding pressure on asset quality.

The worsening asset quality directly weakens the bank’s risk buffer. As of June 2025, Jiangxi Bank’s loan loss reserve coverage ratio was 154.85%, down 5.20 percentage points from the end of 2024, just shy of the 150% regulatory minimum.

The reserve coverage ratio is a key buffer against credit risk. Its decline indicates weakened capacity to absorb losses from bad loans. If NPLs continue to rise, the bank may face insufficient reserves, further squeezing profits and potentially impacting capital adequacy.

Market performance reflects investor concerns about Jiangxi Bank’s prospects. Listed on the Hong Kong Stock Exchange in June 2018 at HKD 6.39, the stock price has steadily declined, entering the “penny stock” zone since May 2022, remaining below HKD 1. As of the end of 2025, the closing price was HKD 0.67, down 8.22% for the year.

As of late February 2026, the stock price hovered around HKD 0.7, nearly 89% below the IPO price, with market capitalization shrinking by over HKD 33 billion since listing. The persistent low stock price reflects market worries about asset quality, profitability, and compliance risks, further complicating capital replenishment.

Overall, Jiangxi Bank is currently at a critical stage of risk cleanup and transformation. It faces weak compliance controls, sluggish performance, deteriorating asset quality, capital pressure, and declining market confidence. The frequent regulatory penalties reveal internal control weaknesses; declining revenue and profits highlight profitability issues; rising NPLs and real estate risks test its risk resilience. These intertwined challenges form the core of its current operational difficulties.