2025 Bank Annual Report Observation Room | Credit cards fall below 700 million: major banks "braking" on card issuance, loan balances collectively negative growth

Ask AI · What is the specific path for bank credit cards to shift from scale competition to value competition?

Once a core focus of retail business, credit card operations are now entering a comprehensive adjustment period. On April 7, Beijing Business Daily reporters analyzed data from A-share listed banks that have disclosed their 2025 annual reports and found that major state-owned banks are pressing the “brake” on expansion. The total number of cards issued by Bank of Communications and Postal Savings Bank has decreased by over 5%, while Industrial and Commercial Bank of China and China Construction Bank are also shrinking simultaneously. The joint-stock banks show differentiation: China Merchants Bank’s circulating card volume has slightly increased, and banks like CITIC Bank and others have seen modest growth, but the main trend is “more declines than increases” in credit card loan balances; some banks’ credit card asset quality is under pressure overall, with risk exposure expanding. According to data released by the People’s Bank of China, by the end of 2025, the total number of active credit and debit cards in use nationwide was 696 million, the first time falling below 700 million since peaking in 2022. Behind this “retreat” is the industry’s inevitable transition from粗放增长 (rough, extensive growth) to精益发展 (lean, efficient development). As credit cards shift from “scale competition” to “value competition,” the industry will transform toward integrated scenarios, ecosystems, and services.

Pressing the “brake” on expansion

As an industry barometer, major state-owned banks have pressed the “brake” on credit card scale expansion. Although each bank’s statistical standards and disclosure practices differ, the overall shrinking trend is consistent.

In 2025, Bank of Communications led with a 7.96% year-over-year decline, with the number of cards on record dropping from 63.0094 million at the end of 2024 to 57.9935 million, a reduction of over 5 million in one year; Postal Savings Bank declined by 5.41% year-over-year, with total cards decreasing from 39.9825 million to 37.8197 million. Industrial and Commercial Bank of China and China Construction Bank respectively declined by 3.33% and 2.33%, with issued cards dropping to 145 million and 126 million; only Bank of China achieved a slight increase of 1.46%, with total issued cards rising to 150 million.

Joint-stock banks show differentiation: China Merchants Bank, known as the “Retail King,” had a circulating card volume of 8B at the end of 2025, a slight increase of 0.61% year-over-year; Zheshang Bank, CITIC Bank, and Huaxia Bank saw year-over-year growth of 4.93%, 4.88%, and 3.20%, respectively.

Compared to card issuance, changes in credit card loan balances better reflect industry health. “More declines than increases” has become the main tone for 2025 credit card business. According to incomplete statistics from Beijing Business Daily, among 18 banks with disclosed data, as many as 16 banks experienced year-over-year declines.

Among state-owned banks, China Construction Bank ranks first with a credit card loan balance of 1.0091 trillion yuan, down 5.33% year-over-year; ICBC’s decline is as high as 10.04%, with balances dropping from 97.45M yuan to 1.01T yuan; Bank of China’s decline reached 18.10%, with credit card loan balances shrinking by over 775.36B yuan; Postal Savings Bank, Bank of Communications, and Agricultural Bank of China also saw various degrees of decline.

The trend is similar among joint-stock banks: China Merchants Bank, with a credit card loan balance of 697.54B yuan, remains the top among joint-stock banks, but its balance decreased by 0.92% year-over-year; Industrial Bank, Huaxia Bank, and Minsheng Bank all saw declines exceeding 9%; Ping An Bank and China Everbright Bank also generally experienced scale contraction. Only Shanghai Pudong Development Bank and Zheshang Bank are among the few that saw growth.

Compared to large state-owned and joint-stock banks, small and medium-sized banks’ credit card businesses are shrinking more noticeably. Zhengzhou Bank’s credit card loan balance by the end of 2025 declined by 8.46% year-over-year; Zhangjiagang Rural Commercial Bank declined by 5.13%; Wuxi Rural Commercial Bank and Ruifeng Rural Commercial Bank’s credit card loan balances also shrank significantly, with declines of 29% and 33.92%, respectively.

Su Xiaorui, senior researcher at Suxi Zhiyan, pointed out that the decline in credit card issuance is driven by both supply-side and demand-side factors. On the demand side, residents are more cautious about credit card spending than before, and with the proliferation of various credit payment tools on internet platforms, credit cards’ appeal to young customers has decreased, shifting toward monthly payment products on platform ecosystems. On the supply side, under the continued pressure on credit card asset quality, banks are proactively reducing high-risk exposures and implementing credit card volume reductions; additionally, retail credit structures are being internally adjusted, with some banks’ consumer loans and business loans becoming new battlegrounds for retail transformation, while the strategic importance of credit cards has declined. Regarding future trends of credit card loan balances, based on recent reforms of bank credit card centers, short-term contraction is expected to continue, with gradual stabilization in the medium to long term.

Divergence in non-performing rates

In recent years, regulators have continuously strengthened compliance management of credit card businesses. From policies like the “Notice on Further Promoting the Standardized and Healthy Development of Credit Card Business” to strict rectification of behaviors such as “over-lending,” “card-for-profit,” and “illegal cash-outs,” banks are being forced to tighten credit strategies. Under regulatory pressure, many banks have proactively reduced high-risk, low-contribution customer limits, eliminated dormant and inefficient cards, leading to a natural contraction of overall loan scale. Meanwhile, strict requirements on transparency of interest and fee charges and collection behaviors have made banks more cautious in expansion, no longer blindly pursuing scale growth.

However, behind the contraction, asset quality issues remain prominent, with overall pressure on the asset quality of state-owned banks’ credit cards and expanding risk exposure. By the end of 2025, ICBC’s non-performing rate on credit cards reached 4.61%, a significant increase of 1.11 percentage points from 2024’s 3.5%; Bank of China and Agricultural Bank of China’s non-performing rates also rose by 0.45 and 0.42 percentage points to 2.18% and 1.88%, respectively; China Construction Bank’s non-performing rate slightly increased by 0.14 percentage points to 2.36%, continuing its upward trend.

Several joint-stock banks achieved reductions in non-performing rates and risk cleanup: Shanghai Pudong Development Bank’s credit card and overdraft non-performing rate dropped from 2.45% to 1.92%, a decrease of 0.53 percentage points; Ping An Bank’s credit card receivables non-performing rate fell by 0.32 percentage points to 2.24%; Industrial Bank, CITIC Bank, and China Merchants Bank also saw slight declines, with credit card non-performing rates at 3.34%, 2.62%, and 1.74%, respectively.

Faced with ongoing asset quality pressures, during earnings calls, many bank executives openly acknowledged current challenges in credit card businesses but also pointed to positive signals. For example, the management of China Merchants Bank stated that the overall retail credit risk remains in an upward phase, and credit card assets are also under some pressure.

Regarding mortgage-backed business loans and credit cards, Jin Xinian, vice president of CITIC Bank, admitted these are current “difficult points.” He said these assets are still stabilizing and are key to future asset quality management. However, forward-looking indicators show signs of improvement.

Wang Pengbo, chief analyst at Broadcom Consulting for the financial industry, pointed out that under non-performing pressure, banks should further refine customer segmentation, reduce access for high-debt and multiple-loan customers, adopt dynamic credit limits based on actual repayment capacity, incorporate multi-dimensional data verification into risk models, strengthen transaction monitoring and abnormal behavior detection during the loan process, and improve risk prediction and disposal efficiency.

Transforming toward integrated scenarios and ecosystems

The People’s Bank of China’s “2025 Payment System Operation Overall Situation” report shows that by the end of 2025, the total number of active credit and debit cards in use nationwide was 696 million, a decrease of 31 million from the previous year. This data not only marks the first time since 2022’s peak that the number has fallen below 700 million but also indicates four consecutive years of contraction, with a total reduction of 111 million over the past three years.

From the industry development perspective, under pressures such as narrowing net interest margins, stricter regulation, internet product impacts, and market saturation, banks are moving away from the traditional “issuance volume first” mindset and launching a series of transformation initiatives. These efforts promote credit card businesses to shift from “scale competition” to “value competition.” Closing down offline credit card branches has become common; banks like Bank of Communications, China Everbright Bank, Minsheng Bank, and Guangfa Bank have shut down some of their credit card branches. On the product side, a “big cleanup” is underway, with many banks halting the issuance of low-efficiency co-branded cards, strictly controlling “one person, multiple cards” and dormant cards, while retaining high-end cards with increased benefits.

According to data disclosed by Bank of Communications, by the end of 2025, 38 branches fully assumed local management responsibilities for credit cards, with the proportion of new active accounts, new card issuance of high-quality customers, and scenario-based installment service customers increasing by 140%, 1.3 percentage points, and 155%, respectively, compared to before the transformation.

At the earnings presentation, Qi Ye, vice president of China Everbright Bank, stated, “2025 is a full year for our bank’s credit card business to transition from direct operation to localized management. We have clarified the core concept of ‘returning to consumption origins and branch management,’ and are continuously promoting risk governance and high-quality development. We fully mobilize branch resources, deepen consumption scenarios, and accelerate structural adjustments centered on suitable customers. In risk management, we strictly control new growth, resolve existing issues, revise core approval policies, optimize risk models, and strengthen detailed management of existing customers and the reduction of potential high-risk clients, improving post-loan recovery efficiency.”

The next step for the credit card industry is to break out of the traditional functions of payment and credit, and move toward integrated scenarios, ecosystems, and services. Profit models should shift from primarily interest income to diversified revenue streams. Wang Pengbo emphasized that, for example, banks should deeply embed high-frequency scenarios such as consumption, travel, healthcare, and education, creating scenario-based credit card products to enhance customer stickiness and card usage frequency; simultaneously, expand value-added services by layering in wealth management, insurance, points redemption, and benefits services, while leveraging digital capabilities to offer personalized credit and payment solutions, reducing reliance on interest income. Only then can the industry evolve from basic, simple credit tools to comprehensive financial service carriers, which is the core path for the shift from scale to quality.

Under non-performing pressure, many banks have upgraded their “preferred customer” strategies, strictly controlling high-risk customer access while cultivating high-quality clients, with credit limits gradually shifting toward “dynamic adjustment and differentiated allocation.” Su Xiaorui further pointed out that looking ahead, banks’ credit card development should focus on scenarios, return to consumption origins, and promote lean growth within the existing market, shifting from quantity to quality, anchored on value contribution. Meanwhile, the idea of retail integration is becoming more popular: integrating savings, wealth management, loans, and credit card services to improve the overall financial service quality for high-end clients, making high-end customer retention more efficient and increasing profitability for credit card institutions.