Zhengzhou Bank, surrounded by old real estate debts, seeks new opportunities in county areas

At the end of the year and the beginning of the new year in the financial market, two seemingly unrelated events outline the strategic migration trajectory of Zhengzhou Bank:

On one side, the 1.1 billion yuan real estate loan for the Xitang project has won a lawsuit, but facing a defendant already deeply entrenched in the dishonesty list, the creditor is likely to become "paper wealth," and Zhengzhou Bank has also admitted that it has "long since made provisions for losses";

On the other side, its affiliated village banks in Xunxian and Yanling have successively completed the "village reform branch," further deepening the county-level layout.

Between retreat and advance, this city commercial bank rooted in the Central Plains seems to be accelerating its withdrawal from the quagmire of real estate dependence, seeking growth momentum in the new blue ocean of county areas with stronger anti-cyclical capabilities.

Old Real Estate Debts

On the last day of 2025, the Zhengzhou Intermediate People's Court made a first-instance judgment on the 1.1 billion yuan financial loan case between Zhengzhou Bank and Jinwei Industrial, bringing an end to this years-long dispute.

According to the judgment, the defendant Jinwei Industrial must repay the principal and interest of 1.1 billion yuan within ten days (by January 10, 2026), and the defendants Henan Zhongguang Urban Operation Management, Yongwei Real Estate, Cui Hongqi, Li Wei, Li Lingling, etc., bear joint repayment responsibility.

However, business registration information shows that Jinwei Industrial has zero paid-in capital, and the once core asset Xitang project has been almost completely disposed of through the guarantee of delivery of buildings, with no executable property remaining, while the guarantors Cui Hongqi and Li Wei have long been deeply entrenched in the dishonesty list.

Despite obtaining a favorable judgment, Zhengzhou Bank is still likely to face the awkward situation of "having won the lawsuit but losing money."

The tragedy of the Xitang project is just one slice of Zhengzhou Bank's real estate non-performing loans.

In 2020, when the Zhengzhou real estate market still had some warmth, Cui Hongqi, who owned the land resources of the old boiler factory site, teamed up with the local real estate company Yongwei Real Estate to establish Jinwei Industrial through a joint venture, launching the "Yongwei Jinqiao Xitang" project.

This popular residential project, located next to Zhengzhou University, quickly became the "ceiling" of Zhengzhou High-tech Zone due to its superior location, but unexpected events always come suddenly—

Three months after Zhengzhou Bank issued the 1.1 billion yuan loan, the project suddenly stopped due to the misappropriation of funds by the actual controller Cui Hongqi.

Subsequent government intervention in 2024 to promote the delivery of buildings for the Xitang project protected the rights of homebuyers but could not recover funds for the bank, leaving Zhengzhou Bank in the embarrassing situation of "winning the lawsuit but losing money."

The loss of a single project is bearable, but what Zhengzhou Bank faces is a concentrated outbreak of batch real estate non-performing loans.

In 2024 alone, the bank has already reported three major real estate bad debts, with the involved principal amount of 2.2 billion yuan exceeding the bank's net profit from the previous year, delivering a heavy blow to its profit foundation.

For example, Xinyuan Group, the first real estate company in Henan to be listed in the United States, has 1.1 billion yuan in loans from Zhengzhou Bank that remain unpaid;

Although the court has ruled that Xinyuan Real Estate must repay the principal and interest, by mid-2025, the total overdue debt of Xinyuan Group has reached 5.926 billion yuan, with a net loss of 1.433 billion yuan in the first half of the year, essentially losing its ability to repay debts.

The concentrated transmission of risks from real estate companies has driven the non-performing loan ratio of Zhengzhou Bank's public real estate industry to rise sharply;

From 2019 to the first half of 2025, the bank's real estate non-performing loan ratio surged from 0.15% to 9.75% To ensure asset quality, Zhengzhou Bank has initiated a "de-real estate" transformation during the crisis:

First, it actively reduced the scale of real estate-related loans, decreasing the proportion of real estate loans from 13.62% at the end of 2019 to around 5%;

Second, it actively resolved existing risks, suing real estate companies to "collect debts" while transferring an asset package worth approximately 15 billion yuan to Zhongyuan Asset Management at a 66% discount in 2024, which included debts from several already sued real estate companies.

By the end of the third quarter of 2025, the bank's non-performing loan ratio had remained at 1.76%, 8 basis points better than the overall level of urban commercial banks.

Behind the gradually stabilizing asset quality is a large-scale write-off of non-performing loans:

From 2022 to 2024, the bank's "write-off and transfer" amounts were 4.69 billion yuan, 4.77 billion yuan, and 4.054 billion yuan, significantly higher than previous levels;

During the same period, profit growth rates were -24.92%, -23.62%, and 1.39%, with the overall profit of 1.876 billion yuan in 2024 not reaching the levels of ten years ago;

The controversy over "years without dividends" caused by shrinking profits and declining capital replenishment ability has sparked widespread discussion in the capital market.

Currently, the bank's overdue data still shows pressure, with overdue loans reaching 21.09 billion yuan by the end of the first half of 2025, an increase of 135.38% compared to the end of 2020, of which 7.77 billion yuan in loans overdue for more than a year have not yet been classified as non-performing.

Zhao Fei, Chairman of Zhengzhou Bank, stated that in the future, the bank will emphasize risk internal control, focusing on credit risk, advancing modularly, and building a comprehensive risk management framework that extends horizontally and vertically.

Breakthrough in County Areas

Deeply mired in the real estate quagmire, Zhengzhou Bank has begun to shift its focus to the more promising county markets.

After all, in the context of falling housing prices, depreciating assets, and significantly reduced consumer willingness, the sinking market has indeed shown stronger counter-cyclical capabilities than urban economies.

Looking back, Zhengzhou Bank's attention to the county economy can be roughly divided into three stages.

The initial attempt began in 2009, when Zhengzhou Bank started to establish its institutional layout in the counties under Zhengzhou City, setting up the first county branch and the first village bank, and completed full coverage of branches in Zhengzhou's counties within the next two years.

In 2018, the bank further established the "Leading Group for Precision Poverty Alleviation," identifying the county financial market as a new goal for the next five-year plan. Three years later, it set up a secondary department, the "Rural Finance Department," under the retail department, professionalizing and systematizing county financial services.

However, from a strategic perspective, Zhengzhou Bank still viewed the county areas more as a part of inclusive finance and rural revitalization rather than as a source for incremental growth, with limited resource investment in the sinking market.

It wasn't until the new leadership team took office in 2024 that a real turning point began to emerge:

That year, Zhengzhou Bank proposed the "County Area Leading High-Quality Development Strategy," positioning the county economy as a "test field," "growth pole," and "incubator" for serving regional economic development, and decided to incubate various innovative products and institutional mechanisms in the county areas.

This established the core position of the county areas in the bank, indicating that their importance has gone beyond the early practices of rural revitalization and inclusive finance It can be observed that Zhengzhou Bank's county-level business has now achieved a dual-drive model of "retail + corporate".

For example, in terms of retail, it expands service boundaries through "entering online, entering rural areas, and entering communities".

Strategically, the bank's "Rural Butler" has become one of the core concepts of its retail business, which, along with urban residents, financing, and wealth, has been incorporated into the customer-centric business philosophy. By optimizing rural service channels and enhancing service experiences, it gradually forms the core competitiveness of county-level finance.

As of the end of 2024, the bank has relied on the "Agricultural Benefit Station +" scenario to develop acquiring merchants and enrich card usage environments, cumulatively issuing 258,500 rural revitalization cards, an increase of 86,600 cards compared to the end of the previous year.

The corporate business focuses on "industrial finance + county economy," cultivating new growth poles through "county-led special actions."

For example, each quarter, it collaborates with the Provincial Financial Office and the Provincial Development and Reform Commission to align policies, formulating "one policy for one place" based on local industrial characteristics, and reserving special credit quotas annually;

Among them, Gongyi, as a strong industrial county, has received special support from Zhengzhou Bank for traditional industrial upgrades and major project construction, while Jiyuan has gained financial support for regional coordinated development based on its responsibilities in the northwestern part of Henan;

In the county economic field, areas like Xingyang, Zhongmu, and Erqi, which coordinate between old and new urban areas, continue to form a complementary financial service network covering all scenarios through characteristic products like "Rural Revitalization Loans."

At the same time, Zhengzhou Bank plans to establish a high-quality talent development mechanism, encouraging young cadres to prioritize training in county-level institutions and giving priority promotions to those who perform excellently;

The distribution of benefits will also be adjusted accordingly. The newly appointed chairman Zhao Fei has promised that management salaries will be reduced by 10% for two consecutive years, with all freed-up resources directed towards grassroots levels.

It can be observed that since 2025, Zhengzhou Bank's credit resources have further shifted from real estate to county-level areas:

By the end of the third quarter of 2025, the bank's credit structure continued to optimize, with real estate loans reduced by nearly 7 billion yuan compared to the end of 2023, while the growth rate of loans in key areas such as "three rural" county-level, manufacturing, and green finance has outpaced the overall level of the bank.

However, the path of migration is by no means smooth.

On one hand, the old wounds of real estate have not yet fully healed, with a slight increase in related non-performing rates by mid-2025 compared to the beginning of the year;

On the other hand, while county-level finance is a blue ocean, its characteristics such as high service costs and lack of credit data pose higher demands on the bank's refined operations and risk pricing capabilities. Zhengzhou Bank needs to increase its volume while facing direct competition with local rural commercial banks and other institutions.

Whether the bank can completely shake off the shadow of real estate and accelerate its pace in the county-level track remains to be seen over time