The acquisition of a significant shareholding in Yunnan Hongta Bank by CITIC Bank Corporation Limited (ASX: 601998, HKG: 00998) has been formally completed.

On June 26, CITIC Bank announced it had received notification from Hongta Bank and obtained the requisite regulatory approval from the Yunnan local financial regulator. The approval formally permits CITIC Bank to acquire the entire stake in Hongta Bank previously held by Kunming Industrial Development and Investment Co., Ltd. The transaction involves 914.55 million shares, representing a 14.52% ownership stake, for a total consideration of 981 million yuan.

Acquiring a Stake at a Discount

The transaction solidifies CITIC Bank's position as a key strategic investor in this regional commercial bank. The seller, a state-owned capital platform in Kunming, initially listed the shares for sale at a starting price of 1.021 billion yuan in early April. Following a price adjustment in a subsequent listing, CITIC Bank emerged as the sole interested buyer, concluding the deal at the final price of 981 million yuan.

This final transaction price represents an approximate 13% discount to the carrying value of the equity. When measured against Hongta Bank's net asset value per share of 2.21 yuan at the end of 2025, the purchase price equates to just 48.54% of the corresponding net assets.

With the completion of this sale, the original seller has fully exited its shareholder position. CITIC Bank now becomes the fourth-largest shareholder. The core shareholder structure of Hongta Bank remains stable, with its top two shareholders—both affiliated with the tobacco industry—collectively holding 37.99%. Overall, state-owned entities continue to hold over 85% of the bank's shares.

Hongta Bank possesses a unique competitive position, specializing in financial services for the entire tobacco industry chain in Yunnan province. This focus provides it with a stable deposit base and lending assets that are less susceptible to broader economic cycles.

For the first quarter of 2026, Hongta Bank reported operating revenue of 499 million yuan and net profit attributable to shareholders of 180 million yuan, representing year-on-year increases of 16.05% and 12.50%, respectively. Notably, while the industry-wide net interest margin (NIM) faces pressure, Hongta Bank's NIM has risen from 1.04% in 2023 to 1.10% in 2025, an increase of 6 basis points.

CITIC Bank stated that this investment aims to develop new business growth avenues by leveraging Yunnan's local特色 industries. It will enhance the bank's strategic presence in the southwestern region and create differentiated advantages through the tobacco industry chain, providing long-term support for its retail and corporate banking segments.

Record Quarterly Profit Achieved

Separately, CITIC Bank has reported a landmark quarterly performance. For the first quarter of 2026, the bank achieved operating revenue of 54.649 billion yuan, a 5.23% increase year-on-year. Its net profit attributable to shareholders reached 20.098 billion yuan, marking a 3.02% growth and representing the first time in the bank's history that quarterly profit has surpassed the 20-billion-yuan threshold.

Breaking down the revenue, net interest income saw a modest increase of 1.66% to 36.270 billion yuan, with the quarterly NIM at 1.61%, indicating a notable deceleration in the downward pressure on margins. Non-interest income surged by 13.07% to 18.379 billion yuan, significantly outpacing interest income growth and helping to offset margin compression.

The bank's total assets continued to grow, exceeding 10.24 trillion yuan by the end of the quarter. Asset quality remained stable, with a non-performing loan ratio of 1.15%, unchanged from the end of the previous year. Provision coverage stood at a robust 202.45%.

Key business pillars including wealth management, investment banking, cross-border finance, and asset custody performed strongly. Retail assets under management reached 5.50 trillion yuan, while corporate wealth management scale grew by 10.80% from the beginning of the year.

The bank is also advancing initiatives in key strategic areas such as technology finance, green finance, pension finance, and digital finance, with significant progress reported across these segments.

In a related development, the bank's board recently approved the appointment of Mr. Lü Tiangui as the bank's President, subject to regulatory approval.