Banking

Year in Review

In 2023, CITIC Bank remained committed to sustainable and high-quality development. The company continued to deepen its operational transformation, optimising the overall structure of the business. As a result, it experienced accelerated growth and improved risk management. Overall, the Bank maintained a stable and upward trend of development marked by enhanced quality. During the period, it recorded operating revenue of RMB205.6 billion, a 2.6% decrease year-on-year, of which net interest income was RMB143.5 billion, a 4.7% decrease year-on-year. Non-interest income increased by 2.6% year-on-year to RMB62.0 billion. The proportion of non-interest income rose by 1.6 percentage points to 30.2%. Despite a challenging environment, the year witnessed significant strides in the transition toward light risk-weighted assets. CITIC Bank achieved RMB67.0 billion in profit attributable to its shareholders, up 7.9% year-on-year.

During the reporting period, CITIC Bank steadily expanded the scale of its business, improved service quality and enhanced efficiency to support the real economy. By the end of 2023, total assets amounted to RMB9,052.5 billion, an increase of 6% compared to the previous year end. Customer loans increased by 7% and customer deposits grew by 6% from the beginning of the period. During the year, CITIC Bank closely followed the direction of national policies to serve the real economy. The growth rates of loans in key areas such as green finance and strategic emerging industries outpaced the overall loan growth rate.

CITIC Bank recorded declines in both non-performing loans (NPL) and the NPL ratio in 2023, and consolidated and strengthened its risk resilience capabilities. By the end of 2023, the balance of NPL fell 0.63% to RMB64.8 billion and the NPL ratio declined 0.09 percentage point to 1.18% from the end of the previous year. The provision coverage ratio increased 6.40 percentage points to 207.59% by year end.

During the period, CITIC Bank maintained its focus on capital management under the guidance of “light risk-weighted assets with higher return” to improve capital allocation efficiency. Its capital adequacy ratio fulfilled all regulatory requirements.

Business Highlights

Three Core Strengths

Guided by the “342 Action Plan for Developing Core Business Capabilities”, CITIC Bank accelerated the improvement of its market competitiveness by focusing on three core businesses: wealth management, asset management, and comprehensive financing. During the period, the mark-to-market value of retail assets under management increased by 8.3% from the end of the previous year to RMB4.24 trillion. Wealth management assets reached RMB1.73 trillion, increasing by 9.6% from the end of the previous year. The balance of comprehensive financing increased by 6.9% from the end of the previous year to RMB13.15 trillion.

Corporate Banking¹

CITIC Bank continued to implement national macroeconomic policies in its corporate banking business, with a core focus on serving the real economy. The Bank has expanded efforts to organise and allocate high-quality credit assets while providing increased support to critical sectors such as inclusive financing for small and micro enterprises (SMEs), green lending, strategic emerging industries, and rural revitalisation. The balance of general RMB corporate loans amounted to RMB2,479.6 billion, representing an increase of RMB180.2 billion from the end of the previous year. Loans for green finance, inclusive finance, medium-to-long-term manufacturing industries, strategic emerging industries, and agriculture-related sectors increased by 37.4%, 22.2%, 27.8%, 25.4% and 15.1% year-on-year, respectively. CITIC Bank adhered to a customer-centric approach and enhanced its tiered and categorised customer management system. By the end of 2023, CITIC Bank recorded a total of 1,157,600 corporate clients, maintaining steady growth in its various corporate businesses:

Retail Banking

CITIC Bank continued to enhance its retail operations system and achieved continuous growth in the number of customers. By the end of 2023, the number of individual customers increased by 7.47% to 137 million. The number of private banking clients⁵ amounted to 74,000, an increase of 10.64% from the end of the previous year. The Bank offers specialised and differentiated comprehensive financial services to key customer segments, such as retirees, individuals planning to go abroad, and Generation Z. During this period, the Bank launched the upgraded version 2.0 of the “Happiness+” pension account book, providing a one-stop retirement planning platform for elderly customers. It also organised the “CITIC Bank Building Dreams Far and Wide” event to celebrate the 25^th anniversary of its overseas financial services, establishing a comprehensive overseas financial service system for customers who plan to go abroad. Additionally, CITIC Bank continuously developed innovative products and services tailored to the younger generation through its “Five Focuses” strategy, continuously improving a service system to cater to the needs of this demographic.

By the end of 2023, the balance of individual deposits was RMB1,305.0 billion, an increase of 12.6% year-to-date. The balance of individual loans (excluding credit cards) was RMB1,710.9 billion, up 10.1% from the end of the previous year; among these, the balance of mortgage loans was RMB971.2 billion, an increase of 2.9% from the end of the previous year. As one of the earliest commercial banks in China to introduce exclusive services for senior clients, CITIC Bank continuously upgraded its “Happiness+” pension financial service system to meet the lifelong retirement planning needs of its customers. As of the end of 2023, it had opened a total of 927,100 individual pension accounts. CITIC Bank effectively leveraged the positive role of credit cards in national policies focused on expanding domestic demand, stimulating consumption, and improving people’s livelihoods. It continued to make significant efforts in fueling the continuous release of consumer potential to deepen the ecosystem operation and cultivating the brand image of “credit cards with a human touch”. By the end of 2023, a total of 115.52 million credit cards had been issued, up 8.4% from the end of the previous year, and the total credit card loan balance reached RMB520.7 billion. During the reporting period, the total trade turnover of credit cards was RMB2,716.0 billion.

Financial Markets

CITIC Bank’s financial markets business closely follows the national policies, continuously optimises its business structure, and strengthens the synergies with CITIC Group. With the “CITIC Interbank+” platform as the carrier, the Bank continued to strengthen integrated operations for interbank customers. During the period, the Bank continued to intensify its efforts to serve the real economy by directly discounting notes of RMB1,547.1 billion, serving 16,777 corporate clients, of which 11,687 were SMEs, accounting for 69.66% of the total. In financial markets, the Bank continued to give full play to its professional advantages and continuously improved its trading capabilities. During the period, it continued to provide liquidity to the interbank foreign exchange market, with a trading volume of US$2.6 trillion in foreign exchange market making, maintaining a leading position in the market. Performing its duties as an underwriter of treasury bonds, the Bank has ranked first among joint-stock banks in terms of comprehensive underwriting performance for two consecutive years, and has actively supported the high-quality development of the bond market through investment and market-making. By emphasising its synergistic advantages with CITIC Group in asset management, the Bank has established an all-weather product system covering the entire market including all categories of assets and all channels. By the end of 2023, the number of wealth management clients served exceeded 10 million, reaching 14,064,900 clients.

Innovation and Fintech

Empowered by Fintech, CITIC Bank strengthened its comprehensive digital capabilities in operations and management. The Bank strived to enhance overall competitiveness and market value by supporting high-quality implementation of the Business Core Strengthening Initiative. During the reporting period, the Bank invested RMB12,153 million⁶ in Fintech, a year-on-year increase of 38.9%. The number of Fintech staff reached 5,626⁶, a year-on-year increase of 9.93%, accounting for 8.41% of the total staff count.

CITIC Bank accelerated the transformation of innovative achievements into productivity. In the retail business sector, the Retail M+ platform, which incorporates tools such as customer segmentation management, centralised management of personal loans, layered client asset allocation and investment advisory services. These efforts provided strong support for comprehensive customer operations. In the corporate business sector, CITIC Bank continued to construct and promote the industry’s first self-developed Tianyuan Intelligent Treasurer Management System. Through iterative upgrades to the standard version and the launch of the ecological version, the Bank provided professional and customised diversified treasury management solutions for its customers. In particular, it offers a one-stop, data-intelligent global treasury management system for central state-owned enterprises and large state-owned enterprises. In the financial market business sector, the new-generation of the “Interbank+” platform builds three functional pillars, namely “Boutique Sales Mall”, “Market Making and Trading Cloud Hall” and “Intelligent Digital Exchange Platform”, realising the full coverage of interbank clients, with a cumulative total of more than 2,700 contracted clients.

Notes:

• The numbers disclosed in the corporate banking, retail banking and financial markets are data of the Bank.
• Including small-size enterprise loans, micro-enterprises loans, and business loans for self-employed and microenterprise owners.
• It is classified according to the S70 statement of National Financial Regulatory Administration (NFRA).
• The size and ranking of corporate annuities are derived from the latest data published by the Ministry of Human Resources and Social Security at the end of the third quarter of 2023.
• Customers with an average monthly daily balance of personal assets under management of $6 million or more.
• The number is disclosed based on CITIC Bank’s consolidated financial reporting standard.