Banks shift to nurture asset-light growth

As narrowing net interest margins squeeze traditional lending profits, many banks are shifting their focus toward boosting intermediary business income, making asset-light businesses a key pillar in reshaping their revenue models, analysts said after lenders outlined their 2026 priorities at recent work conferences.

Some banks also made it clear in their key task plans for 2026 that they will step up efforts to expand financial market businesses, which are typically asset-light, high-turnover intermediary businesses with a certain countercyclical adjustment feature. Such businesses can not only improve lenders' revenue structures, but also reduce reliance on traditional lending.

China Everbright Bank said it will list the professionalized operation of financial market businesses as one of its key priorities. The bank aims to increase the contribution of wealth management, transaction banking, investment banking and custody services to intermediary business income, promote steady revenue growth and empower financial market operations through digital transformation.

Industrial Bank said it will rely on asset management and wealth management as key support pillars in 2026, actively meeting financing needs from industrial finance and wealth management demand from retail clients to create more sources of noninterest income growth.

At present, wealth management has become one of the main sources of banks' noninterest income, and its importance within banks' overall business systems is becoming increasingly prominent.

At the beginning of this year, Shanghai Pudong Development Bank adjusted its wealth management structure, splitting its previous single department of wealth management and private banking at its head office into separate wealth management and private banking departments. Last year, Bank of Communications and Postal Savings Bank of China also announced the establishment of dedicated wealth management departments at the head-office level.

After organizational restructuring, banks can break down internal business silos and better coordinate products, channels and client resources. This would enable a shift from product-centric sales toward a customer-centric model, improving service professionalism and consistency while strengthening client loyalty, said Lin Yingqi, a financial analyst at China International Capital Corp.

Zeng Gang, chief expert and director of the Shanghai Institution for Finance and Development, said that during the 15th Five-Year Plan period (2026-30), many banks' strategies are likely to undergo fundamental changes — shifting from scale expansion to quality improvement, and from reliance on interest income to a more diversified revenue structure. This will prompt banks to place greater emphasis on noninterest income, including wealth management and investment banking businesses.

Analysts said persistent pressure on bank net interest margins is driving a shift from interest-dependent earnings structures toward more diversified and balanced revenue sources. Meanwhile, the transition from savings-dominated portfolios toward diversified asset allocation has already begun, creating broad prospects for the wealth management market.

China will deepen comprehensive investment and financing reforms in the capital market and improve market entry mechanisms for medium and long-term capital, according to a government work report submitted on Thursday to the country's top legislature for deliberation.

The gradual recovery of capital markets has also provided a favorable external environment for financial market businesses. Financial investment activities are driving rapid growth in noninterest income brought by wealth management products and mutual fund distribution, emerging as a new highlight for profit growth.

In addition, "digital intelligence" has become a high-frequency theme at many lenders' 2026 work conferences.

Bank of Communications said it will further advance its "AI Plus" initiative this year by strengthening digital-intelligence thinking and deepening practical applications, using AI technologies to restructure business processes and innovate service models.

Shanghai Pudong Development Bank emphasized that 2026 will mark a year of comprehensive deepening of its digital intelligence strategy. The lender plans to break down barriers between different modules of this strategy and better coordinate key elements such as products, platforms and institutional frameworks to achieve system integration and value enhancement.

In the era of rapidly developing large language models, banks should leverage financial technology to comprehensively enhance risk management capabilities, Zeng said.

jiangxueqing@chinadaily.com.cn