Net profit exceeds 70 billion for the first time, and CITIC Bank's dividend distribution is finally generous.

Ask AI · How does CITIC Bank achieve profit growth despite a decline in revenue?

Produced by | Dharma Finance

After entering the “trillion yuan club,” CITIC Bank was the first to announce its performance report for 2025.

On March 20, CITIC Bank (601998.SH) announced that its total operating income for the year 2025 was 212.475 billion yuan, a decrease of 0.55% compared to the previous year; and its net profit attributable to shareholders was 70.618 billion yuan, an increase of 2.98% year-on-year.

The biggest highlight of CITIC Bank’s annual report is the stepwise leap in asset scale. By the end of 2025, CITIC Bank’s total assets reached 10.13 trillion yuan, an increase of 6.28% from the end of the previous year. It forms a part of the “trillion yuan tier” together with China Merchants Bank, Industrial Bank, and Pudong Development Bank.

CITIC Bank’s total asset growth over the past five years has been relatively stable. Although the growth rate decreased for four consecutive years prior, the overall fluctuations have been smooth without significant ups and downs. Moreover, after four consecutive years of declining growth rates, the asset growth rate of the bank showed a recovery trend in 2025.

However, in terms of revenue performance, CITIC Bank slightly underperformed compared to the other three “trillion yuan” joint-stock banks. According to previous performance reports, the revenue growth rates for China Merchants Bank, Industrial Bank, and Pudong Development Bank in 2025 were 0.01%, 0.24%, and 1.88%, respectively, while CITIC Bank was the only one to experience a decline.

CITIC Bank has maintained a balanced, stable, and sustainable main tone in recent years, making the decline in revenue somewhat expected.

Compared to revenue growth, CITIC Bank has achieved positive net profit growth for five consecutive years, which is quite rare among joint-stock banks. Chairman Fang Heying also stated in his annual report speech that the bank’s net profit underwent a “triple jump” of 50 billion, 60 billion, and 70 billion over five years, making it one of the few joint-stock banks to achieve five consecutive years of positive growth.

Notably, CITIC Bank’s dividends for 2025 reached a new high. According to the profit distribution plan, CITIC Bank plans to distribute a cash dividend of 1.93 yuan (including tax) for every 10 shares, with a total annual cash dividend amount of 10.740 billion yuan; combined with the 10.461 billion yuan cash dividends already distributed in the interim, the total cash payout for the year amounts to 21.201 billion yuan.

In fact, as a leader among joint-stock banks, CITIC Bank’s dividend ratio is significantly weaker compared to China Merchants Bank. In recent years, China Merchants Bank’s annual cash dividend ratio has remained above 30%, while CITIC Bank has not reached 30% since 2017.

In 2025, CITIC Bank’s dividend payout ratio from two cash dividend distributions reached 30.02%, with both the dividend amount and ratio setting a new ten-year record, significantly enhancing its attractiveness.

Slight decline in net interest income

Under CITIC Bank’s balanced, stable, and sustainable operational philosophy, it once again achieved a “profit growth without revenue growth” result in 2025. This marks the second revenue decline within five years, following a 2.6% drop in 2023.

The growth in CITIC Bank’s net profit was primarily adjusted through provisions. In 2025, CITIC Bank made provisions of 58.172 billion yuan, accounting for 27.38% of its revenue.

From 2021 to 2024, the proportions of provisions to revenue were 37.67%, 33.78%, 30.21%, and 28.6%, respectively. It can be seen that in the context of continuously declining interest margins in the banking industry, reducing provisions to adjust profits has become an important means of stabilizing profits.

The continuous narrowing of interest margins is a common pressure faced by the banking industry in 2025, and CITIC Bank is no exception. By the end of 2025, CITIC Bank’s net interest margin was 1.63%, a decrease of 14 basis points from the end of the previous year. Last year, CITIC Bank’s net interest income was 144.469 billion yuan, a decline of 1.51% from the previous year, while non-interest net income was 68.006 billion yuan, an increase of 1.55% year-on-year.

The decline and increase in the two major net income categories were roughly consistent, but since the net interest income is larger, the growth in non-interest net income could not offset the decline in the former.

At the same time, CITIC Bank is also reducing costs to ensure an increase in profit margins. In 2025, the bank’s operating expenses were 128.801 billion yuan, a decrease of 2.95% year-on-year. Among them, business and management expenses amounted to 67.159 billion yuan, a decrease of 2.251 billion yuan from the previous year, down 3.24%.

In terms of asset quality, CITIC Bank’s performance is commendable. By the end of 2025, CITIC Bank’s non-performing loan ratio was 1.15%, a decrease of 0.01 percentage points from the end of 2024, achieving a continuous decline for seven years.

Regarding CITIC Bank’s operational strategy for 2026, Fang Heying mentioned at the performance meeting that the bank will focus on adjusting structure, solidifying strengths, strengthening characteristics, and targeting key areas as the main operational strategy.

In terms of structural adjustment, CITIC Bank will continue to strengthen its risk management philosophy and strategies based on structure; in solidifying strengths, it will further build a growth model for liabilities supported by payment, settlement, and transaction under a new balance of quantity and price, solidifying the foundation for liability costs; in strengthening characteristics, it will amplify differentiated competitive advantages through a comprehensive financial service model.

In terms of targeting key areas, it will focus on several business growth points that have good fundamentals, good markets, and high value. Capital market business, cross-border finance, investment trading capability, wealth management, risk mitigation, and collections will all become important sources of “incremental growth” for CITIC Bank in the future.

Retail profit contribution plummets

Fang Heying stated at the performance meeting that CITIC Bank’s overall development pattern is “corporate business takes the lead, retail maintains contribution, gold market increases income, and risk control creates value.” However, the retail banking business currently faces many challenges.

In 2025, among CITIC Bank’s three major segments, the corporate banking business generated net operating income of 91.930 billion yuan, an increase of 2.18%; the financial market segment generated net operating income of 28.059 billion yuan, up 4.95% from the previous year. Only the retail banking business generated net income of 74.843 billion yuan, a decrease of 8.53% from the previous year, becoming the only segment to decline among the three major segments.

Despite retail banking remaining an important strategic direction for CITIC Bank, since 2022, the pre-tax profit of CITIC Bank’s retail banking business has declined for four consecutive years.

From 2021 to 2024, the pre-tax profits of CITIC Bank’s retail banking business were 22.704 billion yuan, 17.380 billion yuan, 15.935 billion yuan, and 9.230 billion yuan, respectively.

In 2025, the bank’s retail banking business pre-tax profit was 5.303 billion yuan, a year-on-year decline of 42.55%, with the proportion of total profit plummeting from 34.6% in 2021 to 6.3%.

Currently, domestic commercial banks’ retail businesses are undergoing structural adjustments, with credit card business being one of the core segments entering a deep optimization phase. From CITIC Bank’s disclosed operational data for 2025, its credit card business shows characteristics of “quantity increase and quality adjustment.”

By the end of 2025, the total number of credit cards issued by the bank reached 129 million, an increase of 4.60% from the previous year; however, the balance of credit card-related loans was 462.117 billion yuan, a year-on-year decrease of 5.28%, indicating a contraction in overall asset scale.

In terms of transactions for the year, CITIC Bank’s total credit card transaction volume was 2.18 trillion yuan, a year-on-year decline of 10.66%; the revenue generated from credit card business was 47.749 billion yuan, with a decline rate of 14.60%. Observing over a longer period, since 2023, the bank’s credit card transaction volume and operating income have maintained a downward trend for three consecutive years, revealing increasing industry growth pressures and business transformation demands.

Compared to the overall decline in non-performing loans, CITIC Bank’s personal loan non-performing ratio is still a concern. In 2025, the non-performing loan ratio for personal loans rose from 1.25% to 1.32%, with the non-performing ratio for personal consumption loans increasing by 0.66 percentage points year-on-year to 2.80%, and the credit card non-performing ratio at 2.62%, up by 0.12 percentage points year-on-year.

The bank’s risk director, Jin Xinian, stated that since 2024, in response to the industry-wide trend of retail risks, the bank has taken measures such as implementing a joint prevention and control mechanism for business and risk, and strengthening the full-process management of credit granting to continuously enhance its ability to acquire customers and manage risks independently. With the risk trend of major products improving, the bank is confident in stabilizing the quality of its retail assets as soon as possible.