Directly from the "Cosmic Bank's" Earnings Conference: Net Interest Income Inflection Point Expected in 2026, Confidence in Delivering Excellent Performance

ICBC held its earnings press conference on the evening of March 27. President and Chief Compliance Officer Liu Jun, Vice President and Chief Risk Officer Wang Jingwu, Vice President and Chief Financial Officer Yao Mingguo, Vice President Zhao Guide, Board Secretary Tian Fenglin, and several other management members attended.

Liu Jun summarized ICBC's operating highlights for 2025 and stated, "Of course, we hope ICBC's performance could be even better, but if we can steadily achieve a comprehensive return level above the average each year, ICBC will certainly be a stabilizer for the capital market." He also expressed ICBC's confidence in delivering a diversified, comprehensive response that represents the development direction of world-class financial institutions, building on a solid performance foundation.

Regarding dividends, Liu Jun also acknowledged the calls for adjusting the dividend payout ratio. "For the long-term healthy development of the capital market, if an upward adjustment can lead to more sustained and positive market development, ICBC will certainly play a exemplary role. We will closely observe capital market changes and respond to everyone's needs."

Profitability Resilience Further Enhanced

President Liu Jun summarized ICBC's 2025 performance, especially in the final year of the "14th Five-Year Plan," highlighting several bright spots. Facing a complex and changing external environment, ICBC has consistently prioritized improving the quality and efficiency of its operations while serving the real economy. Indicators across revenue, profit, structure, and quality have shown positive changes, and the bank has not relaxed its pursuit of efficiency and quality due to its large size. In the current macroeconomic environment, particularly with narrowing interest margins, the capital market is keenly interested in our efficiency, profitability, balance sheet structure, and control over non-performing assets.

First, operating efficiency has steadily improved, and profitability resilience has been further enhanced. Core profitability indicators such as operating income, net fee and commission income, pre-provision profit, and net profit all achieved positive growth. Profitability volume continues to lead the industry.

Structurally, net interest income continues to play a foundational role in revenue. The net interest margin was 1.28%, a decrease of 14 basis points from the beginning of the year, but the rate of decline narrowed quarter by quarter, showing a stabilizing trend. Net fee and commission income increased by 1.6% year-on-year, reversing the previous negative growth trend; other non-interest income strongly supported revenue growth. Overall, the stability, balance, and sustainability of ICBC's profit growth have been further enhanced.

Second, the balance sheet has expanded steadily, and the quality of service to the real economy has been continuously improved. In 2025, the Group's total assets reached 53.48 trillion yuan, making it the first bank globally to surpass 50 trillion yuan. Domestic RMB loans increased by 2.17 trillion yuan year-on-year to 29.2 trillion yuan, an increase of 8%; RMB bond investments increased by 2.48 trillion yuan, reaching a new high; domestic RMB deposits increased by 3.1 trillion yuan year-on-year.

While leading in volume, more emphasis was placed on optimizing the structure and pace of lending. The loan-to-deposit ratio reached 67%, a year-on-year increase of 3.6 percentage points. Key areas such as manufacturing, strategic emerging industries, green finance, and inclusive finance maintained relatively rapid growth, effectively demonstrating the role of large banks as the main force in serving the real economy.

Third, asset quality and risk control. At the end of 2025, the Group's non-performing loan ratio was 1.31%, a decrease of 3 basis points from the beginning of the year, marking a continuous downward trend for five consecutive years. At the end of the year, the provision balance was 852.3 billion yuan, an increase of 36.8 billion yuan, or 4.5%, from the beginning of the year, further strengthening risk mitigation capabilities.

This indicates that in 2025, ICBC created necessary reserve capacity in terms of financial income, effectively increasing the provision coverage ratio and preparing for better mitigation of the impact from macroeconomic cycles. Simultaneously, the construction of an enterprise-level intelligent risk control platform is progressing, and risk asset resolution in key areas is proceeding in an orderly manner.

Sound business development allows ICBC to better share the fruits of value creation with its shareholders and provide stable and sustainable investment returns. In 2025, ICBC's A-share and H-share prices rose by 14.6% and 20.7% respectively, outperforming other large banks. Full-year cash dividends amounted to 110.593 billion yuan, maintaining its position as the listed company with the highest total cash dividends in the A-share market.

Liu Jun stated, "Of course, we hope ICBC's performance could be even better, but if we can steadily achieve a comprehensive return level above the average each year, ICBC will certainly be a stabilizer for the capital market."

Transitioning from a Funding Intermediary to a Comprehensive Service Provider

President Liu Jun continued to outline the focus for 2026: First, actively expanding comprehensive services. To build a world-class financial institution, we cannot solely rely on a balance sheet dominated by loans; we must comprehensively develop modern financial services. In the areas of new productive forces and new infrastructure, ICBC must transition from a funding intermediary to a comprehensive service provider of funding, information, and efficiency, among other value elements. We will not only provide ample credit resources but also make non-lending businesses an important pillar, strengthening the synergy among commercial banking, investment banking, asset management, custody, and wealth management transaction settlement to create comprehensive solutions for clients.

Second, strengthening integrated global operations. China's economy is now highly integrated into the global economic cycle, and ICBC must balance the development of both markets and effectively mobilize resources. We will upgrade our global resource allocation and cross-border financial service capabilities, particularly focusing on upgrading products and services around RMB internationalization and improving the comprehensive service system for RMB pricing, trading, settlement, clearing, investment, financing, and asset management. As the largest market maker in China's interbank market, ICBC has an undeniable responsibility to be a main force and pioneer in the next phase of RMB internationalization, enhancing its international pricing influence.

Third, continuously enhancing digital momentum. We consistently adhere to the "Four Orientations" requirement. Advanced AI technologies will be integrated into operational processes, with the prerequisite of rigorous market and internal security validation, as protecting customer privacy and information security is ICBC's most important responsibility.

2026 will be a challenging year, but ICBC is confident in delivering a diversified, comprehensive response that represents the development direction of world-class financial institutions, building on a solid performance foundation.

Credit Risks are Generally Controllable, Provisions are Sufficient

Vice President Wang Jingwu introduced that in recent years, ICBC has consistently balanced high-quality development with high-level security, steadily improving asset quality. Since the "14th Five-Year Plan," ICBC's non-performing loan ratio has continuously improved by no less than 2 basis points annually. At the end of 2025, the Group's non-performing loan ratio was 1.31%, a decrease of 3 basis points from the beginning of the year.

In terms of inclusive and personal loans, the asset quality control pressure in these segments has increased, which is a common industry trend. However, ICBC has always maintained its bottom line, and the credit risks in these segments are currently overall controllable, with sufficient provision extraction.

For inclusive loans, by vigorously supporting lending to the real economy, strengthening services for key customer groups, and improving the digital inclusive product library, we have continuously enhanced the coverage, accessibility, and satisfaction of inclusive finance services. In terms of risk control: first, we adhere to the combination of digital risk control and expert loan approval; second, we improve the accuracy of risk monitoring and early warning through digital and centralized means; third, we promptly identify external risk characteristics and strengthen model iteration and collateral management; fourth, we take multiple measures to improve the effectiveness of risk resolution. Looking ahead, against the backdrop of continuous consolidation of a stable and improving macroeconomic trend, combined with the improvement of the bank's inclusive finance professional capabilities and the refinement of risk control mechanisms, ICBC will excel in inclusive finance.

For personal loans, ICBC focuses on its core business and actively aligns with existing and new policies. Specifically: first, we are adapting to the development trends of the real estate market and implementing policies to build a new real estate development model and promote stabilization and recovery; second, we are strengthening the focus on people's livelihood policies and enhancing the supply of consumer finance; third, we are addressing weak areas in financial services and improving the quality of services in county-level agricultural and commercial sectors.

In terms of asset quality, ICBC's personal loans have always maintained superior asset quality. Affected by factors such as economic transformation growth in the past two years and the adjustment of the real estate market, the non-performing loan ratio has temporarily entered an upward trend, but this is consistent with the overall industry trend. Future risks for personal loans are controllable. With the accelerated implementation of national consumption promotion policies and the release of dividends from the "15th Five-Year Plan," the asset quality of personal credit loans will return to a reasonable level. ICBC has established a Personal Credit Business Department to achieve centralized and specialized management of personal loan business.

Net Interest Income Expected to Reach Inflection Point This Year

Vice President Yao Mingguo introduced that regarding loan pricing trends, loan yields are expected to continue their downward trend in 2026, but the rate of decline will significantly narrow.

May 2025 was our most recent LPR (Loan Prime Rate) adjustment, and most of its impact has already been reflected. Based on this year's (2026) data, new loan interest rates for corporate loans, personal housing loans, and personal operating loans have shown a stabilizing trend. The interest rates on new loans in the first two months decreased by 2 basis points compared to last year, and 18 basis points less than the same period last year. However, considering the possibility of further LPR reductions this year, loan yields may continue to decline, but the rate of decline will narrow.

Regarding net interest margin, Yao Mingguo's basic judgment is that the net interest margin in 2026 will likely follow an "L"-shaped trend. In 2025, ICBC's net interest margin was 1.28%, a decrease of 14 basis points. However, the downward trend in loan yields has been narrowing quarter by quarter, with a 5 basis point reduction in the year-on-year decrease. If we do not consider further significant adjustments to LPR or deposit benchmark rates, net interest income is expected to turn positive year-on-year, reaching an inflection point this year, and the rate of decline in net interest margin will further converge. Overall, the downward trend of the net interest margin has not yet changed in the short term, but the marginal stabilizing trend is expected to continue.

Clear Main Ideas for Building a Smart Digital ICBC

Vice President Zhao Guide introduced the construction of "Smart Digital ICBC." Upgrading Digital ICBC (D-ICBC) to "Smart Digital ICBC" (AI-ICBC) is based on three considerations: first, following the trend of the times and seizing the general trend of intelligent development; second, implementing national strategies and promoting the "AI+ Action"; third, deepening reform and transformation to inject strong momentum into the entire bank. We fully embrace artificial intelligence and strive to enhance the level of digital development.

Regarding the achievements in AI application, in 2025, ICBC launched the "Leading AI+ Action" to create new productive forces in finance, becoming the first institution in the industry to receive the highest level certification for FDMM (Financial Data Maturity Model Assessment). On the technical level, we have built a fully self-controllable "ICBC Brain" technology system, which has four characteristics. First, efficient computing power, building an elastic computing pool with a focus on domestic computing power for large models; second, model adaptation, creating a matrix of enterprise-level base models that better understand finance; third, rich data, building a financial dataset of trillions of tokens; fourth, secure and reliable, establishing a full-process security control system for AI applications.

On the application level, we have promoted the large-scale application of artificial intelligence in over 500 scenarios. For example, the intelligentization rate of financial market trading has reached 96%; we have developed a marketing assistant for individual customer managers, driving an increase of hundreds of billions in key product transaction volume; 78% of remote customer service is handled by artificial intelligence, and the intelligentization rate of key business operations has exceeded 60%.

Regarding the key plans for this year (technology aspects), in conjunction with the "15th Five-Year Plan" outline, we have clarified the main ideas for building a smart digital ICBC, summarized as "One New, Three Highs": digital-driven new productive forces, high-quality development, high-level security integrated within the group, and efficient governance combining business and technology.

Progress on Supplementary Capital to Be Announced

Board Secretary Tian Fenglin introduced that in terms of capital management, in 2025, the bank supplemented its core tier-one capital by 246.9 billion yuan through profit retention (internal capital replenishment). We completed the issuance of 230 billion yuan in capital instruments and 10 billion yuan in TLAC (Total Loss-Absorbing Capacity) bonds. Through the establishment of normalized capital constraint mechanisms such as the EVA (Economic Value Added) management model, the efficiency of group capital utilization has been continuously improved.

As of the end of 2025, the capital adequacy ratio was 18.76%, and the core tier-one capital adequacy ratio was 13.57%, both operating stably within a reasonable range. In 2026, ICBC will orderly carry out capital replenishment and formulate a new round of plans for issuing capital and TLAC instruments. Regarding the special national treasury bonds to support large commercial banks in supplementing capital, which the market is concerned about, please refer to ICBC's official announcements.

Regarding dividends, since its listing in 2006, ICBC has cumulatively generated 1.58 trillion yuan in cash dividend returns for shareholders, with the cash dividend payout ratio remaining above 30% for many consecutive years. To enhance investor returns, starting from 2024, we increased the frequency of dividends (twice a year, interim and final) and provided H-share investors with the option of RMB dividend payment currency.

In 2025, despite a significant increase in stock prices, the average dividend yields for A-shares and H-shares were still 4.22% and 5.99% respectively, far exceeding the yields of time deposits and regular wealth management products during the same period. In the future, we will scientifically determine an appropriate dividend payout ratio to ensure the sustainability and growth of shareholder returns.

President Liu Jun added that ICBC's capital base is the largest among global banks, and any change in our capital will serve as a benchmark for the market. First, we will further scientifically quantify capital planning, making it a rolling dynamic process that highly integrates capital raising with market demand. Second, from the perspective of price-to-book ratio (PB) and dividend yield, ICBC holds considerable investment value. We will continuously enhance our wealth creation capabilities and, by continuously strengthening our financial foundation, ensure that both capital replenishment and market returns are robust. Third, regarding the calls for adjusting the dividend payout ratio, "For the long-term healthy development of the capital market, if an upward adjustment can lead to more sustained and positive market development, ICBC will certainly play an exemplary role. We will closely observe capital market changes and respond to everyone's needs."

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