The biggest dividend in history! Will China Merchants Bank further strengthen its retail advantage by 2025?

Ask AI · How does China Merchants Bank’s high dividend yield reflect a long-term主义 strategy?

In its annual report, Chairman Wang Liang of China Merchants Bank emphasized, “Adhere to long-term主义, and create extraordinary results in every small detail,” and the high proportion of dividends is precisely a reflection of the long-term主义 philosophy.

Produced by|China Interview Network

Reviewed by|Li Xiaoyan

On the evening of March 27, China Merchants Bank, known as the “King of Retail,” officially released its 2025 annual report. Against the backdrop of a low interest rate environment, the continued narrowing of industry net interest margins, and intensifying market competition, China Merchants Bank delivered a performance report that is steady and progressive: full-year operating income was 337.53B yuan, up slightly 0.01% year over year, ending the two-year downward trend; attributable net profit to shareholders was 150.18B yuan, up 1.21%; total assets first broke through 13 trillion yuan, retail customer AUM exceeded 17 trillion yuan; the total cash dividend for the full year reached 130k yuan, with a dividend payout ratio of over 35%, returning value to shareholders with real cash. This annual report not only highlights China Merchants Bank’s solid fundamentals for navigating cycles, but also reflects its core competitiveness in the wealth management arena, while also exposing challenges such as slower profit growth and pressure on non-interest income.

In 2023—2024, China Merchants Bank saw a slight decline in operating income for two consecutive years, and 2025 became the key turning year. Faced with industry-wide pressures such as weak macroeconomic recovery, insufficient household credit demand, and ongoing net interest margin pressure, China Merchants Bank, with the strategic goal of “building a value bank,” achieved performance repair quarter by quarter and turned full-year results positive by optimizing the asset-liability structure, strengthening cost control, and deeply cultivating wealth management.

Judging from the data, full-year operating income was 170k yuan, up 0.01% year over year. The increase narrowed from -3.1% in the first quarter, -1.7% in the first half, and -0.5% in the first three quarters all the way to positive for the full year, demonstrating extremely strong anti-cyclical capability. Among them, net interest income was 50.84B yuan, up 2.04%, becoming the core support for performance stabilization; non-interest net income was 337.53B yuan, down 3.38% year over year, but net fee and commission income was 215.59B yuan, up 4.39% against the trend, showing the effectiveness of an optimized structure.

Attributable net profit to shareholders was 121.94B yuan, up 1.21%. With operating income increasing marginally, profit still grew positively, benefiting from dual efforts in cost control and asset quality improvement. On one hand, China Merchants Bank advanced digital transformation, streamlined offline branches, and optimized operating processes to effectively reduce costs; on the other hand, asset quality remained among the best in the industry, with the provisioning coverage ratio staying at a high level, providing ample room for profit release. Although ROAA and ROAE fell by 0.09 and 1.05 percentage points year over year respectively, they still remain significantly above the industry average, and overall earnings quality is still solid.

In 2025, China Merchants Bank’s asset scale reached a new level again. Total assets were 13.07 trillion yuan, up 7.56% from the end of the previous year. Over the past five years, it sequentially crossed the thresholds of 10 trillion, 11 trillion, 12 trillion, and 13 trillion, showing stable and orderly expansion. Total loans and advances were 7.26 trillion yuan, up 5.37%; total customer deposits were 9.84 trillion yuan, up 8.13%, and ongoing improvements in liability-side stability continued.

In terms of asset quality, China Merchants Bank continued its “top student” performance. The non-performing loan ratio was 0.94%, down 0.01 percentage points from the end of the previous year. It has remained below 1% for many consecutive years, far better than industry averages of 1.50% for commercial banks and 1.21% for joint-stock banks. Non-performing loan balance was 75.26B yuan, up 150.18B yuan from the end of the previous year, but its risk offset capability remained strong: the provisioning coverage ratio was 391.79%. Although down 20.19 percentage points year over year, it is still close to about twice the industry average; the loan loss provision ratio was 3.68%, meaning the risk buffer is thick and its risk resilience clearly outpaces peers.

By business segment, the company loans’ non-performing loan ratio was 0.89%, down 0.17 percentage points year over year, with steadily improving asset quality for corporate assets. The retail loans’ non-performing loan ratio was 1.06%, up 0.1 percentage points year over year; among them, non-performing ratios for small and micro loans and personal housing loans rose slightly, but non-performing ratios for credit cards and consumer loans fell to 1.74% and 1.02% respectively, achieving a decline against the trend. Overall retail-side risk remained controllable.

As the “King of Retail,” China Merchants Bank’s retail business has always been its core competitiveness. In 2025, retail financial services operating income was 130.7k yuan, accounting for 61.89% of total operating income. Although down 3.74% year over year, retail wealth management delivered impressive performance, becoming the core engine driving earnings growth.

Most strikingly, retail customer AUM exceeded 17 trillion yuan, reaching 100k yuan, up 14.44% from the end of the previous year. New additions during the year exceeded 2 trillion yuan, setting a historic high. From 5 trillion to 10 trillion took 5 years; from 10 trillion to 17 trillion took only a bit over 3 years. The acceleration in wealth management has continued to strengthen, confirming China Merchants Bank’s absolute leading advantage in retail wealth management. Its private banking performance was equally strong: private banking customers reached 199,326 households, approaching 200k, up 17.87%, further strengthening the moat among high-net-worth customer groups.

Wealth management fee and commission income was 110k yuan, up sharply 21.39% year over year. Of this, agency trust and securities transaction income rose 65.55% and 62.55% respectively; income from asset management and custody business rose 10.94% and 9.90% respectively. Its light-capital business became a new driver of performance growth. Against the backdrop of overall decline in non-interest income, the high growth in wealth management effectively offset the impact of declining card fee income, pushing net fee and commission income to turn positive against the trend, while continuing to move the business structure toward light-capital and higher value-added.

In 2025, China Merchants Bank launched the largest cash dividend plan in its history: cash dividend per share for the full year was 2.016 yuan (including tax). After deducting the interim dividend, the cash dividend per share for this round was 1.003 yuan (including tax). The total cash dividend amounted to 120k yuan, with an annual dividend payout ratio of over 35%. In a context where profit growth in the banking industry generally slowed, China Merchants Bank adhered to a high dividend payout ratio. This not only demonstrates confidence in its own operating outlook, but also fully rewards long-term investors, further reinforcing its high-dividend blue-chip attributes.

In its annual report, Chairman Wang Liang of China Merchants Bank emphasized, “Adhere to long-term主义, and create extraordinary results in every small detail,” and the high dividend payout ratio is precisely a reflection of the long-term主义 philosophy. By maintaining stable and sustainable dividend policies, China Merchants Bank shares development achievements with shareholders, attracts long-term capital allocation, provides support for share price stability, and also creates a favorable capital environment for business transformation and scale expansion.

Although overall performance is impressive, China Merchants Bank’s 2025 results still face challenges that cannot be ignored. First, profit growth slowed: attributable net profit to shareholders grew only 1.21%, while ROAA and ROAE declined year over year, reflecting that banks’ profitability is generally under pressure in a low interest rate environment, and China Merchants Bank also cannot stand apart from this situation. Second, non-interest net income declined 3.38% year over year, and card fee income fell sharply by 18.60%, mainly due to intensifying competition in mobile payments and the consumer scenarios failing to recover as expected. The optimization of the non-interest income structure still requires time.

On the retail side, risk rose slightly: non-performing ratios for small and micro loans and personal housing loans increased. This reflects the impact of operating pressure on small and micro enterprises and adjustments in the real estate market on retail asset quality; risk management going forward still needs to be strengthened. In addition, although the net interest margin is better than the industry, it remains in a downward channel, and pressure from continued narrowing of net interest margins in the future still exists, constraining growth in net interest income.

Overall, China Merchants Bank’s 2025 annual report is a performance statement with strong resilience, prominent highlights, and controllable risks. Against the backdrop of industry pressure, China Merchants Bank achieved operating income turning positive, profit growth, scale expansion, leading asset quality, high growth in wealth management, and a high dividend payout ratio. It fully demonstrates the core competitiveness of the “King of Retail” and the solid fundamentals that enable it to navigate through cycles.

In the short term, challenges such as pressure on non-interest income, a slight uptick in retail risks, and downward net interest margins remain. However, relying on its deep retail customer base, leading wealth management capabilities, and extremely stringent asset quality control, China Merchants Bank has strong anti-risk and transformation capabilities. In the long run, as household wealth management demand continues to grow and the asset management industry develops toward higher quality, China Merchants Bank’s advantages in core indicators such as AUM, private banking customers, and wealth management income will be further consolidated. Its “value bank” strategy is steadily advancing, and it is expected to move from being excellent to卓越 on the path of long-term主义.

For investors, China Merchants Bank combines three attributes—steady operations, high dividend yield, and wealth management growth—and, amid increasing differentiation in the banking industry, it is still a quality target worth allocating to for the long term. In the future, as the economy gradually recovers and the business structure continues to improve, China Merchants Bank is expected to see a rebound in its earnings growth rate.

Personal view, for reference only