CITIC Bank's 10 Trillion Yuan Glory and the Disappearing Slogan

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

The massive scale of 13 trillion yuan in 2025 officially places this longstanding joint-stock bank into the “10 Trillion Club.”

But accompanying the scale milestone is not a declaration of aggressive expansion, but rather a rational compromise of business logic in response to objective realities.

This underlying compromise is most directly reflected in the recent management responses.

CITIC Bank’s 2026 spring earnings conference was held earlier and more cautiously than in previous years.

During hours of executive communication and data disclosure, the once-aspired “big and light” slogan for the bank’s lightweight transformation quietly receded; Chairman Fang Heyi emphasized “steady progress with quality improvement,” reshaping the bank’s business structure into “major corporate responsibilities, stable retail contribution.”

The shift in slogans is never an isolated narrative.

In the current context of shifting economic drivers, this is not only a response to cyclical headwinds but also reflects a strategic pivot—moving away from the pursuit of “lightweight” transformation towards a reliance on the core corporate banking business.

This may indirectly confirm that the past few years’ strategy of expanding retail to escape the heavy capital cycle is facing a stage test. Since the logic of relying solely on “light assets and high growth” is changing, the next core focus shifts to more pragmatic bottom-line defense.

As the margin of interest income from liabilities gradually diminishes over time, internal cost reductions reach a rigid bottom line, and the once-rare collection successes cannot be normalized, how does this listed bank giant in deep waters stabilize its fundamentals?

A more authentic survival logic is clearly reflected in the footnotes of the financial statements.

Strategic Reversal

To explore this strategic shift, we first need to examine the financial aspects where the “big and light” concept has yet to deliver.

CITIC Bank’s retail transformation has been a systematic project spanning over a decade: starting from its second transformation in 2014, establishing the “retail first” strategy in 2021, and in recent years deepening the pursuit of high-quality growth under the “big and light” logic. This approach once offered the market highly imaginative transformation options.

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

But the “light” aspect requires a nuanced analysis.

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

The key to revenue structure is net fee and commission income. Its proportion in total revenue indicates whether the bank has escaped reliance on heavy capital-dependent net interest margin from deposits and loans.

In this dimension, CITIC Bank has delivered a resilient report: the proportion of fee income in total revenue has rebounded to 20.28%, with particularly impressive growth in wealth management—fee income from wealth management increased by 45.17%, and agency business fees grew by 24.77%.

In an industry where fee income is generally under pressure, these structural breakthroughs in agency and wealth management business have helped stabilize CITIC Bank’s non-interest income.

However, a longer-term, objective view shows that this marginal improvement is more like a difficult recovery growth, as the 20.28% fee income ratio still lags behind the high of 23.24% in 2021.

More critically, the partial recovery of fee income has ultimately failed to fundamentally reverse the underlying asset weight increase.

The ultimate test of “light capital” is the risk-weighted assets (RWA) density (RWA/total assets). CITIC Bank’s performance is not outstanding: in 2024, its RWA density was 74.15%, ranking mid-tier among joint-stock banks, still 17.49 percentage points below the top-ranked China Merchants Bank; by 2025, this indicator increased rather than decreased, rising to 75.85%.

The 7.68 trillion yuan in risk-weighted assets forms a heavy backdrop behind the 10 trillion scale, directly leaving an unavoidable drag on core profitability metrics: at the end of the reporting period, the bank’s CET1 capital adequacy ratio fell to 9.48%, and the weighted average return on equity (ROE) declined to 9.39%.

A closer look at efficiency data reveals that the fatigue of the heavy-asset model is further transmitted.

Although CITIC Bank’s cost-to-income ratio slightly decreased to 31.61% in 2025, both per capita revenue and profit have declined.

This indicates that the improvement in indicators is mainly driven by internal “cost-cutting” and extreme compression, rather than an endogenous boost from a “lighter” business model.

The segmentation of credit and revenue structures more directly confirms this.

In 2025, CITIC Bank’s corporate loan balance reached 3.29 trillion yuan, up 13.24% from the beginning of the year, while personal loans only amounted to 2.37 trillion yuan, a slight increase of 0.2% year-on-year; profit-wise, the proportion of profit from corporate business rose to 64.6%, while retail profit contribution fell to 6.3%.

The skewed credit structure and revenue focus depict a return to traditional banking, with CITIC Bank substantially shifting towards corporate lending amid a period of retail credit pressure.

Vice President Gu Lingyun’s detailed explanation of “corporate lending” at the earnings conference reveals the essence of this strategic shift.

In the context of slowing retail engine growth, he stated that CITIC Bank has re-emphasized its core resources—state-owned enterprise resources and “comprehensive financing” advantages—by deeply binding central and local SOEs and major projects, leveraging group synergy to expand the corporate banking base.

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

Relying on corporate loans as a ballast to smooth cyclical volatility is perhaps a rational choice made by CITIC Bank at the 10 trillion yuan threshold.

“Squeezing” Profits

Since relying on heavy-asset corporate business to stabilize the overall portfolio, the bank must accept the cost of relatively low yields and thin interest margins from traditional corporate lending.

In the face of overall revenue pressure and continued asset-side concessions, how to “squeeze” net profit from within has become a key challenge for CITIC Bank.

In 2025, CITIC Bank’s operating net income slightly decreased by 0.55% to 212.475 billion yuan; but despite shrinking revenue, net profit attributable to the parent broke through 70 billion yuan, reaching 70.618 billion, an increase of 2.98% against the trend.

This abnormal “profit growth without revenue growth” is primarily due to proactive and decisive interest margin defense.

Chairman Fang Heyi revealed that the bank’s net interest margin in 2025 remained stable at 1.63%, maintaining an absolute level of stability and exceeding the average of joint-stock banks by 21 basis points.

In a cycle of declining asset yields, this rare interest margin advantage is not from asset-side gains but from strong liability management.

A detailed breakdown shows that pressure on the asset side is evident.

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

But successful liability management built a defensive line: the decline in the cost of corporate and market-based liabilities helped lift interest margins by 17 and 45.7 basis points respectively, with the average cost of customer deposits dropping sharply by 0.37 percentage points to 1.52%, and the cost of fixed-term corporate deposits falling from 2.54% to 2.11%.

The significant reduction in deposit costs stems from the bank’s early “braking” on liabilities.

Fang Heyi disclosed that the bank proactively phased out high-cost liabilities such as structured deposits and large certificates of deposit about 1-1.5 years ahead of industry peers, a forward-looking defensive move that effectively provided a valuable profit buffer.

However, solely relying on interest margin defense is not enough to fully sustain absolute profit growth.

Dissecting the nearly 3% net profit increase reveals that it still depends on meticulous financial operations, with the robust profit figure supported by three key strategies.

First, rigid cost control. Under strict management, CITIC Bank reduced business and management expenses by 3.24% to 67.159 billion yuan, squeezing out space on the profit statement through operational austerity.

Second, smoothing through provisioning adjustments. At the end of the period, the bank’s loan loss coverage ratio decreased by 5.82 percentage points to 203.61%, with moderate provisioning easing and release of provisions directly boosting current profits.

The most subtle support comes from gains realized through the cleanup of past risks. Vice President Jin Xinian admitted that the bank’s cash recoveries from asset write-offs reached 12.9 billion yuan for the year, maintaining a hundred-billion-yuan scale for six consecutive years.

Relying on forward-looking liability management to protect interest margins, combined with internal cost cuts and recovery of past bad debts, CITIC Bank has stabilized its current performance.

But this also indicates that once provisioning coverage normalizes and recovery dividends peak, future profit growth will face more difficult challenges.

Breaking the Deadlock and Bottom Line

As financial adjustment space narrows, core business pressures beneath the profit figures become apparent. The most “difficult bone” to chew is the retail sector, once highly anticipated.

When profit margins are under extreme pressure and asset quality faces cyclical tests, retail business not only struggles to serve as a second growth engine but also becomes a major risk exposure.

In 2025, CITIC Bank’s credit card non-performing loan ratio rose 0.12 percentage points to 2.62%, and personal consumption loan NPLs increased by 0.66 percentage points to 2.80%. Under the macroeconomic weakening, these previously high-yield assets are experiencing severe cyclical pressure, significantly dragging down overall asset quality.

Faced with retail pressure, Chairman Fang Heyi emphasized that “retail stable contribution” does not mean lowering its strategic position, and proposed a four-dimensional approach: “defense, opportunity seeking, accumulation, and trend following.”

However, reaffirming strategic resolve alone cannot quickly bridge the gap in current data; a substantive breakthrough in retail still requires time.

In the context of ongoing retail credit risk releases, the real stabilizer for the bank’s asset quality bottom line is a set of highly traditional data: personal housing mortgage loans totaling 1.02 trillion yuan.

This large asset, accounting for 47.5% of retail loans and 18.1% of total bank loans, with a low non-performing rate of 0.41%, acts as a “ballast” to dilute risk. It functions like a ballast stone, preventing retail NPLs from spiraling out of control, but also highlights the bank’s current reliance on asset structure.

Amid credit pressure, CITIC Bank is attempting to use intermediary business to fill profit gaps.

In 2025, wealth management AUM grew by 16.34%, reaching over 5.70 trillion yuan; at the same time, the bank’s financial markets segment generated 29.918 billion yuan, bringing the bank’s non-interest income back into a positive growth zone of 1.55%.

However, objectively, relative to the size of the loan portfolio and provisioning consumption, these two segments’ profit contributions remain limited and insufficient to form a solid buffer against cyclical risks.

On the basis of maintaining business and risk control bottom lines, CITIC Bank has presented its final defensive move.

Board Secretary Zhang Qing revealed that the bank plans to raise the cash dividend payout ratio to 31.75%, with a total dividend of 21.2 billion yuan.

This is not merely a stopgap response to market volatility but a necessary shift after the banking industry’s departure from scale-driven growth.

As asset scale reaches the 10 trillion yuan level, the previous extensive expansion driven by high capital consumption becomes unsustainable, and the once-hopeful lightweight transformation faces growing pains. In this context, returning retained earnings to shareholders in the form of abundant cash and relying on stable dividends to provide market certainty is a pragmatic adjustment of the bank’s operational logic.

Thus, CITIC Bank’s defensive framework is now a complete closed loop.

Objectively, CITIC Bank is fully converging toward a prudent defensive strategy. Removing the halo of lightweight and high-growth, this 10-trillion-level financial giant is quietly changing course amid the cycle’s turbulence.

It no longer seeks to craft a glamorous countercyclical breakout story but instead adopts a comprehensive defensive financial strategy, aiming to stabilize and create space for genuine endogenous growth drivers to emerge in the next cycle.