【Huachuang Finance Xu Kang Team】China CITIC Bank 2025: Revenue Growth Inflection Point Turning Upward, Dividend Payout Ratio Increased to 31.75%

(Source: Xiaokang Financial)

Details:

On the evening of March 20, CITIC Bank announced its 2025 annual report. The full-year operating income reached 212.475 billion yuan, narrowing the year-over-year decline to -0.55% (1-3Q25: -3.46%). Operating profit was 83.674 billion yuan, up 3.39% year-over-year (1-3Q25: +4.7%). Net profit attributable to shareholders of the listed company was 70.618 billion yuan, an increase of 2.98% (1-3Q25: +3.02%). The non-performing loan ratio decreased by 1 basis point to 1.15% month-over-month, and the provision coverage ratio slightly declined by 0.6 percentage points to 203.6%.

Comments:

Revenue growth turning upward, core revenue capabilities continue to improve; asset quality remains stable and improving, with net profit attributable to the parent maintaining a steady growth rate of around 3%. 1) Both volume and price are favorable, with significant growth in non-interest income supporting high quarterly revenue growth in Q4 2025. Q4 2025 revenue increased by 8.6% year-over-year, with a 13.1 percentage point increase quarter-over-quarter, mainly driven by continued strengthening of core revenue. The company maintains differentiated pricing strategies; under the “dual advantage” of volume and price, quarterly net interest income turned positive with a 0.16% YoY growth. Quarterly non-interest income grew by over 50% YoY. 2) Asset quality remains stable and improving, with net profit growth attributable to the parent remaining steady. In 2025, net profit attributable to the parent increased by 3.0% YoY, with the growth rate roughly flat quarter-over-quarter. The non-performing loan ratio decreased slightly by 1 basis point to 1.15%, and the provision coverage ratio only declined by 0.6 percentage points to 203.6%. The estimated quarterly net non-performing loan generation rate was 0.93%, showing improvements both quarter-over-quarter and year-over-year, indicating effective risk control and stable asset quality.

Corporate lending remains strong, with increased bond allocations. Interest-earning assets and total loans grew by 6.23% and 2.48% YoY respectively, with a slight slowdown in growth, mainly due to weaker retail loan demand and reduced low-yield bills. Leveraging CITIC Group’s comprehensive “financial + industrial” license advantages, CITIC Bank has strong competitiveness in integrated financing, and the new AIC (CITIC Securities Financial Investment) enhances the “commercial banking + investment banking” model. Year-end corporate loans (excluding bills) increased by 13.2% YoY. Meanwhile, bond investments increased by 17.43% YoY, outpacing the growth in the first three quarters.

The “Five Leading” strategy drives fee income resilience. CITIC Bank is deeply advancing its wealth management transformation, with retail assets under management reaching 5.36 trillion yuan at the end of 2025, up 14.29% YoY. Wealth management fees increased by 45.17%, and agency business fees grew by 24.77%, contributing to over 5% YoY growth in net fee income. Wealth management and asset management have become the two main drivers of core income growth, expected to enhance ROE levels over the next 1-3 years.

Liability-side deposit costs have been reduced, with interest margins stabilizing in 2025. The disclosed net interest margin and net interest spread at the end of 2025 were 1.63% and 1.60%, respectively, unchanged from the first half of 2025. Based on our calculations, the quarterly net interest margin in Q4 2025 decreased by only 1 basis point to 1.62%, with yields on interest-earning assets and costs of interest-bearing liabilities decreasing by 12 and 10 basis points quarter-over-quarter to 3.03% and 1.44%, respectively. Long-term high-interest deposits will continue to reprice, positively supporting the interest margin.

Asset quality remains stable and improving, with easing pressure on non-performing loan formation. Overall, the company’s non-performing loan creation pressure has eased, with the NPL ratio decreasing by 1 basis point to 1.15% at the end of 2025, and the provision coverage ratio remaining stable. The estimated quarterly net non-performing loan generation rate was 0.93%, down 30 basis points quarter-over-quarter and 3 basis points year-over-year. Forward-looking indicators show positive trends: the watchlist ratio decreased by 1 basis point to 1.62%, and overdue rate dropped by 7 basis points to 1.43% compared to the first half of 2025. Breakdown shows improvements mainly in corporate loan asset quality, while non-housing retail loans faced some pressure. At the end of 2025, corporate loans and retail loans’ NPL ratios decreased by 5 and increased by 4 basis points respectively compared to H1 2025, to 1.09% and 1.32%. The mortgage loan NPL ratio decreased by 9 basis points to 0.41%.

Investment advice: Slight.

Risk warning: Insufficient economic growth momentum may further pressure bank interest margins. Bank credit issuance may fall short of expectations.

Data tracking