Strategies follow the market trends, CITIC Bank aims to take the lead in corporate banking by 2025, with retail banking steadily contributing.

(Source: Meicai.com)

CITIC Bank adjusts its retail focus, with corporate business serving as a ballast.

By / Daily Financial Report Zhang Heng

Recently, CITIC Bank has released the first 2025 financial report among A-share listed banks. The data shows that in 2025, CITIC Bank’s total asset size first surpassed 10 trillion yuan, reaching 10.13 trillion yuan, up 6.28% year over year; operating income was 212.475 billion yuan, down slightly by 0.55% year over year; and net profit attributable to shareholders was 70.618 billion yuan, up 2.98% year over year, setting a new historical high.

In terms of asset quality, as of the end of 2025, CITIC Bank’s asset quality remained stable and healthy. The balance of non-performing loans was 67.216 billion yuan, up slightly by 1.10% from the beginning of the year; the NPL ratio was 1.15%, down 0.01 percentage points from the previous year. It has declined steadily for seven consecutive years. Not only is this level lower than the 1.50% average for commercial banks in the same period, but it is also better than the 1.21% average performance of joint-stock banks.

Sustainable profitability lays the foundation for dividends, while relatively steady asset quality ensures that high dividends have no worries. In 2025, CITIC Bank plans to increase its cash dividend to 21.201 billion yuan, accounting for 31.75% of net profit attributable to ordinary shareholders. This is up 1.25 percentage points from 2024, and both the dividend amount and the dividend ratio have reached historical highs.

If this dividend is included, CITIC Bank has paid dividends 20 times since listing, and the cumulative dividend amount will reach 195.03 billion yuan, with a cumulative dividend payout ratio of 24.69%. This increase in dividend strength reflects CITIC Bank’s determination to actively reward shareholders and share the dividends from development.

One point worth paying attention to is that CITIC Bank has readjusted the strategic position of retail—from previously hoisting the banner of a “retail-first strategy,” to “corporate business takes the lead and retail business delivers stable contributions.”

Does focusing on corporate business mean that retail business is no longer important? CITIC Bank Chairman Fang Heying made it clear: “This is not a reduction in retail’s strategic position, but rather assigning retail the responsibility to ‘tackle difficulties head-on’—with retail credit risks occurring more frequently in cycles at present, retail must focus more on wealth management, respond steadily, and win with quality.”

In his view, “strategy must follow the market.” “We need to calmly observe how credit risks occur periodically more often and how value impairment changes, and leverage the strong momentum of the wealth management market’s rapid expansion. By riding the momentum as the retail business system and professional capabilities are built, we will plan the overall trend for retail business development.”

Why has this situation arisen? How are CITIC Bank’s retail and corporate businesses developing in terms of operations at present?

Retail focus adjustment,

corporate business as a ballast

In its early stage of development, CITIC Bank’s business focus was significantly tilted toward the corporate sector, earning it the reputation of “King of Corporate Banking.” At that time, the proportion of its corporate loans in total loans was maintained at more than 70% for a long time. In a phase where economic growth was mainly driven by real estate and infrastructure investment, this structure was appropriate and effective.

However, as the macroeconomic structure underwent profound changes, an asset portfolio overly concentrated in corporate business gradually limited the bank’s growth potential and business flexibility. Meanwhile, starting around 2011, influenced by factors such as the clearance of excess production capacity in the manufacturing industry, CITIC Bank’s non-performing loan ratio for corporate loans began to rise steadily—from about 0.87% in 2012 to 2.42% in 2020. This change in asset quality posed a real constraint on its expansion of asset scale and the growth of operating income and profits.

Beginning in 2015, CITIC Bank reshaped its retail business. Its transformation pace accelerated, and its strategy became increasingly clear. Every three years, it formulates a three-year retail business outlook plan: from the initial “One Body with Two Wings” strategy (corporate business as the “one body,” and retail + financial markets business as the “two wings”); to three major business segments running in parallel, with retail becoming big and strong; and later shifting the retail focus from deposits and loans to wealth management, proposing wealth management as the strategic pivot to promote an upgrade of retail business.

At the recently held 2025 annual performance briefing, CITIC Bank’s articulation of its retail strategy showed a subtle adjustment. Previously, the “big and light” development target that had been given great expectations for retail transformation was no longer emphasized. In his opening remarks, Chairman Fang Heying set “advancing steadily, with quality improvement as progress” as the core tone for the current stage, and clearly stated the business layout as “corporate business takes the lead and retail business contributes steadily.”

This change in wording implies that during a key period when the economy is transitioning between new and old growth drivers, CITIC Bank’s strategic focus is undergoing a significant pullback—from the prior pursuit of a retail-centered “light capital, light assets” transformation vision, to a greater reliance on and solidification of its traditional corporate business fundamentals.

As a result, with the ongoing adjustments in retail transformation strategy turning in a new direction, CITIC Bank’s business structure has also been quietly changing. The data shows that as of the end of 2025, the bank’s total loans were 5.86 trillion yuan, up 2.48% year over year. Of this, corporate loans were 3.29 trillion yuan, up 13.24% year over year, and their share of total loans increased by 5.34 percentage points year over year to 56.18%; retail loans were 2.37 trillion yuan, but only grew by 0.2% year over year, with their share decreasing by 0.92 percentage points year over year to 40.37%.

By industry, the top three industries in corporate loans by proportion are manufacturing, leasing and business services, and water conservancy, environment and public facilities management, accounting for 11.74%, 10.68%, and 7.45% of total loans, respectively. In retail loans, mortgage, credit cards, consumer loans, and business loans had year-on-year changes of +5.28%, -5.24%, -9.29%, and -0.17%, respectively, with shares of 19.17%, 7.90%, 4.81%, and 8.33%, respectively.

In terms of operating performance, in 2025 CITIC Bank’s retail banking business achieved revenue of 79.367 billion yuan, down 7.37% year over year; pre-tax profit was 5.303 billion yuan, down 42.55% year over year. Its contribution to the bank’s overall profit declined from 11.4% to 6.3%. Meanwhile, the corporate banking business performed strongly. In the same period, it achieved revenue and pre-tax profit of 98.829 billion yuan and 54.324 billion yuan, respectively, with growth rates of 3.77% and 9.02%, respectively. Its contribution to the bank’s total profits further increased to 64.6%.

The retail challenges CITIC Bank currently faces are not unique; they are a common reflection across the banking industry during the economic cycle. Based on the bank’s deep insight into the market, it has shown a clear and pragmatic readjustment of strategic focus. Leveraging its strong “integrated financing” service capabilities and the advantages of group synergy, it has reinforced its corporate fundamentals. By providing deep services to central state-owned enterprises, local major projects, and other key customers, it provides a stable “ballast” for overall growth in asset scale and revenue.

Net interest margin continues to narrow,

wealth management sees explosive growth

In 2025, among CITIC Bank’s operating income, net interest income was 1444.69 billion yuan, accounting for 67.99%, far higher than income from fee-based businesses and investment returns. Meanwhile, in 2025 its net interest margin declined to 1.63%, continuing downward from 1.77% in 2024 by 14 basis points.

Objectively speaking, after years of continuously advancing retail transformation, CITIC Bank has made significant progress. The share of its retail loans in total loans has surpassed 40%, which is at a relatively high level within the banking industry.

On the liability side, the bank’s average cost rate of customer deposits dropped sharply by 0.37 percentage points to 1.52%. Among them, the cost rate of corporate time deposits fell significantly from 2.54% to 2.11%; the cost rate of personal time deposits was reduced by 0.48 percentage points to 2.38%. On the asset side, in 2025 the yields on both corporate and retail loans at CITIC Bank showed a downward trend, respectively dragging net interest margin down by roughly 19 and 14 basis points.

Under these circumstances, effective management of liabilities formed a crucial hedge. By continuously optimizing the liability structure, the bank’s cost rates for corporate and personal liabilities declined significantly, respectively providing reverse support to net interest margin of about 17 and 45.7 basis points. Especially noteworthy is that the bank’s average deposit cost rate dropped sharply by 0.37 percentage points to 1.52%. Specifically, the cost rate of corporate time deposits fell significantly from 2.54% to 2.11%; and the cost rate of personal time deposits was reduced by 0.48 percentage points to 2.38%.

It is this “scissors gap,” where deposit costs fall more than loan pricing, that constitutes the main buffer allowing CITIC Bank’s net interest margin to remain relatively stable during the industry’s downward cycle. Compared with the industry average net interest margin of 1.42% for Chinese commercial banks at the end of 2025, CITIC Bank’s level of 1.63% remains higher by 21 basis points. Even though its own margin is also narrowing, given the common backdrop of industry-wide decline, this performance can be considered steady.

The excellent control of liability costs benefits from highly forward-looking strategic adjustments. According to information from management, CITIC Bank, about one to one and a half years earlier than its peers, proactively reduced high-cost liabilities such as structured deposits and large certificates of deposit. This “early braking” defensive operation preserved valuable profit space for the bank amid the current period when retail credit is under pressure.

Worth mentioning is that since 2021, wealth management has been explicitly elevated as the strategic focus for CITIC Bank’s retail business—and even for business development across the industry. With the benefit of CITIC Financial Holding’s ecological synergy, the bank is able to deepen in-depth coordination with professional companies within the group, such as CITIC Securities, Huaxia Fund, and CITIC Prudential Life Insurance, among others. This not only provides unique product and resource support for its wealth management business, but more importantly, it builds the capability for cross-institutional customer resource sharing and integrated services, gradually forming a differentiated service system. Currently, the bank has established an initial competitive advantage in wealth management.

Financial performance confirms the effectiveness of this strategy. In 2025, CITIC Bank achieved non-interest net income of 68.006 billion yuan, up 1.55%, and its share of operating income increased to 32%. Among them, the net income from fees and commissions across the bank rebounded to 20.28% of operating revenue. Particularly striking is that wealth management-related income grew against the trend. Fees from wealth management business rose sharply by 45.17% year over year, mainly due to continuous strengthening of channel development, product management, and customer experience. Fees from agency business also increased by 24.77%, with funds, insurance, trust services, and so on all making good contributions. Against the background of widespread pressure on fee collection across the industry, structural breakthroughs in wealth management and agency businesses effectively stabilized the overall base of non-interest income.

Behind this is a clear logic for business model evolution: shifting from the traditional model that relies on the spread between deposits and loans to a light-capital model that creates value through professional services. Wealth management generates fee income without heavily consuming capital, resulting in higher returns on capital. The size of the proportion of this income is a key indicator for whether a bank reduces its dependence on net interest margin. In this respect, CITIC Bank’s path has already shown results, delivering a resilient set of business performance and actively cultivating it as a crucial growth engine for the future.

Refined financial strategies for net interest margin,

three-pronged paths supporting profits

Against the backdrop of overall pressure on the industry, CITIC Bank’s 2025 financial report also presents a picture of stabilizing performance through meticulous financial operations. Facing dual pressures of slightly declining operating revenue and narrowing net interest margin, the slight increase in net profit was mainly driven by tapping internal management efficiency.

First, strict cost control provides direct room for profit on the income statement. By compressing business and management fees, CITIC Bank “tightens the flow of spending,” reflecting the rigidity of internal management constraints. The data shows that in 2025 CITIC Bank’s business and management fees fell to 671.59 billion yuan, down 3.24% year over year; the cost-to-income ratio was 31.61%, down 0.88 percentage points from the previous year.

Second, the flexible adjustment of provisioning policies became a key financial lever. Moderately slowing down provisioning and releasing earlier reserves directly benefitted current profits. This is a common technical operation to smooth performance within the framework of accounting standards. By the end of 2025, CITIC Bank’s loan loss reserve coverage ratio decreased from 209.43% to 203.61%, a reduction of 5.82 percentage points. By using loan loss reserves to manage profits, it maintained positive growth in earnings.

At the same time, considering that asset quality as a whole remained stable and provisioning coverage declined, CITIC Bank’s decline in loan loss reserve coverage was not a passive response to an increase in bad loans; rather, it was a proactive decision to slow provisioning and release profits.

Finally, continuous recovery of historical assets provides considerable cash inflow. This part of the “historical dividend” effectively increases current earnings. Vice President Jin Xinian stated publicly that CITIC Bank’s cash recovery from assets written off during the whole year reached 12.9 billion yuan, and it has remained above the 10 billion yuan level for six consecutive years.

On the positive side, this combination of strategies has been effective in supporting performance during the counter-cyclical period, showing management’s ability to manage finances and respond to short-term challenges. Strict expense control improves operating efficiency, and even with some reduction, ample loan loss reserve coverage still remains far above regulatory red lines, leaving a thick risk buffer cushion.

Overall, CITIC Bank’s performance in 2025 is a proactive adjustment of the balance of focus between corporate and retail businesses as market cycles change, together with a defensive financial strategy chosen under existing constraints. With both hands working together, CITIC Bank stabilizes its footing. Its development logic is no longer about winning by scale alone, but has shifted toward deep value cultivation. The direction is correct, but more time and patience are needed. Long-term growth still needs to return to the main coordinates of expanding revenue sources, optimizing the asset structure, and improving true risk management capability.

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