After the "100 Trillion Yuan Club" of joint-stock banks unites, what will they rely on to traverse the low-interest-rate cycle?

Ask AI · How does SPD Bank achieve double growth in revenue and net profit against the trend?

According to the 2025 annual report of listed banks, by the end of 2025, CITIC Bank and SPD Bank both surpassed 10 trillion yuan in assets, tying with China Merchants Bank and Industrial Bank. However, the leap in scale has not been accompanied by a corresponding high increase in overall revenue. Against the backdrop of continuous narrowing of net interest margins in the banking industry, among the four “trillion-yuan” joint-stock banks, only SPD Bank achieved significant growth in both revenue and net profit in 2025, while China Merchants Bank and Industrial Bank saw slight revenue increases, and CITIC Bank’s revenue declined by 0.55% year-on-year.

During the reporting period, the net interest margins of China Merchants Bank, Industrial Bank, CITIC Bank, and SPD Bank were 1.87%, 1.71%, 1.63%, and 1.42%, respectively, representing decreases of 11, 11, 14, and 0 basis points year-on-year.

As the space for “lending to make money” continues to shrink, how do these “trillion-yuan” joint-stock banks break through growth bottlenecks and navigate the low-interest cycle? The China Securities Journal analyzed the operational strategies of these four banks in 2025 and found that the answer lies in the coordinated efforts of the “three driving forces”: expanding buffers through refined management of liabilities, improving yield levels through asset structure optimization, and pioneering new growth curves via diversified intermediary businesses.

Strengthen proactive management of liabilities

In the context of continuous narrowing of net interest margins, the ability to control liability costs determines the bank’s interest margin resilience.

“During a low-interest-rate cycle, maintaining a stable interest margin should be prioritized, ensuring that net interest margin remains industry-leading to consolidate competitiveness,” said Miao Jianmin, Chairman of China Merchants Bank, at the earnings release. In 2025, the bank continued to maintain its absolute advantage in low funding costs, with the average cost rate of customer deposits falling to 1.17%, down 37 basis points year-on-year, with demand deposits accounting for as much as 49.4%, providing a solid support for interest margin.

In 2025, Industrial Bank’s average interest expense on liabilities decreased by 43 basis points to 1.74%, with retail, corporate, and interbank deposits decreasing by 31, 34, and 59 basis points, respectively. “We promote the ‘Webbing Project’ to advance scene-based ecosystem construction, integrating product services throughout the customer’s production and operation processes, aiming for funds to operate in a closed loop within the bank,” said Lu Jiajin, Chairman of Industrial Bank. The bank focuses on payment and settlement scenarios, conducting systematic refined customer management, striving to become the primary settlement bank for customers, promoting settlement funds to deposit, and effectively reducing liability costs.

CITIC Bank’s management highlighted during the earnings release the balanced control of volume and price in liability business, describing it as a broad buffer against low-interest margin shocks. In 2025, CITIC Bank’s corporate deposit cost rate decreased, increasing the interest margin by 17 basis points; personal deposit cost rate decreased, increasing the margin by 6 basis points; market-based liability cost rate decreased, boosting the margin by 15.7 basis points, with liabilities contributing nearly 40 basis points to the interest margin.

Optimize asset structure

Asset structure optimization has become a key measure for joint-stock banks to resist pressure from narrowing interest margins. Most banks have reduced the proportion of low-yield assets like bills and increased high-yield assets such as loans, achieving structural improvements to stabilize interest margins.

China Merchants Bank’s net interest margin rebounded from 1.83% in Q3 2025 to 1.86% in Q4, marking its first quarter-over-quarter improvement in nearly three years. “Structural optimization is the key to the rebound of net interest margin,” explained Peng Jiawen, Vice President of China Merchants Bank. “On one hand, we continue to increase the proportion of higher-yield assets, such as loans; on the other hand, in Q4 last year, we moderately reduced low-yield assets like bills to further strengthen asset-liability management.”

On the asset side, SPD Bank adopted a “quality enhancement, efficiency improvement, and dynamic adjustment” strategy to stabilize interest margins. In 2025, the bank’s net interest margin remained at 1.42%, unchanged from 2024. Management stated that the key to this achievement was asset structure optimization: focusing on key sectors, regions, industries, and products; strengthening special business empowerment and resource allocation; increasing high-quality loan issuance; and optimizing issuance pace. The proportion of parent company’s local and foreign currency general loans in earning assets increased by 2.5 percentage points compared to 2024, effectively delaying the decline in earning asset yields.

Breakthrough in non-interest income

Relying solely on interest margin income is no longer sustainable; the rise of intermediary businesses has become another pillar for joint-stock banks to navigate the low-interest cycle.

In 2025, China Merchants Bank’s net fee and commission income increased by 4.39% year-on-year, marking its first positive growth since 2022; Industrial Bank’s net fee and commission income grew by 7.45%, showing an upward turning point; CITIC Bank’s net fee and commission income increased by 5.58%, accounting for 15.42% of operating net income, up 0.89 percentage points from 2024.

“Enhancing the contribution of intermediary business income and forming a more stable revenue structure are important experiences for domestic and foreign commercial banks to pass through cycles,” said Lu Jiajin. In 2025, Industrial Bank made comprehensive efforts in payment and settlement, guarantees, bond underwriting, financial advisory, asset management, wealth distribution, and asset custody to expand intermediary income. The bank also seized the opportunity of a market rebound to boost growth in investment banking, asset management, and wealth management.

Wang Liang, President of China Merchants Bank, stated that in terms of non-interest income, the bank’s large wealth management income, especially retail wealth management fee income, grew rapidly in 2025, effectively compensating for gaps in other net income. However, the new regulations on fee reductions for public funds, officially implemented this year, will impact fund distribution business, posing challenges to non-interest income growth.