How to Break the Deadlock Under Performance Pressure? Everbright Bank Management Responds to Revenue and Profit Fluctuations

(Source: JM Finance)

On March 31, Industrial Bank of China (601818.SH, 06818.HK) held its 2025 annual results briefing. At the meeting, the bank’s management communicated with the media on issues of market concern, including fluctuations in revenue and profits and investment in financial technology.

Data shows that in 2025, Industrial Bank of China achieved operating income of RMB 126.31B, a year-on-year decrease of RMB 9.1B, down 6.72%; and net profit attributable to the bank’s shareholders of RMB 38.83B, down 6.88% year on year.

Responding to revenue and profit pressure

In response to the issues of negative growth in operating income and net profit in 2025, as well as the expansion of the net profit decline, Liu Yan, vice president and chief financial officer of Industrial Bank of China, said that the bank’s performance fluctuations were mainly affected by multiple factors such as the industry environment and market changes. The bank has responded proactively by strengthening cost control.

Liu Yan said that against the backdrop of LPR rate cuts and industry-wide fee reductions to benefit customers, banks are generally facing pressure from narrowing net interest margins and falling intermediary income.

Specifically for Industrial Bank of China, first, since 2024, the combined effect of LPR rate cuts and adjustments to existing mortgages has affected the loan-side yield, while the downward pace of deposit rates has been slower than that of loans, resulting in a year-on-year narrowing of the net interest margin and constraining growth in interest income; second, the bond market’s rate decline in 2024 brought a high-base effect to the valuation of investment-type assets. In 2025, bond yields rose, creating mark-to-market valuation losses and lowering other income; third, the bank has increased efforts in risk resolution and business transformation, and credit card interest and fee income has faced intermittent pressure.

Facing the downturn in operating income, Industrial Bank of China eased profit pressure through strict cost control. In 2025, full-year operating expenses decreased by 8.9%, with the decline exceeding that of operating income, effectively offsetting part of the performance impact.

Liu Yan stated clearly that 2026 is a key year for the bank to solidify its foundation. The bank will adhere to “differentiated development,” build advantages in featured businesses, and, through three major initiatives—growing income, controlling costs, and strengthening risk management—thicken resource support and drive a stabilization and rebound in the profitability level.

Increase risk prevention and control in key areas

When discussing asset quality, Qi Ye, vice president of Industrial Bank of China, said that as of end-2025, Industrial Bank of China’s non-performing loan ratio was 1.27%, up 2 BP from the beginning of the year, and overall asset quality remained steady.

Qi Ye said that, judging from the circumstances of newly occurring non-performing loans, in the corporate segment the overall scale of non-performing loan generation declined compared with the previous year. The risk prevention and control in key corporate areas achieved positive results last year. The bank increased its clearing of existing real-estate inventory risks, advanced platform-based debt resolution in a stable and orderly manner, and implemented rollover loans without principal repayment for small and micro enterprises. It also actively took measures such as concentration ratio management, large-amount look-through, early-warning monitoring, and proactive exits, strengthening active management of existing assets.

Qi Ye explained that another area comes from retail loans, where the asset quality of real-estate-related loans and consumption credit assets mainly including credit card receivables is under pressure. Industrial Bank of China has clearly identified this as a key area. It set up a dedicated team, established mechanisms, and tilted resources to strengthen control and resolution, and this year also produced positive effects. On the one hand, it strictly controls the entry gate. It formed differentiated entry strategies and manages collateral-to-loan ratios by selecting regions and conducting client rating, strengthened due diligence and anti-fraud management, and standardized the management of partnering institutions to control new risks at the source. On the other hand, it strengthens overall coordination and adds supporting capacity in the form of dedicated teams, and improves a full-process post-loan management system.

Regarding the credit card business, Qi Ye pointed out that 2025 was the first complete year for the bank’s credit card business to shift from a direct-operated model to localized operations. Industrial Bank of China clarified the core philosophy of “returning to the essence of consumer finance and returning to branch operations,” fully mobilized branch and sub-branch resources, went deep into consumer scenarios, and accelerated structural optimization with customer satisfaction at the center. In risk governance, it adheres to balancing strict control of new risks with resolving existing risks. It revised core approval policies, continued to optimize risk-control models, simultaneously strengthened refined management of existing customers and reduced potential high-risk customers, and improved the effectiveness of post-loan collection and recovery. Over the past year, credit card non-performing loan generation was stable with a slight decline, and risk governance achieved initial results.

Discussing bank technology investment

Yang Bingbing, vice president of Industrial Bank of China, disclosed that in 2025 the bank’s technology investment accounted for more than 5% of operating revenue. However, it did not blindly expand investment; instead, it precisely focused on four core directions: computing power, algorithms, data, and functions.

In terms of computing power infrastructure, it simultaneously advanced the development of general-purpose computing power and intelligent computing power. 2025 became the turning point for intelligent computing power development, whose growth rate was close to 150%, far exceeding that of general-purpose computing power, laying the foundation for deep AI applications;

On the algorithms side, it built an intelligent assistant matrix covering 9 categories of job positions and possessing 10 general capabilities. It covers more than 15k employees. For corporate customer managers’ assistants, it has cumulatively generated more than 37k intelligent reports. The “AI + RPA” initiative added 610 automation scenarios, saving more than 1,100 person-hours per year;

In the data domain, it systematically promoted the construction of high-quality data sets, pushing data from “accurate and usable” to “understandable, inferable, and executable.” The bank’s self-developed “Ask the Data” tool covers 6,000+ indicators, with nearly 5,000 active users, significantly lowering the threshold for using data at the front line;

On the function layer, it advanced upgrades to the next-generation core business system and the integrated branch teller system, rebuilt end-to-end online processes for corporate inclusive finance, and improved approval efficiency by more than 80%. It delivered more than 30 supply-chain benchmark-chain projects. For retail credit, post-loan collection and recovery was achieved end-to-end online.

A wealth of information and precise interpretation—right on the Sina Finance APP