First proposed the "Five Transformations" initiative! Industrial Bank explains in detail, outlining new directions for the next five years

On March 27, Industrial Bank held its 2025 annual performance briefing as scheduled.

In a nearly two-hour Q&A session, with 12 questions from the audience, Industrial Bank Chairman Lu Jiajin and a group of senior executives answered questions one by one, addressing market concerns directly.

Over the past year, the bank’s total assets reached a new milestone of 11 trillion yuan; it achieved total operating income of 212.74 billion yuan and a net profit attributable to shareholders of 77.47 billion yuan, marking two consecutive years of “double growth.”

Looking ahead to the 14th Five-Year Plan period, Lu Jiajin stated that the bank will lead with the “Five Transformations,” focusing on deepening industrial finance around the construction of a modern industrial system, continuously polishing the “Four Brand Images,” and building a first-class value bank.

Among them, the “Five Transformations” were proposed for the first time, including digital intelligence, greening, internationalization, integration, and ecological sustainability; the “Four Brand Images” now include green finance, wealth management, investment banking, and the addition of “technology finance,” which is prioritized.

“We will make every effort to implement our strategy, continue to outperform the market during the 14th Five-Year Plan period, and solidify our position among joint-stock commercial banks,” Lu Jiajin said.

According to the plan, based on mid-term dividends, the bank intends to distribute a year-end dividend of 5.01 yuan (including tax) per 10 shares for 2025, totaling 22.56 billion yuan in cash dividends for the year, with the annual cash dividend ratio rising to over 31%.

On asset quality: Focused risk reduction in key areas

As in previous years, Lu Jiajin summarized the 2025 performance with “outperforming the market.” “The operation of commercial banks can be simply described as assets, liabilities, non-interest income, risk control, and operations. We focus on these five aspects to improve income, reduce costs, enhance quality, and increase efficiency.”

On the asset side, focusing on “balanced business structure,” Industrial Bank emphasized adjusting and optimizing its asset structure, with green loans, technology loans, and medium to long-term loans for the manufacturing sector growing by 19%, 18%, and 15% respectively, all exceeding the overall loan growth rate.

At the same time, Industrial Bank deepened its “regional + industry” operations, with loans in key industries (the top ten industries by regional industrial revenue) growing by 20% compared to the beginning of the year.

On the liability side, “cost reduction” is the top priority. By solidifying the main accounts for corporate cash management and advancing the “Weaving Network Project 3.0,” the bank’s deposit interest rate fell by 33 basis points year-on-year to 1.65%, effectively countering the trend of narrowing interest margins.

The financial report shows that by strengthening asset-liability management, Industrial Bank has maintained positive growth in net interest income for three consecutive years.

At the same time, the bank seized opportunities from the warming capital market, enhancing the synergy of its group’s “large investment banking, large asset management, and large wealth management.” Last year, it achieved net income from fees and commissions of 25.89 billion yuan, a year-on-year increase of 7%, with the proportion also showing a rebound.

By the end of last year, the bank’s large investment banking FPA reached 4.89 trillion yuan, an increase of 8.1% from the beginning of the year; the group’s asset management scale totaled 3.65 trillion yuan, up 26% from the beginning of the year; and wealth sales grew by 19% year-on-year to 3.36 trillion yuan.

In terms of asset quality, last year Industrial Bank implemented risk management reforms, with the amount of non-performing assets generated declining by 6.8% year-on-year, and the year-end non-performing loan ratio standing at 1.08%, the same as at the beginning of the year.

Among them, the bank’s new corporate non-performing loans in real estate, local government financing platforms, and credit cards fell by 42%, 31%, and 13% year-on-year, respectively. “Risk in key areas has been somewhat reduced,” Lu Jiajin summarized.

However, Industrial Bank emphasized that risk costs remain the largest operational cost. “The pressure is still quite significant. From the current market environment, the budget plan for this year’s asset quality will remain relatively stable,” said the bank’s Vice President Sun Xiongpeng.

On 2026: Deepening industrial finance

At the beginning of the year, Industrial Bank revealed that its operations in 2026 would focus on “deepening industrial finance and building an intelligent bank,” with industrial finance also seen as a strategic focus during the 14th Five-Year Plan period.

In Lu Jiajin’s view, industrial finance represents an update of development concepts and an upgrade of operational models, breaking through corporate finance and strategic client management.

“Corporate finance mainly serves corporate legal persons, while strategic client management mainly serves key corporate legal persons. Industrial finance not only serves enterprises but also the ecosystems in which they operate, addressing related innovation chains, supply chains, talent chains, capital chains, and equity chains. It shifts from large enterprises to small and medium-sized enterprises, from enterprises to individuals, from focusing on主体信用 to transaction credit, and from single services to comprehensive services,” Lu Jiajin emphasized.

He stated that the next steps for the bank will focus on three aspects:

First, focus on leading companies. Based on in-depth research, the bank will enter more new industrial tracks, seize leading enterprises in industries, and promote growth and optimization of asset business.

Lu Jiajin revealed that last year the bank focused on 21 key industries, sorting through the customer equity chain, capital chain, and supply chain, identifying a target pool that includes 1,800 customer profiles, 2,023 core customers, and 175,000 customers, and has allocated this to branches to jointly enhance enterprise services.

“This target pool is dynamic and will continually expand based on market changes. This year, we plan to add 200 customer profiles and 300 core customers,” Lu Jiajin disclosed.

Second, promote integration. The bank aims to break down the rigid barriers between lines and positions to promote integrated development across various businesses, especially for integrated operations among large, medium, and small clients, as well as integrated operations in public and private retail.

It is reported that last year the bank expanded retail payroll clients through public-private linkage to 2.672 million households, a year-on-year increase of 4.3%; new clients acquired through payroll services accounted for over 33% of new retail clients. “We have already seen results,” Lu Jiajin noted.

Third, strengthen technology. The bank has launched an industrial map feature based on its CRM system, showcasing the regional distribution of industries, supply chain connections, and information on core enterprises to help branches accurately identify clients and resolve the issue of client whereabouts.

“In the future, we will also strengthen client map construction and AI marketing model development to better understand clients and the market. Combined with proactive credit models we have been promoting in recent years, we will effectively address client service issues,” Lu Jiajin stated.

On the “New Five Years”: Leading with the “Five Transformations”

In the new round of five-year development strategic planning outline compiled by Industrial Bank, the “Five Transformations” have been proposed for the first time and are seen as the strategic direction.

Among them, digital intelligence ranks first and serves as the fundamental engine for the bank’s strategic transformation. It is understood that the bank has set a goal to become a “first-class intelligent bank,” hoping to “seize the opportunity to leapfrog with AI.”

“We have established an ‘Artificial Intelligence +’ action leadership group, with myself as the leader, and issued the Industrial Bank ‘Artificial Intelligence +’ action plan, promoting the transition from ‘Digital Industrial Bank’ to ‘Smart Industrial Bank,’” Lu Jiajin stated.

Following digital intelligence, greening is seen as a distinctive backdrop for operational development. “As the first Equator Bank in China, we must maintain our advantage in green finance, focusing on strengthening carbon finance innovation to create new advantages and achieve new development amid increasingly fierce market competition.”

Internationalization is viewed as a necessary path for expanding space. Lu Jiajin believes that in the coming years, enterprises going overseas will enter an acceleration phase, and internationalization must be regarded as a key factor in success or failure, making international business an indispensable function in serving clients.

“We strive to have our international business fully rank among the top tier of joint-stock commercial banks within the next two to three years, making internationalization a new growth driver for the entire bank,” he stated.

It is reported that the bank has identified over a dozen key branches for international business in economically developed regions and has designated a group of branches specializing in international business at the sub-branch level, establishing a special assessment and incentive mechanism. Additionally, it will leverage the Hong Kong branch as a strategic foothold.

Moreover, as the financial service needs of various market entities become increasingly diversified, financial service models have shifted from a single product supply to comprehensive solutions. Based on this, Industrial Bank will take integration as a core approach to deepen client engagement.

“We will continue to strengthen group collaboration to fully unleash our comparative advantages of having multiple financial licenses and comprehensive service functions, achieving our own value growth in the process of deeply serving clients,” he stated.

Considering that ecological sustainability is an important trend in economic and social development and a key weapon for various market entities to succeed, Industrial Bank has also proposed to position ecological sustainability as a higher form of financial service.

“We need to ‘jump out of the financial sector to engage in finance,’ integrating financial services with non-financial services into client ecological scenarios, enhancing client stickiness and expanding service boundaries,” Lu Jiajin pointed out.

Proofread by: Pan Da