As the 2026 interim results landed, China Merchants Bank delivered its first full report card following the leadership transition. During the first half, retail business pre-tax profit came in at RMB 42.888 billion, down 17.58% year-on-year, with its profit contribution ratio sliding to 47.27%. Meanwhile, corporate banking pre-tax profit reached RMB 45.703 billion, up 23.33% year-on-year, overtaking retail in profit scale for the first time.
The long-standing pattern of retail profits exceeding corporate profits, maintained for over a decade, has been broken. Market sentiment quickly heated up, with many voices attributing the fading of the "retail king" halo to Wang Xiaoqing, who only took office at the end of April. Our analysts believe that digging beneath the financial figures reveals that retail pressure is the combined result of cyclical factors, industry dynamics, and balance sheet shifts—hardly something to pin on the new management team.
From a fundamental perspective, CM Bank's retail foundation has not collapsed. As of the end of June 2026, total retail customers stood at 231 million, Golden Sunflower and above clients reached 6.4074 million, and private banking clients surpassed 215,900. Management retail client total assets (AUM) hit RMB 18.44 trillion, up 7.96% from the end of last year, setting a record high. Large wealth management income reached RMB 24.704 billion, up 18.44% year-on-year, while fee and commission income surged 26.53% year-on-year. The wealth management segment continues to show robust growth—a core moat built over years that hasn't changed with the leadership shift.
What's truly dragging retail profits is concentrated in the credit side. Households continue to deleverage, demand for consumer and mortgage loans has weakened, and credit risk has risen. The retail loan non-performing ratio climbed to 1.16%, with the credit card NPL ratio rising to 1.90%. Credit impairment provisions increased significantly, directly eroding the retail segment's profit space. Retail loan balances contracted slightly by 1.11% from the start of the year, and loan yields declined in tandem, creating a volume-price double squeeze that weighed heavily on interest income.
Our analysts note this isn't a problem unique to CM Bank—the entire banking industry faces similar pressure on retail credit. However, with retail loans accounting for close to 50% of total loans, the bank's exposure to the household credit cycle is higher, making the impact more visible. On the corporate side, supported by recovering real-economy financing demand, corporate loans grew 9.27% from the start of the year, with the NPL ratio falling to 0.78%. Improved asset quality has made corporate banking a key profit complement.
Tracing the timeline clarifies where responsibility lies. Wang Xiaoqing officially assumed duties at the end of April, with his presidency qualification approved by regulators in July. The credit risk and asset quality changes reflected in the semi-annual report are the result of years of credit deployment and macro-environment evolution—not decisions made in just two or three months. At the results briefing, Wang also unpacked the sources of pressure: both industry-wide challenges stemming from the macro cycle and the bank's own structural factors. He stressed that the long-cultivated retail advantage shouldn't be casually abandoned.
Of course, "not being the fall guy" doesn't mean there are no tests ahead. The loosening of the crown is an objective fact, and the challenges facing Wang's team remain stark. First, how to balance scale and risk, preventing further deterioration of retail asset quality amid household deleveraging. Second, completing the earnings model shift—converting the massive AUM client base into sustainable fee income, reducing reliance on credit interest. Third, managing the relationship between corporate and retail banking, using corporate as a short-term profit buffer without discarding the differentiated retail identity.
Being overtaken by corporate profits in the short term doesn't mean the retail advantage is dead. CM Bank still possesses the strongest retail customer base and wealth management system among domestic joint-stock banks. The real test isn't about profit share in one or two semi-annual reports—it's whether, after the cycle bottoms out, the bank can complete its model iteration and re-activate the earnings elasticity of its retail business.