Shandong City Commercial Bank "Number One" Battle Heats Up: Qingdao Bank Strengthens Its Position to Maintain the Largest Scale, Qilu Bank Continues to Lead in Profitability

As two leading city commercial banks in Shandong Province, Qingdao Bank and Qilu Bank have shown a “race to catch up” in recent years.

According to the latest performance brief, by the end of 2025, both banks’ asset sizes surpassed 800 billion yuan. Last year, Qingdao Bank expanded by approximately 49.4 billion yuan in the fourth quarter, nearly double the quarterly increase of Qilu Bank, enabling it to overtake Qilu Bank in assets by the end of the year and maintain its leading position.

It is worth noting that, according to incomplete statistics, among the 12 A-share banks that have disclosed performance briefs, Qingdao Bank and Qilu Bank ranked first and second respectively in net profit growth attributable to shareholders, with 21.66% and 14.58%. In terms of actual profit, they achieved 5.188 billion yuan and 5.713 billion yuan respectively, with Qilu Bank still leading in profitability.

Both banks are headquartered in sub-provincial cities in Shandong—one in Jinan, the provincial capital, and the other in Qingdao, a planned separate city. The Daily Economic News reports that Qilu Bank leverages Shandong’s strong county economy to develop county finance and achieve differentiated competition; Qingdao Bank, located on the coast of the Yellow Sea, focuses on marine economy and aims to become the country’s first blue finance specialty bank.

Qingdao Bank Reclaims the Top Spot in the Fourth Quarter, Stabilizing Its Scale as the “Number One”

Both in scale and profitability, these two banks significantly outperform other local city commercial banks in Shandong.

Looking at the longer term, from the end of 2020 to 2024, Qingdao Bank’s assets have consistently been higher than Qilu Bank’s. However, as Qilu Bank has kept pace, the gap has narrowed, and by the end of 2024, their sizes are very close.

In the first three quarters of 2025, Qilu Bank temporarily overtook Qingdao Bank, leading in scale growth. Specifically, at the end of Q1 2025, both banks’ total assets exceeded 700 billion yuan, with Qilu Bank surpassing Qingdao Bank. By the end of Q2, Qilu Bank’s assets exceeded 750 billion yuan, with a lead of 83 billion yuan. At the end of Q3, the gap widened further to 131 billion yuan.

The turning point came in the fourth quarter, when Qingdao Bank turned the tide by increasing credit issuance, with quarterly asset growth of about 49.4 billion yuan—almost twice the quarterly increase of Qilu Bank. As a result, Qingdao Bank regained its position as the largest city commercial bank in Shandong at the end of last year, leading Qilu Bank by 10.6 billion yuan.

Overall, both banks expanded rapidly last year. According to the performance brief, by the end of 2025, Qingdao Bank’s total assets reached 814.96 billion yuan, an increase of about 125 billion yuan from the previous year, up 18.12%. Qilu Bank’s total assets were 804.381 billion yuan, up about 114.8 billion yuan, an increase of 16.65%.

The data shows both banks experienced strong growth in deposits and loans. Qingdao Bank’s total loans reached 397 billion yuan, up 16.53%; deposits totaled 502.9 billion yuan, up 16.41%. Qilu Bank’s loans were 382.8 billion yuan, up 13.55%; deposits totaled 489.5 billion yuan, up 11.37%.

Compared to Qingdao Bank, the latter’s deposit growth was more prominent. In mid-January, Qingdao Bank responded to institutional research, stating that it adheres to customer segmentation strategies in both corporate and retail banking, increasing low-cost deposit marketing efforts and accumulating low-cost funds. The bank also plans to provide comprehensive financial services in capital markets, corporate cash management, and wealth management for residents, aiming to maintain steady deposit growth.

It is noteworthy that, despite asset expansion, both banks maintained stable asset quality, with non-performing loan ratios decreasing year-on-year.

Qingdao Bank’s NPL ratio declined to below 1%. As of the end of 2025, non-performing loans amounted to 3.841 billion yuan, down 0.32 billion yuan from the previous year; the NPL ratio was 0.97%, down 0.17 percentage points. The loan loss coverage ratio was 292.3%, up 50.98 percentage points from the end of last year.

Qilu Bank’s performance brief shows that its NPL ratio was 1.05% at the end of 2025, down 0.14 percentage points year-on-year; its loan loss coverage ratio was 355.91%, up 33.53 percentage points, maintaining asset quality improvements for seven consecutive years.

Stable Net Interest Margin and Cost Control Lead Qilu Bank to Outperform in Net Profit

In terms of profitability, both banks have performed well. According to the data, among the 12 A-share banks that have disclosed 2025 performance briefs, Qingdao Bank and Qilu Bank ranked first and second in net profit growth attributable to shareholders, with 21.66% and 14.58%. Qingdao Bank is currently the only bank with a net profit growth rate exceeding 20%.

However, in terms of absolute profit, Qilu Bank outperformed Qingdao Bank, with last year’s net profit attributable to shareholders at 5.713 billion yuan versus Qingdao Bank’s 5.188 billion yuan. In fact, last year’s profitability was closely contested; Qilu Bank led in the first quarter of 2025, but Qingdao Bank’s net profit surpassed it in the first half and third quarter reports. By the end of the fourth quarter, Qilu Bank widened the gap again, maintaining its profitability advantage.

Additionally, in operating income, both banks ranked highly among the 12 banks with disclosed performance briefs. Qingdao Bank achieved operating income of 14.573 billion yuan in 2025, a 7.97% increase; Qilu Bank’s operating income was 13.135 billion yuan, up 5.12%.

The performance brief indicates that net interest income’s strong growth was the main driver of Qilu Bank’s revenue increase. The bank revealed that its net interest margin increased by 2 basis points year-on-year to 1.53%, with volume and price increases boosting net interest income to 10.519 billion yuan, up 16.48%.

Looking at the longer term, Qingdao Bank’s annual revenue has generally been higher than Qilu Bank’s in recent years, but its net profit has lagged, with Qilu Bank consistently leading in net profit attributable to shareholders.

Why does this phenomenon occur? A glimpse can be seen from the cost side of both banks.

The data shows that, although Qingdao Bank’s revenue has been higher, its operating expenses for business and management fees are significantly higher than those of Qilu Bank. For example, in 2024, Qingdao Bank’s business and management expenses were about 4.7 billion yuan, 1.3 billion yuan more than Qilu Bank.

Based on this, the cost-to-income ratio reveals a clear gap. Qingdao Bank’s ratio has generally been above 30%, significantly higher than Qilu Bank, with a difference of up to 8.5 percentage points in 2022 and 2023. This means that for the same operating income, Qilu Bank incurs lower expenses, demonstrating stronger cost control and higher operational efficiency.

The full-year data for 2025 has not yet been released, but the first three quarters show some narrowing of this gap. Qingdao Bank’s and Qilu Bank’s cost-to-income ratios for the first three quarters of 2025 were 27.37% and 25.91%, respectively, a difference of 1.46 percentage points, with Qingdao Bank’s ratio decreasing by 0.98 percentage points from the same period last year.

Leveraging Regional Resources to Play to Their Strengths

Both banks were established in 1996 and have gone public on capital markets. Qingdao Bank listed on the Hong Kong Stock Exchange in December 2015 and on the Shenzhen Stock Exchange in January 2019, becoming Shandong’s first listed bank and the second city commercial bank in China to list both A and H shares. Qilu Bank listed on the New Third Board in 2015 and transferred to the Shanghai Stock Exchange in June 2021.

In terms of branch network, Qingdao Bank has 17 branches within Shandong Province, with over 200 outlets, covering all 16 cities in the province. It also has two holding subsidiaries: Qingdao-Yin Financial Leasing and Qingdao-Yin Wealth Management.

Qilu Bank is rooted in Jinan, focusing on Shandong but also expanding into outside regions such as Tianjin, Henan, and Hebei. It has 237 outlets, 12 village banks, and investments in Jining Bank and Dezhou Bank.

Both banks are headquartered in sub-provincial cities in Shandong and have developed their regional strengths over years.

The data shows that county finance is a major feature of Qilu Bank. Relying on Shandong’s robust county economy, Qilu Bank has vigorously developed county finance, which has been a key growth driver in recent years. As of mid-2025, its county branch deposits totaled 150.1 billion yuan, loans 110.9 billion yuan, with growth rates exceeding 10%, accounting for about 30% of total deposits and loans.

Behind this growth, Qilu Bank has continuously expanded its county branch network, reaching 87 branches by June 2025, establishing 65 county-level inclusive financial centers, and deploying dedicated county inclusive marketing teams, serving 2.3608 million county customers.

In a recent institutional survey, Qilu Bank stated that county branch contributions are steadily increasing. It outlined strategies such as customer segmentation, developing industry maps for Shandong and Tianjin, promoting characteristic industries, advanced manufacturing, and agricultural infrastructure projects; addressing customer shortfalls through financial products supported by government policies; using online micro-loans to attract farmers; expanding services along the agricultural supply chain; deepening cooperation with government-backed guarantees; and extending customer lifecycle management.

Qingdao Bank, on the other hand, is focusing on marine economy development. Based in Qingdao, a key coastal city and a hub for modern marine industries, Qingdao Bank aims to create China’s first blue finance specialty bank. In 2021, it partnered with the International Finance Corporation (IFC) under the World Bank Group to launch China’s first blue finance pilot project, jointly developing the world’s first “Blue Asset Classification Standard,” providing unified guidelines for defining, risk assessment, and product design in blue finance, filling an industry gap.

It is understood that Qingdao Bank has built a comprehensive blue finance service system covering credit, settlement, wealth management, and other areas to meet the diversified needs of the marine economy. In October 2024, the bank launched the “Qingchu Yu Lan” blue finance brand, offering five categories and 14 exclusive products to support marine-related enterprises throughout their lifecycle.

As of the end of September 2025, Qingdao Bank’s blue loans reached 21.341 billion yuan, a 27.17% increase from the end of last year, far exceeding the 10.16% growth rate of total customer loans.

Additionally, in September 2025, the bank jointly released China’s first marine economy-focused bond index—the “Shanghai Clearing House Marine Economy Preferred Bond Index”—enhancing the valuation and investment tools for blue finance markets and broadening financing channels for marine industries.

Images in the article are sourced from data compiled and charted by the reporter.