The convergence of weakening demand, rising risks, and shrinking supply is collectively driving credit resources toward the corporate banking segment. Tucked within the half-year reports of banks lies an increasingly distinct industry inflection point.
In the first half of 2026, ICBC's personal finance business saw its pre-tax profit plummet by 49.36% year-on-year, with its share of the group's pre-tax profit dropping from 46.6% in the same period last year to 22.4%. Meanwhile, its corporate finance business pre-tax profit surged by 67.80%, with its share climbing from 32% to 50.8%. Within a single bank, the two business lines nearly swapped positions in just six months.
ICBC is not an isolated case. A structural shift favoring "strong corporate, weak retail" is now sweeping across the listed banking sector. As of the end of June, the total corporate loan balance of 42 listed banks stood at 121.37 trillion yuan, up 7.90% from the end of the previous year, while the personal loan balance totaled 62.66 trillion yuan, down 0.27%. Among these, 28 banks reported negative growth in personal loans compared to the end of last year.
Of these, 8 A-share joint-stock banks saw their personal loan balances decline, including Hua Xia Bank (down 6.76%), CGB Bank (down 6.72%), and China Minsheng Bank (down 4.52%). State-owned giants also saw contraction: ICBC's personal loans decreased by 2.2 billion yuan, Bank of China's domestic personal loans fell by 3.701 billion yuan, and Bank of Communications slashed its personal loan balance by 80.013 billion yuan, a 2.82% drop, marking the largest absolute reduction among the 42 listed banks. Bank of Xi'an recorded the steepest percentage decline, with personal loans shrinking by 29.71% from the end of last year, effectively erasing nearly 30% of its outstanding retail portfolio in just six months.
On the corporate front, 38 banks saw enterprise loan growth exceeding 5%, with 15 surpassing 10%. Both Bank of Suzhou and Bank of Ningbo posted gains of over 18%. Deposits are also tilting toward corporates, with 22 banks reporting corporate deposit growth above 5% from the end of last year. Postal Savings Bank of China saw its corporate deposit balance expand by 21.81% (the bank's financial statements classify this as company deposits, synonymous with the statistical definition of corporate deposits), attributing the surge to enhanced corporate financial service capabilities and supply-chain-driven marketing.
Agricultural Bank of China stands out among the state-owned giants as one of the few still growing personal loans. As of June 30, its personal loan balance reached 9.572127 trillion yuan, up 309.451 billion yuan, or 3.3%, from the end of last year, ranking first among the 42 listed banks in both absolute increment and growth rate. Breaking it down, personal business loans increased by 348.685 billion yuan, up 11.7%, while personal consumption loans (including credit card overdrafts) grew by 49.054 billion yuan, up 3.4%. The increment from business loans alone exceeded the total personal loan growth by 39.2 billion yuan. Excluding business loans, ABC's personal loans actually saw a net decline.
If the shift in credit allocation is merely a front-end business signal, the divergence on the income statement confirms the migration of banking priorities. Compared to marginal scale adjustments, the gap in profitability is far more glaring. China Construction Bank offers the most direct illustration: its corporate finance business generated operating income of 179.777 billion yuan in the first half, with total profit of 75.123 billion yuan, a staggering 329.94% increase from 17.473 billion yuan a year earlier. During the same period, its personal finance business booked operating income of 185.787 billion yuan, still 6 billion yuan higher than the corporate side, but total profit slid from 78.734 billion yuan to 67.222 billion yuan, down 14.62% year-on-year. Despite similar revenue scales, the profit disparity has become unmistakable.
CM Bank, long regarded as the benchmark for retail banking in China, also experienced a landmark reversal in the first half. During the reporting period, its retail finance business generated operating income of 96.82 billion yuan, still exceeding the 75.536 billion yuan from wholesale finance, but pre-tax profits flipped: retail finance pre-tax profit fell 17.58% to 42.888 billion yuan, while wholesale finance pre-tax profit reached 45.703 billion yuan, overtaking retail by 2.815 billion yuan. This marks the first time in over a decade of CM Bank's retail transformation that the corporate segment has surpassed retail in profitability.
Postal Savings Bank of China also reflects this structural downgrade. In the first half, its personal banking revenue grew just 2% year-on-year to 119.302 billion yuan, with its revenue share dipping from 65.15% to 61.98%. Meanwhile, corporate banking revenue climbed 15.87% to 47.211 billion yuan, a growth rate nearly eight times that of the retail segment.
Behind this accelerating tilt is the dual pressure of risk and demand, coupled with banks' rational choices amid the economic cycle. Deteriorating asset quality was the first catalyst. Wind data shows that among listed banks disclosing partial data, the average non-performing loan (NPL) ratio for corporate loans stood at 1.01%, while the average for personal loans reached around 2%, a significant jump from 1.75% at the start of the year. Of these, 13 banks posted personal loan NPL ratios exceeding 2%.
The stress in personal NPLs is concentrated in business and consumption loans. At an earnings call on August 31, Zheshang Bank's Vice President and Chief Risk Officer Pan Huafeng explained that individual bad loans are small in ticket size but involve a large number of accounts, and due to constraints such as judicial proceedings, their disposal progresses more slowly than corporate non-performing assets. When faced with bad debt, corporate lending can be addressed through case-by-case negotiations, restructuring, and write-offs, whereas retail NPLs rely more on time-consuming and batch-based collection efforts. Rising risks intensify provisioning pressure on the retail segment, further eroding business profitability.
A structural mismatch in demand represents the more fundamental shift in growth logic. Household credit contraction persists. In the first half, the six largest state-owned banks collectively reduced personal housing loans by 508.625 billion yuan, more than quadruple the reduction from the same period last year. Central bank data reveals that national personal housing loan balances fell by 716.3 billion yuan, or 3.8% year-on-year, to 36.29 trillion yuan, marking 13 consecutive quarters of negative growth. Beyond mortgage credit, sluggish recovery in household income expectations has weakened actual demand for credit cards and consumer loans, prompting banks to tighten credit card limits and raise approval thresholds for consumer loans. Supply-side contraction now resonates with demand-side weakness.
Conversely, corporate financing demand is steadily recovering. A rebound in manufacturing activity, front-loaded infrastructure investment, and expansion in new quality productive forces are collectively driving corporate credit demand. Dong Ximiao, chief economist at Merchants Union Consumer Finance, analyzes that the interplay of weakening demand, rising risks, and shrinking supply is jointly pushing credit resources toward the corporate side. Against the backdrop of persistently narrowing net interest margins, this shift also reflects banks' focus on profitability. Large-ticket corporate loans offer higher deployment efficiency and lower operational costs, while also attracting corporate deposits, settlement services, and investment banking business, yielding significantly better risk-adjusted comprehensive returns than retail lending. With the adjustment of earlier hard requirements like the "two increases" for micro and small enterprise loans, banks are now able to pivot from "scaling up" to "prioritizing returns," autonomously optimizing their credit mix.
Notably, the customer base for retail banking has not shrunk in tandem with credit contraction. Take CM Bank as an example: in the first half, its active card volume reached 97.7073 million, with 70.4322 million active accounts, still growing from the end of last year. This suggests that the current "weak retail" is more about a temporary gap in household credit demand rather than a failure of the retail banking business model. Over a longer horizon, this adjustment appears to be a periodic correction following a decade of retail transformation in the banking industry, not the end of the retail strategy.
What cannot be denied, however, is that banks' growth logic has fundamentally shifted: the corporate business is reclaiming its role as the primary growth engine, and the competitive battleground among banks is transitioning from customer acquisition in retail to deeper industrial expertise and cycle-management capabilities in the corporate arena. The pace at which household income expectations and employment recover will be the pivotal variable determining when this balance tilts back.