Citic’s Results Showed Strong Fee Income Growth and Improved Credit Quality, NIM Pressure Remained

No-moat China Citic Bank's, or Citic’s, 2021 results showed a 5% increase in total revenue and 13.6% growth in net profit from 2020. We attribute the stronger-than-expected growth to fast-growing non-interest income and reduction in credit costs. We believe the bank has achieved some positive outcomes from its three-year business reform since new management came on board in 2019. These included a strengthening wealth management business, enhanced corporate customer mix, and credit quality. We expect Citic’s “New Retail Banking” strategy to help enhance its deposit base in the long run, but we anticipate the slowing economy and easing policies to continue posing greater-than-peer pressures on its NIM in coming quarters.