Live Performance Meeting | CITIC Bank Chairman Fang Heying: Non-interest income share increased by 9.3 percentage points over the past five years

《每日经济新闻》记者｜Zhang Shoulin    《每日经济新闻》编辑｜Bi Luming

On March 23, at Citibank’s 2025 annual results briefing, Citibank (SH601998) Chairman Fang Heying disclosed that over the past five years, the bank’s non-interest income proportion has increased by 9.3 percentage points.

In addition, the bank has spared no effort in building a risk control system of “strong measures to promote development and effective measures to control risk,” and, on the basis of generating revenue, has enhanced its ability to absorb risks. Over the past five years, the bank has set aside RMB 66 billion in provisions each year to absorb bad debts.

Looking ahead to future development conditions, Fang Heying stated that strategy must follow the market. The company’s business should take the lead; retail business should steadily contribute; financial markets should bring in additional revenue; and risk prevention and control should create value.

Site of Citibank’s results briefing. Photo by 《每日经济新闻》 reporter Zhang Shoulin

Retail deposits: current deposits make up 27%

At the results briefing, Fang Heying said that in 2025, Citibank’s net profit grew by nearly 3%, placing among the leaders in growth among large and mid-sized banks.

He said that a package of measures to stabilize revenue and reduce costs opened up room for profit growth. Specifically, it is reflected in three aspects of changes:

First, shifting from stabilizing the net interest margin to stabilizing operating revenue. The net interest margin has gradually stabilized, and the decline in operating revenue has narrowed over time. Among them, the release of investment and trading capabilities and the sustained growth in net fee income provide stable support for growth.

Over the past five years, the bank’s non-interest income proportion has increased by 9.3 percentage points. In 2025, it achieved fee income of RMB 32.77 billion, up 5.6%, which is 2.2 percentage points higher than its peers, ranking second in the peer group both in total amount and in growth rate.

Second, shifting from a decline in the non-performing loan ratio to a reduction in credit costs. In 2025, the bank recovered RMB 37.2 billion in non-performing loans in total. For the full year, its credit cost ratio fell by 0.07 percentage points, and the share of asset impairment in revenue decreased by 1.2 percentage points. These are key supports for growth.

Third, shifting from controlling costs to achieving “double decreases” in operating cost and cost-to-income ratio. The bank achieved a reduction in operating costs of RMB 2.25 billion for the full year, and the cost-to-income ratio fell by 0.88 percentage points accordingly, contributing to growth.

With net interest margin under pressure, more attention has been paid to liability business management. Fang Heying said that the bank achieved volume-price balanced management for liability business. “What we are pushing is for our liability cost to truly build a broad buffer band that can withstand the impact of low net interest margin,” he said.

Looking deeper, Fang Heying said, the deposit structure has improved. Since strengthening self-discipline mechanisms for deposits, the “quality” of true current deposits has increased significantly. The retail deposit current-deposit share reached 27%. Although this is lower than the current-deposit share of corporate deposits, it increased by 3.2 percentage points over the past two years. In addition, controlling high-cost liability funds is now more powerful and effective; the shares of three items—three-year time deposits, structured deposits, and deposit agreements—are all below 32%.

He said that the development path for liability business is fairly clear: adherence to a combination of short, medium, and long terms. In other words, for liabilities and liability costs in the short term, rely on performance evaluation; in the medium term, rely on products; and in the long term, rely on systems and capabilities.

On risk control, Fang Heying said that the bank spared no effort in building a risk control system of “strong measures to promote development and effective measures to control risk,” and that positive changes have taken place in the area of risk management. It also improved its risk absorption capacity on the basis of creating revenue. Over the past five years, it set aside RMB 66 billion in provisions each year to absorb bad debts. In addition, it leveraged the unique advantages of Citic’s collaborative risk-sharing to accelerate the disposal of certain key projects.

“Strategy must follow the market”

In facing the 2026 operating outlook, Fang Heying’s thinking centers on three points.

First, led by the “San San Strategy,” continuously refine six types of capabilities. “At the work meeting at the beginning of the year, we proposed that over the next five years we would implement the ‘San San Strategy,’ which means three excellence and three leadership: an excellent wealth management bank, an excellent investment and trading bank, and an excellent comprehensive financing bank; a leading payments and settlement bank, a leading cross-border financial services bank, and a leading digital bank. What we pursue is to become the top performers in the industry,” Fang Heying said.

He believes that these six types of capabilities are a comprehensive upgrade and gear shift of a bank’s traditional deposit-lending-remittance business. Excellence in wealth management capability is an expansion of what banks traditionally “take deposits” for. Excellence in comprehensive financing capability and excellence in investment and trading capability are an expansion of what banks traditionally “lend” for. Leading cross-border settlement capability is an expansion of what banks traditionally “remit/transfer” for. And leading digital capability is a remolding at the level of a bank’s genes. These six capabilities are not scattered six points; they are an overall plan for the entire business operation of the bank.

Second, at a high level, coordinate and implement the financial “Five Great Articles,” and organically unify taking the road of socialism with Chinese characteristics with the development path of value-focused banking, bringing them together into concrete actions to accelerate transformation and development.

“This is a major proposition. So we need to coordinate both, accelerate the pace of transformation, and, while doing deep and thorough work on the ‘Five Great Articles,’ plan the development of commercial banks in the new era,” he said.

Third, target the market to optimize development strategy and build a new cross-cycle development pattern that is visible, attainable, and sustainable.

“Strategy must follow the market. At the beginning of the year we proposed that the company should take the lead, retail should steadily contribute, the money market should increase revenue, and risk control should create value,” he explained. For the company to take the lead, it means there is a market to take on and a foundation to take on.

Retail’s steady contribution means assigning it the responsibility to press forward through difficulties. We need to seize the general trend of rapid expansion in wealth management markets, and ride the momentum built by the retail development system and capabilities.

Cover image source: The Economic Daily News