Trade tension woes may hurt Chongqing Rural Comm Bank’s net profits

The bank’s EPS may fall by 1.8% or grow by as much as 1.5% this year.

Chongqing Rural Commercial Bank’s (CQRCB) earnings per share is expected to fall by as much as 1.8% or grow by 1.5% in 2025, according to estimates by CGS International.

Prolonged trade tensions may hurt China’s economic outlook, which in turn could transmit to lower banking reported net profits, the investment house said in a report published in April 2025.

“We note there is an over 90% correlation between China’s nominal GDP growth and China banking sector net profit growth,” said CGS International analysts Laura Li Zhiyi and Michael Chang.

Li and Chang said that CQRCB may be a key beneficiary of policymakers’ efforts to reduce local government debt risks.

The banking sector in general can also continue to be a beneficiary of insurers seeking high-dividend yield investments, as CGS International observed in a report on February 2025. Some state-owned enterprises (SOEs) also seek attractively valued high dividend yield investments, they added.

“We also like the potential for reduced asset quality concerns following accelerated policymaker efforts towards local government debt resolution, given the historically positive impact this had on the sector’s re-rating,” Li and Chang said.