Multidimensional Defense Across Cycles: China Merchants Bank to Deliver a High-Quality Development Report Card by 2025

Ask AI · How does China Merchants Bank’s AI-First strategy reshape customer service experience?

Investor Network Yu Ruoli

In the complex and ever-changing macroeconomic and financial market environment of 2025, China’s banking industry is generally facing profound changes, including narrowing net interest margins and the reshaping of asset quality. Against this backdrop, the 2025 annual report released by China Merchants Bank (600036.SH) (hereinafter referred to as “China Merchants Bank”) fully demonstrates its strong multi-dimensional defensive capabilities and the driving momentum of systemic evolution for its “Value Bank” strategy.

According to the annual report, while China Merchants Bank continues to lead the industry’s first-tier group in return on equity (ROE), it has also clearly proposed further increasing the cash dividend payout ratio to 35% or higher, solidifying its value “bottom color” with a firm foundation of returns. In the face of industry challenges, China Merchants Bank not only achieved a steady increase in the total assets under management of retail customers (AUM), surpassing the threshold of 17 trillion yuan, but also completed a structural leap in non-deposit AUM. In digital transformation, the company has also established an “AI-First” strategy; its AI Agent has achieved intelligent companionship for hundreds of millions of long-tail customers, setting a benchmark path for intelligent transformation.

In addition, China Merchants Bank actively responds to policy initiatives, deeply integrating service to the real economy and ESG concepts into its business logic. Guided by the “Five Big Articles,” the growth rates of its green loans and loans to technology enterprises are both significantly higher than the average growth rate of all loans. It has also achieved notable quantified results in the fields of technology finance and green finance. Through an in-depth perspective on these key operating indicators and objective data, China Merchants Bank’s 2025 annual report has clearly presented its internal logic for traversing cycles and its business resilience.

Financial resilience under industry pressure: transforming from “scale-driven” to “value leap”

At present, China’s banking industry is at a critical stage of shifting from rapid, large-scale expansion to high-quality, development with deeper substance. With multiple reductions in the Loan Prime Rate (LPR) and the lagged effect of deposit rate cuts, the industry’s net interest margin (NIM) has repeatedly hit new lows, presenting an opportunity to reshape the traditional “earning the interest spread” model. Meanwhile, real estate risks are moving into the phase of absorption and resolution, local government debt is being smoothly refinanced and replaced, and credit challenges in the transformation of the real economy remain objectively present.

Against this backdrop, China Merchants Bank, through fine-grained management of its asset-liability structure, has delivered an impressive answer for a value leap to the market. In terms of NIM defense, China Merchants Bank optimized its asset-side structure, significantly increasing targeted lending to high-yield retail loans and technology finance. On the liability side, leveraging its strong App ecosystem and advantages in payroll payment services, China Merchants Bank’s current account and savings account (CASA) ratio has continued to remain at an industry-leading level, effectively reducing high-cost negotiated deposits. As a result, China Merchants Bank’s net interest margin performance shows extremely strong resilience, with the scale of its decline significantly narrower than the industry average.

From the perspective of core financial data, China Merchants Bank’s profitability and internally generated capital growth momentum are particularly prominent. Its return on equity (ROE) continues to lead among the first-tier of listed banks, strongly validating the feasibility of its low-capital consumption and high-value growth model. Regarding shareholder returns that the capital market places heavy focus on, China Merchants Bank states clearly in its annual report that the cash dividend payout ratio will be further increased to 35% or higher. Through continuous and stable high cash dividends, China Merchants Bank further reinforces its attribute as a “cash cow” among core assets, sending a clear signal to the market with confidence in its strong capital strength and steady cash returns.

On asset quality—this core “moat”—China Merchants Bank’s non-performing loan (NPL) ratio has continued to stay at a low level below 1%, while its risk provision coverage ratio has remained at around 400%, demonstrating the company’s very strong ability to withstand risks. In 2025, China Merchants Bank proactively and thoroughly resolved risks in key areas such as real estate, adhering to the principle of “comprehensive identification and adequate provisioning in advance,” providing solid safeguards for stable and sound operations. In addition, through deep application of big-data risk control models, China Merchants Bank has also achieved dynamic and precise profiling of retail and credit card customer groups, ensuring that core asset-quality indicators continue to remain above the industry average.

A comprehensive upgrade of the moat: large wealth management and an end-to-end closed loop of all-round capabilities

Faced with fierce peer competition in retail transformation, China Merchants Bank in 2025 also carried out a deep upgrade of its distinctive businesses, with its strategic focus shifting from early “scale expansion” to an efficient leap toward “operational quality.”

Among them, large wealth management remains China Merchants Bank’s long-standing “signature” business and its ballast. The 2025 annual report shows that its total assets under management (AUM) for retail customers have steadily surpassed the threshold of 17 trillion yuan. The structural breakthrough in the proportion of “non-deposit AUM” provides strong support for the company’s stable generation of non-interest income.

These data indicate that China Merchants Bank’s large wealth management business no longer relies solely on high-cost deposits. Instead, it provides diversified, high-quality allocation portfolios for customers—including wealth management, funds, and insurance—centered on customer interests through its self-developed “TREE asset allocation system.” In terms of platform building, the “Zhaocaihao” ecosystem within the China Merchants Bank App has achieved an open, intelligent upgrade. It has introduced over 100 external asset management institutions for in-depth co-building. China Merchants Bank has therefore transformed into an efficient operator of financial traffic and intelligent algorithms, building a thriving wealth ecosystem.

In the private banking business segment, China Merchants Bank has long held the top position in China. In 2025, the average AUM per private banking client continued to grow steadily. With high-quality service, China Merchants Bank’s private banking business has won very high customer loyalty. To further consolidate the competitive barrier for this high-net-worth customer group, China Merchants Bank has also comprehensively implemented an “1+N” expert service system and a five-in-one integrated service model of “investor-company private research.”

This model breaks through traditional departmental barriers. By providing enterprises with high-quality services across the full life cycle—such as financing and equity incentive schemes—it naturally and efficiently drives the wealth management needs of business owners and key employees. It enables efficient transformation from financing product volume (FPA) to retail AUM, deeply linking “serving enterprises” with “serving families.”

In the corporate and supply chain finance areas, China Merchants Bank has also demonstrated an outstanding layout for seamless empowerment of the industrial internet. By using digital technologies such as blockchain and large models, China Merchants Bank not only solves the problem of hard-to-trace credit at the end of the supply chain through its “Cloud Certificate” system, but also further develops innovative data-based products such as “Zhaolian Easy Loan,” greatly improving customer acquisition and service efficiency. At the same time, by directly connecting to enterprises’ financial systems through SaaS products such as “Financial Cloud,” China Merchants Bank successfully upgraded from being an external financing provider to becoming a digital “CFO” for enterprises.

On the retail side, China Merchants Bank has established an “AI-First” strategy. Its AI Agent has realized personalized companionship for hundreds of millions of long-tail customers, effectively addressing the pain point of insufficient coverage by wealth/wealth management managers in the past. In addition, continuously leading NPS and customer satisfaction data not only reflect China Merchants Bank’s service reputation, but also serve as a deep footnote to its value philosophy that “financial results come as a natural gift from customer service.”

Embracing new-quality productive forces: AI-native architecture and a commercial win-win with ESG

2025 is not only a year of banks striving to cope with pressure on net interest margins, but also a technology year in which China Merchants Bank’s artificial intelligence applications break out comprehensively. Through ongoing investment in AI technologies, China Merchants Bank is moving from a traditional commercial bank to a “fintech company backed by AI with strong self-evolution capabilities.”

With its scale of technological investment maintained at a high level over the long term, China Merchants Bank’s investment structure has undergone a qualitative change. The company has achieved an end-to-end leap from a bottom-layer cloud architecture layout to top-layer AI applications and algorithm R&D, demonstrating strong foresight in its forward-looking deployment.

Its flagship achievement is the full integration of its AI Agent within the 14.0 version of the China Merchants Bank App. This intelligent agent enables smooth, full-voice and natural-language interaction. Through personalized, high-frequency companionship for hundreds of millions of long-tail customers, it effectively resolves the long-standing pain point that “wealth/wealth management managers can’t cover everyone.” “AI Xiao Zha” has truly upgraded into a “private wealth assistant” that can generate research reports and precisely execute personalized asset-allocation plans directly based on users’ natural-language instructions.

On the middle and back office operations and risk control side, China Merchants Bank’s multimodal financial large models have fully empowered advanced intelligence domains such as credit approval, anti-money laundering review, and code development. For example, China Merchants Bank’s AI-assisted R&D not only shortens new product development cycles by more than 30%, but also enables intelligent identification of the authenticity of complex trade backgrounds in supply chain finance, turning the value of technology directly into significant efficiency gains.

In addition, China Merchants Bank, for the first time in its annual report, has disclosed data asset governance status—demonstrating its foresight as a benchmark player. By elevating data from being merely a stored material to becoming a productive factor, China Merchants Bank effectively drives precise customer acquisition at the business end and forward-looking risk anticipation at the risk-control end, achieving an assetization leap in the value of data.

In response to national strategies and in serving the real economy, China Merchants Bank has integrated the “Five Big Articles” with its own business logic for mutual benefit and win-win results. For specialist, innovative, and “gazelle” enterprises that represent “new-quality productive forces,” China Merchants Bank has built a comprehensive dedicated system for technology finance. The annual report shows that the growth rates of its loans to technology enterprises and green loans are both significantly higher than the average growth rate of all loans. By launching an upgraded “Sci-Tech Innovation Loan,” China Merchants Bank not only provides loans, but also transforms into a “partner for technology enterprises,” comprehensively considering companies’ patent data, talent structure, and research-and-development investment to lock in high-quality technology tracks in advance.

In addition, in the field of pension finance, China Merchants Bank ranks first among joint-stock banks in both the number of personal pension account openings and the average asset size per account, having successfully built a leading full lifecycle pension service system. In terms of ESG practices and brand value, China Merchants Bank has also achieved abundant results in innovation of carbon-neutral bonds, with its ranking in the authoritative global financial magazine The Banker steadily improving. Meanwhile, the company links green performance with executive performance, demonstrating strong corporate social responsibility.

Relying on a series of forward-looking strategic moves, China Merchants Bank has strongly evidenced to the market its business resilience in traversing cycles. With a new operating paradigm of “intelligent, all-round, high-dimensional defense,” China Merchants Bank continues to accumulate core value and is aligning itself with an even more outstanding industry value benchmark. (Produced by Think Finance) ■