The retail dilemma of CITIC Bank's 10 trillion yuan: Strategies for private banking wealth breakthrough

(Source: WEALTH Wealth Management)

On March 23, CITIC Bank held its 2025 annual performance briefing. In 2025, CITIC Bank achieved total assets exceeding 10 trillion yuan and a net profit attributable to shareholders of 70.618 billion yuan, ranking among the top tier of domestic large joint-stock banks.

However, in stark contrast, the bank’s retail business, previously positioned as a “first strategy,” faced significant pressure, with profits nearly halved. Private banking and wealth management became the few growth areas in the retail sector but struggled to offset losses in the credit business.

01

2025 Retail Business Core Review: Impressive Volume, Imbalanced Structure, Rapid Profit Decline

CITIC Bank’s 2025 annual report shows that the retail business exhibits characteristics of “steady growth in scale, declining revenue, plummeting profits, and rising risks,” with the following core data:

Profits significantly shrank: The retail banking business recorded a pre-tax profit of 5.303 billion yuan, down 42.55% year-on-year; the profit contribution dropped from about 11% in 2024 to 6%, with retail assets accounting for 23.2% of the bank but contributing only single-digit profits, leading to a severe mismatch in input-output.

Negative revenue growth: Retail revenue reached 79.367 billion yuan, down 7.36% year-on-year, making it the only segment among corporate banking, financial markets, and retail to decline.

Credit business stalled: The cumulative issuance of credit cards reached 129 million (up 4.6% year-on-year), but transaction volume was 2.18 trillion yuan (down 11% year-on-year), and business income stood at 47.8 billion yuan (down 14.5% year-on-year), with issues of dormant cards becoming prominent.

Asset quality differentiation: The overall non-performing loan ratio for the bank was 1.15% (an improvement for seven consecutive years), but retail non-performing loans significantly increased—personal consumption loan non-performing ratio was 2.80% (up 0.66 percentage points year-on-year), credit card non-performing ratio was 2.62% (up 0.12 percentage points year-on-year), and the overall personal loan non-performing ratio was 1.32%, becoming the main source of non-performing loans.

Wealth management resilience: Retail AUM reached 5.36 trillion yuan (up 14.29% year-on-year), with private banking clients numbering 96,600 (up 14.93% year-on-year), private banking AUM at 1.36 trillion yuan, and wealth management fees increased by 45.17% year-on-year, making it the only high-growth segment in retail.

Strategic emergency shift: Management clearly stated to “abandon the scale obsession,” actively shrinking retail credit, with the balance of personal loans (excluding credit cards) increasing by only 1.39%, far below the 11.87% growth rate of personal deposits, shifting to “contraction defense, strict risk control.”

Notably, the “retail first strategy” that the bank has adhered to for many years is no longer mentioned. Looking ahead to 2026, CITIC Bank Chairman Fang Heying stated at the performance briefing that “company business will carry the weight, and retail business will contribute steadily.”

Focusing on developing corporate business—does this mean retail business is “not attractive anymore”? In response, Fang Heying clarified that this does not mean a downgrade of retail business but rather “taking on challenges”—given the current periodic prevalence of risks in retail credit, the retail business must focus on the development of the wealth management market.

02

Core Highlights of Retail Business: Wealth Management (including Private Banking) Resilience Prominent, Fundamental Capabilities Steadily Strengthened

Wealth management and private banking: The “ballast stone” of the retail sector

Dual advantages in scale and growth rate: Retail AUM has remained second among joint-stock banks for five consecutive years, with wealth management revenue up 12% year-on-year in 2025, setting a four-year high; private banking clients increased by 12,600 annually, with a growth rate of 14.93%, and private banking AUM increased year-on-year, with average assets per client remaining robust, becoming a member of the first tier of private banking among joint-stock banks.

Outstanding contribution to revenue: Non-interest net income has seen positive growth for six consecutive years, with wealth management fees surging over 45%, and agency business fees increased by 24.77%, effectively offsetting declines in interest margins and credit income, making it the most growth-oriented segment of the retail business.

Initial success in customer segmentation: The private banking center covers 69 key cities, establishing a dedicated service system for high-net-worth clients, with VIP and affluent clients reaching 4.891 million, providing a solid customer base for private banking.

Liability cost and risk control adjustments show results

Significant deposit cost advantage: Retail demand deposits account for 27%, up 3.2 percentage points over the past two years, with a deposit cost rate of 1.52%, leading among joint-stock banks, providing low-cost funding support for retail business.

Proactive risk control contraction: Increased entry thresholds for consumer loans, with high-rated customers accounting for 58%; 37 branches embedded risk officers in personal loan departments, with housing mortgage loan growth ranking first in the industry, actively reducing high-risk credit scale.

Technology empowers retail and wealth management

AI has permeated business processes comprehensively, with the intelligent wealth advisor digital persona “Xiao Xin” serving over 7.91 million clients, peak calls of large models exceeding 3 million times a day, implemented in over 1,700 service scenarios, enhancing the efficiency of wealth management and private banking services through digitization.

03

Core Challenges of Retail Business: Profit Imbalance, Asset Pressure, Prominent Shortcomings in Private Banking Wealth

Severe imbalance in profit structure, with credit business dragging down overall profits

Retail occupies 23.2% of the bank’s assets but contributes only 6% of profits, while corporate business and financial markets contribute 65% and 32% of profits, respectively, with retail transitioning from a “profit center” to a “cost center.”

Credit cards have shifted from “retail ace” to a burden: Card issuance has increased, but transactions, revenue, and monthly active users on the app have all declined, with falling interest rates compounding rising non-performing loans, leading to increased business losses.

Asset quality shows a stark contrast, with retail risks concentrated and exposed

The non-performing loan ratio for corporate loans fell from 1.27% to 1.09%, but retail saw significant increases in non-performing ratios for consumer loans and credit cards due to customer segmentation and lax risk control, with risk costs consuming substantial profits, becoming a “laggard” in a common industry issue.

Core shortcomings in private banking and wealth management: Weak foundation, difficult to fill credit gaps

Low-end customer structure, with low average AUM: Retail AUM is about 5 trillion, but average AUM is only 30,000-40,000 yuan, primarily composed of long-tail mainstream customers, with a very low proportion of high-net-worth clients, lacking customer value, stickiness, and risk tolerance, making it difficult to support high-yield private banking business.

Insufficient competitiveness in private banking, with clear gaps compared to peers: Private banking clients number 96,600, far below China Merchants Bank (169,100), with discrepancies in average AUM compared to large banks and leading joint-stock banks, with weak capabilities in brand influence, exclusive products, and high-end services like family trusts.

Wealth management is “a small horse pulling a big cart”: Although wealth management and agency business have rapid growth, the base is small, and the profit scale is far from sufficient to cover the profit gap in credit cards and consumer loans, with a weak customer base and product system unable to independently support the retail transformation foundation.

Short-term pain from strategic contraction

Shifting from “aggressively pursuing retail” to “defending risk control,” actively shrinking credit has led to weak retail income growth, and the short-term profit predicament is difficult to resolve quickly, representing a passive adjustment under cyclical pressure rather than an active upgrade.

04

Private Banking and Wealth Management: The Core Breakthrough Point of CITIC Retail Transformation

The essence of the retail business dilemma is that the “credit-dependent” old path has reached its end; future breakthroughs must focus on private banking and wealth management, shifting from “scale expansion” to “value cultivation”:

Customer upgrade: From long-tail mainstream to high-net-worth

Increase private banking client expansion, leveraging CITIC Group’s industrial resources to tap into high-net-worth clients such as business owners and new economy elites, raising the proportion of VIP/private banking clients, increasing average AUM and individual client value.

Service upgrade: From product sales to buyer advisory

Strengthen exclusive asset allocation, family trusts, cross-border financial services, etc., in private banking, promoting a shift from “selling products” to a customer demand-centered advisory model, enhancing the sustainability of non-interest income.

Resource synergy: Build barriers leveraging group advantages

Linking CITIC Securities, CITIC Trust, CITIC Prudential, and other financial licenses to create a “one-stop” wealth management ecosystem, forming differentiated competitive strengths in private banking.

Rebalance risk control and returns

Adhere to “not sacrificing quality for scale,” focus on high-quality customers, using light-capital wealth management businesses to hedge credit risks, and reconstruct the retail profit model.

05

Summary and Outlook

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