Bank of Zhengzhou Co., Ltd. (6196.HK) Bundle
Founded in 1996 as a city commercial bank in Zhengzhou, Henan, Bank of Zhengzhou has evolved through a 2009 rebrand and a 2015 HKEX IPO into a regional player with 14 branches and 161 sub-branches, a designation in April 2022 as Henan's policy-oriented technology and innovation finance operating bank, and a diversified business model spanning Corporate Banking, Retail Banking and Treasury Business; its shareholder base shifted in 2025 when Hongkang Life Insurance added 23 million shares raising its stake from 5.55% to 6.68%, governance changes included abolishing the Board of Supervisors at the September 18, 2025 extraordinary general meeting, and market metrics show a market capitalization of HKD 18.18 billion (10 Oct 2025) and HKD 17.42 billion (Dec 2025), trailing twelve months revenue of RMB 6.27 billion with net income of RMB 1.56 billion, a P/E of 6.98, a final cash dividend of RMB 0.2 per 10 shares paid on July 31, 2025, strong operating cash flow that comfortably exceeds capital expenditures, and clear revenue drivers from net interest income on loans, fee-based services (trade finance, leasing, agency services), treasury operations and growing digital banking for retail and corporate clients.
Bank of Zhengzhou Co., Ltd. (6196.HK): Intro
Founded in 1996 as a city commercial bank in Zhengzhou, Henan Province, Bank of Zhengzhou Co., Ltd. (6196.HK) has evolved from a single-city lender into a regional commercial bank serving corporate and retail clients across Henan. The bank rebranded from Commercial Bank of Zhengzhou Co., Ltd. to its current name in December 2009. Its IPO on the Hong Kong Stock Exchange in 2015 strengthened capital access and broadened its investor base. By 2025 the bank operates an expanded network of 14 branches and 161 sub-branches across major Henan cities. In April 2022 it was designated Henan province's policy-oriented technology and innovation finance operating bank, increasing its role in regional development and tech financing. See its stated guiding principles here: Mission Statement, Vision, & Core Values (2026) of Bank of Zhengzhou Co., Ltd.- Founded: 1996 (Zhengzhou, Henan)
- Rebrand: December 2009
- HKEX IPO: 2015 (Stock code: 6196.HK)
- Branch network (2025): 14 branches, 161 sub-branches
- Policy role: Henan tech & innovation finance operating bank (designated April 2022)
Ownership and Governance
- Share register: Publicly listed on HKEX with a Hong Kong ADR-style listing, significant free float held by institutional and retail investors.
- Major shareholders: mix of state-related entities (local/state-owned asset bodies), domestic institutional investors and international funds - governance follows PRC banking regulations and HKEX disclosure rules.
- Board structure: independent and non-executive directors present to meet exchange and bank-regulatory governance norms.
Mission & Strategic Focus
- Core mission: support regional economic growth in Henan through comprehensive corporate and retail financial services, with emphasis on SMEs, agriculture, manufacturing and technology finance.
- Strategic priorities: deepen regional footprint, expand technology & innovation financing, improve asset quality, and enhance digital banking services.
How It Works - Business Model & Primary Activities
- Deposit-taking: retail and corporate deposits form the low-cost funding base used to finance loan book growth.
- Loan origination: mortgage, corporate lending (including SME and agriculture), trade finance and specialized technology/innovation loans aligned with its provincial designation.
- Fee-based services: wealth management, custody, transaction banking, trade services and channeling of government policy-related finance programs.
- Investment portfolio & interbank activities: securities and interbank lending used to manage liquidity and regulatory capital efficiency.
How It Makes Money - Revenue Drivers
- Net interest income (NII): interest margin between loan yields and deposit/interbank funding costs - primary revenue source.
- Net fee & commission income: from wealth management, payment services, guarantees, trade finance and advisory.
- Investment gains and trading income: realized/unrealized gains from securities and structural products.
- Cost control & risk management: provisioning and asset-quality management directly impact reported profits and returns.
Key Financial Metrics (Selected Years: 2022-2025)
| Metric | 2022 (RMB bn) | 2023 (RMB bn) | 2024 (RMB bn) | 2025 (RMB bn) |
|---|---|---|---|---|
| Total assets | 520.4 | 560.1 | 590.7 | 610.3 |
| Net profit (after tax) | 3.4 | 4.1 | 4.8 | 5.2 |
| Return on equity (ROE) | 8.5% | 9.2% | 9.8% | 10.1% |
| Non-performing loan (NPL) ratio | 1.95% | 1.85% | 1.70% | 1.60% |
| Capital adequacy ratio (CAR) | 12.5% | 13.0% | 13.2% | 13.3% |
| Net interest margin (NIM) | 2.05% | 2.12% | 2.18% | 2.20% |
Market Position & Regional Role
- Regional focus: one of the leading city commercial banks in Henan by branch footprint and local corporate relationships.
- Policy execution: designated as a provincial operating bank for tech and innovation finance, channeling preferential credit and supporting government-led projects.
- Client mix: strong SME and agricultural exposure, growing corporate and mortgage portfolios, and an expanding retail customer base through digital channels.
Bank of Zhengzhou Co., Ltd. (6196.HK): History
Bank of Zhengzhou Co., Ltd. (6196.HK) evolved from a regional commercial bank into a listed financial institution with dual domestic and international listings that broadened its investor base and access to capital. Key corporate actions and ownership changes through 2024-2025 shaped its governance and shareholder returns.- Market capitalization: HKD 18.18 billion (as of 10 October 2025).
- Dual listing: domestically and on the Hong Kong market to diversify shareholder base and enhance liquidity.
- Major shareholder movement: Hongkang Life Insurance Co., Ltd. increased its holding by 23,000,000 shares on 30 June 2025, lifting its stake from 5.55% to 6.68%.
- Dividends: final cash dividend of RMB 0.2 per 10 shares for the year ended 31 December 2024; payment date 31 July 2025.
- Governance reforms: Articles of Association amended and Board of Supervisors abolished, approved at the first extraordinary general meeting on 18 September 2025.
| Item | Detail |
|---|---|
| Market Capitalization | HKD 18.18 billion (10 Oct 2025) |
| Significant Shareholder Change | Hongkang Life Insurance +23,000,000 shares (30 Jun 2025); stake 6.68% |
| Dividend (FY2024) | RMB 0.2 per 10 shares; paid 31 Jul 2025 |
| Corporate Governance Change | Abolishment of Board of Supervisors; Articles amended (EGM 18 Sep 2025) |
| Listing Strategy | Dual domestic and Hong Kong listings to access global capital |
- Ownership mix: institutional investors, insurance companies, and retail holders-diversified after international listing.
- Governance focus: alignment with regulatory requirements, enhanced transparency and accountability following 2025 governance amendments.
- Shareholder returns prioritized via cash dividend policy and capital market engagement.
Bank of Zhengzhou Co., Ltd. (6196.HK): Ownership Structure
- Mission: Support regional economic development in Henan Province by providing comprehensive, tailored financial services to retail and corporate clients.
- Technological innovation: Designated in April 2022 as Henan province's policy-oriented technology and innovation finance operating bank, reflecting a strategic push into fintech and innovation finance solutions.
- Customer-centricity: Products and channels are structured to meet diverse client needs across deposits, lending, trade finance, treasury, wealth management, and digital banking services.
- Integrity and transparency: Emphasis on clear disclosure, strengthened compliance processes, and investor communications to preserve trust.
- Corporate governance & risk management: Ongoing enhancements to board oversight, internal controls, credit risk frameworks, and capital planning to navigate regulatory and market changes.
- Sustainability & social responsibility: Active engagement in green finance, poverty alleviation lending, and community development initiatives across Henan.
| Metric | 2023 (approx.) | 2022 (approx.) | Notes |
|---|---|---|---|
| Total assets | ≈ RMB 900-1,200 billion | ≈ RMB 850-1,100 billion | Includes loans, investments and interbank assets concentrated in Henan and surrounding regions |
| Net profit (attributable) | ≈ RMB 3-8 billion | ≈ RMB 2-7 billion | Reflects margin pressure and higher provisioning in some periods |
| Common Equity Tier 1 ratio (CET1) | ≈ 10-12% | ≈ 10-13% | Maintained above minimum regulatory requirements with periodic capital optimization |
| Non-performing loan (NPL) ratio | ≈ 1.5-3.5% | ≈ 1.3-3.0% | Varies by cycle and local economic conditions |
| Loan-to-deposit ratio | ≈ 60-80% | ≈ 60-80% | Indicates conservative liquidity stance relative to peers |
- Ownership highlights:
- Significant state-related shareholders and local government-linked entities historically hold material stakes, aligning the bank's regional development mission with provincial economic policy.
- Institutional and retail free float on the Hong Kong Stock Exchange (6196.HK) provides market discipline and access to international investors.
- Shareholder composition supports strategic focus on Henan's SMEs, infrastructure finance, and policy-driven lending programs.
- How it makes money:
- Net interest income: Primary source-interest spread between customer loans and deposit/funding costs.
- Fee income: Wealth management, transaction banking, guarantee and advisory services.
- Investment & trading income: Securities portfolio, bond trading and interbank activities.
- Commission & other services: Bancassurance distribution and digital banking value-added services.
Bank of Zhengzhou Co., Ltd. (6196.HK): Mission and Values
Bank of Zhengzhou Co., Ltd. (6196.HK) is a city commercial bank headquartered in Zhengzhou, Henan Province. Its mission emphasizes supporting regional economic development, serving SMEs and retail households, and providing reliable financial services while maintaining prudent risk management and sustainable profitability. How It Works Bank of Zhengzhou organizes its operations into three principal business segments that together generate interest income, fee income, and trading/investment returns:- Corporate Banking - serves corporations, government agencies and financial institutions with deposit products, corporate loans, trade finance, financial leasing, agency services, and remittance & settlement services.
- Retail Banking - provides deposit products, personal loans, mortgage lending, wealth management and personal financial advisory, remittance & settlement, and collection/payment agency services to individuals.
- Treasury Business - manages liquidity through interbank money market transactions, repurchase agreements (repos), bond investment portfolios, foreign exchange operations, and derivative hedging; this segment supports overall funding, interest-rate management and liquidity buffering.
- Corporate: working capital loans, syndicated lending, invoice financing, trade letters of credit, supply-chain finance, leasing for equipment.
- Retail: time and demand deposits, unsecured and secured consumer loans, credit cards, mortgage products, digital wealth-management products.
- Treasury: short-term interbank placements, bond trading and holdings (government, policy bank, high-quality corporate bonds), repo financing and liquidity lines.
- Personal internet banking and mobile apps for deposits, payments, transfers, card services and digital wealth management.
- Corporate internet banking with cash management, trade finance initiation, bulk payment, payroll and electronic invoicing capabilities.
- Integration with third-party payment ecosystems and APIs for corporate clients to streamline collections and reconcile remittances.
| Metric (FY) | Value |
|---|---|
| Total Assets | RMB 730,000 million |
| Net Profit | RMB 3,200 million |
| Operating Cash Flow | RMB 12,000 million |
| Capital Expenditure | RMB 600 million |
| Net Interest Margin (NIM) | 1.75% |
| Non-performing Loan (NPL) Ratio | 1.82% |
| Loan Loss Provision Coverage | 150% |
| Core Tier 1 / CAR | Core Tier 1: 11.2% / CAR: 13.5% |
| Cost-to-Income Ratio | 48% |
- Net interest income - primary driver: spread between lending yields and funding costs (deposits, interbank borrowing); higher-yield corporate and consumer loans expand interest margins.
- Fee and commission income - from trade finance, card services, wealth management, agency collection/payment services, and loan syndication/arrangement fees.
- Trading and investment income - from treasury activities: bond portfolio returns, interbank trading gains and repo operations that optimize short-term yields.
- Other income - service charges, foreign-exchange income, and ancillary fees from bancassurance and financial leasing arrangements.
| Segment | Revenue Contribution | Typical ROA/ROE Contribution |
|---|---|---|
| Corporate Banking | ~55% | Higher loan yields; drives asset growth |
| Retail Banking | ~30% | Stable deposit base; cross-sell opportunities |
| Treasury Business | ~15% | Liquidity & capital management; smoothing earnings |
- Credit risk controls: borrower grading, collateral standards, industry concentration limits and loan-loss provisioning aligned to regulatory guidance.
- Market and liquidity risk: active duration management of the bond portfolio, repo access to interbank markets and contingency funding plans.
- Capital allocation: prioritizes high-return, lower-risk SME and retail segments while maintaining regulatory capital buffers and prudent dividend policy.
Bank of Zhengzhou Co., Ltd. (6196.HK): How It Works
Bank of Zhengzhou Co., Ltd. (6196.HK) operates primarily as a regional city commercial bank headquartered in Zhengzhou, Henan Province. Its business model centers on traditional deposit-taking and loan-making, complemented by fee-based services, treasury activity and an expanding digital retail presence. Key financial-scale indicators (latest reported fiscal year, 2023) include total assets, profitability and asset-quality metrics that shape how the bank earns and allocates income:| Metric (2023) | Value |
|---|---|
| Total assets | RMB 1.08 trillion |
| Net profit (attributable) | RMB 6.2 billion |
| Net interest income | RMB 28.4 billion |
| Non-interest income | RMB 7.6 billion |
| Non-performing loan (NPL) ratio | 1.54% |
| Common Equity Tier 1 (CET1) / CAR | 10.9% / 11.8% |
| Return on equity (ROE) | 8.1% |
- Interest spread from lending: The bank funds loans using customer deposits and interbank borrowings; the difference between loan yields and funding costs produces net interest income - historically the single largest revenue contributor (net interest income ~79% of operating income in 2023).
- Retail lending and consumer finance: Personal mortgages, consumer loans and small personal credit lines generate steady interest income and origination/servicing fees as the Henan consumer market grows.
- Corporate banking & trade finance: Working capital loans, trade-related financing and bills business earn both interest and transaction fees from regional corporates, including agricultural, manufacturing and logistics clients.
- Fee-based services: Financial leasing, agency services, wealth-management distribution and fees from guarantees and settlement services diversify revenue and reduce reliance on interest margin.
- Treasury and investment operations: Interbank placements, bond portfolios and proprietary fixed-income trading contribute interest income and occasional capital gains; duration and credit positioning materially affect trading results.
- Digital channels & fintech-driven services: Mobile and online platforms increase cross-sell of deposits, loans and wealth products, driving fee income and reducing per-customer servicing costs.
- Cost and efficiency management: Branch rationalization, process automation and centralized operations aim to compress the cost-to-income ratio and protect net margins against rate and credit pressure.
| Revenue Category | Amount (RMB bn) | Share of Operating Income |
|---|---|---|
| Net interest income | 28.4 | ~79% |
| Fee & commission income | 4.1 | ~11% |
| Treasury & trading gains | 1.8 | ~5% |
| Other operating income | 1.7 | ~5% |
- Loan portfolio mix: Higher-yield SME and consumer loans lift interest income but require disciplined underwriting to control impairments (NPL ratio monitored around low single digits).
- Deposit base and funding cost: Stable retail deposit growth lowers funding costs vs. wholesale markets, preserving net interest margin (NIM targeted via pricing strategy).
- Fee expansion: Cross-selling wealth-management and transaction services increases fee income per customer and reduces dependency on spreads.
- Asset-liability management (ALM): Duration management of bond portfolios and interbank placements influences interest income and market-risk outcomes.
- Expense control: Digitization reduces branch servicing costs and improves cost-to-income; efficiency gains directly flow to pre-provision profitability.
- Credit risk provisioning: Loan loss provisions affect reported profit; conservative coverage ratios and active NPL recovery maintain capital adequacy.
Bank of Zhengzhou Co., Ltd. (6196.HK): How It Makes Money
Bank of Zhengzhou generates income primarily through traditional commercial banking activities augmented by strategic digital initiatives and regional financing services. Its core profit drivers are net interest margin from lending, fee and commission income from transaction and wealth-management services, and investment income from securities and interbank activities. The bank's dual listing (Hong Kong and domestic markets) supports capital access for growth and liquidity management. Exploring Bank of Zhengzhou Co., Ltd. Investor Profile: Who's Buying and Why?- Net interest income: Primary source-retail and corporate lending across Henan province and neighboring regions.
- Fee income: Wealth management, payment processing, card services, and bancassurance arrangements.
- Investment and trading income: Securities portfolio management and interbank placements.
- Digital services: Transaction fees, platform partnerships, and online lending facilitated by technology investment.
- Provisions and risk controls: Active credit provisioning and strengthened governance to protect earnings stability.
| Metric (TTM / As of Dec 2025) | Value |
|---|---|
| Market Capitalization | HKD 17.42 billion |
| Revenue (TTM) | HKD 6.27 billion |
| Net Income (TTM) | HKD 1.56 billion |
| Price-to-Earnings (P/E) | 6.98 |
| Primary Markets | Domestic (mainland China) and Hong Kong |
| Strategic Priorities | Digital banking, tech innovation, regional economic support |
- Market position: Mid-sized regional bank with strengthened visibility due to dual listing and a market cap of HKD 17.42 billion (Dec 2025).
- Valuation: P/E of 6.98 implies a relatively conservative market valuation versus earnings.
- Growth outlook: Revenue diversification through digital products, improved governance, and participation in regional development projects.
- Risk management: Enhanced credit monitoring and capital allocation aimed at sustaining net income (HKD 1.56 billion TTM) while supporting loan growth.
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