Q3 2025 Industrial and Commercial Bank of China Ltd Earnings Call

Speaker #3: For investors and analysts . Good afternoon . Welcome to the ICBC 2025 Q3 Earnings Call . I'm Tianzhong from the Strategic Management and Investor Relations Department .

Speaker #3: 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 .

Speaker #3: Joining us today are Mr. Tim Feng Lin, Board Secretary and Chief Business Officer of ICBC, along with heads of relevant departments and institutions.

Speaker #3: Our directors , Luo Chen , Xiao Li Chun , Dong , Yang Xiong Tao , Herbert , Walter and Li Wei Ping are also attending today's briefing .

Speaker #3: Online now , I'll give a brief overview of Icbc's key performance indicators for the third quarter of 2025 . Facing 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 .

Speaker #3: 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 billion , up 2% year on year , with positive quarterly growth in four of the past five quarters , indicating a clear recovery trend .

Speaker #3: Net profit reached ¥271.9 billion , up 0.5% year on year . Turning positive from the decline in the first half of the year .

Speaker #3: Pushing annualized ROA and ROE up to 0.71% and 9.3% , respectively . The cost to income ratio stood at 26.55% , maintaining a strong efficiency .

Speaker #3: The need decreased by two basis points from the first half, but the single quarter decline narrowed compared to Q1, providing stable support for the revenue growth.

Speaker #3: Second , steady growth and business scale as of end of September , total assets exceeded ¥52.81 trillion , up 8.2% from the end of last year .

Speaker #3: Loan , insurance and bond investment both remained strong , providing over ¥4 trillion in incremental funding for the real economy . Among this customer loans reached to ¥30.45 trillion , up 77.3% by the end of last year .

Speaker #3: Bond investment totaled ¥16.1 trillion , up by 16.2% , and customer deposits amounted to ¥37.3 trillion , up 7.1% . The number of corporate clients exceeded 14 million , and individual customers surpassed the 770 million .

Speaker #3: Further solidified the bank's customer base . Third , the risk control remains sound and improving the NPL ratio so that 1.33% , down one bp from the end 2024 .

Speaker #3: The car was 18.85% . And the provision coverage ratio rose to 2.3% . Percentage points to 217.21% . Progressive risk management in careers 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 .

Speaker #3: Looking ahead, we will remain committed to delivering sustained and high-quality returns to our investors. Now we'll open the floor for questions.

Speaker #3: We welcome all investors and analysts to raise questions . Please identify your institution and the name before speaking . Thank you . Now , the first .

Speaker #4: Question . Thank you for the opportunity . For the first question . I'm from China Securities . We have noticed that the operating income and net income have recorded positive growth .

Speaker #4: Congratulations on that . So what are the measures you have taken and what is your outlook for the full year and the future ?

Speaker #4: Several years. Can you maintain such growth? Thank you. For your question, I'd like to invite the General Manager of the Finance and Accounting Department.

Speaker #4: Mr. Tanner , to answer this question . In the first three quarters , as Mr. Chen has mentioned , the indicators have progressed noticeably .

Speaker #4: The net interest , net income has been up 0.52% returning from positive , returning from negative to positive . And that's an operating income was up by 1.98% .

Speaker #4: Continuing such positive growth . We have taken several measures to reduce costs and increase income . First is to stabilize NII fundamentals , which is our main source of income impacted by the recent years impact .

Speaker #4: Net interest margin compression is 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 .

Speaker #4: Our NII has performed very well from the data we can see that the reduction was -0.7% among our comparable peers . Such data is the best .

Speaker #4: 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 2.0 4,000,000,000,001.97 trillion , respectively .

Speaker #4: So in volume , it has paved the way for the performance of an AI in pricing . We update , we up , we optimize the assets structure and risk pricing capabilities based on the high yield assets , increase in deposits .

Speaker #4: We increased the proportion of term deposits and current deposits to contain our interest payment ratio, benefiting from our efforts in both assets and liabilities.

Speaker #4: Sides . Our net interest margin was 1.28% , down by only two bips . Then half one . The narrowing rate decline . So this has played a very important role to contribute to our operating income .

Speaker #4: Second, we need to cultivate new drivers for growth. If we want to achieve positive growth in operating income, we must enhance our efforts in fee-based income.

Speaker #4: We have . Take taken a lot of measures and grasp market opportunities in fee based income , benefited from the capital market in enlarging wealth .

Speaker #4: We have seen high growth in our main business, and we also played well in containing costs. The fee-based income recorded was $90.9 billion, up by 0.6%, showing a quarterly improvement throughout the year.

Speaker #4: We expect . And the volume has been leading the peers and for ICBC fee based income , if we see from the . 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 market in other noninterest income , which is which has attracted high attention from the market from this year .

Speaker #4: The . So banks have increased are remarkably in this regard . We have seen the fluctuations in stock bonds and forex markets , especially from the Q3 .

Speaker #4: We have seen remarkable changes, which provided opportunities for ICBC in trading. Our Financial Markets Department and Capital Markets Investments Department have seen these opportunities and recorded a $46.7 billion increase in this regard, up by 45.7%, providing support for operating income increase.

Speaker #4: 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 .

Speaker #4: Because of this , in stabilizing in II fundamentals , our operating income achieved positive growth . Thirdly , we effectively contained risk cost .

Speaker #4: 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 .

Speaker #4: Our risk cost has been effectively contained by the end of Q3 and PR ratio of the group was 1.33% , down by one beep .

Speaker #4: Then 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 bips , so when we effectively contain our cost , we continue to enhance our risk resilience capabilities .

Speaker #4: Our control of the risk cost can be seen in our operating income , which paves the way for the contain for the management of the risks .

Speaker #4: Which has played an important role in balancing the risk and and income . So because of the operating income and the net income .

Speaker #4: The three aspects are the main factors . When we look to the future and to the full year , the Q4 will be the time for 14 five year plan .

Speaker #4: And and the beginning of the 15th 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 US are , well contained , paving the way for the good external environment for the development .

Speaker #4: When the policies are implemented and the vitality is unleashed , we are fully confident of Icbc's high level development and we will continue to giving 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 non-interest income and net interest income and achieve a growth for future .

Speaker #4: We will continue to increase our operating strategies , follow following our strategies , and promote our sustainable growth and create a solid and progressive annual and future results for investors and create satisfying returns for all of you .

Speaker #4: Thank you .

Speaker #3: Now we'll take the second question . Please identify yourself . Thank you for this opportunity . I'm from UBS . My name is Yamaji .

Speaker #3: First , I want to congratulate ICBC for your amazing results . And I want to raise a question about Nim . Your . You have already mentioned the narrow Nim .

Speaker #3: So, could you share the current pricing for corporate and retail loans? How do you see the name trending going forward? When do you expect to see an inflection point?

Speaker #3: And is there still room for rate cuts? Thank you. We'll have the Liability Management Department to answer this. Thank you for your question on corporate and retail loan pricing this year.

Speaker #3: Interest rate on newly issued loan continue to decline . Though 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 four and four .

Speaker #3: In the first , second and third quarters , respectively . The average interest rate on newly issued RMB personal loans was 3.01% , with quarterly quarter on quarter declines of 29 four and two b.p.s .

Speaker #3: Overall , the downward trend in both corporate and retail loan rates has moderated on Nim trend . Overall . Nim remains under downward pressure , but has shown signs of stabilization .

Speaker #3: As you mentioned in the first quarter of this year, our NIM stood at 1.28%, down 14 basis points year on year, with a rate of decline narrowing by four compared to the previous year.

Speaker #3: 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 .

Speaker #3: In May, the cuts in the LP were accompanied by a coordinated reduction in deposit rates, effectively mitigating the downward pressure on NIM.

Speaker #3: Second, changes in asset supply and demand have improved the pricing rationality in the first three quarters. Our credit resources were precisely allocated to key areas under the five priorities, and the average rate on newly issued RMB loans was 2.78%.

Speaker #3: Relatively strong performance among our peers. Third, we find that liability costs and management helped narrow the NIM decline. Deposit volume and pricing remained well aligned with the average interest rate on RMB deposits at 1.32%, down 30.

Speaker #3: 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 .

Speaker #3: Has increased from 22.4% in Q4 2019 to 28.4% currently , up by six percentage points . This unrealized gains in our own balance sheet are CI and AC bond portfolios can withstand the seven upward interest rate reversal , helping to strengthen medium and long term profitability .

Speaker #3: And on the neem selection point , we believe that the Nim we selected stabilized in the coming 1 or 2 years , and the will gradually reach an inflection point .

Speaker #3: First, regulators have recognized the continuous need for compression, and the People's Bank of China has recently emphasized the need to balance supporting the real economy with maintaining the financial sector's health.

Speaker #3: 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.

Speaker #3: Our medium to long term profitability remains solid . We continue to optimize asset allocation , focus on meeting genuine financial needs , and proactively increase bond investment to build resilience and long term earning capacity in the low rate environment .

Speaker #3: On room for further rate cuts externally, the U.S. Federal Reserve cut its benchmark rate by 25 basis points in September to 4.00% to 4.25%.

Speaker #3: Range, in line with market expectations. The European Central Bank has kept the policy rates unchanged for now, but the market anticipates a rate cut.

Speaker #3: In December , this external provide more room for monetary policy adjustments in China . Domestically , given that deposit and lending rates are already at relatively low levels , whether further cuts will be implemented will ultimately depend on overall macroeconomic conditions .

Speaker #3: That's all my answer . Thank you . Thank you for your answer .

Speaker #4: The third question comes from the newsroom of securities. My question concerns non-interest income and other non-interest income. In the first three quarters, we have seen fee-based income turn positive.

Speaker #4: 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 market was higher .

Speaker #4: Outlook for your scale of bond investments and strategies . You have raised two questions . The first question is about fee based income .

Speaker #4: I will invite Mr. Toner to answer this question. And for the second question regarding bond investment, I'll invite Mr. Zhongfu from the Financial Market Department.

Speaker #4: 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 .

Speaker #4: 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 25% and 3% .

Speaker #4: Pension business related income has increased by 43% . So in this sector , it has contributed a lot to the non-interest income . Second , we increase the effectiveness of the fundamentals services with high growth by optimizing our efficiency of services and experience of customer .

Speaker #4: The third-party payment achieved quarter-on-quarter growth of 0.7%, while the bank card business increased by 0.8%. These are the fundamentals of the non-interest income.

Speaker #4: Providing basis for the fee based income . Third , in expenditure side , the expenses are effectively contained in the first three quarters based expenses was down by 17% .

Speaker #4: 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 .

Speaker #4: By Q on Q , we have seen that the fee based income has been increasing , seen 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 .

Speaker #4: 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 .

Speaker #4: 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 .

Speaker #4: Deepening industrial finance . We will focus on major strategies in 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 .

Speaker #4: Thank you. Thank you for your question. In bond investment and income in Q3, faced with an interest rate upside trend, we analyze and grasp opportunities in a timely and proper manner.

Speaker #4: We adjusted pace and scale by diversified our strategies . We proactively increase the comprehensive yield of bond investments . Looking to the future , the market interest rate may still fluctuate within a range .

Speaker #4: On the one hand , the central bank will still sustain ample liquidity and the demand of allocation from institutions . This will support interest rate and constrain its upside space .

Speaker #4: On the other hand , Sino-US relations and the stronger stock market may still bring in impact to the fluctuation of the market . So against such backdrop , we will adhere to the principle of being stable , flexible and forward looking .

Speaker #4: First , scientifically managing pace and scale . We will continuously and closely track changes in the macro policy signals and market sentiments dynamically optimizing the overall scale , variety , structure and maturity .

Speaker #4: Distribution of bond investments to balance current returns with medium- to long-term interest rate risks. Second, optimizing allocation and trading strategies.

Speaker #4: We will deepen fine-grained research on various bond types to optimize the allocation structure. We will flexibly employ strategies such as duration-based trading to capture market opportunities.

Speaker #4: 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 .

Speaker #4: 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 .

Speaker #4: 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 .

Speaker #4: Specific execution will be dynamically adjusted and optimized based on policy guidance, market evaluation, and the bank's overall operational objectives. Thank you.

Speaker #4: Now we'll take the fourth .

Speaker #3: Question . Thank you for this opportunity . I'm winning Wu from BofA securities . We've seen the large growth in the corporate loan .

Speaker #3: I want to know whether they suggest a lack of effective credit demand from the raw economy . And also , how did Icbc's corporate and retail insurance performance in the first three quarters in the third quarter , this trend , will they continue in the third quarter ?

Speaker #3: Thank you for your question . First , I will brief you on the credit . Loan issuance in the first three quarters . Overall , we did a great job .

Speaker #3: It is mainly attributed to the upward economic expectations in China. The aggregated term RMB loan maintained a solid growth momentum, driven primarily by corporate lending.

Speaker #3: While retail loans also achieved a year-on-year increase at the end of September, the R&B loan balance at domestic branches reached ¥28.7 trillion, up 8.5% year on year, which is 1.9 percentage points higher than the average for all financial institutions.

Speaker #3: RMB loans increased by more than ¥2 trillion in total . Of corporate loans rose by 1.9 trillion , representing an 11.3 year on year rise .

Speaker #3: 2.9 percentage points higher than the system average. Personal loans increased by ¥175.7 billion, up ¥28.9 billion year-on-year, with a growth rate of 2.8%.

Speaker #3: 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.

Speaker #3: In the first three quarters, tech loans increased by ¥1.25 trillion, and inclusive finance loans increased by ¥596.9 billion. Loans to strategic emerging industries also saw growth.

Speaker #3: Littlejohn specialized Enterprises and the core digital economy grew by over 20% , notably manufacturing loan rose by 1.1 trillion from the end of last year , accounting for 54% of total new loans and increase of RMB ¥450 billion year .

Speaker #3: Structurally , while the share of short term financing has risen , the trend is consistent with the broader macro environment . There are two reasons .

Speaker #3: At the macro level, fixed asset investment has been weaker than expected, leading to a higher proportion of short-term loans and financing across the economy.

Speaker #3: At a macro level , enterprises willingness to expand reproduction has weakened , while the demand for short term working capital remains strong . We have actively adapted to these shifts in economic activity and clients needs , providing tailored finance products and services accordingly .

Speaker #3: It is worth noting that unlike discounting direct bill discounting provides direct funding to corporate clients , serving as an effective means for financial institutions to support the real economy .

Speaker #3: In the first three quarters , direct bill discounting accounted for 92.5% of our new building financing , providing . Loan support for SMEs and manufacturing firms and second , on credit demand .

Speaker #3: 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 .

Speaker #3: 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 .

Speaker #3: On the corporate side, policies aimed at curbing volatility in oil and reducing rate race-like competition, as well as resolving overdue receivables, will likely stimulate credit demand among high-quality enterprises going forward. We will proactively seize policy opportunities during the alignment with the needs of the rural economy and further consolidate the foundation for sustainable credit growth.

Speaker #3: We also mentioned the reverse repos . This business is positioned primarily to balance liquidity needs and its scale fluctuates . Are cyclical . Third , the third quarter reverse repo operations has remained stable with both end of period and average daily balance declining from the 2024 levels .

Speaker #3: Thank you for your question. Thank you for your answer.

Speaker #4: The fifth question . Thank you . I'm from CMS securities . My question concerns asset quality . How do you see the asset quality of this year for Scbc in corporate banking ?

Speaker #4: 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?

Speaker #4: 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 the personal banking department to answer in the first three quarters.

Speaker #4: The core indicators of credit asset quality remained stable , with positive trends . The NPL ratio was 1.33% , down by one beep .

Speaker #4: The NPL ratio for domestic corporate loans was 1.35% , down by 15 beeps , reflecting further enhanced risks . Resilience . Key sectors including manufacturing , wholesale and retail , energy and water conservancy achieved due reductions in both NPL and NPL ratios .

Speaker #4: New NPLs were primarily concerned , concentrated in the real estate sector . The impact of US-China trade policies and tariff negotiations on our corporate borrowers have has been limited .

Speaker #4: Affected clients were mainly those with weak industrial chain resilience and seen profit margins. Borrowers engaged in U.S. export businesses account for a low proportion of our corporate loan portfolio, and their resilience in the U.S. market is generally limited.

Speaker #4: We have made the stress tests and analysis for the tariff policies on the asset quality of corporate loans. The impacts will be limited.

Speaker #4: ICBC conducts financial support for debt resolution, works prudently and orderly, and acts in accordance with market orientation and rule of law principles.

Speaker #4: We collaborate with banking peers to strengthen coordination, secure repayment sources, and enhance credit guarantees to contain risks. On the other hand, we are diversified.

Speaker #4: We use diversified approaches, including debt restructuring of assets and revitalization, to resolve risks. Therefore, we support platform companies with fundamentally sound operations, a good repayment record, and willingness, but that are temporarily facing liquidity problems.

Speaker #4: We have adjusted loan tenors and optimized repayment structures to alleviate constructed maturity. As a result, our exposure to such risks and loans is minimal, and rates are already at reasonable levels with limited room for reduction, ensuring a manageable impact on our net interest margin.

Speaker #4: So, the interest rate reduction, primarily high-cost bond and non-standard financing, has been significant. In recent years, the personal finance asset quality has been facing pressures, with a rising NPL ratio.

Speaker #4: The trend is in line with peers and maintaining a reasonable range comparable to other banks . So we continue to strengthen the three gateways .

Speaker #4: First entry gateway. Rigorous pre-landing controls via data modeling and feature attribution analysis across dimensions to dynamically optimize rules and eligibility criteria in terms of products, clients, regions, and strategies.

Speaker #4: Second, we are monitoring gateway advanced digital collection systems integrated for retail and inclusive finance loans. We are deploying multi-channel class collection strategies to increase effectiveness.

Speaker #4: And we also enhance our data infrastructure with a wide table format for personal credit client information, covering fundamental data risk profiles, behavioral patterns, and value metrics to enable data-driven decision-making.

Speaker #4: Third , in Exit Gateway , proactive NPL management and disposal emphasis on cash recovery during loan servicing write offs , mainly target legacy issues and aged males .

Speaker #4: Pilot programs include NPL securitization and bulk transfers of retail NPL 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 .

Speaker #4: We will shift from manual controls to smart controls, achieving full progress in smart risk management. This will continuously elevate intelligent risk control capabilities and solidify our end-to-end personal loan risk prevention system.

Speaker #4: 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 demand of personal finance and create a a pattern of financing and non-housing personal loans and create a high quality development in personal finance .

Speaker #4: Thank you .

Speaker #3: I'll take the next question. Thank you for this opportunity. I understand. She runs Morgan Stanley. I have questions about inclusive loans because now in the market, there's a lot of concern about the risk in this sector.

Speaker #3: So, what is the current situation of inclusive loan insurance and risk control within the relatively weak credit demand? What are the future development directions and the risk outlook for inclusive finance?

Speaker #3: We can see that in the 15th five year plan , we want to expand the inclusive finance business . And that's the reason why I want to want to know the future development direction .

Speaker #3: Thank you for your support for inclusive finance on loan issuance. ICBC has taken inclusive and retail loans as an important aspect of our transformation.

Speaker #3: By the end of the third quarter, the balance of inclusive loans reached ¥3.5 trillion, an increase of nearly ¥600 billion from the end of last year, representing over 20% growth and a further rise in the share of total loans.

Speaker #3: Market expansion through coordinated SM mechanisms leveraging the coordinating system among the head office, branches, tier two branches, and outlets. We actively participate in local financing coordination task forces and launch a special campaign visiting.

Speaker #3: We visited over 3 million SMEs and issued ¥2.8 trillion in loans , effectively driving the bank's inclusive finance growth . The second , we will accelerate new client acquisition in key sectors .

Speaker #3: We read out action plans such as support private enterprises , implement mechanism and empower business and agriculture . We often advise our inclusive finance layout in technology innovation , advanced manufacturing , trade and service revitalization and small scale foreign trade sectors and proactively expanding into new markets and clients .

Speaker #3: In the first three quarters , we added 84,001st time borrowers , 11,000 more than the same period last year , inclusive agricultural loan increased by ¥230 billion from the end of last year , strongly supporting overall credit growth .

Speaker #3: And third, we will work on our loan products to enhance adaptability. We will accelerate the upgrade of three major product lines: credit-based, collateral-based, and digital supply chain loans. We will deepen the innovation mechanism for these products and enrich our inclusive product offerings.

Speaker #3: Folio and application scenarios. By the end of Q3 2025, digital inclusive finance products accounted for 90% of both balanced and incremental inclusive loans.

Speaker #3: While the region specific products also maintain rapid growth , accessibility , and convenience of inclusive finance services has been further enhanced . We will enhance client stickiness through credit plus services .

Speaker #3: We have improved our credit-plus integrated financial service system that combines lending as a core with a diversified supporting system through platforms such as the Global Matchmaking Hub and the matchmaking platform.

Speaker #3: We help enterprises find new business opportunities, operate effectively, and grow stronger in collaboration with the All China Federation of Supply and Marketing Cooperatives. This initiative will advance the Supply and Marketing Plus Finance initiative and further strengthen the market influence on risk management.

Speaker #3: This year , some SMEs have faced a operational challenge and of course , the industry , the asset quality of inclusive loans has shown a modest rebound .

Speaker #3: CBC has consistently placed risk management at the forefront, adhering to the Intelligent Control plus human oversight approach to build a comprehensive corrective risk prevention system.

Speaker #3: As of the end of September, our MPL ratio for inclusive loans remained better than the industry average, and overall asset quality remained generally stable.

Speaker #3: We have a stricter credit 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 of control .

Speaker #3: We enhance ongoing risk monitoring by improving coordination among the front, middle, and back office. We have strengthened refined risk management, reinforcing anti-fraud and risk detection measures.

Speaker #3: Crackdowns on illegal intermediaries and upgrade our intelligent risk control system across two digital processes . With accelerated resolution of non-performing assets , we have broadened disposal channels such as the asset securitization instead up cash recovery of NPLs , consolidating the foundation for the sustainable development of inclusive finance , and on future outlook going forward , we will continue to follow the principle of ensuring volume , improving quality , stabilizing price and optimizing structure .

Speaker #3: We will step up efforts to support the high quality development and the first is that we will . Well achieve the I said supply , and the second is we will have a more refined product .

Speaker #3: 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 .

Speaker #3: To improve the efficiency of our business, we will implement a comprehensive business operation mechanism. Additionally, we will focus on inclusive finance to position ourselves as a leading bank.

Speaker #3: Thank you. Thank you for your answer.

Speaker #4: The next question . Thank you . I'm Shenzhen from securities . My question is related to deposits . We have seen that this year the the capital market has great changes .

Speaker #4: So, what's the latest? Latest developments in deposit competition against this backdrop have raised the question: has the trend of deposit harmonization eased? Has ICBC observed deposits migrating to WMPs or the stock market?

Speaker #4: Thank you. The first question regarding deposits will be answered by the Assets and Liability Department. The second question about deposit migration will be answered by the Personal Banking Department.

Speaker #4: Thank you for your question about deposit termination. Before answering the question, I would like to introduce to you this year's ICBC's Deposits Development.

Speaker #4: Deposit growth . This year demonstrated a favorable dual improvement in volume and cost dynamic and volume . By the end of September , the balance of domestic RMB deposits reached 38.5 trillion , up by 8.5% , 0.5 percentage point higher than the industry average in the first three quarters .

Speaker #4: Domestic RMB deposits increased by 2.8 trillion , a year on year growth of eight 840 billion by segment saving deposits rose by 1.6 trillion , up 350 billion year on year .

Speaker #4: Corporate deposits grew by $880 billion year on year, up from $670 billion. On pricing, ICBC maintained its comprehensive comparative cost advantage by the end of September.

Speaker #4: The interest payment rate was 1.32%, down 35 bps. This marks the lowest rate and deepest decline among China's big four banks, as you have noticed that the deposit termination has eased, with sequential declines narrowing gradually in Q2 and Q3.

Speaker #4: The quarter-on-quarter decline in the average daily share of general deposit demand deposits was 0.6 percentage points and 0.2 percentage points, respectively, conducive to controlling interest payment rates for banks.

Speaker #4: 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.

Speaker #4: 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 1.1 trillion , while household deposits rose by 3 trillion , up by 760 billion year on year .

Speaker #4: So the trend is still fluctuating. As for WMP-related questions, I'll invite my colleagues from the Personal Finance Department to answer. I'm Chen from the Personal Finance Department of ICBC.

Speaker #4: I'll make some supplements . In savings deposits . In the first three quarters , the savings deposits continued . The are rapid growth in recent several years , Mr. Fu have introduced the data just now in savings deposits from quarter on quarter .

Speaker #4: The savings deposit was up by over $300 billion by the end of September, compared with that of the first half. So there is no remarkable change over our expectation.

Speaker #4: In terms of deposit termination, 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.

Speaker #4: In the interest payment ratio, the RMB interest payment ratio was down by 20%. This was just mentioned by Mr. Fu, and the decrease is even larger for demand deposits.

Speaker #4: The reason is that, against the backdrop of interest rate decline, the scale of ICBC has brought the decline of the interest payment rate.

Speaker #4: What is also worth mentioning is that the current deposits and interest rate decline is even larger year on year. It is attributable to ICBC's implementation of a five transformation strategy in terms of personal finance.

Speaker #4: We have seen fruitful results. Our customer structure has increased, and the scenario expansion, among other factors, has been positive. In the first three quarters, we have achieved remarkable progress.

Speaker #4: 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 .

Speaker #4: 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 products scale by the end of September , the daily average balance was 2.6 trillion , up by almost 150 billion .

Speaker #4: Then that's 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 600 billion , up by 800 and more than 80 billion .

Speaker #4: So 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.

Speaker #4: There is no data , remarkably , to support deposits migration . But we will continue our observation towards that trend . And communicate with the market .

Speaker #4: Thank you .

Speaker #3: Next question . Is to the technical issue . We cannot hear from the questioner . Now , but we've received her question . This question comes from Mr. Vivi from the JP Morgan and her question is how was the quality of ICBC corporate real estate loans in Q3 ?

Speaker #3: 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?

Speaker #3: There are two parts to this question. As we mentioned before, in the corporate estate sector, the sector has been under pressure.

Speaker #3: In the third quarter, the overall asset quality of the corporate real estate loan portfolio remains 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.

Speaker #3: And in terms of the market , we are seeing the transformation from the old sector to the to relatively new one . But we've seen a narrowing decline of housing prices .

Speaker #3: We believe the impact of the sector on the real estate loans will also be narrowed in the future . And as a structural level , ICBC continued to build a diversified , balanced and well-distributed investment , and financing portfolios .

Speaker #3: Corporate real estate loans totaling RMB 889 billion, accounting for less than 3% of the bank's total loan portfolio. The bank also maintained adequate long-term provisions to fully cover the potential risks.

Speaker #3: In terms of asset selection, SAPC adheres to the region Quiet Project integrity standards. Loans are primarily concentrated in key cities with strong population inflows and solid industrial bases.

Speaker #3: The bank focuses on high quality projects in core areas and neurons are granted strictly under standards such as sufficient project value . Normal developer operations and proper management of closed loop fund flows .

Speaker #3: In addition, the mitigating effect of collateral remains sound, and recovery rates for distressed exposures are very high. I want to talk about the personal mortgage loan.

Speaker #3: By the end of Q3 . As the end of the third quarter , the NPL ratio of ICBC personal housing loans has generated , in line with industrial trends .

Speaker #3: The . We are at this leading position after normalizing for riders and securities 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 .

Speaker #3: This model triggered tiered risk control measures and cover the entire long life cycle . Lending and post lending , and this enables real time or near real time health monitoring , perpetuated risk management and precise resource allocation .

Speaker #3: With a real estate market further stabilizing and policy effect , gradually taking hold , some collateral valuation have declined and the bank continues to closely track changes in property values .

Speaker #3: As macro civilization policies take effect and policies to boost the domestic demand and consumption continue to implemented . ICBC says the deterioration trade of the mortgage asset quality to moderate , with no sign of accelerated worsening .

Speaker #3: .

Speaker #4: The last question. Thank you very much for giving me the opportunity to raise questions. I'm from Citic Securities. My question is about internationalization in the low interest rate environment.

Speaker #4: 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 ?

Speaker #4: I'll invite Miss Wang from the International Banking Department. ICBC's internationalization has evolved over three decades. We align with global and going-global strategies.

Speaker #4: ICBC has consistently anchored its global expansion to national strategies. We ensure that overseas network deployment, product development, and strategic focus serve national priorities while enhancing global capabilities.

Speaker #4: Today , as China integrates more deeply into the global economy and accelerates the dual circulation ICBC as a primary cross-border financial services provider , will leverage its strength to bridge the to circulation through financing innovation , driving high quality development .

Speaker #4: For your question about the strategy of internationalization, we are now focusing on the Fifth Five-Year Plan. We align closely with the National Strategy to improve our internationalization and enhance our service landscape.

Speaker #4: And we also adhere to compliance and safeguard the security . And also we promote transformation in promoting internationalization . We will increase the landscape of RMB business and increase the value creation of and strengthen clearing settlement payment , custody and also we will connect internal and external environment and provide services .

Speaker #4: And we will provide financial product lines to the international market and user dividend of the interest 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 .

Speaker #4: We, our network has covered 69 countries and regions by becoming a shareholder of Standard Bank Group. We have covered 20 African countries.

Speaker #4: We have established 250 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 .

Speaker #4: And also, we are the first to establish the integrated global system so as to provide timely funds for our global customers.

Speaker #4: 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 where 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 Berber , which has covered 77 countries and regions .

Speaker #4: And in the eighth CII , we are the comprehensive partner in this activity . So in serving these activities , we provide bridge for the partners .

Speaker #4: Thank you for your question . Thank you for Miss Wang's answer . Dear investors and analysts , for the interest of time , this is the end of the Q&A session today with the with Board Secretary , Mr. Tian , we have responded your questions candidly and thank you for your professional and insightful questions .

Speaker #4: 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 development.

Speaker #4: So as to submit a solid annual answer sheet to all the investors . We will continue to hold reverse roadshows and semantic IR activities .

Speaker #4: If you have other questions, you are welcome to communicate with our IR team. Thank you for your participation. Best wishes for.

Speaker #2: Spencer Hui .