The "Banking and Insurance Integration" in the banking channel tightens again; China Merchants Bank's Wang Liang: Will set 10% as the ROE control baseline | Financial Morning Brief

|March 31, 2026, Tuesday|

**NO.1 **Tighter reins again for the “reporting and fee-in-one” model in bank–insurance distribution channels

Recently, the Human Safety Insurance Regulation Department of the Financial Regulatory Administration issued a notice titled “Notice on Further Strengthening Fee Management for Bank Agency Distribution Channels” (hereinafter referred to as the “Notice”). The Notice requires that when insurance companies file for product registrations for bank agency distribution channels, they must submit, in accordance with the requirements of the intelligent validation system for personal insurance products, details such as the level of commissions paid to banks, compensation incentives for bank–insurance specialists, training and customer service fees, and apportioned fixed expenses, among other items. When insurance companies carry out business in bank agency distribution channels, they must implement the fee policies executed under the actuarial reports of the products that have been filed. Any fee expenditures must obtain authentic, lawful, and effective supporting documents.

Commentary: Against the backdrop of the in-depth implementation of “reporting and fee-in-one,” bank–insurance channels are entering a new period of rapid high-speed growth. But even as development accelerates, there are still certain risk points that deserve heightened vigilance, such as the reemergence of “small-account” issues. The issuance of the Notice is conducive to guiding companies to enhance their ability to manage costs and fees in a more refined manner, helping improve the industry’s overall operating efficiency and development quality in a steady way, and promoting fair competition and stable, healthy development in the industry.

**NO.2 ****Shanghai Clearing House supports the rollout of the first batch of credit derivative business for offshore bonds issued under the “Magnolia Bond” model

According to information from the Shanghai Clearing House, recently, Shanghai Clearing House provided clearing services for the first batch of transactions in the entire market, where Pudong Development Bank, Cathay Haitong Securities, and China International Capital Corporation carried out offshore bond credit derivative trades linked to issuance under the “Magnolia Bond” model.

Commentary: The successful rollout of this business is the first practical effort to use credit derivatives to support “Magnolia Bond” business and high-level opening of China’s bond market to the outside world. This move enriches risk-management tools for the offshore bond market, provides overseas investors with more precise hedging methods, and enhances the market appeal of the “Magnolia Bond.”

**NO.3 ****Agricultural Bank of China: 2025 net profit attributable to shareholders was RMB 291.041 billion

Agricultural Bank of China announced late on March 30 that in 2025 its operating income was RMB 725.131 billion, compared with RMB 711.416 billion in the same period last year. Full-year net profit attributable to the parent company was RMB 291.041 billion, compared with RMB 282.083 billion in the same period last year.

Commentary: In 2025, both Agricultural Bank of China’s revenue and net profit achieved positive year-on-year growth. In the current complex macroeconomic environment, this is by no means easy. It reflects the resilience and determination of a state-owned large bank in serving the real economy and expanding its core business.

**NO.4 ****Bank of China: Shareholders’ after-tax profit in 2025 increased 2.18% year on year

On March 30, Bank of China released its 2025 results, achieving operating income of RMB 659.866 billion, up 4.28% year on year. Of this, net interest income was approximately RMB 440.705 billion, down 1.83% year on year. Shareholders’ after-tax profit was RMB 243.021 billion, up 2.18% year on year.

Commentary: In 2025, Bank of China delivered double growth in both revenue and profit, demonstrating the resilience of its integrated operations. Against the backdrop of a slight year-on-year decline in net interest income, the bank is accelerating its transition to a diversified profitability model of “light capital, heavy service.”

**NO.5 ****China Merchants Bank: Wang Liang—will set a ROE floor of 10%

On March 30, China Merchants Bank President Wang Liang said at the bank’s 2025 annual results press conference that it will strive to improve the level of ROE (return on net assets). Only by being able to maintain ROE of more than 10% can it create a good return for investors. The annual report shows that in 2025, China Merchants Bank’s average total asset yield and average return on net assets were 1.19% and 13.44%, respectively, down 0.09 and 1.05 percentage points year on year.

Commentary: “Setting a ROE floor at 10%” shows that management is clearly aware that the era of simply pursuing scale expansion has passed amid the backdrop of macroeconomic transformation and intensifying industry competition. In the future, it must safeguard the profitability bottom line by improving the efficiency of capital use and conducting more refined operations.

Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Please verify before use. Any actions taken are at your own risk.