In-depth Analysis of Zheshang Bank's Top Management Reshuffle: The Path to Breaking the 1.67% Net Interest Margin Dilemma

Based on authoritative information obtained, I have prepared this in-depth analysis report on

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On December 31, 2025, Zheshang Bank (Stock Codes: 601916.SH, 02016.HK), with assets reaching RMB 3.39 trillion, released multiple personnel change announcements in a concentrated manner, marking the official finalization of the core position adjustments that quietly started in the second half of 2025 [1]. This personnel reshuffle covers the entire management hierarchy from the Chairman to Assistant Presidents, representing the most thorough reshaping of the bank’s governance structure in recent years.

Position	Name	Year of Birth	Tenure Status	Background Characteristics
Chairman	Chen Haiqiang	1974	Pending Regulatory Approval	Promoted internally, the first internally promoted Chairman in nearly a decade
President	Lü Linhua	1978	Newly Appointed	Transferred from Vice President of Zhejiang Rural Commercial United Bank, with extensive experience in regulation
Vice President	Zhou Weixin	1971	Promoted Internally	From the Bank of China system, with abundant local financial resources
Vice President	Pan Huafeng	1972	Promoted Internally	Veteran in risk control, formerly Chief Risk Officer

In recent years, Zheshang Bank has been mired in an “executive curse”: in February 2023, former Chairman Shen Renkang was investigated for serious violations of discipline and law; in August 2024, former President Zhang Rongsun resigned unexpectedly. These incidents led to frequent changes in core positions within three years, seriously questioning the continuity of the bank’s strategy [1].

Since 2025, the bank has received numerous fines: in the first quarter, fines and confiscations exceeded RMB 20 million, and the Shanghai Branch was fined RMB 16.8 million for 15 serious violations; in the second half of the year, it was fined a total of over RMB 14 million for issues including imprudent management of internet loans and inadequate performance of anti-counterfeit currency duties. Violations cover core areas such as the three checks in credit business and falsification of deposits and loans [1].

As the only national joint-stock bank headquartered in Zhejiang, its development has always been deeply tied to local strategies. However, in recent years, its advantages in some areas such as retail and small and micro businesses have faced pressure from city commercial banks like Bank of Ningbo and Bank of Hangzhou [1].

Following this adjustment, Zheshang Bank has abolished the Assistant President level, forming a three-level flat management structure of “Chairman - President - Vice President”. Former Vice President Lin Jingran, and former Assistant Presidents Wang Chaoming and Hou Bo resigned collectively. This streamlining move has been interpreted by the market as an important measure to improve management efficiency and strengthen accountability [1].

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According to Zheshang Bank’s 2025 third quarterly report, as of the end of September, the bank’s total assets reached RMB 3.39 trillion, representing a 1.91% increase from the end of the previous year. Core profitability indicators show a downward trend:

Indicator	First Three Quarters of 2025	Year-on-Year Change
Operating Income	RMB 48.931 Billion	-6.78%
Net Interest Income	RMB 34.438 Billion	-3.23%
Non-Interest Net Income	RMB 14.493 Billion	-14.26%
Net Profit	RMB 11.668 Billion	-9.59%
Net Interest Margin	1.67%	Down 4 BPs from the full-year figure of the previous year
Non-Performing Loan Ratio	1.36%	Down 0.02 percentage points from the end of the previous year
Cost-to-Income Ratio	26.44%	Down 1.46 percentage points year-on-year

A comparison of Zheshang Bank with its major peers can more clearly reveal its competitive position:

Bank	2025 Q3 Net Interest Margin (%)	2024 Net Interest Margin (%)	Year-on-Year Change (BPs)	Non-Performing Loan Ratio (%)	ROE (%)
China Merchants Bank	2.03	2.10	-7	0.95	16.82
Industrial Bank	1.76	1.83	-7	1.08	11.56
Bank of Ningbo	1.82	1.88	-6	0.76	14.50
Zheshang Bank	1.67	1.71	-4	1.36	7.66
Industry Average	1.42	1.52	-10	1.49	10.50

1. Limited Relative Advantage in Net Interest Margin
   : Although Zheshang Bank’s 1.67% net interest margin is higher than the industry average (1.42%), it only ranks in the middle tier among joint-stock banks, with a gap of 36 basis points compared to China Merchants Bank (2.03%) [2][3].

2. Significant Gap in Profitability
   : The ROE is only 7.66%, far lower than China Merchants Bank’s 16.82% and Bank of Ningbo’s 14.50%, accounting for only 72.8% of the industry average.

3. Pressure on Asset Quality
   : Although the non-performing loan ratio dropped by 0.02 percentage points from the beginning of the year to 1.36%, the balance of non-performing loans increased from RMB 25.494 billion to RMB 25.661 billion, indicating that the improvement in asset quality relies more on scale expansion rather than substantive risk resolution [1].

4. Slowing Trend of Interest Margin Narrowing
   : The net interest margin decreased by 4 basis points year-on-year, and the decline rate has significantly narrowed compared to last year, showing signs of marginal improvement [2].

Behind Zheshang Bank’s net interest margin pressure lie deep-seated business structure issues:

As a joint-stock bank originating from corporate business, Zheshang Bank has maintained a high proportion of corporate loans for a long time, resulting in weak pricing power during interest rate downcycles.

Affected by adjustments in the real estate market and weak consumer demand, the yield on retail loans has continued to face pressure, dragging down the overall loan yield level.

Wealth management and investment banking businesses, which should have been growth engines, have obvious shortcomings. Non-interest net income decreased by 14.26% year-on-year, failing to effectively offset the decline in interest income [1].

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The new management team presents a professional complementary pattern of “Regulation + Risk Control + Local Resources”:

: Joined Zheshang Bank in March 2015, and was promoted from President of Ningbo Branch and Hangzhou Branch to Vice President, Chief Risk Officer, and President of the Head Office. He is the first internally promoted Chairman in the bank’s nearly ten years. The “Low Risk, Balanced Return” structural transformation led by him has achieved initial results, with continuous improvement in asset quality [1].

: Has extensive experience in Zhejiang’s financial regulation and rural financial system. He once served in the former Zhejiang Insurance Regulatory Bureau and Zhejiang Banking and Insurance Regulatory Bureau, holding positions such as Assistant Director of the Statistics and Research Department, Director of the Office, and Director of the Policy and Regulations Department. In 2022, he moved to a local financial institution and served as a member of the Party Committee and Vice President of Zhejiang Rural Commercial United Bank, during which he built the bank’s unified compliance management framework. This dual experience of “regulatory experience + institutional practice” exactly meets Zheshang Bank’s current needs in compliance construction [1].

: Has many years of experience in the Bank of China system, serving as Vice President (in charge of work) of Bank of China Lin’an Branch, President of Bank of China Hangzhou High-Tech Zone Branch, and also served as a member of the Party Group and Vice Mayor of Bengbu City through secondment. He has accumulated rich experience in local finance and government cooperation [1].

: A “veteran expert” in risk control. He started as Deputy Section Chief of the Credit Management Department of Bank of China Ningbo Branch in his early years, and led the construction of Zheshang Bank’s risk control system throughout the process. He served as Chief Risk Officer before his new appointment [1].

Based on the professional background and strategic direction of the new management, potential breakthrough strategies include:

Zheshang Bank has launched a new three-year “Deep Roots in Zhejiang” action plan (2025-2027), clearly targeting an increase in its market share in Zhejiang. The total amount of financing services in Zhejiang has reached RMB 1.16 trillion, and the investment in Zhejiang’s “Thousand Projects, Trillion Yuan” major projects has exceeded the full-year level of last year [2]. Lü Linhua of the new team has extensive experience in Zhejiang’s financial regulation system, and Zhou Weixin has deep local financial resources, which can further strengthen regional competitive advantages.

Under the framework of the “Low Risk, Balanced Return” asset structure transformation, the bank proactively allocates long-duration assets with moderate returns and controllable risks. As of the end of September, deposits have exceeded the RMB 2 trillion mark, reaching RMB 2,059.773 billion, representing a 7.15% increase from the end of the previous year. The proportion of deposits in liabilities is 65%, an increase of 3.2 percentage points from the end of the previous year [2].

Pan Huafeng’s expertise in risk control and Lü Linhua’s experience in compliance management can effectively repair previous compliance loopholes, continue and deepen risk reduction work, and consolidate the foundation of asset quality.

Focus on wealth management and investment banking businesses to expand non-interest income sources and hedge against the pressure of narrowing interest margins. In the first half of 2025, the proportion of non-interest income in the banking industry has increased to 29.8%, becoming a key support to buffer the narrowing of interest margins [3].

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In the third quarter of 2025, the net interest margin of commercial banks remained flat at 1.42%. Although the narrowing rate showed signs of marginal easing, the decline in asset-side yields still far exceeded the improvement in liability costs. In the third quarter, the net interest margin of joint-stock banks increased by 1 BP to 1.56%, reversing the narrowing trend since the second quarter of 2024 [3].

• The trend of deposit term continuation persists, with the proportion of fixed deposits hitting a new high of 66.4%. The rigidity of liability costs continues to restrict profit margins [3].
• Asset-side pricing continues to face pressure. The combination of declining loan interest rates and business structure adjustments leads to insufficient momentum for net interest margin recovery.
• Risks in the real estate sector remain highly concentrated, with the non-performing loan ratio remaining at around 4%, accounting for nearly 40% of corporate non-performing loans [3].

Against the backdrop of widespread pressure on net interest margins, regional banks have achieved performance growth exceeding the industry average by relying on regional economic advantages and characteristic businesses. For example, some banks with in-depth layout in the Yangtze River Delta region have achieved double-digit net profit growth, forming a stark contrast with the average growth rate of only 0.65% for large state-owned banks and joint-stock banks [3].

This trend is both an opportunity and a challenge for Zheshang Bank: as the only national joint-stock bank headquartered in Zhejiang, it has regional advantages in deeply cultivating the Yangtze River Delta, but at the same time, it faces fierce competition from local city commercial banks such as Bank of Ningbo and Bank of Hangzhou.

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As of January 12, 2026, Zheshang Bank’s stock closed at US$3.03 (approximately RMB 22), corresponding to the following valuation levels:

Indicator	Value	Industry Comparison
Market Capitalization	US$83.22 Billion	-
P/E (TTM)	5.97x	Below Industry Average
P/B (TTM)	0.47x	At a Historical Low
ROE (TTM)	7.66%	Below Industry Average

1. Improved Management Stability
   : After the formation of the new team, the governance structure tends to be stable, and the continuity of strategic implementation is expected to be enhanced.
2. Marginal Improvement in Asset Quality
   : The non-performing loan ratio has continued to decline, and risk reduction work has achieved results.
3. Strong Deposit Growth
   : The deposit scale has exceeded RMB 2 trillion, and the liability structure has been optimized.
4. Clear Regional Strategy
   : The three-year “Deep Roots in Zhejiang” action plan provides a clear development path.

1. Continuous Pressure on Net Interest Margin
   : The 1.67% net interest margin ranks in the lower-middle tier among peers, and profit growth faces challenges in an interest rate downcycle.
2. Compliance Risk
   : Frequent fines have been issued recently, and compliance construction still needs to be strengthened.
3. Intensified Peer Competition
   : Facing competitive pressure from local institutions such as Bank of Ningbo and Bank of Hangzhou.
4. Macroeconomic Uncertainty
   : Risks in the real estate sector and the progress of real economy recovery affect asset quality.

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Zheshang Bank’s current top management reshuffle is a strategic adjustment against the backdrop of double declines in operating income and net profit, and a widening gap in peer competition. The professional complementarity of the new management team with backgrounds in “regulation + risk control + local resources” provides capacity support to address challenges such as narrowing net interest margins, compliance risks, and asset quality issues.

1. Although the 1.67% net interest margin ranks in the middle tier among peers, there is a significant gap with leading joint-stock banks. It needs to respond through business structure optimization and cost control.
2. The new management has the professional ability to address compliance pain points and strengthen risk control, and is expected to repair governance shortcomings.
3. The combination of the “Deep Roots in Zhejiang” strategy and regional advantages is a key starting point for differentiated competition.
4. The lagging development of intermediary business is the biggest shortcoming, and there is broad space for expanding wealth management and investment banking businesses.

Looking ahead, the key to Zheshang Bank’s successful breakthrough lies in whether the new management can transform professional capabilities into strategic execution, and achieve substantive progress on three fronts: the battle to defend net interest margins, the battle to improve asset quality, and the battle to break through in intermediary business.

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[1] East Money - “Zheshang Bank with RMB 3.39 Trillion in Assets Undergoes Top Management Reshuffle: Can the New Team Fill Old Holes and Break the ‘Lagging Crisis’?” (https://caifuhao.eastmoney.com/news/20260112172355084616500)

[2] Zheshang Bank Official Website - “Zheshang Bank’s Third Quarterly Report Released: Adhere to ‘Quality First, Moderate Scale’ to Precisely Serve the Real Economy” (http://www.czbank.com/cn/pub_info/Press_releases/202511/t20251106_125701.shtml)

[3] Caixin - “Commercial Banks’ Third Quarter Net Interest Margin Remains Flat at 1.42%, Profitability Shows Marginal Improvement” (https://finance.caixin.com/2025-11-15/102383515.html)

[4] Securities Times - “State Administration of Financial Regulation Releases Latest Data! Joint-Stock Banks’ Net Interest Margin Rises 1 BP Month-on-Month” (https://www.stcn.com/article/detail/3496747.html)

[5] Jinling API Data - Company Fundamental and Financial Analysis