Backed by China Life for nearly a decade, Guangfa Bank is still caught between old and new growth engines.

June of this year, the Nanjing branch of GF Bank listed a debt asset package worth 1.827 billion yuan on the disposal platform; Almost simultaneously, the 762 million shares held by the bank’s sixth-largest shareholder, AVIC Investment Holdings, were completely subject to judicial freeze. One event concerns the clearance of existing risks, the other stems from the shareholder's own debt issues; both indicate this unlisted joint-stock bank is still in a period of recovery. But even more noteworthy than these two events is another set of numbers: In 2025, GF Bank’s operating income decreased by 7.65% year-on-year to 63.942 billion yuan, and net profit dropped by 14.75% year-on-year to 13.029 billion yuan. Among 12 comparable joint-stock banks, both declines ranked 11th. Meanwhile, customers, funds, and scenarios flowing from the major shareholder China Life continue to enter. Resources keep flowing in, yet profits continue to decline. This gap is the starting point for understanding GF Bank’s current situation. Old Engine Stalls In 2025, GF Bank’s strategic expression underwent clear changes. For many years, the bank’s business positioning has emphasized retail, strengthening corporate, and optimizing capital markets; retail has always been the unambiguous core. However, in 2025, newly appointed president Lin Chaohui listed retail, corporate, and capital markets as the three major growth poles, proposing to simultaneously develop corporate finance and interbank businesses alongside retail transformation and credit card renewal. The change in language reflects operating pressures at GF Bank. For many years, the core of GF Bank’s retail business has been credit cards. In 1995, it issued China’s first credit card meeting international standards, pioneering the birth of China’s credit card industry. Over the next thirty years, credit cards became the bank’s most important label. As of 2025, GF Bank has served over 70 million debit card clients and 125 million credit card holders; the number of credit card holders is 1.79 times that of debit card clients. This ratio is rare among peers. Comparisons show, in 2025, China Merchants Bank had about 224 million debit card clients and 70.11 million credit card accounts, with debit cards outnumbering credit cards by more than three times; Ping An Bank’s retail clients numbered 128 million, with about 43.69 million credit card accounts, similar in ratio to Merchants Bank. Although disclosure standards differ and the numbers aren’t directly comparable, GF Bank’s much higher ratio demonstrates its uniqueness: One possibility is that GF’s debit card clients hold multiple credit cards per person; another is that many customers only hold credit cards without opening debit cards at GF. This might signify GF Bank’s strength in credit card business, but it also implies that huge numbers of credit card customers keep their daily deposits, transfers, and investment funds elsewhere, leaving GF Bank with just the consumption installment business. Expansion did not translate into customer stickiness, and GF Bank suffered a heavy blow as credit cards collectively fell out of favor. After 2022, household leverage rose, consumer credit entered stock competition, banks tightened credit, and credit card delinquency rates increased. By the end of 2025, GF Bank’s credit card overdraft balance had dropped to 350.7 billion yuan, down over 100 billion yuan in four years, with delinquency rate at 2.16%, nearly one percentage point higher than the bank’s overall delinquency rate. On the profit table, fee and commission income—previously propped up by credit cards—also shrank: net income fell from about 12.2 billion yuan in 2021 to 10.068 billion yuan, a drop of over 2.1 billion yuan in four years. The old growth system built on credit cards is losing speed overall. Limited Self-Repair After the old engine stalled, GF Bank did not give up finding substitute growth within the balance sheet. In 2025, company loan balances increased by 190.8 billion yuan, up 18%, achieving over 10 billion yuan growth for three consecutive years. However, volume growth did not bring price growth; the bank’s corporate loan average yield sharply dropped to 4.16%, resulting in almost flat interest income year-on-year. The capital markets direction also failed to provide incremental revenue, bringing instead significant volatility. In 2025, GF Bank posted a fair value loss of 1.84 billion yuan, compared to a 1.45 billion yuan gain a year earlier—a swing of more than 3.2 billion yuan in two years. Meanwhile, improvements in GF Bank’s asset quality came at the cost of profits. Non-performing loan ratio was 1.44%, declining for three years in a row; real estate sector NPL dropped from 5.66% to 3.37%. But this improvement relied on continued large-scale disposals; in 2025, a total of 36.9 billion yuan in NPLs were cleared—about 1.2 times the year-end NPL balance. The 1.8 billion yuan debt disposal in Nanjing this June is part of this chain. Write-offs and disposals are real losses; the accounts improve, but pressure on the profit statement is real. Under pressure from three business lines, the bank’s operating income in 2025 fell by 5.3 billion yuan, and net profit dropped by 2.255 billion yuan. Compared to peers, the gap is clearer: China Merchants Bank’s net interest margin that year was 1.87%, ROE above 13%; Industrial and Ping An were about 1.7–1.8% NIM with ROE around 9%. By contrast, GF Bank’s NIM was only 1.43%, ROE 4.69%, significantly lower than peer joint-stock banks. Efforts in corporate, capital markets, and risk clearance aside, its self-repair hasn’t brought profits back in the short term. China Life Collaboration Deepens A significant variable in GF Bank in the past decade has been major shareholder China Life. In 2016, China Life spent over 23.3 billion yuan to become the single largest shareholder. In 2025, for the first time in its annual report, GF Bank placed the China Life logo ahead of its own, noting below: insurance, investment, banking. This can be regarded as China Life’s clear expression of its comprehensive financial group positioning: banking is one of its three major pillars. To China Life, GF is not a financial investment, but a puzzle piece serving accounts, funds, custody, pension, and fee-related functions in its overall financial map. Insurance client contact is infrequent, banking is frequent; insurance assets need settlement, custody, and investment channels. The comprehensive financial model of insurance, investment, lending, equity, debt must have a bank as the infrastructure. Such binding is most obvious in personnel; the top management of both institutions has always shared the same list. Since China Life’s takeover in 2016, GF Bank’s chairman position has become customary for the current chairman of China Life Group, without exception. Since 2019, the president role has also been integrated into China Life’s system; Yinzhaojun, Wang Kai, Lin Chaohui—all GF presidents have served as Group Vice-President level executives at China Life. Early on, coordination between China Life and GF focused on corporate and insurance asset levels. In 2021, the cooperative scale under the China Life-GF comprehensive financial model exceeded 410 billion yuan, mainly helping corporate clients package bank credit, settlement, custody, and insurance asset allocation; retail end saw collaboration guiding insurance clients to credit cards and wealth management products. By 2025, this collaboration had spread to more levels. On the liability side, GF, together with China Life Group affiliates, served more than 7 million individual clients, with relevant financial assets averaging over 100 billion yuan daily each year; personal pension accounts exceeded 3.46 million. On the asset side, GF introduced more than 200 billion yuan in insurance funds for clients through comprehensive financial services; asset custody reached 4.33 trillion yuan. For fee income, premium payments for China Life’s agency business grew 29% year-on-year, and investment-banking cooperation scale increased by 35%. For its 2025 strategy, GF Bank’s statement is clear: it aims to become the main platform carrying China Life’s “One Account Wealth Management,” integrating insurance, banking, wealth management, and pension finance into a single system. From early days of corporate-insurance asset coordination to today’s integrated layout for accounts, pensions, settlement, and insurance assets, China Life and GF are much more closely linked than before. However, collaborative scale does not naturally equate to profit recovery; what these clients, funds, and scenarios ultimately become is the real question. New Engine Hard to Ignite China Life resources are still inflowing, and GF is striving within the balance sheet, but the 2025 profit report shows: none of this has yet translated into profit. Where is the problem? External environment is one constraint. After 2022, China’s banking sector collectively entered a new phase: net interest margin keeps narrowing, consumer finance declines, corporate loan pricing becomes cutthroat, bond market volatility intensifies. The insurance industry is also stressed, with the interest spread loss problem troubling the whole life insurance sector, insurance asset yields keep falling, China Life itself is seeking more stable asset allocation. Its resource-export capacity is inherently limited by the external environment. The key is that there is a not-short conversion chain between collaborative scale and profit. Seven million collaborative clients and more than a hundred billion yuan in financial assets sound impressive, but account opening doesn’t equal deposits, referral doesn’t equal retention. Insurance clients may open accounts at GF, but their daily transfers, spending, and investments may not follow; the portion converted to low-cost core deposits is much less than account numbers suggest. Custody scale of 4.33 trillion yuan and over 200 billion yuan in insurance fund inflows prop up scale, not net interest margin. In these businesses, GF mostly plays the role of custodian, facilitator, and underwriter, earning channel and service fees rather than directly issuing high-yield loans or booking interest income. More challenging is the cycle. GF Bank effectively joined China Life’s system in 2016, but only in 2021 completed core strategic upgrades for comprehensive finance and banking-insurance collaboration. By then, credit cards had already shifted from expansion to stock management, and margin was tightening rapidly. By contrast, Ping An Bank leveraged the comprehensive finance model of Ping An Group since 2017, coinciding with a window of strong consumer finance demand and high credit card growth. GF’s transformation was a cycle late. The constraint of not being listed lengthens this cycle: lack of market-based capital supplement channels, no way for shareholders to exit holdings, AVIC Investment’s frozen shares cannot be transferred—a clear example. Positive signals do exist. In the fourth quarter of 2025, GF Bank’s operating income grew 13.0% quarter-on-quarter, net interest margin improved, real estate NPL dropped from 5.66% to 3.37%, the heaviest risk is being cleared, new assets are being deployed, new accounts are accumulating. But what GF Bank must truly complete is not just absorbing the traffic guided by China Life, but a shift in capability system: from a retail bank centered on credit cards to a comprehensive financial platform carrying insurance, banking, wealth management, and pension finance. This shift is much harder than referral itself. Backed by China Life for nearly ten years, what GF Bank needs is not further capital from shareholders, but for these resources to truly penetrate into its profit statement. Risk Disclosure and Disclaimer The market involves risks; investment requires caution. This article does not constitute personal investment advice, nor does it consider the specific investment objectives, financial situation, or needs of individual users. Users should assess whether any opinions, viewpoints, or conclusions in this article fit their particular circumstances. Any investment based on this, you bear the responsibility.