Brokerage firms' margin trading business shows "incremental volume without increased revenue," especially among leading firms. How can this dilemma be broken?

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Caixin Media April 1 report (Reporter Wang Chen): Based on the disclosed annual reports of more than 20 listed securities firms for 2025, the phenomenon of “two-margin business expansion in scale, but limited revenue growth” has become widespread, especially among leading brokerages.

Looking back at 2024, the two-margin business of brokerages began to show hints of “volume increasing but prices decreasing.” At that time, interest income at more than 40 brokerages declined, while in contrast, the average growth rate of the balance of funds lent increased by more than 16%. Entering 2025, this trend appears to be significantly amplified.

From the market perspective, in 2025 overall capital-market trading activity increased markedly, investors’ risk appetite continued to recover, and the outstanding balances of margin financing and securities lending across the market rose steadily. By the end of 2025, the A-share balance of margin financing and securities lending was approximately RMB 2.54 trillion, up 36.26% year over year. The number of investors who opened credit accounts increased by 8.85% compared with the end of the prior year.

Benefiting from the market, brokerages also achieved substantial growth in the scale of funds lent under margin financing and securities lending. Data show that last year the growth rates in funds lent at many brokerages were generally above 30%, and even nearly ten brokerages temporarily raised the upper limits of business scale. However, scale growth did not translate linearly into revenue growth. Compared with the frequent 30%-40% increases in funds lent, interest income from brokerages’ margin financing and securities lending appears more “subdued.”

Leading brokerages’ two-margin business revenue growth stalls

In 2025, brokerages’ margin financing and securities lending business showed a clear “more increment, not more revenue” characteristic. On the one hand, as the market rebounded, each brokerage’s scale of funds lent generally increased significantly. On the other hand, because the financing interest rate continued to fall, the growth rate of interest income lagged far behind the growth rate of scale, even leading to an awkward situation where scale surged but revenue barely increased.

Based on the annual reports of more than 20 listed brokerages already disclosed, the “more increment, not more revenue” phenomenon is particularly pronounced among leading brokerages.

CITIC Securities, Galaxy Securities, China Merchants Securities, and other leading brokerages saw funds lent under margin financing and securities lending rise by generally more than 30%, and some brokerages even grew by more than 40%. Among them, Guotai Junan’s year-over-year growth in funds lent reached as high as 142.74%; the increases at CITIC Securities, CICC, Galaxy Securities, and China Merchants Securities also stood at 49.46%, 51.45%, 42.80%, and 41.60%, respectively.

In contrast, interest income from margin financing and securities lending at these leading brokerages generally grew by less than 20%. Galaxy Securities’ funds lent grew by more than 40%, but interest income increased by only about 5%. The interest income growth rates at CITIC Securities, Huatai Securities, and China Merchants Securities were 15.09%, 15.17%, and 12.92% respectively, far lower than the scale growth rate.

Behind this phenomenon, on the one hand it is affected by falling market interest rates; more importantly, it is the intensifying price war. Over the past year, financing interest rates targeted at newly opened clients were generally concentrated in the 4%-5% range, while for high-quality customers with larger asset volumes, financing interest rates were even below 4%. Because leading brokerages have larger market shares, they are hit more directly by the price war. Although financing scale expanded sharply, the downtrend in fee rates severely eroded interest income.

Even some executives in the margin financing and securities lending business revealed that, to capture market share, some leading brokerages pushed margin rates down to a few percent (2-point-something). This interest-rate level can barely cover the brokerages’ cost of capital, and some brokerages are even in a state of running the business at a loss.

Smaller and mid-sized brokerages stage a turnaround

值得关注的是，部分中小券商却实现了融资融券利息收入的高增长。东方财富、华鑫证券、首创证券、红塔证券等券商脱颖而出。

东方财富2025年融资融券利息收入同比增长37.31%，与融出资金37.25%的增幅基本同步，实现了规模与收入的匹配增长。主要得益于其互联网平台的流量优势和低成本获客能力，使其在价格战中仍能保持较好的盈利能力。

华鑫证券、首创证券、红塔证券等中小券商同样表现亮眼，利息收入增幅均超过25%。其中，红塔证券融出资金增长31.43%，利息收入却大幅增长43.19%，收入增幅甚至超过规模增幅。

为何一些中小券商反而能实现业务量和利息收入的双高增？记者了解到，一些中小券商由于资金成本高，面对价格战时，并不会跟进，因此维持了较高的息差。此外，中小券商本身体体量较小，弹性更大。也有业内人士认为，中小券商客户以散户和区域客户为主，客户资金量小、议价能力较弱。

What new playbooks do brokerages have for margin financing and securities lending in 2025?

Faced with earnings pressure, brokerages have adjusted their development strategies for margin financing and securities lending. Based on the annual report disclosures of various brokerages in 2025, four major core directions for industry transformation have emerged: technology enablement, refined operations, risk-control upgrades, and comprehensive services.

First, technology-driven: use AI large models and intelligent tools to rebuild the service model.

Financial technology is reshaping the underlying logic of services for margin financing and securities lending. In 2025, Guotai Junan proactively explored AI scenario-based applications, launching an industry-leading vertical large model for margin financing and securities lending business, strongly empowering client trading and improving the quality and effectiveness of risk control. Huatai Securities has fully leveraged its financial technology strengths, continuously building an integrated securities and financial ecosystem centered on customers, with innovative products as the vehicle and core capabilities as support, while actively exploring matrix-based operations for customer segments.

In addition, Orient Securities launched a single-function feature for credit conditions, building an intelligent credit data system to empower business management and improve business efficiency. The company adheres to the “three good and three best” principles, and, following the business philosophy of “front-row customer acquisition, front-row service, and front-row support,” it deepens services for high-net-worth clients, improves financing pricing mechanisms, and achieves synchronized growth in business scale and client resources.

Beyond the use of some intelligent tools, two leading brokerages’ innovative products are especially worth watching:

CITIC Securities launched the “Zhengjin Treasure Box” equity service system. As an industry first, it provides individuals with a multi-dimensional smart service equity system including margin financing and securities lending trading, investment research, account services, and more. According to information, this platform covers core functions such as margin financing and securities lending conditional rules, simulated trading, a margin financing and securities lending calculator, the “Investment Research Magic Cube,” and other key features. By integrating market data and information, it provides clients with high-end research reports and personalized reminder services, effectively supporting the steady rise of margin financing shares.

CITIC CCB Investment focuses on optimizing its intelligent investment advisory product, the “Polaris Account Diagnosis Product.” This product is positioned as an intelligent credit account analysis tool for investors. Through three core modules—market, account, and behavior—it provides clients with end-to-end services ranging from controlling the timing of macro market rhythms to issuing micro-level account risk alerts.

Worth noting is that this product introduces the advanced 3M theory, enabling it to attribute clients’ returns to three dimensions: trading methods, trading mindset, and资金管理 (fund management), thereby identifying and correcting irrational investment behaviors such as overconfidence. By the end of 2025, this product had cumulatively signed up nearly 30k margin financing clients for the platform.

Second, refined operations: tiered customer services and deep cultivation of customer groups.

When price competition reaches the ceiling, the granularity of service details determines a brokerage’s profitability. In 2025, many brokerages repeatedly mentioned “refined management” and “differentiated services” in their annual reports.

Guotai Junan enhances refined operations, precisely matching the differentiated needs of different client groups, aiming to improve comprehensive service levels from retail to ultra-high-net-worth individuals and overseas clients. Huatai Securities, by contrast, focuses on key client groups through matrix-based customer-segment operations and innovates business models to achieve both business scale growth and an increase in market share.

This trend toward refinement also extends to more brokerages. Guolian Securities, around customer segmentation and differentiated development, has substantially increased the number of newly opened customers. In addition, institutional client groups have become the focus of competition among all parties. Shenwan Hongyuan, Dongxing Securities, and Hongta Securities have all explicitly stated that they will strengthen institutional service capabilities to meet investors’ diversified strategy needs.

Third, risk-control upgrades: shift from “passive compliance” to “proactive prevention and control.”

As scale expands rapidly, risk management capability has become a core focus for brokerages. Many brokerages have integrated technology deeply into the risk-control process to build a whole-cycle risk monitoring system.

CICC tightens controls over concentration of single customers and underlying assets, and uses stress testing to conduct key monitoring of high-risk clients. Shenwan Hongyuan and Orient Securities have both built dynamic risk-prevention and control mechanisms, relying on digital-and-intelligent tools to strengthen end-to-end management.

Fourth, comprehensive services: expanding from a single business to empowering the entire chain.

Brokerages are accelerating their transition into comprehensive service providers. Guotai Junan deepens cooperation with overseas institutions, promoting the successful landing of QFI margin financing and securities lending business, actively integrating into the group’s ETF ecosystem, and focusing on improving service levels for retail, enterprises, institutions, ultra-high-net-worth individuals, and overseas clients. 广发证券 and Zhongtai Securities both emphasize building a system with linked investment research, investment advisory, and investor services through professional enablement and refined services. Guohai Securities and Zhongyuan Securities are committed to deeply matching investment advisory products with margin financing clients’ needs, driving a transformation toward higher-level service models.

Although Galaxy Securities faces challenges in revenue growth rates, it builds a competitive “credit business + X” business cluster by focusing on functional construction. This model uses credit business as a cornerstone, attempting to unlock diversified comprehensive financial services. Galaxy Securities has also upgraded its Galaxy-branded public securities pool brand with the goal of steadily increasing the scale of securities supply to offset the impact of falling interest rates.

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