Beyond the change in chairmanship, the market has been more focused on the turnover of the bank's president and the ongoing adjustments to its board seats over the past two years.

Recently, BANK OF GUIZHOU (06199) announced that its Chairman, Yang Mingshang, has resigned due to work arrangements by the Guizhou provincial government. On the same day, the Guizhou Provincial People's Government recommended Yang Hongjun as the candidate for director and chairman of the bank.

This seemingly routine personnel change quickly drew market attention following the announcement on the Hong Kong stock exchange. As the only provincial-level corporate bank in Guizhou and a city commercial bank that listed in Hong Kong in 2019, every high-level change at BANK OF GUIZHOU is interpreted by the market as a signal of strategic realignment.

What was the operational trajectory of BANK OF GUIZHOU during Yang Mingshang's tenure? What are the key points regarding the appointment of the new Chairman, Yang Hongjun? More importantly, in the current complex and volatile regional financial market environment, what is the true operational state of this city commercial bank with assets exceeding 600 billion yuan?

Yang Mingshang's Five Years: Stabilizing Growth and Managing Risk

Public information shows that Yang Mingshang was born in November 1965 and has reached the age of 60. His resignation falls under the routine adjustment for state-owned enterprise leadership due to age. Therefore, the market tends to interpret this leadership change at BANK OF GUIZHOU as a scheduled handover rather than a sudden event.

Yang Mingshang has a long history in Guizhou's financial system. He previously worked at the Agricultural Bank of China's Guizhou branch, was transferred to BANK OF GUIZHOU as President in 2014, later served as General Manager of Guizhou Financial Holding, and returned to BANK OF GUIZHOU as Chairman in 2021. This career spans three types of institutions: major state-owned banks, local corporate banks, and provincial financial holding platforms, giving him a comprehensive understanding of Guizhou's financial ecosystem.

In fact, when Yang Mingshang returned to take the helm in 2021, BANK OF GUIZHOU was facing dual pressures from external financial market cycle adjustments and internal asset quality deterioration. In response, Yang Mingshang implemented several strategies, which can be summarized in three key points.

First, promoting digital transformation. Under Yang Mingshang's leadership, BANK OF GUIZHOU launched the "Guixiaozhi" large model platform. By the end of 2025, it had implemented 52 application scenarios and obtained a national invention patent. The number of mobile banking users reached 7.4622 million, and online financial service transaction volume exceeded 100 billion yuan, indicating a significant improvement in the depth and breadth of digital coverage.

The financial benefits of this transformation began to materialize in 2025. The bank's net fee and commission income surged from 301 million yuan in 2024 to 1.062 billion yuan, a year-on-year increase of 252.71%, ending a three-year consecutive decline with growth rates of -15.13%, -6.85%, and -11.01% from 2022 to 2024.

Second, disposing of non-performing assets and improving asset quality. From 2022 to 2024, the bank's non-performing loan (NPL) ratio rose from 1.47% to 1.72%. Notably, the NPL ratio for the real estate sector reached 11.58% at the end of 2024, which was relatively high within the industry at the time.

However, driven by Yang Mingshang's intensified efforts to dispose of non-performing assets, by the end of 2025, the bank's real estate sector NPL ratio had significantly dropped to 1.42%. The overall NPL ratio was reduced to 1.65%, and the provision coverage ratio rebounded to 329.10%.

Third, optimizing the asset and liability structure to stabilize the net interest margin (NIM). In 2025, BANK OF GUIZHOU's NIM was 1.88%, an increase of 11 basis points year-on-year, achieving stabilization and recovery against an industry-wide backdrop of pressure. This was no small feat. The primary reason was that while the asset yield fell by 33 basis points year-on-year, the bank significantly reduced the cost of its liabilities by 41 basis points by focusing on optimizing its deposit structure, where the personal deposit interest payment rate dropped by 38 basis points.

Based on the above analysis, Yang Mingshang's key contributions were stabilizing the fundamental asset quality, optimizing the business structure, and achieving phased results in digital transformation. However, the core issue constraining BANK OF GUIZHOU's valuation—the persistent pressure on profitability—was not fundamentally resolved during his tenure.

In 2025, BANK OF GUIZHOU's return on equity (ROE) was 7.60%. Although it marginally increased by 10 basis points, it did not reverse the trend of consecutive annual declines. It has fallen significantly by 228 basis points from 9.88% in 2021, remaining at a historical low and notably below the average for listed city commercial banks (approximately 10-12%).

Who is Yang Hongjun? Insights into the New Chairman's Background

The new chairman, Yang Hongjun, previously served as President of Guizhou Rural Commercial United Bank. Like Yang Mingshang, he hails from the Agricultural Bank of China's Guizhou branch system, belonging to the "ABC faction" of financial executives.

Public information indicates that Yang Hongjun's career has spanned state-owned banks, provincial credit unions, and provincial rural commercial united banks. His new appointment represents a leap from leading a rural credit reform entity to steering a listed provincial city commercial bank. In December 2025, Guizhou Rural Commercial United Bank officially commenced operations, with Yang Hongjun, as President, deeply involved in this round of rural credit reform.

The market's significant attention to Yang Hongjun's appointment likely stems from two core aspects.

First, can his rural credit experience empower inclusive and small-to-micro finance? Guizhou Rural Commercial United Bank has deep roots in county and rural markets, accumulating extensive experience in inclusive finance and serving small and micro enterprises. While BANK OF GUIZHOU is larger in scale, its retail loan proportion was only 14.10% last year, far below the industry average of 30-40%, as it primarily focuses on corporate business, which increased to 84.32% by the period's end.

It is worth noting, however, that by the end of 2025, the bank's inclusive finance loan balance reached 58.021 billion yuan, a 6.05% increase from the beginning of the year. The balance of inclusive loans for small and micro enterprises was 56.159 billion yuan, a 6.08% increase, both showing good growth. Therefore, it is conceivable that Yang Hongjun's rural credit background may further encourage BANK OF GUIZHOU to expand its inclusive finance and retail business layout.

Second, can his reform execution capability drive internal governance optimization? The reform of rural credit cooperatives has been a challenging aspect of local financial reform in recent years. Yang Hongjun's experience at Guizhou Rural Commercial United Bank demonstrates his capability in institutional integration and reform implementation. This holds potential value for BANK OF GUIZHOU in optimizing internal governance and enhancing its risk control system.

However, some perspectives note significant differences in customer structure and risk characteristics between BANK OF GUIZHOU and the rural credit system. For instance, the rural credit system's core involves deep network penetration, fragmented customer bases, and low interest rate sensitivity but dispersed risks. In this context, whether Yang Hongjun can smoothly adapt from the rural credit system to the role of leading a listed city commercial bank remains to be seen.

Beyond the change in chairmanship, the market has been more focused on the turnover of the bank's president and the ongoing adjustments to its board seats over the past two years.

Wu Fan, born in August 1968, worked at China Construction Bank's Guizhou branch for over 20 years, joined BANK OF GUIZHOU in 2013, transitioned from Chairman of the Supervisory Board to Deputy Party Secretary, was nominated as an executive director, and was appointed President in October 2024, becoming the bank's first female president. During this leadership transition period, the chairman's duties are being performed by President Wu Fan. As a core senior executive who grew within the BANK OF GUIZHOU system, Wu Fan is familiar with the bank's internal operations, which aids in maintaining continuity in strategy execution.

At the board level, BANK OF GUIZHOU has experienced prolonged vacancies for independent director/director qualifications and instances of collective director resignations followed by replacements. Furthermore, current executive director Cai Dong was born in 1966 and is approaching the statutory retirement age as his tenure progresses. Adjustments to the bank's board seats are likely to continue.

In December 2025, after Deputy President Xiang Donghai's appointment was officially approved by regulators, BANK OF GUIZHOU's core management team formed a structure of "one president and five deputy presidents": President Wu Fan, alongside Deputy Presidents Hu Liangpin, An Peng, Qin Wei, Li Jian, and Xiang Donghai, as well as Board Secretary Zhou Guichang and Compliance Director Jiao Zhengjun.

Mixed Performance Results, Structural Asset Quality Issues Unresolved

To understand the "fundamental situation" that new Chairman Yang Hongjun is inheriting, one must examine the financial data. For the full year 2025, BANK OF GUIZHOU achieved operating income of 12.596 billion yuan, a year-on-year increase of 1.44%, and net profit of 4.021 billion yuan, a year-on-year increase of 6.42%. The bank's core operating indicators for 2025 exhibited two main characteristics.

(1) Revenue growth appears somewhat weak. The 1.44% revenue growth rate continues the unstable trend of recent years. In 2023, the bank's revenue even experienced negative growth of 5.38%. Compared to the 2021 revenue of 11.737 billion yuan, the 2025 figure of 12.596 billion yuan implies a four-year compound annual growth rate of only 1.8%, which is not particularly high.

The direct cause of weak revenue growth is the fluctuation in net interest income. In BANK OF GUIZHOU's income structure, net interest income accounts for a high proportion of 80.18%, making it more susceptible to market adjustments. In 2023, the bank's net interest income decreased by 13.31% year-on-year, mainly due to loan repricing from LPR cuts and declining yields on existing loans. Although net interest income recovered with growth rates of 4.71% and 10.23% in 2024 and 2025 respectively, the sustainability of this growth still depends on whether the yield on the asset side can stabilize.

(2) The net profit growth rate is significantly higher than the revenue growth rate, primarily benefiting from a reduction in asset impairment losses. In 2025, BANK OF GUIZHOU's asset impairment losses amounted to 4.195 billion yuan, a decrease of 7.66% compared to 4.543 billion yuan in 2024. This reflects a decline in credit costs following asset quality improvement. However, the space for "releasing profits by reducing provisions" is limited and not a sustainable long-term strategy.

The Q1 2026 report shows that BANK OF GUIZHOU achieved operating income of 3.063 billion yuan, a year-on-year increase of 2.17%, and net profit of 1.336 billion yuan, a year-on-year decrease of 2.20%. This divergence between rising revenue and falling profit reflects the bank's profitability pressure in a complex operating environment. A possible explanation is a further narrowing of the net interest margin or a year-on-year increase in credit costs in the first quarter. Specific reasons await more detailed quarterly report disclosures.

Asset quality is a core dimension for assessing the operational condition of a city commercial bank and a primary reason for the market's low valuation of BANK OF GUIZHOU.

At the end of 2025, BANK OF GUIZHOU's NPL ratio was 1.65%, down 7 basis points from 1.72% at the end of 2024. However, it remains higher than the 1.15% in 2021, indicating that asset quality has not yet recovered to its historical optimal level. Furthermore, a 1.65% NPL ratio is on the higher side among city commercial banks (some have NPL ratios below 1.5%) and cannot be considered excellent.

During the same period, the bank's provision coverage ratio reached 329.10%, an increase of 13.12 percentage points from 315.98% at the end of 2024, indicating enhanced risk absorption capacity. However, it should be noted that the increase in the provision coverage ratio may include a "recovery" factor from a previously low base. While a 329% coverage ratio is relatively strong within the industry, it also implies limited future space for profit release.

Objectively, the direction of change in these two indicators is positive, with significant marginal improvement, but structural issues persist.

(1) The decline in the NPL ratio may be partly due to aggressive disposal of existing non-performing loans. Taking the retail loan business as an example, in 2025, the bank's personal loan balance grew by 6.54%, while personal non-performing loans increased from 2.542 billion yuan to 2.619 billion yuan. The personal loan NPL ratio was compressed from 5.07% to 4.90%. While this reduction appears significant, the level remains relatively high in the industry. There is also a need to be vigilant about whether this was achieved through write-offs or transfers that removed NPLs from the balance sheet, rather than actual improvement in the recovery of existing loans.

(2) The proportion of special mention loans remains high. At the end of 2025, BANK OF GUIZHOU's special mention loan ratio was 3.02%. Although it decreased by 5 basis points from the beginning of the year, it is still 1.83 times the overall NPL ratio. Special mention loans are a leading indicator for NPLs. A 3.02% ratio suggests that approximately 6 to 10 billion yuan in loans may potentially migrate to non-performing status in the future. The foundation for asset quality improvement remains unstable.

(3) The NPL ratio for credit loans is rising, testing risk pricing capabilities. At the end of 2025, BANK OF GUIZHOU's NPL ratio for credit loans reached 3.67%, up 83 basis points from 2.84% at the end of 2024. The non-performing balance for credit loans surged by 21% year-on-year. Credit loans are typically extended to relatively high-quality customers. The simultaneous rise in both the NPL ratio and balance for this category may reflect two issues: first, a potential decline in customer quality standards as the bank lowered entry barriers in pursuit of loan growth; second, accelerated default risk exposure for unsecured loans during an economic downturn.

This may be related to Guizhou province's economic structure. Guizhou is a province with net population outflow, particularly of young and middle-aged labor. Some industries, such as wholesale and retail, have weak risk resistance. The rising default rate for credit loans among these customer groups may indicate that BANK OF GUIZHOU's risk pricing models have not been optimized in sync with its expansion in inclusive finance and consumer finance businesses.

From an industry distribution perspective, within BANK OF GUIZHOU's corporate loans, the leasing and business services sector accounts for 31.55%, and wholesale and retail accounts for 15.89%, together nearly 50%. Among these, the NPL ratio for the leasing and business services sector is only 0.35%, down 7 basis points year-on-year. Such loans often correspond to local government financing vehicles. While the current NPL ratio is low, if local government debt pressures intensify, the hidden risks in these loans could accelerate. The NPL ratio for the wholesale and retail sector is 1.08%, down 19 basis points year-on-year.

Another point requiring attention is the sharp spike in the NPL ratio for the "other" category. At the end of 2025, BANK OF GUIZHOU's NPL ratio for the "other" category jumped from 2.74% in 2024 to 4.66%, an increase of 192 basis points. The non-performing loan balance in this category more than doubled to 1.604 billion yuan, a staggering increase of 112.74%. The bank's annual report has not yet disclosed the specific industry composition of the "other" category, which may include high-risk industries like mining, accommodation, and catering. The sharp rise in this data means BANK OF GUIZHOU will need to continuously and closely monitor the asset quality changes in these business segments in the future.

Overall, BANK OF GUIZHOU has made considerable improvements in its fundamental operations over the past few years. Amid headwinds from the regional financial cycle and overlapping real estate risks, it managed to control the non-performing loan curve, build up provisions, and solidify its digital transformation and provincial hub status. Therefore, the keywords for Yang Mingshang's tenure could be described as "stabilization and compliance."

The challenges for Yang Hongjun upon taking over lean more towards "restructuring for growth," likely focusing on three key areas: repairing profitability, achieving genuine improvement in asset quality, and balancing strategic focus.

A leadership change itself does not determine a bank's fate, but the strategic adjustment space it brings may become an opportunity to break operational deadlock. The market awaits to see whether Yang Hongjun can integrate the inclusive finance experience from the rural credit system with the corporate governance requirements of a listed city commercial bank, and lead BANK OF GUIZHOU out of its current predicament of "increasing revenue without increasing profit."