For the banking industry, the cyclical downturn coincides with a reshuffling of the competitive landscape. In 2024, Bank of Beijing achieved “double growth” in its performance. Revenue and net profit attributable to the parent company increased by 4.81% and 0.81% year-on-year, respectively. During the same period, its stock price rose by 43.69%, outperforming the Wind Bank Index and marking the largest increase in a decade.
As the only city commercial bank with assets exceeding 4 trillion yuan, the positive feedback loop between its stock price and fundamentals validates its current competitiveness. However, a 0.81% profit growth is far from sufficient in the fiercely competitive city commercial bank sector. In the same year, five city commercial banks, including the “rising stars” Qingdao Bank and Hangzhou Bank, reported net profit growth exceeding 10%. Jiangsu Bank and Ningbo Bank, backed by the Yangtze River Delta region, recorded net profits attributable to the parent company of 31.843 billion yuan and 27.127 billion yuan, respectively, both surpassing Bank of Beijing’s 25.831 billion yuan. The top priority now is to identify new levers to maintain its position as the “top city commercial bank” amid this reshuffle. Digitalization is one of the answers provided by Bank of Beijing. At the earnings conference, Chairman Huo Xuewen described digitalization as the bank’s “lifeline and survival line,” elaborating on the related strategy. He revealed that after three years of effort, Bank of Beijing’s digital transformation has entered the 2.0 phase (digital operations). This may indicate that the long-term digital strategy is translating into tangible momentum, driving further profit realization. Compared to past performance, Bank of Beijing’s ability to maintain net profit growth now appears somewhat strained. From 2022 to 2024, while the bank’s revenue growth stabilized and rebounded, its profit growth rate declined from double digits in 2022 to just 0.81% today. Similar to most city commercial banks, Bank of Beijing’s income structure remains dominated by credit, with interest income, intermediary income, and other income accounting for 74. 25%, 4.95%, and 20.8%, respectively. Credit business remains the “core foundation.” The year-on-year growth in loans remained at 9.77%, while deposits grew by 18.34%, providing strong support for asset expansion. The high growth in corporate banking is key to sustaining interest income. Low-cost corporate deposits reached a new high of 17.67% growth, with core deposits accounting for over 80% of the daily average, driving corporate deposit costs down by 16 basis points. Corporate loan growth reached 14.33%, with incremental growth exceeding 100 billion yuan for two consecutive years. The expansion on the asset side is attributed to significant investments in key sectors.The growth rates for tech finance, green finance, inclusive finance, cultural finance, and agricultural loans were 40.52%, 43.11%, 28.30%, 32.39%, and 27.15%, respectively.
Beijing Bank stated that the company has adhered to the dual development principles of “stabilizing growth and optimizing structure,” deepening strategic client management, expanding mid-tier client outreach, and broadening the base customer group. It has leveraged supply chain batch client acquisition and the driving effect of scenario-based finance. Changes in non-interest income reflect broader market trends: first, influenced by the “bond bull market” and rising gold prices, non-interest income grew by 10.06%; second, fee-based income remained under pressure, with commissions and fees declining by 7.84%. Beijing Bank attributed the growth in non-interest income to optimized investment allocations, including flexible investments in bonds, funds, and asset management products. Balance sheet changes revealed further details. Compared to the beginning of the year, the bank’s other debt investments grew by 36.73%, while precious metals, primarily gold, surged by 81.37%. The China Banking Regulatory Commission’s “Notice on Issues Related to Commercial Banks Engaging in Domestic Gold Futures Trading” stipulates that commercial banks meeting conditions such as a capital adequacy ratio of 8%, derivatives trading qualifications, gold spot trading qualifications, and robust market risk management capabilities may engage in domestic gold futures trading. However, banks must also comply with additional regulations like the “Interim Measures for the Administration of Derivatives Trading Business of Financial Institutions” and the “Commercial Bank Market Risk Management Guidelines.” Liu Suqin, Director of Financial Markets, has indicated a shift in gold investment strategy from buying low to shorting high. She emphasized five key focus areas: monitoring interest rates during fiscal injections and open market expansions, capitalizing on bill trading spreads, and timing allocations to high-quality overseas assets. In contrast to investment gains, fee-based income remains under pressure. Due to a year-on-year decline in agency and entrusted business fees, Beijing Bank’s fee income fell by 7.84% to RMB 3.458 billion, contributing less than 5% to total revenue. The bank plans to accelerate its light-capital transformation by developing low-capital businesses such as wealth management distribution to diversify non-interest income sources. Advanced digital transformation is expected to enhance both corporate client management and retail investment research and advisory. Three years ago, Beijing Bank recognized the importance of rapidly adopting advanced technological capabilities and initiated a three-year digital transformation initiative.The ‘Three Major Battles’ with the goal of building ‘Digital Beijing Bank’ include a unified data foundation, a financial operating system, and a risk control platform. Through 20 major technology projects annually, the bank aims to drive high-quality development with ‘technology + data’ as dual engines. The substantial investment in R&D reflects Beijing Bank’s commitment to digital transformation. From 2022 to 2024, the bank’s technology spending accounted for 3.7%, 4.5%, and 4.6% of total revenue, respectively.
Huo Xuewen stated that the previously set ‘Three Major Battles’ have been successfully conquered. He emphasized, ‘The most critical asset for a bank is data, and the key to creating value lies in whether data can be standardized and labeled.’ ‘Banks have numerous systems that require integration at the in the middle, and usage at the upper,’ Huo explained. ‘Based on modern AI technology, we have established a plug-and-play system to enable mutual empowerment between legacy systems.’ The bank is also focusing on AI, advocating the slogan ‘Banks Need to All In AI.’ It has built the ‘Jingzhi Brain’ enterprise-level AI platform to explore large-scale model applications. By developing the ‘Jingzhi’ large model and promoting the Jingyi large model service (MaaS) platform, the bank has formed a technical system combining ‘large models + general machine learning models.’ Huo Xuewen noted that the bank’s digital transformation has progressed from Phase 1.0 to Phase 2.0, with future focus on digital operations. He revealed that by 2025, seven ‘Crystal Ball’ digital management platforms for corporate, retail, risk control, and other areas will be launched. These platforms will transition management decisions from-based to data-driven. For example, the Retail Crystal Ball can enhance efficiency and quality through data analysis and intelligent decision-making, providing personalized and services. The first phase of Crystal Ball already enables from headquarters to branches, and the second phase will extend this to and, allowing them to monitor their performance and account management effectiveness. Huo stated that the launch of corporate and retail Crystal Ball systems will enable differentiated pricing. ‘We can comprehensively analyze products and value creation, achieving pricing for assets and liabilities based on, meeting needs while maximizing,’ he said. As digital transformation enters the operational phase, Beijing Bank will undergo a comprehensive from pricing and risk control to business management. However, whether these changes will be reflected in financial reports requires longer-term validation. Risk Warning and Disclaimer: Market risks exist, and investments require caution.This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situations, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their particular circumstances. Investments made based on this article are at the user’s own risk.
