The intense competition in the new energy vehicle industry highlights a persistent "impossible trinity": automakers strive to maximize range, minimize energy consumption, and ensure top-tier safety, yet these goals often conflict. Extending range increases battery weight, reducing energy consumption requires lighter bodies, and safety demands robust structural integrity. The industry consensus points to vehicle lightweighting as the key solution. By optimizing body structures, adopting lightweight materials like high-strength steel and aluminum alloys, and integrating powertrain systems, automakers can reduce weight without compromising safety, thereby improving efficiency and extending range—achieving balance among the three competing objectives.
This logic offers a valuable framework for assessing high-quality development in the banking sector. During a critical phase of cyclical transition, banks face their own "impossible trinity": balancing scale expansion, risk control, and capital adequacy. Pursuing growth often involves higher-risk weighted assets, accelerating capital depletion; strict risk management curtails credit issuance, hindering expansion; and maintaining ample capital restricts asset growth flexibility and profitability. In this context, asset lightweighting emerges as a crucial strategy for commercial banks to resolve this trilemma. By reducing high-risk assets like non-standard credit and increasing holdings of low-risk bonds and cash, banks can optimize asset structure and risk density, achieving dynamic equilibrium among stable growth, risk mitigation, and capital adequacy.
Within financial reporting systems, a bank's "lightness" is measured along two dimensions: revenue-generating capacity without capital consumption, and capital utilization efficiency under constraints. Previously, reliance on retail expansion became increasingly challenging due to rising customer acquisition costs and asset quality volatility. Simply shifting to low-risk, low-yield assets for "paperweight reduction" revealed issues of low capital returns. As straightforward asset reallocation proves ineffective, transformation efforts are focusing on deeper structural changes in balance sheets.
Currently, three distinct pathways are emerging in banks' lightweighting transformations: First, the retail model pioneered by China Merchants Bank, which leverages wealth management to attract low-cost demand deposits, building moats around funding costs and capital efficiency. Second, amid retail setbacks, a return to corporate banking foundations, focusing on industrial clients and replacing traditional capital-heavy spread-based competition with transaction management and comprehensive services. Third, transcending traditional business lines by integrating technologies like AI and algorithms to reshape risk pricing and systematically reduce reliance on human and capital resources.
These pathways are interconnected rather than isolated: Retail banking shifts from extensive expansion to intensive cultivation; corporate banking serves as a stable profit base and lightweight exploration; technology deeply embeds into processes, enabling precise risk insight and capital savings. Modern lightweight banking is no longer about superficial metric competition but about breaking the contradiction between scale growth and capital consumption, achieving a virtuous cycle of endogenous profit-driven capital growth.
**Retail Benchmark** In the banking sector's lightweighting transformation, China Merchants Bank (CMB) sets the benchmark. By 2025, CMB leads peers in both non-capital-consuming revenue generation and fund utilization efficiency. The first capability is reflected in the ratio of net fee and commission income excluding market volatility factors. After removing volatile non-interest income, this ratio reveals a bank's genuine ability to earn fees through services without capital consumption. Calculations show CMB's ratio reached 24.62% in 2025, significantly领先 peers—Ping An Bank and CITIC Bank recorded 21.23% and 18.09%, respectively, with most joint-stock banks below 15%.
The second capability is measured by return on risk-weighted assets (RoRWA), indicating profit per unit of risk assumed. In 2025, CMB's RoRWA reached 1.99%, compared to an industry average of 0.6–0.9%, meaning CMB generated over double the profit per unit of core capital consumed. This dual leadership is supported by CMB's extensive wealth management ecosystem. Amid industry-wide fee income pressure, CMB's wealth management fees surged 21.39% year-on-year to RMB 267.11 billion in 2025, with fund and wealth product agency fees rising 40.36% and 18.98%, respectively. As clients designate CMB as their primary wealth manager, assets naturally migrate: retail assets under management (AUM) grew 14.4% to RMB 170.8 trillion. In contrast, CITIC Bank, with total assets约90% of CMB's, had retail AUM of only RMB 53.6 trillion—less than one-third of CMB's.
This vast wealth management ecosystem accumulates massive low-cost demand deposits, underpinning extreme capital efficiency. During an asset-side downturn, an average interest-bearing liability cost of just 1.26% in 2025 helped maintain a high net interest margin of 1.87%, leading joint-stock banks. This demonstrates the financial appeal of wealth management revenue recycling into low-cost funding. For years, peers allocated resources to replicate this high-frequency, low-cost deposit model. However, replicating the "CMB model" is now exceedingly difficult. CMB's chairman Wang Liang noted that retail credit growth is facing a "cliff-like decline," with asset quality pressures persisting. As macro cycles pressure retail asset quality—evident in credit card and consumer loan non-performing ratios—sole reliance on retail credit expansion is hindered. Without a large, sticky retail client base, heavy spending on customer acquisition in saturated markets can erode profits.
With retail avenues constrained, banks must shift transformation focus deeper into balance sheets.
**Unfinished Transformation** CMB's success cannot mask industry-wide anxiety. In banking regulation, different assets consume capital at varying rates: a high-risk SME loan may require 100% capital allocation, while a high-credit-grade government bond may consume zero. If total assets expand but risk-weighted asset (RWA) growth slows, it indicates a shift toward capital-efficient businesses. Tracking this metric reveals that by 2025, most banks' lightweighting progress is slow, even regressing. Among joint-stock banks, except for China Zheshang Bank, all saw total asset growth lag RWA growth; Shanghai Pudong Development Bank (SPDB) lagged by 4.97 percentage points, Ping An Bank and CITIC Bank by 2.44 and 2.43 points, respectively. This reflects a defensive posture: despite wealth management opportunities, slowed growth makes it hard to fill revenue gaps short-term, forcing banks back to credit expansion, raising RWA density.
Even Zheshang Bank's apparent lightweighting progress stems more from statistical shifts than genuine efficiency gains. While its total asset growth exceeded RWA growth in 2025, indicating paper capital relief, its pure fee income ratio was only 7.45%—low among peers—and RoRWA was a modest 0.61%. Why did capital efficiency remain weak? Because Zheshang sharply increased low-risk, low-yield interbank placements, with such assets growing nearly 38 percentage points faster than loans. This "lightening" involved shifting assets to less capital-intensive areas—not enhancing profitability but reducing capital occupancy. Such passive expansion often aims to optimize regulatory metrics or pursue interbank arbitrage. However, sacrificing asset yields for paper lightweighting carries drawbacks: funds circulate within the financial system without connecting to the real economy or generating fee income from settlements or wealth management. If macro rates reverse or bond market fluctuations erase fair value gains, low-margin asset structures face profit deceleration risks.
With wealth management stalled and simple asset shuffling ineffective, seemingly "heavier" banks must find more sustainable lightweight solutions.
**Corporate Banking Focus** From a balance sheet perspective, returning to corporate banking is an industry trend. In 2025, retail loan balances at nine A-listed joint-stock banks shrank 0.83% year-end, with growth down 1.36 percentage points;同期, corporate loan balances grew 10.07%, expanding 1.15 points. However, credit flowing back to corporate doesn't mean banks abandon lightweighting. With retail dividends depleted, many corporate-focused banks are returning to their resource advantages, emphasizing lightweight restructuring of corporate services. For these institutions, deepening industrial chain and transaction finance may be more pragmatic than强行switching to retail. Dong Ximiao, deputy director of the Shanghai Finance and Development Laboratory, suggests that blindly adhering to or abandoning "retail first" is unwise. He argues a more practical strategy for most banks is using refined corporate banking as a stable profit base to buy time and resources for retail strengthening, ultimately achieving dual-engine驱动.
The core of this approach shifts from earning spreads on asset规模to earning fees from services. CITIC Bank chairman Fang Heying states future competition lies in transitioning from "credit intermediary" to "service intermediary," building领先in comprehensive financing and transaction settlements. Becoming a credit engine within corporate transaction ecosystems is key to CITIC's corporate lightweighting. Leveraging 1.388 million corporate clients, CITIC no longer assesses small suppliers individually but uses products like "Credit e-Chain" to anchor them to core enterprise credit. In 2025, CITIC's assets exceeded RMB 10 trillion, with loan growth of 2.48% far below total asset growth of 6.28%. The gap was filled by increasing interbank assets and financial investments, somewhat similar to Zheshang. However, breakdowns show financial investment growth hit 11.67%, focusing on more liquid FICC (fixed income, currencies, commodities) businesses. This isn't merely hoarding low-yield assets but using FICC market-making and trading to absorb corporate liquidity, linked with transaction banking. Settlement volumes rose 16.30% year-on-year, with massive settlement funds reducing reliance on high-capital信贷. Service-driven expansion proved efficient, with RoRWA at 0.92%, relatively high among peers.
SPDB emphasizes corporate treasury services. By promoting systems like Beidou Treasury, SPDB embeds financial services into group companies' daily payments and settlements. In 2025, focusing on tech, supply chain, inclusive finance, cross-border, and财资, high-frequency transactions contributed nearly 70% of corporate loan growth. Managing corporate cash flows, SPDB recorded RMB 685.79 billion in corporate net operating income, gaining stable non-interest income while reducing dependence on market spreads.
Industrial Bank acts as a capital intermediary. Shifting from lending to facilitating funding via bond underwriting and securitization, it converts non-loan activities into fee income. In 2025, net fee income reached RMB 258.91 billion, up 7.45%—far exceeding traditional loan interest growth of 0.44%. This matchmaking capability leverages strengths in green finance and infrastructure projects.
Although the three paths differ, they share a common goal: replacing traditional spread businesses with services and transaction management. Financially, fee income's coverage of capital consumption improves substantially. After corporate业务lightweighting and high turnover, massive settlement funds not only hedge narrowing spreads but also naturally feed retail via channels like payroll services. However, lightening assets and revenue is only the first step. The vast physical branches, departments, and staffing supporting this complex system also need an efficiency revolution.
**Foundation Revolution** During industry-wide pressure, true lightweight operation transcends accounting adjustments, evolving into systematic replacement of capital-heavy models through organization, processes, and algorithms. The technological foundation beneath financial statements is a critical detail determining success. Analysis shows banks' tech investment logic is shifting from cost item to capital efficiency driver. In 2025, 13 national banks spent RMB 183.878 billion on tech, averaging 4.5% of revenue; China Everbright Bank led joint-stock banks at 7.17%, while Industrial Bank's tech staff ratio reached 13.88%, an industry high. R&D spending aims clearly at acquiring new productivity. As branch expansion红利fades, leveraging tech to重构personnel and operational efficiency becomes a generational tool to counter human and capital consumption. Yang Bingbing, Everbright's deputy president, stresses tech investment must concentrate on computing power, algorithms, and data, ensuring every dollar directly serves business quality and efficiency.
Algorithmic risk control directly frees capital. Using AI and large models for precise risk pricing reduces unnecessary RWA allocations, unlocking capital tied up in risk defenses. For instance, Ping An Bank, integrating satellite communications, IoT, and AI, controls specific scenario NPLs below industry averages via dynamic production monitoring. In the era of data as a factor of production, data transforms from IT maintenance cost to a strategic, valorizable asset. With accounting rules enabling data asset recognition on balance sheets, banks like SPDB are building data asset catalogs, exploring value growth without capital consumption, opening new credit dimensions.
After strengthening foundations, some banks productize internal tech capabilities for external revenue. Industrial Bank's subsidiary sells mature risk solutions as SaaS; Zheshang Bank productizes supply chain finance systems, earning licensing fees without using credit额度. Additionally, new technologies connecting directly to the physical world eliminate post-lending burdens from information asymmetry. CMB, SPDB, and Ping An have deployed commercial satellite monitoring, using AI to assess crop growth or project progress, replacing manual inspections. Compared to large credit teams conducting field checks, digital感知systems have lower marginal costs; satellite launches,看似capital-intensive, structurally replace long-term risk control expenses. When banks real-time monitor asset status and gain data certainty, they need less premium for unknown risks. Reduced premiums and provisions are tangible balance sheet benefits from digital闭环.
Reviewing the banking sector's 2025 restructuring journey—whether retail refinement, corporate重构, or tech breakthroughs—all converge on one theme: endogenous capital conversion capability. When services transform into fee income, tech into pricing power, and data into credit, it may further break the deadlock between scale and capital. Dong Ximiao notes joint-stock banks are undergoing a profound shift from scale expansion to value creation. He emphasizes transformation success depends on whether banks can build genuine resilience by optimizing revenue structures, enhancing capital efficiency, and lowering liability costs amid cyclical pressures. Only by establishing endogenous capital cycles can this resilience be realized—not merely balance sheet optimization but the foundational confidence for commercial organizations to navigate economic cycles.
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