For INDUSTRIAL BANK, the 2025 report cards hold no miracles, only the painful divestment and reshaping inherent in a zero-sum game of existing assets.
Reflected on the surface of the financial statements, the bank's core indicators show a flattening trend: full-year operating income was 212.741 billion yuan, and net profit attributable to the parent company was 77.469 billion yuan, with year-on-year growth rates of only a marginal 0.24% and 0.34%, respectively.
The capital market, accustomed to high growth, is prone to misinterpreting such performance as passive stagnation in a harsh winter. However, at the recently concluded performance briefing, faced with the dual pressures of narrowing interest margins and asset scarcity, management conveyed a sense of resilience to navigate across cycles.
Chairman Lü Jiajin stated bluntly that the current INDUSTRIAL BANK possesses the &#34;dual value of profitability and defensiveness.&#34;
To mitigate market expectation fluctuations during the transformation's period of pain, INDUSTRIAL BANK offered a cash dividend of 31.02%. Beneath this defensive tone, its massive asset base of 11.09 trillion yuan has not stalled but is undergoing a profound underlying realignment beneath the surface.
This realignment outlines a systematic restructuring. To gain perspective on INDUSTRIAL BANK's current fundamentals, three threads must be clarified:
First, the marginal profit growth reflects genuine asset clearing, with legacy burdens such as real estate and local government financing vehicles (LGFVs) being accelerated and accurately recognized;
Second, hundreds of billions of yuan in credit funds are exiting the old cycle, shifting toward a trillion-yuan foundation of technology and green industries;
Third, with the approval of the AIC license and the construction of a digital intelligence foundation, INDUSTRIAL BANK is attempting to break the traditional narrative of banks relying on &#34;net interest margins.&#34;
A review by Lü Jiajin serves as a footnote to this proactive change: &#34;We persist in doing what is difficult but right, transitioning from the old triangular cycle of real estate, infrastructure, and finance toward a new triangular cycle.&#34;
For today's INDUSTRIAL BANK, advancing into the depths of technology and digital intelligence is no longer a tactical patch but a fundamental restructuring of its underlying logic.

<h2>Bottom-Line Defense of the Balance Sheet</h2>
As the necessary path for underlying restructuring, INDUSTRIAL BANK's profit foundation is being tested.
In 2025, against the backdrop of continuous LPR reductions and macroeconomic &#34;asset scarcity,&#34; the yield level of INDUSTRIAL BANK's assets inevitably experienced an overall decline:
The average yield on interest-earning assets for the full year was 3.24%, a year-on-year decrease of 48 basis points; the average yield on corporate and personal loans and advances was 3.59%, a decrease of 61 basis points.
However, this did not deal a severe blow to the bank's revenue—in 2025, net interest income still achieved positive growth of 0.44%, reaching 148.752 billion yuan.
Supporting this marginal growth is the effective reduction of liability costs and the success of the &#34;volume compensating for price&#34; strategy.
On one hand, there is strict liability control on INDUSTRIAL BANK's deposit side: the interest rate on corporate deposits was reduced by 34 basis points to 1.59%, and the interest rate on retail deposits was also lowered by 31 basis points to 1.80%.
By strengthening its network-building project and the retention of interbank settlement deposits, the bank stabilized its fundamental position in the competition for low-cost funds. Although the net interest margin further narrowed by 11 basis points to 1.71%, it remains 15 basis points higher than the overall average for joint-stock banks.
On the other hand, the increase in interest-earning assets directly offset the shrinking margins: the bank's total asset scale expanded by 5.58% to 11.09 trillion yuan, successfully &#34;compensating for price with volume.&#34;
The Hub noticed that while asset scale expanded, INDUSTRIAL BANK's underlying risk indicators remained within normal ranges. At the end of 2025, the non-performing loan (NPL) ratio was 1.08%, up only a marginal 0.01 percentage points from the end of the previous year.
However, beneath the surface stability, risk exposure in specific sectors shows localized amplification:
First, the NPL ratio for corporate real estate rose by 0.45 percentage points to 4.34%;
Second, the NPL ratio for local government financing vehicles (LGFVs) climbed by 2.60 percentage points to 6.52%.
The rise in these two core indicators essentially constitutes a defensive clearing action.
Under the macroeconomic cycle of deep real estate adjustment and local debt resolution, INDUSTRIAL BANK has chosen to proactively downgrade classifications and recognize impairment for real estate projects that are difficult to recover in the short term and certain weak LGFV debts. Utilizing existing provision resources and profit margins, it has realistically recognized and digested historical burdens.
As of the end of 2025, the bank's real estate financing and LGFV debt decreased by 53.293 billion yuan and 46.643 billion yuan, respectively. The downward trend in these two figures marks the bank's proactive decoupling from the highly dependent &#34;real estate-infrastructure&#34; old cycle.
To digest the pain of cutting high-yield assets and clearing historical burdens, the consumption of provisions became an inevitable cost—at the end of 2025, the bank's provision coverage ratio dropped from 237.78% to 228.41%.
Notably, while accelerating the cleanup of its balance sheet, management still delivered a cash dividend exceeding 30%.
The logic behind this combination of moves is clear and resolute: stabilize bottom-line profits through volume-driven growth and cost reduction; then, through a high proportion of cash dividends, signal to the capital market that existing risks are being proactively digested and core profitability has not been fundamentally damaged.
For a large commercial bank with 11 trillion yuan in assets, relying solely on defense is clearly not a path to the future.
As hundreds of billions in credit funds withdraw from old-cycle assets, how to find a new home has become INDUSTRIAL BANK's next challenge.
<h2>How to Scale Back the Old while Expanding the New</h2>
New homes may be found in the credit demands of emerging industries.
In 2025, INDUSTRIAL BANK's overall loan growth rate for the year was 3.70%. However, beneath this stable overall level, credit resources were significantly tilted toward policy-guided sectors of the real economy.
At the end of the year, the bank's technology finance loan balance increased to 1.12 trillion yuan, a year-on-year growth rate of 18.47%; the green finance loan balance reached 1.11 trillion yuan, a year-on-year growth rate of 19.05%.
Loan scales in both new tracks surpassed the trillion-yuan mark and maintained high growth rates of nearly 20%.
This divergent growth reflects a shift in the credit foundation: against the backdrop of weak traditional credit demand, INDUSTRIAL BANK is anchoring its balance sheet expansion engine in technology tracks such as new energy, new materials, high-end equipment manufacturing, and semiconductors.
But the flip side is that switching tracks inevitably brings &#34;acclimatization&#34; issues for risk control logic.
In the past, when banks lent to real estate or traditional manufacturing, the core focus was on tangible collateral such as land and factories. This &#34;bricks-and-mortar&#34; risk control logic often fails when facing asset-light, R&amp;D-heavy technology enterprises.
To bridge the risk control gap, INDUSTRIAL BANK comprehensively upgraded its &#34;Technical Flow&#34; evaluation system:
This system no longer relies solely on collateral. Instead, it converts intangible assets such as a company's R&amp;D investment, patent quantity, and core technical team into credit evaluation indicators. In 2025, the bank approved financing amounts exceeding 1.15 trillion yuan based on the &#34;Technical Flow&#34; system.
From &#34;looking at bricks&#34; to &#34;looking at patents,&#34; the reshaping of the underlying risk control logic has become the institutional cornerstone supporting technology loan growth, helping the bank adjust its credit structure at the margins of slowing scale growth.
However, replacing traditional real estate assets with 1.12 trillion yuan in technology loans solves the problems of asset &#34;volume&#34; and &#34;direction,&#34; but it is difficult to easily cross the &#34;price&#34; hurdle.
In the current credit market, high-quality technology companies are the core targets of intense interbank competition. Interest rates for corporate loans to large state-owned technology enterprises or leading firms have been pushed down, occasionally even inverting with deposit costs. Meanwhile, moving down-market to small-to-medium and startup tech firms naturally brings higher market risks.
This means that the overall yield on technology loans cannot easily be compared to the real estate financing of the past.
With the net interest margin at only 1.71%, the traditional model of purely relying on &#34;lending and collecting interest&#34; faces a profit ceiling. As Vice President Zeng Xiaoyang admitted at the performance briefing, small-to-medium startup tech firms prefer capital support. If commercial banks only intervene with debt, they not only bear the high risk of early development but also earn only limited fixed interest.
This mismatch between risk and return is a common dilemma facing all banks seeking a transformation into technology finance.
Facing this business model bottleneck, how will INDUSTRIAL BANK break through?
<h2>Success or Failure of Digital Intelligence</h2>
Internally, seeking survival space through digital intelligence and operational efficiency; externally, breaking the profit ceiling of a single credit intermediary through comprehensive licenses—this is the dual-track path provided by INDUSTRIAL BANK.
In the current stage of existing asset competition, the focus of technology investment has shifted from early-stage customer acquisition to substantive cost reduction and efficiency gains.
In 2025, INDUSTRIAL BANK's investment in information technology reached 7.614 billion yuan, accounting for 3.58% of operating income. The bank's technology personnel reached 8,245, accounting for nearly 14% of the total staff.
At the performance briefing, Chairman Lü Jiajin stated bluntly that digital intelligence transformation is a &#34;battle for survival,&#34; and the output of this massive investment is gradually being realized as a hedge against risk and operating costs.
For example, the takeover of the entire credit chain by intelligent risk control models has improved the management efficiency of massive dispersed assets. In the current environment where macro retail asset quality is generally under pressure, INDUSTRIAL BANK still suppressed its retail NPL ratio to a low of 0.88%.
Furthermore, the application of AI technology in back-office links such as customer service, programming, and operations has smoothed the expansion of rigid operating costs. With marginal revenue growth, the bank's cost-to-income ratio remained stable at 29.56% for the year.
However, massive technology investment has not yet been able to immediately reverse the trend of declining overall efficiency.
Over the past three years, INDUSTRIAL BANK's ROE (Return on Equity) has slid from 10.64% to 9.15%. Revenue per capita dropped from 3.1671 million yuan to 3.0849 million yuan, and profit per capita fell from 1.1584 million yuan to 1.1233 million yuan.
In 2025, none of these three key data points escaped their downward trajectories.
This means that while the defensive battle of seeking profit from management through digital intelligence has stabilized the base, there is still a long road ahead to truly achieve a leap in the bank's overall productivity efficiency.
<h2>AIC License Breakthrough</h2>
If digital intelligence is the operational foundation for the present, the landing of the Financial Asset Investment Company (AIC) license is a long-term strategic card for INDUSTRIAL BANK to sow for the future.
As national ministries further expand pilot programs for equity investment, the policy channel for commercial banks to participate in technology venture capital has been opened. INDUSTRIAL BANK became the first joint-stock commercial bank approved to establish an AIC.
By the end of 2025, Xingyin Investment, a wholly-owned subsidiary of INDUSTRIAL BANK, steadily expanded its operations after establishment, completing a capital deployment of 6.808 billion yuan during the reporting period.
The essence of the AIC license is granting commercial banks the legitimate qualification to engage in direct equity investment.
Vice President Zeng Xiaoyang emphasized at the briefing that the establishment of the AIC is not just a simple license supplement but a key variable for the high-quality development of technology finance. Through equity investment, the bank can become a growth partner for enterprises.
The establishment of Xingyin Investment has opened up INDUSTRIAL BANK's internal synergistic mechanism of &#34;equity-debt linkage.&#34;
Through this AIC platform, INDUSTRIAL BANK can further &#34;invest early, invest small, invest long-term, and invest in hard technology.&#34; The &#34;commercial bank + investment bank&#34; business structure also gives the bank the opportunity to share in equity premiums when enterprises move toward the capital markets.
However, with registered capital in the tens of billions and an initial deployment of 6.8 billion yuan, the AIC cannot yet create massive waves in a net profit pool of 77.4 billion yuan. Whether this model can truly bring substantial growth in non-interest income in the next cycle remains to be seen.
Looking back at INDUSTRIAL BANK's 2025, there were no miracles of defying the trend, only realistic choices under objective conditions. This asset migration inevitably brings pain, but for a giant ship, the ability to smoothly replace its underlying dynamic power in a storm may determine its true coordinates in the next cycle more than maintaining high book growth.

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