Breaking Down QILU BANK CO., LTD. Financial Health: Key Insights for Investors

From its 2009 merger roots in Shandong to a market cap of roughly RMB 37.97 billion (ticker 601665.SS), Qilu Bank's story blends regional focus and measurable growth: headquarters in Jinan, total assets rising to RMB 506.013 billion by end-2022 and further to RMB 751.305 billion by June 30, 2025, with loans of RMB 371.41 billion and deposits of RMB 478.571 billion; a turbulent 2010 bill fraud that removed top executives preceded recent operational strength-H1 2025 operating income of RMB 6.782 billion (+5.76% YoY), net interest income up 13.57%, non-interest income of RMB 817 million (+13.69%), net profit attributable of RMB 2.734 billion (+16.48%), ROE of 12.80%, NPL ratio at 1.09% with a provision coverage of 324.24%, and strategic ownership including Commonwealth Bank at 20% and Jinan State-owned Assets at 18%; traded with 6.15 billion shares outstanding, trailing P/E of 7.04 and forward P/E of 5.53, the bank amplifies SME lending, digital transformation and fee-based services across 16 prefecture cities and major Chinese metros-read on to see how these figures translate into business models, revenue drivers, ownership dynamics and the outlook analysts peg at mid-teens revenue and earnings growth.

QILU BANK CO., LTD. (601665.SS): Intro

• Founded on June 6, 2009, through the merger of Shandong Provincial Commercial Bank and Jinan City Commercial Bank to consolidate regional banking services.
• Headquarters: No. 10817, Jingshi Road, Yaojia Subdistrict, Lixia District, Jinan, Shandong Province, China.
• 2010 bill fraud incident involving between RMB 1.0 billion and RMB 1.5 billion; resulted in the dismissal of Chairman Qiu Yunzhang and President Guo Tao.
• By end-2022 total assets: RMB 506.013 billion; net income (2022): RMB 3.631 billion.
• 2024 operational performance: revenue rose 15.46% year-on-year to RMB 8.73 billion; net income increased 17.05% to RMB 4.66 billion.
• Employees as of December 31, 2024: 5,675 (up 8.45% YoY), indicating expansion of branches and services.

• Listed entity: Shanghai Stock Exchange ticker 601665.SS.
• Shareholder base: mix of state-owned entities, institutional investors, and retail shareholders typical for regional Chinese joint-stock commercial banks (majority stakes often held by government-related funds or provincial financial investment arms-specific top-10 shareholding should be checked in the latest public filings).
• Corporate governance: board and executive structure aligned with Chinese banking regulation; past governance shock (2010) led to strengthened internal control and compliance frameworks.

• Positioned as a regional commercial bank serving individuals, SMEs, and local government-related financing needs in Shandong and surrounding regions.
• Strategic emphasis on stable asset quality, diversified product offerings, and digitalization of retail and corporate channels.
• For the bank's formal statement of purpose and values see: Mission Statement, Vision, & Core Values (2026) of QILU BANK CO., LTD.

• Traditional banking intermediation: accepts deposits and issues loans-net interest margin (NIM) from lending to corporates, SMEs, mortgage and consumer loans is a primary income source.
• Fee-based services: wealth management products, card services, payment and settlement, treasury and brokerage-related fees contribute non-interest income.
• Wholesale and interbank: bond investments, money market operations and interbank lending/borrowing support liquidity and investment returns.
• Digital channels: online/mobile banking to capture retail deposits and improve cost efficiency; cross-selling of insurance and investment products.

• Interest income: largest revenue component-interest on loans minus interest paid on deposits and borrowings (net interest income).
• Non-interest income: fees from payment processing, asset management, trust/wealth management distribution, bank card services, and advisory fees.
• Trading and investment gains: returns from bond portfolios, investment securities, and trading activities in fixed income and FX.
• Cost base: personnel expenses (5,675 staff as of 2024), branch operating costs, IT and compliance investments-ongoing digital and compliance spending to control credit risk and regulatory compliance after past governance issues.
• Risk provisions: loan loss provisioning and asset quality management directly affect net income and capital ratios.

QILU BANK CO., LTD. (601665.SS): History

• Founded as a local commercial bank with roots in Jinan and Shandong province.
• Listed on the Shanghai Stock Exchange under ticker 601665.
• Strategic shareholders include institutional and government-linked investors that shaped capitalization and governance.

• Commonwealth Bank - 20.0% (major strategic investor, provides international expertise and potential funding/access to global markets)
• Jinan State-owned Assets Operation Co. - 18.0% (local government-linked shareholder supporting regional development ties)
• Other institutional investors - collectively ~16.20%
• Insiders - 0.02%; Public float - ~3.69 billion shares

• Deliver inclusive financial services across retail, SME and corporate segments in Shandong and adjacent regions.
• Support local economic development through lending to infrastructure, manufacturing and services.
• Enhance service quality and digital capabilities while maintaining prudent risk management.

• Net interest margin: primary profit driver - earns spread between interest on loans and cost of deposits/wholesale funding.
• Fee income: account services, trade finance, wealth management, transaction banking and card services augment non-interest revenue.
• Loan portfolio: retail mortgages, SME loans and corporate lending generate interest income; sector mix and NPL trends determine credit cost.
• Investment and treasury operations: securities portfolio income, interbank placements, and ALM activities contribute to earnings and liquidity management.
• Cost control: branch network efficiency and digital channel adoption influence operating expense ratio and profitability (reflected in P/E multiples of 7.04 trailing / 5.53 forward).

QILU BANK CO., LTD. (601665.SS): Ownership Structure

• Mission and values: support local economic vitality in Shandong, prioritize SMEs and individual customers, and pursue inclusive, technology-enabled financial services.
• Core services: deposit products, mortgages and consumer lending, corporate and SME loans, trade finance, wealth management, and fee-based advisory/services.
• Digital strategy: mobile and internet banking platforms to capture younger, tech‑savvy customers and reduce delivery costs.
• Growth levers: SME lending, trade finance tied to regional industry clusters, cross‑selling wealth and fee services, and partnerships for fintech innovation.

• Major institutional shareholders include provincial-state entities and financial holding companies aligned with Shandong economic policy and local government interests.
• Public shareholders and institutional investors constitute a significant free float following A‑share listing (601665.SS), enabling capital market access for growth and capital adequacy improvements.
• Board composition reflects a mix of government-affiliated directors, independent directors, and industry/financial professionals to balance regional policy alignment and market governance.

• Net interest income: spread between interest earned on loan book and interest paid on deposits-primary income source given large retail and SME loan portfolio.
• Fee and commission income: wealth management, bancassurance distribution, trade finance fees, and transaction services-growing share via strategic partnerships.
• Investment and trading income: securities investments and interbank activities contribute to non‑interest income and liquidity management.
• Cost management and digitalization: investments in digital platforms lower transaction costs and enable higher cross‑sell rates, improving return on assets over time.

QILU BANK CO., LTD. (601665.SS): Mission and Values

• Mission: Provide safe, convenient, and efficient financial services that support regional growth and improve customer financial well-being. See Mission Statement, Vision, & Core Values (2026) of QILU BANK CO., LTD.
• Core values: customer-first, risk-consciousness, innovation in product delivery, community engagement, and prudent governance.

• Founded as a city commercial bank with deep ties to Shandong Province; expanded network across all 16 prefecture-level cities in Shandong and into major hubs such as Beijing, Tianjin, Zhengzhou, Kaifeng, Lianyungang, Xuzhou, Nanjing, and Shanghai.
• Ownership structure: a mix of state-owned entities, corporate investors, and public shareholders listed on the Shanghai Stock Exchange (ticker: 601665.SS). Major shareholders historically include provincial government-related entities and strategic institutional investors (share register varies over time per public filings).

• Business model: operates as a full-spectrum city commercial bank offering retail deposits and loans, corporate financing, supply chain finance, cash management, and selected investment banking services.
• Retail services: demand deposits, fixed-term savings, personal loans (including housing mortgages and consumer credit), wealth management and payment services delivered through branches and digital channels.
• Corporate services: term lending, working capital loans, trade and supply-chain finance, deposit and cash-management solutions, syndicated loans and advisory for medium-sized enterprises and local corporates.

• Net interest margin (NIM): primary income source-earnings generated from the spread between lending yields and deposit funding costs across retail and corporate portfolios.
• Fee and commission income: service fees from wealth management, transaction banking, trade finance, guarantees, and advisory services.
• Investment and treasury operations: income from proprietary bond portfolios, interbank placements, and foreign-exchange operations, subject to market and liquidity management strategies.
• Asset quality management: strong provisions (coverage ratio 324.24% as of 30‑Jun‑2025) reduce expected credit losses, supporting stable recurring profitability despite credit cycles.

• Comprehensive branch presence in all 16 prefecture-level cities of Shandong Province.
• Strategic out-of-province branches in Beijing, Tianjin, Zhengzhou, Kaifeng, Lianyungang, Xuzhou, Nanjing, and Shanghai to serve corporate clients and high-net-worth individuals.
• Omnichannel delivery combining physical branches with digital banking platforms to lower costs and expand retail reach.

• Reported NPL ratio of 1.09% (30‑Jun‑2025), reflecting disciplined credit underwriting and active workout strategies.
• Provision coverage of 324.24% indicates conservative provisioning policy and strong loss-absorbing capacity relative to classified assets.
• Concentration controls focus on regional industry sectors, single-borrower limits, and collateralization to manage credit concentration risks.

QILU BANK CO., LTD. (601665.SS): How It Works

• Primary revenue drivers: net interest income from loans minus deposit funding costs; non-interest income from fees, commissions, and service charges.
• Balance-sheet activities: origination and management of retail, SME and corporate loans; term and demand deposit products; interbank placements and bond investments for liquidity and yield.
• Fee businesses: card and payment processing, wealth management, agency services, and guarantee/commitment fees.
• Risk/capital management: provisioning for credit losses, loan loss reserves, and capital adequacy maintenance to support regulatory requirements and growth.

• Interest spread: the bank earns interest on loan portfolios and securities while paying interest on deposits and borrowings; growth in net interest income (+13.57% YoY H1 2025) indicates improving spreads or higher interest-earning asset volume.
• Fee expansion: processing fees and commissions (RMB 817m, +13.69%) provide lower-capital, higher-margin income, reducing reliance on interest margins.
• Profitability conversion: operating income of RMB 6,782m and efficient cost/risk control led to net profit of RMB 2,734m (H1 2025), supporting a ROE of 12.80%.
• Capital allocation & shareholder returns: stable profitability and improved capital generation enabled an increased dividend payout ratio in 2024, reflecting a commitment to shareholder returns.

QILU BANK CO., LTD. (601665.SS): How It Makes Money

• Net interest income from lending to retail, SME and corporate customers (consumer loans, mortgages, working capital loans).
• Fee and commission income (wealth management, card fees, payment processing, advisory and agency services).
• Investment income from bond holdings, trading portfolios and gains on disposals of securities.
• Non-interest income via bancassurance, fintech partnerships, and cross-selling of financial products.
• Digital banking services and platform monetization (API-based services, transaction fees, value-added digital products).

• Market position: With a RMB 37.97 billion market cap and low trailing/forward P/E ratios, QILU BANK is positioned as a value-oriented regional bank with room for multiple expansion if earnings growth materializes.
• Profitability outlook: Projected EPS and revenue CAGRs (12.6% and 15.4%) and a three-year ROE of 13.1% point to improving profitability driven by loan growth, NIM stabilization and rising fee income.
• Growth drivers: Digital transformation initiatives, strategic partnerships (fintech, payments, wealth platforms), and selective market expansion are expected to diversify revenue and reduce dependence on traditional interest margins.
• Risk considerations: Credit cycle sensitivity, interest-rate movements, and execution risk on technology rollouts will influence actual outcomes versus forecasts.