Earnings call transcript: ICBC Q3 2025 sees steady growth amid market stabilization

Industrial and Commercial Bank of China (ICBC) reported a stable financial performance for the third quarter of 2025, with operating income reaching $611 billion, a 2% increase from the previous year. The bank’s net profit rose slightly by 0.5% to $271.9 billion. Despite a minor decline in the net interest margin (NIM) by 2 basis points to 1.28%, ICBC’s extensive network and innovative strategies continue to bolster its market position.

Key Takeaways

• Operating income increased by 2% year-on-year.
• Net profit grew by 0.5% year-on-year.
• Total assets surpassed $52.81 trillion, an 8.2% rise.
• Customer loans and deposits saw significant increases.

Company Performance

ICBC demonstrated resilience in Q3 2025, with its operating income and net profit both showing modest growth. The bank’s strategic initiatives, including digital transformation and inclusive finance, have contributed to its robust performance. Despite a slight dip in the NIM, ICBC’s focus on risk control and diversified operations has positioned it well in the competitive banking sector.

Financial Highlights

• Operating income: $611 billion, up 2% year-on-year
• Net profit: $271.9 billion, up 0.5% year-on-year
• Total assets: $52.81 trillion, up 8.2%
• Customer loans: $30.45 trillion, up 77.3%
• Customer deposits: $37.3 trillion, up 70.1%
• NIM: 1.28%, down 2 basis points

Outlook & Guidance

ICBC remains optimistic about its future prospects, with expectations for the full-year NIM to stabilize around 1.26%. The bank plans to continue supporting the real economy and expanding its international banking operations. It anticipates a gradual improvement in credit appetite and aims to further develop its inclusive finance products.

Executive Commentary

Tianjong Huang emphasized the bank’s commitment to strengthening its development foundation by serving the real economy. Tao Long Hung expressed confidence in ICBC’s high-level developments, while Wang Xun highlighted the bank’s dual focus on domestic and international circulation.

Risks and Challenges

• Potential macroeconomic pressures could affect credit demand.
• Continued NIM pressure due to market interest rate dynamics.
• Regulatory changes in international markets could impact operations.
• Competition in the digital finance sector may intensify.
• Economic fluctuations in key regions could affect asset quality.

ICBC’s performance in Q3 2025 reflects its strategic resilience and adaptability in a challenging economic environment. With a strong focus on innovation and international expansion, the bank is well-positioned to navigate future challenges and opportunities.

Full transcript - Industrial and Commercial Bank of (1398) Q3 2025:

Tianjong Huang, Strategic Management and Investor Relations, ICBC: Dear investors and analysts, good afternoon. Welcome to the ICBC twenty twenty five Q3 Earnings Call. I’m Tianjong Huang from the Strategic Management and Investor Relations department. On behalf of ICBC, I would like to extend my sincere gratitude to all investors and analysts who have long cared for and supported our bank. Joining us today are Mr.

Tianfeng Lin, Board Secretary and Chief Business Officer of ICBC, along with Head of relevant departments and institutions. Our directors, Luo Yun Zheng, Cao Lijun, Dong Yang, Zhong Manhao, Herbert Walter and Li Wei Ping are also attending today’s briefing online. Now I’ll give a brief overview of ICBC’s key performance indicators for the 2025. Sensing a complex and challenging external environment, ICBC has continued to uphold its role as a key pillar of the economy, steadily advancing its five transformation, intelligent risk control, modernized structure, digital driver, diversified operation and ecosystem development, achieving a dynamic balance between scale, profitability and risk management. First, profitability stabilized and rebounded.

In the first three quarters, ICBC achieved operating income of $611,000,000,000, up 2% year on year with positive quarterly growth in four of the past five quarters, indicating a clear recovery trend. Net profit reached 2 and 71,900,000,000.0, up 0.5% year on year, turning positive from the decline in the first half of the year, pushing annualized ROA and ROE up to zero point seven one percent and nine point three percent, respectively. The cost to income ratio stood at 26.55%, maintaining a strong efficiency. The NIM decreased by two bp from the first half, but the single quarter decline narrowed compared to Q2, providing stable support for the revenue growth. Second, steady growth in business scale.

As of September, total asset exceeded JPY52.81 trillion, up 8.2% from the end of last year. Loan insurance and bond investment both remained strong, providing over 4,000,000,000,000 incremental funding for the real economy. Among this, customer loans reached JPY 30,450,000,000,000.00, up 77.3% by the end of last year. Bond investment totaled JPY 16,010,000,000,000.00, up by 16.2% and customer deposits amounted to JPY 37,300,000,000,000.0, up 70.1%. The number of corporate clients exceeded 14,000,000 and individual customer surpassed seven seventeen million, further solidified the bank’s customer base.

Third, risk control remains sound and improving. The NPL ratio stood at 1.33%, down one bp from the end twenty twenty four. The car was 18.85. And the provision coverage ratio rose 2.3 percentage points to 217.21%. Private risk management in periods and effective mitigation measures have kept asset quality stable.

In the future, ICBC will continue to strengthen its development foundation by serving the real economy, safeguard stability through intelligent risk control and foster new momentum through comprehensive transformation. Looking ahead, we’ll remain committed to delivering sustained and high quality returns to our investors. Now we’ll open the floor for questions. We welcome all investors and analysts to raise questions. Please identify your institution and the name before speaking.

Thank you. Now the first question. Thank you for the opportunity for the first question. I’m Maokun Zuo from China Securities. We have noticed that the operating income and net income have recorded positive growth.

Congratulations on that. So what are the measures you have taken? And what is your outlook for the full year and the future several years? Can you maintain such growth? Thank you.

For your question, I’d like to invite the General Manager of Finance and Accounting Department, Mr. Tao Long Hung to answer this question. In the first three quarters, as Mr. Chen has mentioned, the indicators have progressed noticeably. Net interest the net income has been up 0.52%, returning negative to positive.

And operating income was up by 1.98%, continuing such positive growth. We have taken several measures to reduce costs and increase income. First, to stabilize NII fundamentals, which is our main source of income impacted by the recent year’s impact, net interest margin compression as the question is the initial commonly faced by the market. So NII has been decreasing. In Q3, we have been trying our best to reduce the decrease to stabilize our fundamentals through quantity and pricing balance.

Our NII has performed very well. From the data, we can see that the reduction was minus 0.7% among our comparable peers. Such data is the best in the measures of pricing and volume. Balance in volume, We serve the demand in major strategies and new developments and serve the new productive forces to provide the effective credit demand with ample loan growth and debt investments, which increased by KRW 2,040,000,000,000.00 and KRW 1,970,000,000,000.00, respectively. So in volume, it has paved the way for the performance of NII.

In pricing, we optimize the asset structure and risk pricing capabilities based on the high yield assets increase. In deposits, we increased the proportion of term deposits and current deposits so as to contain our interest payments ratio benefited from our efforts in both assets and liability sides. Our net interest margin was 1.28%, down by only two bps than half one, the narrowing rates decline. So this has played a very important role to contribute to our operating income. Second is to cultivate new drivers for growth.

We want to achieve positive growth in operating income. We have to enhance our efforts in fee based income. We have take a lot of measures and grass market opportunities in fee based income benefited from the capital markets in enlarging wealth. We have seen high growth in main business and also we played well in containing the costs. So the fee based income recorded billion up by 0.6%, a quarterly improvement throughout the year we expect and the volume has been leading the peers.

And for ICBC based income, if we see specifically, there is no one time factors. This is what we have achieved through normal achievements and can be tested by the markets in other non interest income, which is which has attracted high attention from the markets. From this year, the SOE banks have increased remarkably in this regard. We have seen the fluctuations in stock, bonds and ForEx markets, especially from Q3. We have seen remarkable changes and which provided opportunities for ICBC in trading.

Our financial markets department and capital markets investments department have received these opportunities and recorded 46,700,000,000.0 increase in this regard, up by 45.7%, providing support for operating income increase. What is worth mentioning is that the diversified operation has achieved remarkable results. The domestic subsidiaries operating income has been up 34.5%. The contribution was increased from 2.7% last year to 3.6% by 0.9 percentage points forming a more diversified income structure. Because of this in stabilizing NII fundamentals, our operating income achieved positive growth.

Thirdly, we effectively contained risk costs. We continue to enhance our risk management. We coordinate high quality development and high level security and we deepen intelligent risk control and play the role in the comprehensive risk management and increase our risk resilience and control capabilities, especially in key regions. Our risk cost has been effectively contained by the end of Q3 and TR ratio of the group was 1.33, down by one bp than last year. The asset quality has been increasing.

Provision coverage ratio was 217.21%, up by 2.3 percentage points. Loan loss provision ratio was 2.89%, up by two bps. So when we effectively contain our costs, we continue to enhance our risk resilience capabilities. Our control of the risk costs can be seen in our operating income, which paved the way for the management of the risks, which has played an important role in balancing the risk and income. So because of the operating income and the net income, These three aspects are the main factors.

When we look to the future and to the full year, the Q4 will be the time for fourteen five year plan ends and beginning of the fifteen five year plan. So the package of financial incremental policies continue to be implemented. You may have noticed that the trade frictions of China and U. S. Are well contained, paving the way for the good external environment for the developments.

When the policies are implemented and the vitality is unleashed, we are fully confident of ICBC’s high level developments. And we will continue to give into full play the measures and balance the quantity and pricing and cultivate the diversified growth drivers and grasp chances in the volatility of the market and effectively stabilize the noninterest income and net interest income and achieve sustainable growth for future. We will continue to increase our operating strategies, following our strategies and promote our sustainable growth and create a solid and impressive annual and future results for investors and create satisfying returns for all of you. Thank you. Now we’ll take the second question.

Please identify yourself. Thank you for this opportunity. I’m from UBS. My name is Yanmei Zhu. First, I want to congratulate ICBC for your amazing results.

And I want to ask a question about NIM. You also you have already mentioned the narrow NIM. So could you share the current pricing for corporate and retail loans? How do you see the NIM trending going forward? When do you expect to see an inflection point?

And is there still room for rate cuts? We’ll have the asset and liability management department to answer this. Thank you for your question. On corporate and retail loan pricing, this year, interest rate on newly issued loan continued to decline. The pace of the decrease has narrowed significantly on a quarter on quarter basis from January to September 2025, the average interest rate on newly issued RMB corporate loans fell to 2.7% with quarter on quarter declines of 16 bps, four bps and four bps in the first, second and third quarters, respectively.

The average interest rate on newly issued RMB personnel loans was 3.01% with quarterly quarter on quarter declines of 29 BPs, 4BPs and 2BPs. Overall, the downward trend in both corporate and retail loan rates has moderated. On NIM trends, overall, NIM remains under downward pressure, but has shown signs of stabilization, as you mentioned. In the first and third quarter of this year, our NIM stood at 1.28%, down 14 bp year on year, with the rate of decline narrowing by four bp compared with the previous year. We expect the full year NIM to remain around 1.26%.

The main considerations are as follows: First, the impact of monetary policy adjustment on NIM is manageable. In May, the 10 bps cut in the LPR was accompanied by a coordinated reduction in deposit rates, effectively mitigating the downward pressure on NIM. Second, changes in asset supply and demand has improved the pricing rationality. In the first three quarters, our credit resources were precisely allocated to key areas under the five priorities. The average rate on newly issued RMB loans was 2.78%, a relatively strong performance among our peers.

Third, refined liability cost management helped narrow the need decline. Deposit volume and pricing remained well aligned with the average interest rate on RMB deposits at 1.32, down 30 BPs from the end of last year. Fourth, optimize the balance sheet structure is enhancing medium to long term profitability. The share of bond investments in our total interest earning assets has increased from 22.4% in Q4 twenty nineteen to twenty eight point four percent currently, up by six percentage points. This unrealized gains in our own balance sheet RMB OCI and AC bound portfolios can withstand the seven bp’s upward interest rate reversal, helping to strengthen medium and long term profitability.

And on the NIM inflection point, we believe that the NIM will likely stabilize in the coming one or two years and the NIM will gradually reach an inflection point. First, regulators have recognized a continuous need compression. And the People’s Bank of China has recently emphasized the need to balance supporting the world economy with maintaining the financial sector’s health. We have already seen marginal improvement with a smaller NIM decline so far this year. As deposit repricing gradually completes, liability costs are expected to decline further.

Our medium to long term profitability remains solid. We continue to optimize asset allocation, focus on meeting genuine financial need and proactively increase bond investment to build resilience and long term earning capacity in a low rate environment. On room for further rate cuts, externally, the U. S. Federal Reserve cuts its benchmark rate by 25 bps in September to 4% to 4.25% range, in line with the market expectation.

The European Central Bank has kept the policy rates unchanged for now, but the market expects a rate cut in December. This external developments provide more room for monetary policy adjustments in China. Domestically, given that deposit and the lending rates are already at relatively low levels, whether further cuts will be implemented will ultimately depend on overall macroeconomic conditions. That’s all my answer. Thank you.

Thank you for your answer. The third question. I’m from Guangfa Securities. My question concerns noninterest income and other noninterest income. In the first three quarters, have seen fee based income turn positive.

What are the major drivers? And what is the outlook for future trends? We also noticed that, as you have mentioned, we have seen volatilities in bond markets. What’s your outlook for your scale of bond investments and strategies? You have raised two questions.

The first question is about fee based income. I’ll invite Mr. Tao Long Hong to answer this question. And for the second question of bond investment, I’ll invite Mr. Zhong Fukong from Financial Markets Department.

Our fee based income turned positive in the first three quarters, which is not easy. I have mentioned just now. If we see by breakdown, achieving positive growth is attributable to the diversified support in income side and the control in the expenditure side. So that the fee based income has achieved positive growth. The first, the wealth management business has achieved remarkable results.

We grasp chances, the corporate wealth management, personal wealth management and private banking related income has been up by 253%. Pension business related income has increased by 43%. So in this sector, it has contributed a lot to the noninterest income. Second, we increased the effectiveness of the fundamentals services with high growth By optimizing our efficiency of services and experience of customer, the third party payments achieved Q on Q growth of 0.7%. Bank card business increased by 0.8%.

These are the fundamentals of the noninterest income providing basis for the fee based income. Third, in expenditure side, the expenses are effectively contained in the first three quarters. Fee based expenses was down by 17%. The main reason is that merchant acquiring and business documentation has seen reduced costs. All the three aspects contributed to the year on year growth in fee based income.

By Q on Q, we have seen that the fee based income has been increasing. Seeing from looking to the future, faced with the policy environment of interest concession, we are unleashing the new vitality of income drivers in three aspects. We will continue our efforts to support fee based income. First, wealth management. Now we see in this aspect, the related business has contributed a great potential in terms of pension finance and opportunities in capital markets and create new drivers in wealth management, hoping that they can provide more returns in fee based income.

Second, continue to enhance the advantages of fundamental products. We will continue to optimize our payment settlement system and cross border services and the coverage of our products and increase the resilience in this regard and enlarge our fundamentals. Third, deepen the industrial finance. We will focus on major strategies and modern industrial system and innovate CFS. We are confident to leverage our advantages in customer bases, our network and comprehensive services and fintech and to achieve high quality and sustainable development in fee based income.

Thank you for your question. In bond investment and income, in Q3 faced with interest rate upside trend, we analyze and grab chances in timely and proper manner. We adjusted pace and scale by diversifying strategies. We proactively increased the comprehensive yield of bond investments. Looking to the future, the marketing interest rates may still fluctuate within a range.

On the one hand, the Central Bank will still sustain ample liquidity and the demand of allocation from institutions. This will support interest rates and constrain its upside space. On the other hand, Sino U. S. Relations and the stronger stock markets may still bring impact to the fluctuation of the market.

So against such backdrop, we will adhere to the principle of being stable, flexible and forward looking. First, specifically managing pace and scale, we will continuously and closely track changes in the macro economy, policy signals and market sentiment, dynamically optimizing the overall scale, variety structure and maturity distribution of bond investment to balance current returns with medium to long term interest rate risks. Second, optimizing allocation trading strategies. We will deepen fine grain research on various bond types to optimize the allocation structure. We will flexibly employ strategies such as duration based trading to capture market opportunities.

Third, balancing immediate and long term considerations. We will always prioritize asset safety and income stability. While pursuing reasonable returns, we will place high importance on the long term healthy development and risk resilience of the investment portfolio. Facing a complex and volatile market environment, our bank’s bond investment business will continuously deepen market research, strengthen fine grained management, scientifically manage investment pace and risk exposure and flexibly utilize diversified strategies to enhance comprehensive returns. Under the premise of effective risk control, we will strive to achieve stable and sustainable contributions from bond investment to bank’s overall operating income and mitigate the short term impact of market fluctuations on financial performance.

Specific execution will be dynamically adjusted and optimized based on policy guidance, market evaluation and the bank’s overall operational objectives. Thank you. Now we’ll have to take the fourth question. Thank you for this opportunity. I’m Wenning Wu from BOFA Securities.

We’ve seen the large growth in the corporate loan. I want to know whether this suggests a lack of effective credit demand from the rural economy. And also how did ICBC’s corporate and retail loan insurance performance since the first two quarters? In the third quarter, this trend well, they continue in the third quarter. Thank you for your question.

First, I’ll brief you on the credit loan issuance in the first three quarters. Overall, we did a great job. It mainly contributed to the upward in economic expectation in China. In aggregated term, RMB loan maintained a solid growth momentum, driven primarily by corporate lending, while retail loans also achieved a year on year increase. As of September, RMB loan balance at domestic branches reached 28,700,000,000,000.0, up 8.5% year on year, 1.9 percentage points higher than the average for all financial institutions.

R and D loans increased by more than JPY 2,000,000,000,000 in total. Of this, corporate loans rose by 1,900,000,000,000.0, representing an 11.3 year on year rise, 2.9 higher than the system average. Personal loans increased by 175,700,000,000, up JPY 28,900,000,000.0 year on year with a 2.8% growth rate. In terms of loan allocation, manufacturing stood out as a key factor. We have continued to strengthen credit support for key sectors such as technology innovation and SMEs.

In the first quarter, tech loans increased by JPY 1,250,000,000,000.00. Inclusive finance loans increased by 5 and 96,900,000,000.0. Loans to strategic emerging industries, Littlejohn specialized enterprises and the core digital economy all grew by over 20%. Lastly, manufacturing loan rose by KRW 1,100,000,000,000.0 from the end of last year, accounting for 54% of total new loans, an increase of RMB $450,000,000,000 on year. Structurally, while the share of short term financing has risen, the trend is consistent with the broader macro environment.

There are two reasons. At a macro level, fixed asset investment has been weaker than expected, leading to a higher proportion of short term loans and financing across the economy. At a micro level, enterprises’ willingness to expand reproduction has weakened. While the demand for short term working capital remains strong, we have actively adapt to these shifts in demand activity and the clients’ needs, providing tailored finance products and service accordingly. It is worth noting that unlike with discounting, direct to bill discounting provides direct funding to corporate clients.

Serving as an effective means for financial institution to support the real economy, we first requires direct to bill discounting accounted for 92.5% of our new building financing providing loan support for SMEs and manufacturing firms. And second, on credit demand. Although we are facing temporary weakness in both corporate and household loans, but I believe it is expected to gradually recover as macro policies take effect. Both corporate and retail credit demand has shown short term softness. However, as macro policies are implemented, credit appetite is likely to improve progressively.

On the retail side, fiscal interest rate subsidy programs for consumption and business loans will help unlock retail credit potential. On the corporate side, policies aimed at curbing rat race like competition and resolving overdue receivables will likely stimulate credit demands among high quality enterprises. Going forward, we will proactively seize policy opportunities to ensure alignment with the needs of world economy and further consolidate the foundation for sustainable credit growth. We also mentioned the reverse repos. This business is positioned primarily to balance liquidity needs and its scale fluctuates are cyclical.

The third quarter reverse repo operations have remained stable with both end of period and average daily balance declining from the 2024 levels. Thank you for your question. Thank you for your answer. The fifth question. Thank you.

I’m Wang Shijuan from CMS Securities. My question concerns asset quality. How do you see the asset quality of this year for SCBC in corporate banking? What are the impacts of tariff policies? And what is the progress of debt resolution participation in retail banking?

What are the reasons for the high NPL ratio? And how do you view the future trends? Your question consists of two parts. First, about corporate banking, I’ll invite credit and investment management to answer. For the second part, I’ll invite personal banking department to answer, sir.

In the first three quarters, the core indicators of credit asset quality remained stable with positive trends. The NPL ratio was 1.33%, down by one bp. The NPL ratio for domestic corporate loans was 1.35, down by 15 bps, reflecting further enhanced risk resilience key sectors, including manufacturing, wholesale and retail, energy and water conservancy achieved due reductions in both NPL and NPL ratios. New NPLs were primarily concentrated in the real estate sector. The impact of U.

S.-China trade policies and tariff negotiations on our corporate borrowers has been limited. Affected clients were mainly those with weak industrial chain resilience and thin profit margins. Borrowers engaged in U. S. Export businesses accounts for a low proportion of our corporate loan portfolio, and their resilience on The U.

S. Market is generally limited. We have made the stress test and analysis for the tariff policies on the asset quality of corporate loans. The impacts will be limited. ICBC conducts financial support for debt resolution work prudently and orderly in court in accordance with market orientation and rule of law principles.

We collaborate with banking peers to strengthen coordination, secure repayment sources, and enhance credits guarantees to contain risks. On the other hand, we we use diversified approaches, including debt restructuring assets, right, revitalization to resolving risks. So the for platform companies with fundamentally sound operations, good repayments, willingness, but temporarily liquidity problems, We have adjusted loan tenures and optimized repayment structures to alleviate constructed maturity. So the our exposure to such risks, such loans is minimal and rates are already at reasonable levels with limited room for reduction, ensuring a manageable impact on our net interest margin. So the interest rate reduction primarily target high cost bonds and non standard financing.

So in recent years, the personal finance asset quality has been facing pressures with rising NPL ratio. The trend is in line with peers and maintaining a reasonable range comparable to other banks. So we continue to strengthen three gateways. First, entry gateway, Rigorous pre lending controls via data modeling and feature attribution analysis across dimensions to dynamically optimize rules and eligibility criteria in terms of products, clients, regions, strategies. Second, monitoring gateway, advanced digital collection systems integrated for retail and inclusive finance loans, deploying multichannel collection strategies to increase the effectiveness.

And we also enhanced data infrastructure with a wire table format for personal credit information covering fundamental data risk profile, behavioral patterns and value metrics to enable data driven decision making. Third, in exit gateway, proactive NPL management and disposal emphasis on cash recovery during loan servicing. Write offs mainly target legacy issues and aged NPLs. Pilots programs include NPL securitization and bulk transfers of retail NPLs to achieve timely risk clearance. So in the future, we will leverage big data algorithms and AI to build end to end risk control models covering onboarding credits, approval pricing, post lending, and collection through data model based risk control plus expert loan governance, we will shift from manual controls to smart controls, achieving full progress smart risk management.

This will continuously elevate intelligent risk control capabilities and solidify our end to end personal loan risk prevention system. Now we are undergoing the important transformation time for personal loans. In the future, we will continue to enhance our products in its innovation and risk control so as to establish the system of housing and non housing personal loans and meet the demands of personal finance and create a pattern of housing and non housing personal loans and create a high quality development in personal finance. Thank you. I’ll take the next question.

Thank you for this opportunity. I’m Anastas Xu Ran from Morgan Stanley. I have questions about inclusive loans. Because now in the market, it’s very concerned about the risk in this sector. So what is the current situation of inclusive loan insurance and risk control?

Given the relatively weak credit demand, what are the future development directions and the risk outlook for inclusive finance? We can see that in the fifteenth five year plan, we want to expand the Inclusive Finance business. And that’s the reason why I want to know the future development direction. Thank you for your support for the inclusive finance on loan issuance. ICBC has taken the inclusive and the retail loans as the important aspects of our transformation.

By the end of the third quarter, the balance of inclusive loans reached 3,500,000,000,000.0, an increase of nearly 600,000,000,000 from the end of last year, representing over 20% growth and further rise in the share of total loans. Market expansion through coordinate SME mechanism, leveraging coordinating system among the head office branches, Tier two branches and analysts, actively participate in local financing coordination, task forces and launched a special campaign visiting we visited over 3,000,000 SMEs and issued trillion in loans, effectively driving the bank’s inclusive finance growth. Second, we will accelerate new client acquisition in key sectors. We will result action plans such as support private enterprises, implement mechanism and empower business and agriculture. We optimized our inclusive finance layout in technology innovation, advanced manufacturing, trade and service revitalization and small scale foreign trade sectors and proactively expanding into new market and clients.

In the first three quarters, we added eighty four thousand first time borrowers, 11,000 more than the same period last year. Inclusive agricultural loan increased by $230,000,000,000 from the end of last year, strongly supporting overall credit growth. And third, we will work on our loan products to enhance adaptability. We’ll accelerate the upgrade of three major products line, credit based, collateral based and digital supply chain loans, different original innovation mechanism for mechanism products and enrich our inclusive portfolio and application scenarios. By the end of Q3, digital inclusive finance products accounted for 90% of both balance and incremental inclusive loans, while the region specific products also mentioned rapid growth.

Accessibility and convenience of inclusive finance services has been further enhanced. We will enhance client stickiness through credit plus services. We have improved our credit plus integrated financial service system that combined lending as a core with diversified supporting system. Through platforms such as global Matchmaking Hub and every matchmaking platform will help enterprise to identify new business opportunities and grow stronger. In collaboration with All China Federation of Supply and Marketing Cooperatives, we’ll advance the supply and the marketing plus finance initiative and further strengthen the market influence.

On risk management this year, some SMEs have faced operational challenge. And across the industry, the asset quality of inclusive loans has shown a modest rebound. SABC has consistently placed risk management at the forefront, adhering to the intelligent control plus human oversight approach to build a comprehensive, proactive risk prevention system. At the September, our NPL ratio for inclusive loans remained better than the industrial average and overall asset quality remained generally stable. We have a stricter credit entry management.

We have optimized the key products and credit models, improved model review and decision making mechanism, enhancing multidimensional data cross validation and strengthen coordination between online and offline risk control. We enhanced ongoing risk monitoring by improving coordination among front, middle and back office. We have strengthened refined risk management, reinforcing anti fraud and risk detection measures, crackdowns on illegal intermediaries and upgrade our intelligent risk control system across two digital processes. We’ve accelerated the resolution of nonperforming assets. We have broadened disposal channels such as the asset securitization and set up cash recovery of NPLs, consolidating the foundation for a sustainable development of inclusive finance.

And our future outlook, going forward, we will continue to follow the principle of ensuring volume, improving quality, stabilizing price and optimizing structure. We will step up efforts to support the high quality development. The first is that we will will achieve the, I said, supply. And the second is we will have a more refined products. We will make them online, more smarter, and we will have an ecosystem.

And we will have a tailor made financial products for our clients, improve the efficiency of our business. And thirdly, we will have this comprehensive business operation mechanism. We will work on the inclusive finance and as a leading bank. Thank you. Thank you for your answer.

The next question. Thank you. I’m Sheng Joon from Huaqai Securities. My question is related to deposits. We have seen that this year, the capital market has great changes.

So what’s the latest development of deposit competition against such backdrop? Has the trend of deposit termization eased? Has ICBC observed deposits migrating to VMP or the stock markets? The first question regarding deposit will be answered by asset and liability department. The second question of deposit migration will be answered by personal banking department.

Thank you for your question about deposits termination. Before answering the question, I’d like to introduce to you this year’s ICBC’s deposits developments. Deposit growth this year demonstrated a favorable due improvement in volume and cost dynamic In volume, by the September, the balance of domestic RMB deposits reached 38,500,000,000,000.0, up by 8.5%, 0.5 percentage points higher than the industry average. In the first three quarters, domestic RMB deposits increased by KRW 2,800,000,000,000.0, a year on year growth of $840,000,000,000. By segment, saving deposits rose by CNY 1,600,000,000,000.0, up CNY $350,000,000,000 year on year.

Corporate deposits grew by CNY $880,000,000,000, up by CNY $670,000,000,000 year on year. On pricing, ICBC maintained its comparative cost advantage. By the September, the interest payment rate was 1.32%, down 35 bps. The lowest rate and deepest decline amongst China’s big four banks. As you have noticed that the deposit termination has eased with sequential declines narrowing gradually in Q2 and Q3.

The quarter on quarter decline in the average daily share of general demand deposits was 0.6 percentage points and 0.2 percentage points, respectively, conducive to controlling interest payment rates for banks. As for the trend of deposits shifting to non bank institutions, we think it remains under observation. Now the market liquidity is loose and capital market transactions are active. We have seen that some deposits have shifted to other markets, but no sustained trend has materialized. For example, in September, non bank deposits across all financial institutions fell by RMB 1,100,000,000,000.0, while household deposits rose by 3,000,000,000,000, up by KRW $760,000,000,000 year on year.

So the trend is still fluctuating. And for WMP related questions, I’ll invite my colleagues from personal finance department to answer. I am Chen Chao Chi from personal finance department from ICBC. I’ll make some supplements. In savings deposits, in the first three quarters, the savings deposits continued the rapid growth in recent several years.

Mr. Fu have introduced the data just now in savings deposits. From quarter on quarter, the savings deposit was up by over KRW 300,000,000,000 by the September compared with that of half one. So there is no remarkable change over our expectation In terms of deposit termization, I’d like to make some supplements. From the data, we have seen that such trend is not that remarkable or remains to be seen in the future.

In interest payment ratio, the RMB interest payment ratio was down by 20 bps, just now mentioned by Mr. Fu. And the decrease is even larger for demand deposits. The reason is that against the backdrop of interest rate decline, the scale of ICBC has brought the decline of interest payments rates. What is also worth mentioning is that the current deposits interest rate decline is even larger year on year.

It is attributable ICBC’s implementation of fire transformation strategy in terms of personal finance. We have seen fruitful results. Our customer structure increments and the scenario expansion among others in the first three quarters have achieved remarkable progress. Thirdly, in deposits migration, from our general observation, my view is that it is not remarkable, but it still remains to be seen in the future. It can be reflected in the growth of savings deposits.

The growth of savings deposits was over 9% this year. Having said that, we have seen that the wealth management product scale by the September, the daily average balance was KRW 2,160,000,000,000.00, up by almost 150,000,000,000 than that than the end of last year, up by 7.4%. In third party custody, the growth was 16.4% because the scale is not that large. The balance was over R600 billion dollars up by than billion. From these data, we can see that as the savings deposits are growing fast, the WMP and the third party custody balance are also increasing fast.

There is no data remarkably to support deposits migration, but we will continue our observation towards that trend and communicate with the market. Thank you. Next question. Due to the technical issue, we cannot hear from the questioner now. But we’ve received her question.

This question comes from Ms. Li Vi Vi from the JPMorgan. And her question is how was the quality of ICBC’s corporate balance sheet loans in Q3? Can asset quality remain stable in the future given the significant decline in housing prices this year? How are mortgage assets performing?

And what is the outlook? There are two parts in this question. As we mentioned before, in the corporate real estate sectors, this sector has been under pressure. In the third quarter, the overall asset quality of FCBC’s corporate real estate loan portfolio remained stable. From its peak in June 2023, the real estate loan portfolio has shown a steady downward trend.

And in the future, I would like to talk about this trend from several perspectives. And in terms of the market, we are seeing the transformation from the old sector to relatively new one. We’ve seen a narrowing decline of housing prices. We believe the impact of the sector on the real estate loans will also be narrowed in the future. And at a structural level, ICBC continue to build a diversified balance and well distributed investment in the financing portfolios.

Corporate real estate loans totaling billion, accounting for less than 3% of the bank’s total loan portfolio. The bank also maintained adequate loan loss provisions to fully cover the potential risks. In terms of asset selection, SABC adheres to the region point projects integrity standards. Loans are primarily concentrated in key cities with strong population inflows and a solid industrial basis. The bank focused on high quality projects in core areas and new loans are granted strictly under certain standards such as sufficient project value, normal developer operations and proper management of closed loop fund flows.

In addition, the mitigating effect of collateral remains sound and recovery rates for distressed exposures are highly high. I want to talk about the personal mortgage loan by the end of Q3. At the end of the third quarter, the NPL ratio of ICBC personal housing loans has generally in line with industrial trends. We are at the leading position after normalizing for write offs and securitization disposal. We continue to advance the construction and application of the digital risk control system.

Monitoring models have been developed for risk indicators such as collateral quality, excessive leverage, hidden borrow linkage. This model triggered tiered risk control measures and cover the entire loan’s life cycle pre lending, omni, and post lending. And this enables real time or near real time health monitoring, perpetual risk management and precise resource allocation. With the real estate market further stabilizing and the policy effect graduating on hold, some collateral valuation have declined and the bank continues to closely track changes in property values. As macroeconomic civilization policies take effect and the policies to boost domestic demand and consumption continue to implement it, as we see that the deterioration trade of the mortgage asset quality to moderate with no sign of accelerated worsening.

The last question. Thank you very much for giving me the opportunity to raise questions. I’m Xiaobu Zhi from C6 Securities. My question is about internationalization in the low interest environment. People are discussing about expanding non interest income and advancing internationalization.

So could you outline ICBC’s direction, strategy and advantage of internationalization? I’ll invite Ms. Wang Xun from International Banking Department. ICBC’s internationalization has evolved over three decades. We align with global and going global strategy.

ICBC has consistently uncorrelated global expansion to national strategies. We ensure over system network deployments, product development and strategic focus serve national priorities while enhancing global capabilities. Today as China integrates more deeply into the global economy and accelerates the due circulation, ICBC as a primary cross border financial service provider will leverage its strengths to bridge the two circulation through financing innovation driving high quality development. For your question about the strategy of internationalization, now we are focusing on fifth five year plan. We align closely with the national strategy and to improve our internationalization and improve our service landscape.

And we also adhere to compliance and safeguard the security. And also we promote transformation in promoting internationalization. We will increase the landscape of R and D business and increase the value creation of and strengthen clearing settlements, payments, custody. And also, we will connect internal and external environments and provide services. And we will provide financial products lines to the international market and use a dividend of the national strategies to respond quickly to customers.

About our advantage, our colleagues have mentioned, we have strong customer base, diversified business structure and strong innovation and competitiveness. We our network has covered 69 countries and regions. By becoming the shareholder of Standard Bank Group, we have covered 20 African countries. We have established two fifty subsidiaries in Belt and Road countries, and we also have 12 RMB clearing bank. So we have become a China a Chinese bank that serves the domestic circulation and the international circulation.

And also we are the first to establish the integrated global system so as to provide timely funds for the global customers. Also, we can provide cross border funds in terms of custody settlement, ForEx transaction and the comprehensive financial services. And also, we have great international reputation. We’re the chairperson of the BRICS countries. We are also the chairperson of the China Europe Alliance and the Belt.

And we are also the partner of BRBR, which has covered 77 countries and regions. And in the eighth CIIE, we are the comprehensive partner activity. So in serving these activities, we provide bridge for the partners. Thank you for your question. Thank you for Ms.

Wang’s answer. Dear investors and analysts, for the interest of time, this is the end of the Q and A session. Today with Board Secretary, Mr. Tian, we have responded your questions candidly. And thank you for your professional and insightful questions.

Thank you for the remarkable answers. In the future, in our strategy and operation, we will absorb your suggestions and provide and promote our high quality developments so as to submit a solid annual answer sheet to all the investors. We will continue to hold reverse roadshow and semantic IR activities. If you have other questions, you’re welcome to communicate with our IR team. Thank you for your participation.

Best wishes for the meeting. The meeting has ended.

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