Summary of Key Points
In the first half of 2026, CITIC Bank achieved a steady growth of approximately 3% in both revenue and profit. Its net interest margin (the difference in interest income generated by the bank) stabilized month-on-month, mainly due to efforts in controlling deposit costs and adjusting the loan portfolio. The retention rate of funds after the maturity of three-year fixed deposits remained stable, as residents continue to prefer conservative deposits. However, there has been a shift in wealth allocation towards financial assets, accompanied by a "K-shaped divergence" in customer risk preferences. The wealth management business performed exceptionally well, with the bank's asset under management (AUM) increasing the most among joint-stock banks, and the number of private banking customers exceeding 100,000. For the future, CITIC Bank plans to navigate economic uncertainties by reforming its financial market business (with the goal of making this segment account for more than one-third of total revenue) and continuously optimizing its asset-liability structure.
Detailed Analysis
1. Net Interest Margin Stabilized! A Dual Approach of Reducing Interest Costs and Adjusting the Loan Portfolio
The net interest margin is the profit margin calculated as the difference between the interest income from loans and the interest costs associated with deposits. CITIC Bank's net interest margin in the first half of the year was 1.62%, up 0.01 percentage points (1 BP) from the first quarter. Although it decreased slightly compared to the same period last year, it has stabilized.
- How was this achieved?
- Reducing interest costs: Deposit costs were lowered by 27 BP (0.27 percentage points). For example, the proportion of corporate current deposits reached 44% (among the top two in joint-stock banks), and the proportion of retail current deposits increased by 0.4% from the beginning of the year. Lower interest rates on current deposits helped reduce the overall cost. The bank also actively managed high-cost deposits (such as through the classification and interest rate cuts on structured deposits).
- Adjusting the loan portfolio: The proportion of general loans (such as business loans and personal consumer loans) increased by 1.2%. The relatively stable returns from these loans partially offset the impact of declining loan interest rates.
- Future challenges: The net interest margin may face pressure in the second half of the year. On one hand, the benefits from the maturity of high-cost three-year deposits are dwindling (more maturities in the first half, limiting further reductions). On the other hand, loan renewals and early repayments could put pressure on loan interest rates. CITIC Bank's strategy is to increase long-term loans on the asset side (to lock in fixed terms and mitigate potential revenue declines) and continue to focus on low-cost settlement deposits on the liability side.
2. Funds Stay with the Bank After Three-Year Fixed Deposits Maturity
Many three-year fixed deposits matured this year, and there were concerns that residents would move their funds to other investments (such as wealth management products or funds). However, CITIC Bank's data shows that, after maturity, customers either renewed their deposits or purchased other products from the bank, with the retention rate remaining similar to last year. The reason is simple: with declining interest rates and market volatility, deposits are still considered the most stable option. However, residents are also diversifying their wealth by shifting from real estate (such as homes) to financial assets, presenting opportunities for the bank's wealth management business.
3. "K-Shaped Divergence" in Customer Risk Preferences: Some Seek Risk, Others Prefer Stability
There is a clear split in customer risk preferences:
- Some customers are willing to take on more risk in exchange for potentially higher returns, such as investing in equity-linked financial products. The scale of such products at CITIC Bank nearly doubled in the first half of the year, with their proportion rising from 14.7% to 25.6%.
- Other customers are more conservative and prefer to invest in fixed deposits or products with guaranteed returns.
CITIC Bank has responded with differentiated services, offering customized wealth management plans for high-net-worth customers (with over 100,000 private banking clients) and offering stable products for regular customers. The fee income from wealth management and private banking services increased by 21% in the first half, reflecting the effectiveness of this strategy.
4. Wealth Management Becomes a Priority: CITIC Bank Leads Joint-Stock Banks in AUM Growth
AUM represents the total amount of assets managed by the bank for its clients (including deposits, wealth management products, and funds), and it is a key indicator of wealth management capabilities. CITIC Bank's AUM increased by more than 250 billion yuan in the first half of the year, a year-on-year increase of 38.7 billion yuan. Only two other joint-stock banks saw higher AUM growth, with CITIC Bank ranking first. By the end of July, it was the only joint-stock bank with year-on-year AUM growth.
Additionally, the scale of CITIC Bank's Xinyin Wealth Management business grew to 2.49 trillion yuan, ranking second in the industry, and the scale of equity-linked products (risky investments) also increased significantly, indicating that customers are willing to try more diverse investments with CITIC Bank.
5. Future Five-Year Goals: Focusing on Financial Market Business
In the past, banks primarily relied on net interest margins for revenue. CITIC Bank aims to diversify its revenue sources. Over the next five years, it plans to make the revenue from investment and trading activities (such as bond trading and market-making services) account for more than one-third of total revenue and aims to become a leader among domestic banks in these areas. The rationale is that net interest margins are under increasing pressure, so non-interest income (such as transaction fees and management fees) will become more crucial. CITIC Bank has already made progress in this regard, with non-interest net income increasing by 3.69% in the first half of the year, faster than interest income.
Conclusion
CITIC Bank has performed well in the first half of the year, stabilizing its net interest margin through cost control and seizing opportunities in the wealth management sector as residents shift their assets. In the future, it plans to diversify its revenue sources, especially through financial market activities, to adapt to economic changes. This is a trend across the banking industry: banks cannot rely solely on net interest margins and must learn to generate additional revenue. For customers, the bank will offer a wider range of products, allowing them to choose between conservative deposits and riskier investments, depending on their risk preferences.