After the controversy, let's take another look at China Merchants Bank's true moat.

(Source: China Visitor Network Finance View)

As the “King of Retail,” China Merchants Bank’s retail moat is deepening from scale advantage to quality advantage.

Produced by | China Visitor Network

Reviewed by | Li Xiaoyan

In the new normal of low interest rates, narrow interest spreads, and intense competition in the banking industry, the dual focus on China Merchants Bank’s 2025 performance and Chairman remarks about the “King of Retail” essentially reflect the market’s in-depth questioning of the core competitiveness and sustainability of leading banks. Despite short-term slowdowns in growth, investment fluctuations, and declining retail profit share, China Merchants Bank, with its “customer-centric” corporate culture at its core, combined with a solid retail foundation, wealth management, intelligent technology, and risk control systems forming a three-dimensional moat, still possesses a resilient thickness capable of crossing cycles, and its long-term competitive advantage remains unshaken.

Chairman Miao Jianmin’s comments on the “moat” have sparked heated discussion, focusing on interpretations of employee dedication cases. Public opinion simplifies this as “overtime culture,” but this is a one-sided understanding of China Merchants Bank’s deep corporate culture. Miao Jianmin’s core statement emphasizes that “internalizing the customer-centric approach into corporate culture and transforming it into employees’ daily behaviors” is the fundamental moat. The case examples aim to illustrate organizational traits of high efficiency and customer orientation—such as completing performance materials in two days and extended branch services—fundamentally reflecting market response speed and customer-first principles, rather than merely time consumption.

This culture is not empty talk. From “changing because of you” to “the best customer experience bank,” over thirty years of service accumulation has formed China Merchants Bank’s unique organizational DNA. It supports three major advantages: first, talent cohesion—market-oriented, professional guidance attracts top industry talent, with R&D personnel accounting for over 27%, far above industry average; second, service penetration—remote service connection rate of 99.09%, 20-second response rate of 94.73%, customer satisfaction of 99.82%, creating an ultimate experience that raises user switching costs; third, strategic execution—successfully implementing strategic shifts from retail transformation to large-scale wealth management, forming a positive cycle of “concept-culture-behavior-performance.” As a soft competitive edge, culture is hard to copy and cannot be quickly built, making it the most solid underlying barrier for China Merchants Bank.

By 2025, China Merchants Bank is expected to achieve revenue of 337.53B yuan (year-on-year +0.01%) and net profit attributable to the parent of 150.18B yuan (year-on-year +1.21%). Although growth has slowed, amid persistent narrowing of interest margins and market volatility, this “slight increase” demonstrates operational resilience. Looking vertically, revenue has turned positive after two consecutive years of decline, with quarterly growth becoming a key turning point; horizontally, daily profit exceeds 410 million yuan, ROE reaches 13.4%, continuing to lead among joint-stock banks.

Asset quality and liability advantages strengthen the safety margin. Total assets at year-end surpassed 13 trillion yuan, with non-performing loan ratio at 0.94%, maintaining a high-quality level below 1% for many years; provision coverage ratio at 391.79%, leading the industry in risk offset capacity. Customer deposits near 10 trillion yuan, with an 8.13% increase, and over 52% of deposits are demand deposits, providing a significant low-cost funding advantage, supporting a steady increase in net interest income (+2.04%). Even though proprietary investments are affected by bond market fluctuations, with fair value change losses of 8.16 billion yuan, overall risk remains controllable and does not shake the profit foundation.

The business structure shows positive adjustments. Although pre-tax profit share of retail finance has declined for three consecutive years, its absolute scale continues to grow steadily, with 224 million retail customers and 17.08 trillion yuan in assets under management (AUM), an increase of 130k yuan annually, maintaining a solid foundation. High-net-worth clients with “Jin Kuihua” and above grew by 17%, with client structure continuing upward. Wealth management revenue reached 100k yuan, a significant increase of 16.91%, ending three years of decline and becoming the biggest highlight of performance. Among them, agency fund income increased by 40.36%, agency trust income by 65.55%, with notable results in product standardization and equity allocation transformation. Non-interest income structure optimization—net fee income of 170.8k yuan (+4.39%)—turned positive for the first time since 2022, making the growth path of light capital more clear.

As the “King of Retail,” China Merchants Bank’s retail moat is deepening from scale advantage to quality advantage. Its credit card business demonstrated resilience during the industry downturn, with circulation accounts surpassing 70 million, reaching a record high, and card volume steadily recovering. Facing declining transaction amounts, the bank proactively adjusted strategies, implementing “stable and low volatility” operations: optimizing platinum card benefits, focusing on high-contribution customer groups; upgrading intelligent service systems, with the “Mobile Life” app’s monthly active users reaching 40.72 million (+0.68%), improving service efficiency through human-machine collaboration. Short-term income faces pressure, but customer quality and asset structure continue to optimize, reserving momentum for industry recovery.

The new growth engine is clearly emerging in large-scale wealth management. China Merchants Bank has built the “TREE asset allocation system,” serving over 11.75 million clients with holdings, with differentiated professional advisory capabilities. The group’s collaborative advantages are prominent, with China Merchants Bank Wealth Management and China Merchants Fund managing assets totaling 26.09 trillion yuan, providing stable mid- and back-end income. Transitioning from “product sales” to “client asset allocation,” AUM continues to grow rapidly, forming a positive flywheel of “client—scale—income—technology.” Chairman Miao Jianmin explicitly states that “wealth management is the core breakthrough for retail’s new departure,” with strategic importance continuously rising.

China Merchants Bank is transforming technological investment into core competitive strength. Annual tech investment exceeds 20 billion yuan, accounting for 5.47% of revenue, with over 2,220 systems fully cloud-based, launching the financial large model “Yizhao,” and AI covering over 120 business scenarios. Digital penetration covers the entire service process: intelligent online services, automated risk control decisions, digitalized management—improving efficiency and reducing costs. Examples include the “Xiao Zha” intelligent agent for credit cards and remote service matrix, typical cases of technology-enabled experience enhancement.

Talent and organizational advantages continue to strengthen. The head of the credit card center has been replaced, with Wealth Management veteran Li Mingdong taking over, signaling deeper integration of “credit card + wealth management,” connecting payment entry points with asset allocation. The “head office—branch” structure ensures strategic implementation, while talent development systems support business innovation. During industry transformation, precise personnel deployment and professional teams provide key guarantees for breakthrough.

Controversies over the chairman’s remarks, slowing performance growth, and investment fluctuations are all stage phenomena during China Merchants Bank’s transformation. Clearing the fog reveals that the customer-centric culture is an irreplaceable core, with over 200 million retail clients and 17 trillion yuan in AUM forming an unshakable foundation. The upward inflection point in large-scale wealth management is a clear new engine, and intelligent technology and top talent are continuously reinforcing barriers.

The banking industry is experiencing deep differentiation, with high-quality banks strengthening through comprehensive competitiveness. China Merchants Bank’s moat is not a single advantage but an ecosystem of deep coordination among culture, clients, business, technology, and talent. Short-term challenges do not alter the long-term trend. As wealth management potential is unleashed, retail business is optimized and digital transformation deepened, China Merchants Bank’s moat will become broader and deeper through adjustments, maintaining its leadership in high-quality development of China’s banking sector.