[Wanlian Bank | Company Review] China CITIC Bank (601998): Steady Growth in Scale and Increased Dividend Payout Ratio

Key Report Elements:

CITIC Bank Releases 2025 Annual Performance Report.

Investment Highlights:

l Revenue growth rate narrowed: In 2025, the company achieved revenue and net profit attributable to shareholders of 212.5 billion yuan and 70.6 billion yuan, respectively, with year-over-year growth rates of -0.5% and 3%. Among them, the decline in revenue growth rate compared to the first three quarters narrowed, and the net profit attributable to shareholders’ growth rate was roughly flat with the first three quarters. In Q4, the significant narrowing of the year-over-year decline in other non-interest income led to a rebound in revenue growth.

l Steady scale growth, slightly improved dividend payout ratio: As of the end of 2025, total assets reached 10.13 trillion yuan, up 6.3% year-over-year. Year-over-year growth rates for loans and deposits were 2.6% and 4.5%, respectively. Risk-weighted assets grew by 8.7% year-over-year, and the core Tier 1 capital adequacy ratio was 9.48%. The dividend payout ratio increased to 31.75% in 2025, up 1.25 percentage points from 2024.

l Overall asset quality remains stable: As of the end of 2025, the company’s non-performing loan ratio and special mention loan ratio were 1.15% and 1.62%, respectively, down 0.01 and 0.02 percentage points from the beginning of the year; the loan loss reserve coverage ratio was 203.61%, down 5.82 percentage points from the start of the year.

l Net interest margin remained stable for three consecutive quarters: The company’s reported net interest margin for 2025 was 1.63%, down 14 basis points year-over-year, remaining stable over three quarters. The yields on interest-earning assets and loans decreased by 52 and 57 basis points, respectively; the costs of interest-bearing liabilities and deposits decreased by 41 and 37 basis points.

l Profit forecast and investment recommendation: In 2025, CITIC Bank’s asset scale continued steady growth, asset quality remained stable, and dividend payout ratio increased. Based on the latest annual report data, we forecast revenue growth rates of 1.64%, 2.67%, and 3.48% for 2026-2028, respectively, and net profit attributable to shareholders growth rates of 1.16%, 3.35%, and 3.48%. Based on CITIC Bank’s A-shares closing price on March 30, the corresponding 2026-2028 P/B ratios are 0.6x, 0.56x, and 0.52x, maintaining an “Overweight” rating.

Risk Factors: The banking industry is significantly affected by macroeconomic conditions, monetary policy, and regulatory policies. Changes in the economy and related policies will have an important impact on bank operations, including fluctuations in net interest margin and asset quality expectations.