CITIC Bank Jinxinien: Home-backed Operating Loans and Credit Cards in Stabilization Process, Leading Indicators Show Positive Signs

How does CITIC Bank leverage three key areas to optimize retail asset quality?

On March 23, during CITIC Bank’s 2025 performance release, Vice President Jin Xinian provided a detailed response to market concerns about retail asset quality. He pointed out that, currently, retail asset quality faces similar pressures as peers, but when broken down by product, it shows a differentiated trend of “steady, good, and in transition.” Through efforts across development, management, and disposal, overall risk remains controllable.

Structural Differentiation in Asset Quality: Stable Mortgages, Improving Consumer Loans

Regarding the risk status of retail assets, Jin Xinian categorized them into three situations.

First, the quality of mortgage assets, serving as the “ballast,” has stabilized. Data shows, “Our mortgage non-performing rate is 0.41%, down 0.08 percentage points from last year. The non-performing generation rate is 0.29%, down 0.47 percentage points from the high points of the past two years.” Jin emphasized that mortgages account for 47.5% of the bank’s retail loans, which is crucial for stabilizing retail asset quality.

Second, the risk trend for consumer loans is improving. Although the scale has decreased due to the clearance of tail-end customers and proactive restructuring, key risk indicators have shown signs of turning around. “The non-performing generation rate for auto loans has decreased for two consecutive quarters, and the non-performing generation rate for instant credit loans has decreased for three consecutive quarters.”

For mortgage-backed business loans and credit cards, Jin candidly acknowledged these are current “difficult points.” He stated that these assets are “still in the process of stabilization and are key areas for us to improve asset quality management.” However, forward-looking indicators are showing positive signs.

Three Areas of Focus: Managing Risks During Development

To control retail asset quality, Jin Xinian proposed focusing on three dimensions: development, management, and disposal.

In development, CITIC Bank adheres to “resolving risks during growth.” By focusing on independent customer acquisition capabilities, the bank aims to improve the quality of new loans to optimize existing ones. Over the past two years, the proportion of low-risk retail credit customers has effectively increased: “High-score customer groups for mortgage-backed loans increased by 14 percentage points, and high-score groups for instant credit loans increased by 20 percentage points.” Additionally, customer acquisition through credit card branches increased by 12 percentage points, and high-frequency consumption scenarios increased customer acquisition by 33 percentage points.

In terms of structural optimization, the bank has clarified its role of mortgages as the “ballast.” “The proportion of mortgages has increased by 3.6 percentage points over the past two years.” The focus of lending strategies is on high-tier cities: “Last year, over 90% of incremental loans were directed toward first- and second-tier cities and cities with net population inflow, with existing loans in these areas accounting for over 80%.”

On the management side, the core is strict control at entry points and autonomous risk management. Jin emphasized the need to “strictly regulate behaviors to prevent operational risks from creating new risks,” especially focusing on “governance and prevention of black and gray intermediaries.” Simultaneously, the bank is deepening the “joint prevention and control mechanism of business and risk,” accelerating the iteration and upgrading of risk control strategies.

In disposal, CITIC Bank allocates resources accordingly: “Over 70% of write-off resources last year were used to resolve retail non-performing assets.” Additionally, the bank is strengthening collection teams, broadening disposal methods, and increasing collaboration within CITIC Group to accelerate the clearance of existing risks.

Looking ahead, Jin Xinian expressed confidence that, with the implementation of national policies to stabilize growth and promote consumption, the recovery of residents’ balance sheets, and improvements in risk management capabilities, “retail asset quality will gradually stabilize and improve.”