Strategic Resilience and Risk Management: How Bank of Nanjing Outperforms in a Challenging Banking Sector

In the first half of 2025, Bank of Nanjing reported an 8.8% year-over-year increase in attributable profit, reaching 12.6 billion yuan, outperforming many of its peers in China’s state-owned banking sector [1]. This resilience is particularly striking given the broader industry’s struggles with stagnant interest margins, deflationary pressures, and a weak property market [2]. The bank’s success stems from a dual focus on strategic innovation and robust risk management, positioning it as a model for navigating China’s evolving financial landscape.

Strategic Resilience: Diversification and Digital Transformation

Bank of Nanjing’s growth is driven by its targeted expansion into international and transaction banking, leveraging its deep understanding of the Yangtze River Delta’s SMEs. By supporting cross-border trade in sectors like manufacturing and e-commerce, the bank has tapped into China’s national push for technological self-reliance and global market integration [3]. Strategic partnerships, such as its long-standing collaboration with BNP Paribas, have further strengthened its ability to serve clients in Southeast Asia and Africa [4].

Simultaneously, the bank is investing heavily in digital infrastructure. Its adoption of artificial intelligence and real-time payment systems aligns with China’s broader digitalization goals, enhancing operational efficiency and customer service [5]. Notably, the bank’s use of a domestic distributed database infrastructure underscores its commitment to both technological sovereignty and regulatory compliance [6]. These initiatives not only reduce costs but also future-proof the bank against disruptions in a rapidly digitizing economy.

Risk Management: A Foundation for Stability

The bank’s ability to mitigate risks has been critical to its performance. Despite a peak in credit risk during the 2022 pandemic-driven downturn, Bank of Nanjing reduced its default probability from 1.422 to 0.796 by June 2025, reflecting disciplined credit policies and proactive financial stability measures [7]. Its credit rating improved from B2 in 2021 to B1 by late 2024, signaling growing confidence from rating agencies [8].

This resilience is underpinned by a risk management framework influenced by its partnership with BNP Paribas, which has provided expertise in areas like asset-liability management and compliance [9]. The bank’s approach also aligns with global trends, such as Basel III’s emphasis on data transparency and integrated risk reporting [10]. By prioritizing IT security and adopting structured vulnerability assessments, Bank of Nanjing ensures it remains resilient against cyber threats and regulatory shifts [11].

Policy Tailwinds and Sector-Wide Challenges

The bank’s performance is further supported by China’s central bank (PBOC) policies, which have directed credit toward innovation and key sectors. In March 2025, new yuan loans surged to 3.64 trillion yuan, reflecting a broader rebound in credit activity [12]. While this trend benefits the sector, Bank of Nanjing’s alignment with national priorities—such as supporting SMEs and cross-border trade—positions it to capture a disproportionate share of this growth.

However, challenges persist. Geopolitical tensions and a slowing property market continue to weigh on the banking sector [13]. Bank of Nanjing’s focus on SMEs and digital services, however, insulates it from some of these risks, as these segments are less exposed to property-linked downturns.

Conclusion

Bank of Nanjing’s success in H1 2025 is a testament to its strategic agility and risk-aware governance. By combining localized insights with cutting-edge technology and prudent credit policies, the bank has navigated macroeconomic headwinds more effectively than many of its peers. As China’s banking sector faces continued pressures, institutions that prioritize innovation and resilience—like Bank of Nanjing—will likely emerge as leaders.

Source:
[1] Bank of Nanjing's Attributable Profit Jumps Nearly 9% in H1, [https://www.marketscreener.com/news/bank-of-nanjing-s-attributable-profit-jumps-nearly-9-in-h1-ce7c50dcdc88fe22]
[2] Chinese banks face profit squeeze as loan growth falters, [https://www.reuters.com/markets/asia/chinese-banks-face-profit-squeeze-loan-growth-falters-2025-08-28/]
[3] Bank of Nanjing supports local clients' cross-border expansion, [https://www.theasianbanker.com/updates-and-articles/bank-of-nanjing-supports-local-clients-cross-border-expansion]
[4] BNP Paribas in China, [https://china.bnpparibas.com/en/our-solutions/strategic-partnership-with-bank-of-nanjing/]
[5] Bank of Nanjing Builds a Domestic Distributed Database, [https://www.sunline-i.com/show-929.html]
[6] Opportunities and risks in China's banking sector, [https://www.axa-im.com/investment-institute/market-views/resilience-and-realignment-opportunities-and-risks-chinas-banking-sector]
[7] Bank of Nan-jing, [https://martini.ai/pages/research/Bank%20of%20Nan-jing-caec9bb48bc1973681462dfa830da23f]
[8] China March bank lending beats expectations, [https://www.reuters.com/world/china/china-march-new-bank-loans-rise-364-trln-yuan-beating-expectations-2025-04-13/]
[9] Risk Management in Banking: Process, Types, Best Practices, [https://www.metricstream.com/risk-management-in-banking.html]
[10] Banking in 2025: Risk, regulation, and strategic readiness, [https://www.wolterskluwer.com/en/expert-insights/banking-in-2025-risk-regulation-and-strategic-readiness]
[11] Bank IT Security Risk Assessments, 2025 Complete Guide, [https://www.saltycloud.com/blog/it-security-risk-assessment-for-banks/]
[12] China's central bank commits to credit guidance for tech innovation, [https://www.chinabankingnews.com/p/chinas-central-bank-commits-to-credit]