Falling below 700 million cards! Credit cards enter a deep adjustment phase: transactions slip, bad debt faces pressure—how effective is the “return to branches” strategy?

(JM Finance)

In 2025, the credit card business has entered a deep-water phase of adjustment.

On the one hand, both the scale of credit card numbers and transaction volume have shown a contraction trend. By the end of 2025, China’s credit cards and co-branded lending cards had fallen to below 700 million, and the stock-based era has arrived.

On the other hand, credit card delinquencies have generally worsened. Industrial Bank (601398.SH)’s credit card delinquency rate reached 4.61%, becoming a major drag on personal loan asset quality.

Under the new market environment, multiple banks, including Bank of Communications (601328.SH) and Everbright Bank (601818.SH), have decided to bring their credit card business back under the branches. Judging from some partial data indicators, the optimization effects appear to have already begun to show, but the adjustment is still going deeper.

The industry continues to “shrink,” and CCB holds onto a trillion-yuan scale

The People’s Bank of China data shows that by the end of 2025, China’s credit cards and co-branded lending cards totaled 696 million, down further from 727 million at the end of 2024.

Interface News reporter, based on data from 15 A-share listed banks (state-owned banks + joint-stock banks), found that the card volume scale at multiple banks is consistent with this trend. For example, by the end of 2025, Industrial & Commercial Bank of China’s number of credit cards was 145 million, down from 150 million at the end of 2024, a decrease of 5 million.

Some banks, however, achieved modest growth. The one with the most noticeable increase was China CITIC Bank (601998.SH). By the end of 2025, its cumulative credit card issuances totaled 129 million, up by about 6 million from 123 million at the end of the previous year.

But judging by transaction value across the year, the 15 banks almost “retreated across the board.” Data show that in 2025, the decline rates of credit card transaction value at several banks—Bank of Ningbo? (601166.SH), China CITIC Bank, Bank of Communications, Everbright Bank, Ping An Bank (000001.SZ), Industrial and Commercial Bank of China, Huaxia Bank (600015.SH), and Bank of China (601988.SH)—all exceeded 10%. Only China Minsheng Bank (600016.SH) (electronic payment transaction volume) saw a modest increase.

From the perspective of credit card loan balances, in 2025, China Construction Bank (601939.SH) continued to hold its “leading position,” though the scale was reduced.

In 2024, China Construction Bank’s domestic credit card loan balance reached 1.07 trillion yuan, making it the first bank nationwide to surpass 1 trillion yuan in credit card loan scale. In 2025, CCB’s credit card loans stayed at the trillion-yuan level, at 1.01 trillion yuan, but fell by 56.9 billion yuan year-on-year, a decline of 5.33%.

China Merchants Bank (600036.SH)’s credit card loan scale followed closely, at 939.15 billion yuan, down 0.92% year-on-year. Among the 15 banks, other than those, banks with loan scales above 500 billion yuan also included Agricultural Bank of China, Industrial and Commercial Bank of China, and Bank of Communications.

On a year-on-year basis, among the 15 banks, 13 saw year-on-year declines in their credit card loan scales, and many saw reductions exceeding 10%. In particular, Bank of China’s credit card loan scale plunged from 606.7 billion yuan in 2024 to 498.8 billion yuan in 2025, down by more than 17%.

Fu Yifeng, a special researcher at SuShang? (SuShang Bank) (Soo??) Bank, told Interface News that, overall, the volume of credit card issuances has continued to decline, and most banks have scaled back issuance. Only a small number of banks achieved modest growth, but the momentum was limited. Transaction value and loan balances generally retreated, reflecting that credit card usage activity and credit demand have weakened.

Only Shanghai Pudong Development Bank (600000.SH) achieved a 5% increase in its credit card loan balance, raising the scale to 389.3 billion yuan; Zhejiang Commercial Bank (601916.SH), with a smaller base, saw a slight rise of 0.9% in 2025 to 10.7k yuan.

“What did the ‘top student’ do right?” In its annual report, Shanghai Pudong Development Bank highlighted keywords such as promoting the transformation of interest-bearing conversion and auto installment programs. The bank said that by the end of 2025, the loan balance for credit card new-energy vehicle installment business was 10.1k yuan, up 33.68B yuan from the end of the previous year.

Quality matters more than scale, “accepting a decline in the share of credit card business revenue contribution”

Worsening credit card delinquency has become the main trend.

In 2025, among state-owned major banks—including Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China (601288.SH), and Bank of Communications—and joint-stock banks such as China Minsheng Bank and China CITIC Bank, credit card delinquency rates all rose. Moreover, Industrial and Commercial Bank of China, China Minsheng Bank, and Industrial Bank all had credit card delinquency rates above 3%, placing them at a high level within the industry.

Among them, Industrial and Commercial Bank of China’s credit card delinquency rate reached 4.61%, jumping 111 basis points year-on-year.

Image source: ICBC 2025 annual report

Fu YiQin? told Interface News that “the performance of (credit cards) this year is both an inevitable outcome of the industry following regulatory guidance to clean up and dispose of existing stock risks, and a concrete embodiment of banks’ active transformation and pursuit of high-quality development. Overall, it is in a key transition stage of industry adjustment.”

It is worth noting that Shanghai Pudong Development Bank became one of the banks with the most visible improvement in credit card delinquency. Its delinquency rate in 2025 was 1.92%, down 53 basis points year-on-year.

Interface News reporter noted that along with industry adjustments, banks now generally believe that credit card quality matters more than scale.

At a performance briefing, when asked, Wang Liang, President of China Merchants Bank, frankly acknowledged: “In the past few years, we have adhered to a strategy of ‘steady, low volatility,’ selected customer groups, and prevented risks. To manage asset quality well, we have accepted a change in which the credit card business revenue contribution share declines. Therefore, the asset quality of our credit card loans has remained relatively stable. At the end of last year, the delinquency rate was 1.74%, maintaining a relatively good position among peers.”

Previously, China Merchants Bank had analyzed credit card delinquencies and listed a set of historical data on the changes in credit card loan delinquency rates: the credit card loan delinquency rate across the market showed signs of rising in 2019. By 2020, with the combined impact of the pandemic, the credit card delinquency rate rose significantly. Over the six years from 2019 to 2025, except for a slight improvement and rebound in 2021, for most of the remaining time, the overall delinquency rate across the market showed a clear upward trend, and no turning point was observed.

Looking ahead, the asset quality of bank card assets is expected to continue to face pressure. At the performance briefing, Xu Mingjie, Deputy President of China Merchants Bank, mentioned that looking at this year and the coming period, the asset quality of retail loan assets across the whole industry will still be under pressure. Including credit cards, the asset quality of retail loan assets still faces certain challenges.

Fu Yifeng analyzed for Interface News that the industry’s core shift is toward “quality matters more than scale.” Many banks have proactively adjusted their strategies, selected customer groups, and strictly controlled risks, no longer blindly chasing issuance volume. “As for delinquencies, it is expected that they will still be under pressure in the future, but overall risk will remain controllable, gradually entering a phase of steady release. In the short term, affected by the macroeconomic environment, the pressure on retail loan asset quality will continue. Credit card delinquency rates may stay at a high level, and some banks that accumulated more risk earlier will still face pressure for delinquency to rise. But in the long run, the evolution of delinquencies will gradually slow, showing an improving trend.”

Next, controlling risks will be a major core topic for credit cards. For example, in its annual report, Industrial Bank clearly stated that it will improve a full-process risk-control system for credit card business, iterate risk-control models, enhance the quality of incremental credit granting, strengthen refined management during the loan period and post-loan collections, and continue to reduce newly occurring delinquencies.

The positive side of the industry’s efforts lies in two aspects. “On the one hand, banks have generally placed greater importance on risk control. They have shifted risk control forward in processes such as customer-group selection and credit granting management, reducing the placement of high-risk business and curbing new delinquency from the source. On the other hand, banks are accelerating the disposal of non-performing assets, clearing stock risks through methods such as bulk transfers to alleviate delinquency pressure. In addition, as the industry’s transformation deepens, measures such as deepening high-quality customer segments and scenario-based operations will gradually take effect. This will help stabilize asset quality, and it is expected that delinquency rates will not experience a sharp spike and will gradually move toward stability.” Fu Yifeng told Interface News.

It is also worth mentioning that, as the pilot program for transferring non-performing loans has had its deadline extended to December 31, 2026, industry participants generally believe that banks’ transfer of credit card delinquent assets will continue, becoming an important channel for banks to clear risks.

Business returns to branches, and the “major retreat” of credit card centers

In 2025, the “major retreat” of credit card centers continued to spread.

In December 2025, Guangfa Bank Co., Ltd.’s credit card center’s Hengyang branch terminated operations after receiving regulatory approval. In August 2025, Henan Financial Supervision Bureau approved the termination of operations of Bank of Communications’ Taipingyang Credit Card Center’s Zhengzhou branch. In July 2025, Guangdong Financial Supervision Bureau approved the termination of operations of China Minsheng Bank Co., Ltd.’s credit card center’s South China branch.

Previously, due to industry adjustments, banks such as Bank of Communications and Everbright Bank—typical cases—began implementing a strategy to localize credit card operations. In Bank of Communications’ 2024 annual report, it explicitly said, “Promote the transformation to a localized operation model for credit cards.” In Everbright Bank’s 2024 annual report, it emphasized that, for credit card business, it continuously strengthened the concept of prudent and steady development, adhered to returning to the fundamentals of consumption, and firmly returned to branches, using refined operations as a lever to continuously optimize customer groups and the asset structure.

After one year, these institutions’ progress in localized credit card operations has achieved certain results.

In its 2025 annual report, Bank of Communications stated that it is deeply advancing the reform of localized credit card operating model. By the end of the reporting period, 38 branches had fully taken on responsibilities for localized credit card operation and management. Compared with before the transformation, the proportions of high-quality customers among newly activated users by location, newly issued cards, and customers served by installment services improved by 140%, 1.3 percentage points, and 155% respectively.

Recently, Qi Ye, Vice President of Everbright Bank, said at a performance briefing: “2025 was the complete year of our credit card business transitioning from direct operation to localized operation. We clarified the core philosophy of ‘returning to the fundamentals of consumption, and returning to branches,’ and have continued to promote risk governance and high-quality development work. We fully mobilized the strength of our branches, delved into consumption scenarios, and accelerated structure optimization centered on customers who fit our ‘suitable’ criteria.”

Fu Yifeng believes that the trend of “credit cards returning to branches” is expected to continue. At present, the incremental growth peak has been reached for the credit card industry, and the rough expansion model of independent card centers is no longer suitable for development needs. Returning to branches can leverage the geographic advantages of branches to enable more precise customer operations and risk control. Its impact is mainly reflected in three areas: first, improving risk-control efficiency—branches are more familiar with local customer circumstances and can effectively reduce cross-region credit-granting risks; second, optimizing customer service—enabling credit card business to coordinate with other retail businesses of branches and provide customers with one-stop comprehensive financial services; third, reducing costs and improving efficiency—integrating resources currently held by branches, reducing the operating costs of independent card centers, while also improving customer activity and the proportion of high-quality customer groups.

“Additionally, this model can also drive credit card business to be embedded into local consumption scenarios,” Fu Yifeng said.

A wealth of information and precise analysis—available on the Sina Finance app