Highest increase exceeds 20%: The battle for AUM among listed banks intensifies

Ask AI · What advantages and strategies do different types of banks have in competing for AUM?

China Economic Journal reporter Qin Yufang, Guangzhou report

As of April 2, 24 listed banks have released their 2025 performance reports. While performance has rebounded and the decline in net interest margins has narrowed, expanding retail customer bases and growing the total assets under management (AUM) of retail clients have already become the key focus of commercial banks’ diversified retail business transformation and an upgrade to their wealth management strategies.

According to annual report data, among 13 listed state-owned banks and joint-stock banks, the number of retail customers has achieved positive year-over-year growth across the board, while 8 banks’ AUM recorded year-over-year growth of more than 10%.

Industry insiders believe that against the backdrop of falling interest rates and continuously narrowing net interest margins, banks are being forced to shift from a “net interest margin driven” model to a “non-interest income driven” model, with fees from wealth management becoming an important breakthrough. Growing AUM to increase non-interest income (especially wealth management fees) in order to offset the decline in interest income is a key measure for banks to respond to the current challenges and achieve long-term development.

Multiple banks achieve double-digit year-over-year AUM growth

In banking operations, AUM refers to the total of all financial assets managed by a commercial bank under the name of its retail customers. It includes not only traditional bank deposits (demand and time deposits), but more importantly also covers various wealth management products that customers purchase through the bank.

Judging from the performance reports disclosed by 13 state-owned large banks and joint-stock banks, 9 of them have AUM growth of more than 10%. Among them, Zhejiang Shuren? Bank (601916.SH) grew by 22.91%, China Merchants Bank (600036.SH) by 14.44%, and CITIC Bank (601998.SH) by 14.29%, ranking in the top three. In addition, China Merchants Bank’s AUM first surpassed 17 trillion yuan, holding the No. 1 position among joint-stock banks. Compared with the end of 2024, it grew by 2.165 trillion yuan, and its growth rate reached a new high.

At the earnings release, Wang Liang, President of China Merchants Bank, said that the bank’s past advantage lay in retail banking. In recent years, while the growth rate of retail business’ contribution to revenue and profit has been slower than before, the internal structure has undergone major changes. On the one hand, retail customers have grown rapidly; the bank now has 224 million customers, with especially faster growth among high-value customers. On the other hand, AUM has grown rapidly: over the past four years, the annual incremental amount has been about 1 trillion yuan, and in 2025 the incremental amount reached 2 trillion yuan, with the fastest growth ever.

At the annual report conference, Lu Wei, President of Postal Savings Bank of China (601658.SH), also said that by the end of 2025, the bank’s AUM for individual customers would reach 18.3 trillion yuan, a 9.64% increase, with a strong growth momentum and record highs in self-managed AUM additions. He believes that retail finance has huge potential and there is still room to improve the quality of retail customers. The bank has set a “million-level” customer-acquisition goal for 2026, focusing on accelerating growth in its private wealth customer segment and its younger customer segment.

Overall, expanding the number of retail customers and growing AUM has become a consensus among banks seeking breakthroughs in retail business growth.

In this regard, Zeng Gang, Director of the Shanghai Financial and Development Laboratory, analyzed that the continued narrowing of net interest margins is the most direct pressure. In the past, banks mainly attracted funds by raising deposit rates; now they need to improve profitability quality by growing AUM and optimizing asset allocation. This is no longer simple spread arbitrage, but rather the excavation of customers’ full lifecycle value. In reality, China’s resident investable assets exceed 300 trillion yuan; 170 trillion yuan has entered the asset management field, but 130 trillion yuan still exists in the form of deposits—an incremental market banks must compete for. For banks, this is not optional but a necessity for survival and development.

Dong Ximiao, Chief Economist of Zhaolian and Deputy Director of the Shanghai Financial and Development Laboratory, said that commercial banks’ current high emphasis on retail AUM and their collective intensification are, in essence, a deep transformation of their operating model in the context of the low-interest-rate era—from relying on the spread between deposits and loans to being driven by wealth management. This is not only a passive response to the narrowing of net interest margins, but also an active push to seek new growth models.

AUM competition will show an “olive-shaped” split

Looking at development trends, what differences exist among different types of banks in terms of their focus and paths for expanding AUM?

Zeng Gang believes that the retail AUM of first-tier state-owned large banks has mostly already exceeded 10 trillion yuan, with clear advantages. These banks have a large customer base, well-developed channel networks, and strong brand trust, resulting in the lowest cost to acquire new customers. Their expansion path is “penetration downward + breakthrough upward”—expanding into lower-tier markets through digital channels while deeply cultivating private banking services for high-net-worth clients. As for second-tier joint-stock banks, China Merchants Bank is currently the only “large-banks” contender; its retail AUM is approaching the level of state-owned large banks. It adopts a “wealth platform” strategy, emphasizing an open product ecosystem and refined customer segmentation. The retail AUM of other joint-stock banks generally falls between 1 trillion and 6 trillion yuan, facing the greatest pressure for differentiation. Their advantages lie in shorter decision chains and relatively more flexible innovation, but their customer base is still thinner compared with large banks, so they need to secure growth space through “misaligned” or differentiated competition. Third-tier city commercial banks rely on regional advantages, government-related resources, and county-level wealth accumulation, and adopt a “local deep cultivation” strategy. However, constrained by talent, investment research capabilities, and product development abilities, their growth space is relatively limited.

Looking ahead, Zeng Gang believes that in the future, AUM competition will increasingly take on an “olive-shaped” split: leading large banks will dominate high-net-worth customers, regional banks will hold onto long-tail customer groups, and mid-tier institutions will face mounting survival pressure.

Faced with fierce competition, Zeng Gang believes that banks need to build three core capabilities to form new competitive advantages. First, a comprehensive financial ecosystem that connects the full chain of “deposits, loans, remittance settlement, and investment insurance,” enabling customers to receive one-stop solutions for wealth inheritance, tax planning, and risk management. This is the core competitive advantage compared with securities firms and third-party institutions. Second, digital capabilities: build a “virtual-and-physical integrated” service model. Through AI investment advisory assistants, client matching driven by knowledge graphs, and RPA automation, banks can achieve large-scale replication of investment advisory capabilities. Special importance should be attached to intelligent emotion recognition and intelligent post-investment companionship—automatically triggering risk alerts and portfolio analysis during market volatility—which is key to preventing stampede-style redemptions. Third, the investment research (IR) system: actively cultivate and retain excellent investment research talents, and establish truly differentiated product development mechanisms. This is especially important for smaller and mid-sized banks and also a key bargaining chip in competing with large banks.

Postal Savings Bank researcher Lou Feipeng emphasized that, in the face of changes in the market environment, for some banks to stabilize their retail business, the key lies in digital operations, comprehensive services, and refined risk-control capabilities. These capabilities allow banks to deeply extract value from existing customers, make up for narrowing net interest margins through non-interest income, and control asset-quality risks, thereby enabling the sustainable development of retail business.

Yu Fenghui, Senior Researcher at Pangu Think Tank, also pointed out that under the current backdrop of challenges facing banks’ retail business, banks that are able to stabilize retail business’ contribution to revenue and profit often demonstrate strong capabilities in three key areas: digital transformation, optimizing customer experience, and product innovation. Digital transformation is not just the application of technology; it also involves using big data analytics to achieve precise marketing and personalized services, thereby improving customer stickiness. Optimizing customer experience involves improvements across the entire process—from product design to after-sales service—to meet and even exceed customer expectations, thereby enhancing customer loyalty. Strong product innovation capabilities ensure that banks can quickly respond to market changes, launch new products and services that meet customer needs, and further consolidate their market position.