CITIC Bank's 10 Trillion Glory and the Disappearing Slogan

What are the real pressures driving CITIC Bank’s strategic retraction?

CITIC Bank has delivered its first annual report after surpassing the 10 trillion yuan total asset threshold.

The enormous scale of 10.13 trillion yuan has officially placed this veteran joint-stock bank into the “10 trillion club.”

However, accompanying this peak in scale is not a declaration of aggressive expansion, but rather a rational compromise of business logic with objective realities.

This compromise is most intuitively reflected in the recent management Q&A session.

CITIC Bank’s performance press conference in the spring of 2026 seemed earlier and more cautious than in previous years.

During the lengthy hours of executive exchanges and data disclosures, the slogan “large and light,” which once held great hopes for the bank’s lightweight transformation, quietly retreated; Chairman Fang Heying set the tone at the outset with “steady progress, and quality improvements within progress,” reshaping the bank’s business structure to “corporate business taking the lead, retail making stable contributions.”

The shift in slogans has never been an isolated narrative.

In the current context of transitioning old and new economic drivers, this is not only an adaptation to cyclical headwinds but also reflects a strategic shift in the face of revenue pressure—moving from the pursuit of a “lightweight” transformation vision back toward reliance on the corporate core.

This perhaps indirectly confirms that the banking industry’s recent attempts to escape the heavy capital cycle by expanding retail are facing a phase of testing. Since the simplistic reliance on “light assets and high growth” is undergoing a shift, the next core issue turns to a more pragmatic bottom-line defense.

As the interest margin space on the liability side is gradually consumed over time, as internal cost reductions hit rigid bottom lines, and as the historical asset recovery miracles can no longer be regularly repeated, how does this giant joint-stock bank, navigating deeper waters, stabilize its fundamentals?

The more realistic survival logic is clearly reflected in the footnotes of the financial statements.

Strategic retraction

To explore this strategic shift, we need to first uncover the financial facets of why “large and light” failed to materialize.

CITIC Bank’s retail transformation has been a systematic project spanning over a decade: starting from the second transformation in 2014, establishing the “retail first strategy” in 2021, and then deepening the pursuit of “large and light” high-quality growth in recent years; this logic once provided the market with highly imaginative transformation options.

Looking solely at the 2025 total asset growth rate of 6.28% and the scale of 10 trillion, the “large” goal has indeed been achieved;

But the essence of “light” needs to be dissected into two parts.

The core of measuring “asset weight” lies in revenue structure and capital consumption.

The key to revenue structure is net income from fees and commissions; by observing its proportion in total revenue, one can determine whether the bank has escaped reliance on the heavy capital of interest spread from deposits and loans.

In this dimension, CITIC Bank has presented a resilient answer: the proportion of non-interest income in total revenue has risen to 20.28%, with the wealth management business showing particularly bright performance—investment management fees surged by 45.17%, and agency business fees grew by 24.77%.

In a context where non-interest income across the industry is generally under pressure, the structural upward breakthrough in agency sales and wealth management has stabilized CITIC Bank’s non-interest income.

However, when viewed over a longer period, this marginal improvement resembles a difficult recovery growth; after all, the 20.28% non-interest income ratio still shows a noticeable gap from the 23.24% peak level in 2021.

More critically, the partial recovery of non-interest income ultimately failed to fundamentally reverse the reality of underlying assets quietly becoming heavier.

Examining the ultimate test of “light capital”—risk-weighted asset (RWA) density (risk-weighted assets/total assets), CITIC Bank’s performance is not outstanding: in 2024, the bank’s RWA density was 74.15%, ranking in the middle among joint-stock banks, with a 17.49 percentage point gap from the top-ranking China Merchants Bank; by 2025, this metric not only did not decrease but instead rose to 75.85%.

With as much as 7.68 trillion yuan in risk-weighted assets, the heavy underpinning behind the 10 trillion scale directly left unavoidable marks of loss on core profit metrics: by the end of the reporting period, the bank’s core Tier 1 capital adequacy ratio fell to 9.48%, and the weighted average return on equity (ROE) dropped to 9.39%.

Internally analyzing the efficiency data, the fatigue of the heavy asset model is further transmitted.

Despite CITIC Bank’s cost-to-income ratio slightly decreasing to 31.61% in 2025, both revenue per capita and profit per capita showed declines.

This improvement in indicators is largely due to internal “thrift” and extreme compression, rather than an inner impetus driven by a “lighter” business model.

The division of credit flow and revenue landscape more straightforwardly confirms this point.

In 2025, CITIC Bank’s corporate loan balance reached 3.29 trillion yuan, a 13.24% increase from the beginning of the year, while the personal loan balance was only 2.37 trillion yuan, a slight year-on-year increase of 0.2%; in terms of profit, the bank’s profit contribution from corporate business had risen to 64.6%, while the much-anticipated retail profit contribution had slid to 6.3%.

The tilt in credit structure and revenue focus outlines a panoramic return to tradition, as CITIC Bank has substantially shifted toward corporate credit in the context of overall pressure on retail credit.

Vice President Gu Lingyun’s detailed interpretation of “corporate lending” during the earnings conference illuminated the essence of this strategic shift.

In the context of the retail engine losing momentum, he stated that CITIC Bank has once again relied on its central enterprise resource endowments and “comprehensive financing” advantages, deeply binding central state-owned enterprises and significant local projects, leveraging group synergy to fully expand its corporate fundamentals.

This approach may no longer possess the high valuation imagination of a lightweight bank, but in a defensive cycle, it is indeed the most effective card to stabilize the asset base and resist external uncertainties.

Relying on corporate ballast to smooth out the dramatic fluctuations of the cycle may be CITIC Bank’s rational choice at the threshold of 10 trillion.

“Squeezing” out profits

Since the choice has been made to rely on heavy asset corporate business to stabilize the fundamentals, it inevitably must bear the costs of relatively low returns and thin spreads of traditional corporate credit.

In the reality of overall revenue pressure and continued concessions on the asset side, how to “squeeze” out net profits internally has become a proposition that CITIC Bank must face.

In 2025, CITIC Bank’s operating net income slightly declined by 0.55% to 212.475 billion yuan; however, against the backdrop of shrinking revenue, net profit attributable to shareholders exceeded 70 billion yuan, reaching 70.618 billion yuan, showing a countercyclical growth of 2.98%.

This abnormal “profit increase without revenue growth” is largely due to the foresight and decisiveness in protecting interest margins.

Chairman Fang Heying revealed at the earnings conference that the bank’s net interest margin remained stable at 1.63% in 2025, not only maintaining absolute stability but also exceeding the average of joint-stock banks by as much as 21 basis points.

In a period where asset returns are generally declining, this rare advantage in interest margins does not stem from advances on the asset side, but rather from strong control on the liability side.

Delving into the changing attributions, the pressure on the asset side is evident.

The decline in yield on corporate and personal loans dragged down interest margins by 19 and 14 basis points, respectively;

However, successful control on the liability side has established a defensive line, with the decline in costs of corporate and market-oriented liabilities throughout the year strongly supporting interest margins by 17 and 45.7 basis points respectively, and the average cost of customer deposits significantly reduced by 0.37 percentage points to 1.52%, while the cost of corporate time deposits plummeted from 2.54% to 2.11%.

The reason for achieving such a significant reduction in deposit costs lies in the proactive management on the liability side, which acted a year ahead.

Fang Heying disclosed that the company had exited high-cost liabilities such as structured deposits and large certificates of deposit 1 to 1.5 years ahead of peers; this forward-looking defensive move has effectively won CITIC Bank a very valuable profit buffer.

However, relying solely on interest margin defense is still insufficient to fully support absolute growth in net profits.

Dissecting this nearly 3% increase in net profit internally, it still relies on an extremely precise financial operation; the ample book profits cannot be divorced from the meticulous concealment of three pathways.

The first is the rigid compression of costs. Under strict control, CITIC Bank’s business and management expenses were reduced by 3.24% to 67.159 billion yuan. This daily operational thrift has forcibly created space in the profit statement.

Secondly, the smoothing effect of provisioning adjustments. By the end of the reporting period, the bank’s provision coverage ratio decreased by 5.82 percentage points from the end of the previous year to 203.61%, with a moderate slowdown in provisioning efforts and the release of reserves directly feeding back into current profits.

The most concealed form of support comes from the gains brought about by the clearance of historical risks. The bank’s Vice President Jin Xinian admitted that cash recoveries from assets written off during the year reached 12.9 billion yuan, a figure that has remained above the 10 billion mark for six consecutive years.

By relying on proactive liability management to maintain the bottom line of interest margins, supplemented by internal cost-cutting and recovery of historical debts to support the profit statement, CITIC Bank has firmly stabilized its performance base during the period.

But this also signifies that as the provision coverage ratio returns to normal levels and the recovery dividend gradually peaks, future profit growth will face harder challenges.

Breaking the deadlock and bottom line

As the space for financial adjustments narrows, the core business pressures beneath the book profits begin to emerge. This most “difficult challenge” lies in the once-hopeful retail segment.

When the limits of profit space are pressured by the cyclical examination of asset quality, the retail business not only finds it temporarily difficult to take on the role of the second growth curve but has also become the current main exposure to risk.

In 2025, CITIC Bank’s credit card non-performing loan rate climbed by 0.12 percentage points to 2.62%, while the non-performing rate of personal consumption loans rose by 0.66 percentage points to 2.80%. Against the backdrop of weakening macro expectations, these once high-yielding assets are undergoing severe cyclical pressure, significantly dragging down overall asset quality.

In the face of the pressures on the retail segment, Chairman Fang Heying emphasized that “retail makes stable contributions” does not mean lowering its strategic positioning, and he proposed a breaking logic of “defense, seeking opportunities, accumulating strength, and going with the trend” from four dimensions.

However, the reaffirmation of strategic determination still finds it difficult to quickly bridge the gap in real data in the short term; a substantive breakthrough in retail business will take time.

In the context of ongoing releases of retail credit risk, what truly stabilizes the bank’s asset quality bottom line is an extremely traditional set of stock data: the massive 1.02 trillion yuan in personal mortgage loans.

This asset, which accounts for 47.5% of the entire retail loan market and 18.1% of the bank’s total loans, with its low non-performing rate of 0.41%, plays the role of a “large denominator” in diluting risk. It acts like a ballast stone, preventing the overall non-performing rate in retail from spiraling out of control, but also indirectly confirms that the bank currently still has a strong path dependence in its asset structure.

As credit assets come under pressure, CITIC Bank attempts to rely on intermediary businesses to patch the profit gap.

In 2025, the bank’s wealth management AUM achieved a growth of 16.34%, totaling 5.70 trillion yuan; during the same period, the financial markets segment generated 29.918 billion yuan, pulling the bank’s non-interest net income back into positive growth territory at 1.55%.

However, objectively speaking, compared to the scale of the credit market and the consumption of provisions, the current profit contribution from these two major segments is still limited, insufficient to construct a “solid breakwater” against the cycle.

On the basis of stabilizing business and risk control bottom lines, CITIC Bank has revealed its final card during this defensive period.

Board Secretary Zhang Qing disclosed at the earnings conference that it plans to raise the cash dividend ratio to 31.75%, with a total dividend amount of 21.2 billion yuan.

This is not merely a stopgap measure to respond to market fluctuations but an inevitable shift for the banking industry after bidding farewell to the impulse for scale.

As the asset scale enters the 10 trillion level, the extensive expansion with high capital consumption is no longer sustainable, and the previously anticipated lightweight transformation is also facing growing pains in reality. In this context, returning retained profits to shareholders in the form of abundant cash and relying on stable dividends to seek market certainty is the most pragmatic adjustment of the enterprise’s operational logic.

At this point, CITIC Bank’s defensive formation has clearly closed the loop.

Objectively speaking, CITIC Bank is fully converging towards a stable defensive strategy. Shedding the past halo of light assets and high growth, this 10 trillion-level financial giant is quietly changing course amid the cyclical winds and waves.

It no longer insists on depicting a brilliant story of counter-cyclical breakthroughs but chooses to fully align with a defensive financial strategy to promote stability, seeking space to find genuine intrinsic momentum to navigate through the next cycle.