Data from 42 listed banks shows that during the first half of this year, growth in corporate deposits and loans outpaced that of retail deposits and loans across the board, with the retail segment, particularly consumer lending, showing notable weakness. Wind figures indicate that total corporate loan balances at these 42 banks reached 121.37 trillion yuan, up 7.90% from the start of the year, while personal loan balances fell 0.27% to 62.66 trillion yuan. Among the 42 banks, 28 recorded negative growth in personal loan balances from the beginning of the year.
In past years, retail banking was widely regarded as the industry's stabilizer for navigating economic cycles, because it connects to millions of individual customers, offers sufficient risk diversification, and typically commands higher lending rates than corporate banking, allowing banks to both expand scale and boost profitability. However, this once-lucrative business line has now entered a phase of relative decline in banks' reported revenue structures, as seen in the income statements of lenders like China Merchants Bank, where retail finance's contribution to total revenue has dropped while the corporate banking share has risen rapidly. Why is the retail revenue share falling, and why are banks gravitating toward the increasingly competitive corporate lending space? Amid rising non-performing loan ratios, the question arises: is retail still the industry's anchor?
Retail banking encompasses services provided to individuals, including mortgages, consumer loans, wealth management, payroll processing, and personal deposits. Previously, it was a fiercely contested battleground for all banks: it is asset-light and diversifies risk, retail loan yields generally exceed corporate loan rates, thereby improving net interest margins, and products such as payroll services, credit cards, and wealth management foster sticky customer relationships that generate stable recurring income. These attributes earned retail its reputation as the industry's cyclical anchor.
At China Merchants Bank, dubbed the king of retail, corporate banking also outperformed retail in the first half of 2026. Retail finance revenue reached 96.82 billion yuan, up 0.65% year-on-year, yet its share of total revenue fell 2.25 percentage points to 54.34%. In contrast, wholesale banking revenue rose 7.42% to 75.536 billion yuan, increasing its share to 42.39%. Similarly, Postal Savings Bank of China reported that personal banking revenue accounted for 61.98% of total revenue in the first half of 2026, down from 65.15% in the same period of 2025.
Dong Ximiao, chief economist at Connexus Financial, attributes the decline in retail revenue share to three overlapping factors: demand, risk, and supply. On the demand side, households remain reluctant to increase leverage, while corporates show stronger financing needs due to a recovering manufacturing sector and infrastructure investment. On the risk side, deteriorating asset quality in retail lending has forced banks to set aside more provisions, eroding profits, with some lenders seeing retail profitability decline sharply and risk-adjusted capital returns fall below those of corporate banking, prompting a reallocation of resources. On the supply side, amid persistent retail credit risk, banks have proactively tightened credit card limits and consumer loan approval standards, channeling more incremental credit toward corporate clients.
The falling retail share does not signal a sudden loss of value, but rather results from slower retail growth, faster corporate expansion, and rising retail risk costs, notes Ji Shaofeng, chairman of Micro-finance Union and a inclusive credit expert. The declining proportion reflects both a slower-growing numerator in retail and a faster-growing denominator in corporate banking, and should not be interpreted as an absolute contraction of retail operations.
Competition in corporate banking has become intense. A bank corporate loan officer previously told reporters that quality assets are fiercely contested, with multiple banks often extending credit to the same优质 corporate client, leading to widespread competition on loan quotas and interest rates. What makes corporate banking attractive? Ji explains that the appeal lies in larger per-client ticket sizes, faster scale build-up, and strong alignment with technology finance, green finance, advanced manufacturing, and enterprise transformation needs. More importantly, a corporate client is not just a single loan but a gateway to a broader operating relationship, allowing banks to extend settlement deposits, cash management, bills, supply chain finance, bond underwriting, cross-border finance, payroll, and personal financial services for business owners, generating comprehensive value beyond the loan spread.
However, hidden costs exist. Ji cautions that retail problems typically surface as scattered, diversified exposures, whereas a single misstep in corporate lending—where a few large clients can wipe out years of profits—carries far greater concentration risk. For inclusive small and micro enterprise credit, simply relying on tax-based models, collateral, or a mix of online and offline channels cannot solve real operating analysis challenges. Banks must build their own corporate credit analysis frameworks and establish standardized governance through customer operation centers and product management centers.
The shift from retail to corporate is not a simple lane change. As Ji notes, a bank that has not developed solid customer operation, pricing, risk control, and organizational coordination capabilities in retail will likely find that pivoting to corporate does not create a second growth curve, but rather packages existing problems into larger-sized loans. So, is retail still the anchor? Ji believes it remains so, but the definition must evolve: it is no longer about more personal loans equating to greater safety, but rather about leveraging a vast customer base, stable personal deposits, assets under management, payment settlement, and wealth management relationships to provide long-term, diversified funding sources and income streams. The next phase for retail is not to continue relying on traffic, models, and task-driven momentum, but to strengthen both customer operation centers, which manage long-term customer value, and product management centers, which assume life-cycle responsibility for product access, pricing, limits, risk, and exit. Without disciplined operations beyond origination, and without product governance beyond model-driven decisions, larger retail scale may paradoxically make risk harder to identify.
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