Performance of China’s leading investment bank CITIC Securities declines for three consecutive years

On the evening of March 28, China International Finance Co., Ltd. (China International Finance Corporation) released its 2024 annual report, revealing a double decline in operating income and net profit. According to the financial report, this state-owned investment bank has seen its performance decline for three consecutive years.

In 2024, China International Finance Corporation achieved operating income of 21.333 billion yuan, a decrease of 7.21% year-on-year; and net profit attributable to equity shareholders of the parent company was 5.694 billion yuan, a decrease of 7.50% compared to the previous year.

Breaking down the business lines, investment banking and stock businesses dragged down the company’s performance last year.

In 2024, the operating income of China International Finance Corporation’s investment banking division was 2.583 billion yuan, a decrease of 659 million yuan compared to the previous year, a drop of 20.33%, primarily due to a decrease in investment banking service fees and commission income. Additionally, the market value of private equity investment funds and non-listed equity investments decreased compared to 2023, resulting in a decrease in related investment income.

The operating income of the stock business division decreased by 8.13 million yuan year-on-year, a decline of 15.48%, mainly due to a reduction in over-the-counter derivatives business as client trading demands decreased, leading to a decrease in related investment income. The decrease in brokerage service fees and commission income also contributed to the decline in operating income.

Established in 1995, China International Finance Corporation is China’s first Sino-foreign joint investment bank jointly invested by state-owned China Construction Bank (now owned by CCB Investment) and other companies. Its main business is providing financing and listing services to large state-owned enterprises in China and internationally, holding a near-monopoly position in this field.

However, after two years of lockdown due to the COVID-19 pandemic in China, China International Finance Corporation’s performance began to decline.

According to the financial report, in 2022, the company’s operating income decreased by 13.42% year-on-year, and net profit attributable to shareholders dropped by 29.51%; in 2023, operating income and net profit attributable to shareholders fell by 11.87% and 18.97% respectively.

According to Wind data statistics, China International Finance Corporation’s net profit attributable to shareholders growth rate in 2023 (a decrease of 18.97%) ranked the fourth from the bottom among A-share listed securities firms.

Furthermore, since 2024, China International Finance Corporation has been subject to multiple administrative regulatory measures by the authorities.

The China Securities Regulatory Commission and local securities regulatory bureaus issued regulatory announcements regarding China International Finance Corporation on January 5, January 12, April 28, September 29, and October 26 in 2024.

According to a pre-disciplinary notice by the China Securities Regulatory Commission disclosed by China International Finance Corporation in October of last year, the company was investigated and punished for allegedly providing underwriting services for the Si’er Semiconductor IPO without due diligence. The China Securities Regulatory Commission confiscated 2 million yuan of underwriting revenue from China International Finance Corporation and imposed a fine of 6 million yuan.