1.1 trillion Industrial Bank discusses latest strategy: Industrial finance as the core, wealth management as the wing

21st Century Business Herald reporter Huang Zixiao

On March 27, Industrial Bank held its 2025 annual performance briefing. Chairman Lü Jiajin and Vice Presidents Sun Xiongpeng, Zhang Min, Zhang Ting, and Zeng Xiaoyang attended the meeting in person. President Chen Xinjian was unable to attend due to official duties.

On the evening of March 26, Industrial Bank had already released its 2025 performance report. By the end of 2025, the Industrial Bank group’s total assets reached RMB 11.09 trillion, up 5.58% from the end of the previous year; operating income was RMB 110.9k, up 0.24% year over year, and net profit attributable to shareholders was RMB 212.74B, up 0.34% year over year. The non-performing loan ratio was 1.08%, and the allowance coverage ratio was 228.41%. The net interest margin was 1.71%, down 11 basis points year over year.

At the press conference, management of Industrial Bank responded one by one to topics including industrial finance, retail finance, Xingyin AIC, digital transformation, and asset quality.

At the close on March 27, Industrial Bank (601166.SH) closed at RMB 18.70, down slightly by 0.95%. The day before, the bank’s board of directors examined and approved the announcement of the 2025 annual profit distribution proposal. The bank’s full-year dividend payout ratio was 31.02%, marking the 16th consecutive year of growth.

On industrial finance: seize industry leaders, promote integration, and strengthen technology

In its financial report, Industrial Bank clearly defines industrial finance as a strategic focus for the “15th Five-Year Plan” period. Centering on industry to support the construction of a modern industrial system, it connects the government (G end), enterprises (B end), individuals (C end), and financial institutions (F end) across the entire value chain, and boosts efforts in an all-round way.

Lü Jiajin said that developing industrial finance is not simply about “doing corporate banking and making loans,” which would result in heavy assets, low returns, and limited space. The key is to plan around the integration and development of industrial modernization featuring both intelligence and green initiatives. Using industry as the pivot, the bank will drive updates to development concepts and changes in operating models, and strengthen integrated financial services along the industrial chain, supply chain, equity chain, capital chain, and talent chain. In addition to corporate banking, Industrial Bank also needs to do family financial services for industrial workers, thereby driving the bank-wide transformation and development.

Industrial Bank also mentioned in its financial report that, with industrial finance as the core entity, it will build an industrial-finance development framework led by the head office and focused by branches in their main battlefront roles, with cross-department, cross-line, and cross-subsidiary coordination.

First, seize the leaders. With a sense of urgency of “one cannot wait,” integrate into the tide of technological innovation and industrial innovation, and, on the basis of deepened research, push forward more new industry tracks. Grasp the leading enterprises in each industry to promote growth in asset business and optimize its structure. Last year, the bank mapped out 21 key industries, clarified a “customer lineage” covering 1,800 customers, more than 2,000 core customers, and 175k small and medium-sized customers, and established a target database. This year, it plans to add analysis on 200 new customers.

Second, promote integration. In the AI era, silicon-based life will replace many tasks currently performed by carbon-based life. As long as you train enterprises in AI with knowledge related to enterprise finance—covering funds, retail, interbank, and so on—one person can play multiple roles. To develop industrial finance, it is necessary to break down clear separations among lines of business and the situation in which posts govern themselves independently, and to use artificial intelligence to help relationship managers do these tasks.

“In the future, as an enterprise, it will no longer be clear whether you are a fund relationship manager, a retail relationship manager, or an interbank relationship manager.”

Third, strengthen technology. Industrial finance greatly expands the boundaries of the business. In the past, relationship managers fought their battles single-handedly. Now, with technology support and data enablement, technology support has been strengthened. At present, relying on the customer management system (CRM) that has been rolled out, the bank helps accurately identify customers. Going forward, it will further strengthen customer breakthroughs, build marketing models, and achieve results that better reflect the market.

He said that in integrated operations across large, medium, and small customers, the bank needs to extend service for core customers to subsidiaries upstream and downstream and trading counterparties of those customers. Last year, the bank successfully issued loans of more than RMB 18 billion in sectors such as home appliances, electronics, people’s livelihood, consumption, logistics, and distribution. In terms of integrated operations in corporate retail: the number of corporate customers using salary disbursement services was 116k households, up 14.6%; the full-year disbursement amount was more than RMB 175k, up 8.5% year over year.

On AIC: better balancing risk and return

In November last year, AIC Xingyin Investment, a subsidiary of Industrial Bank, was established, and to date it has already rolled out multiple investments to cover the lithium battery industry chain. The bank’s 2025 annual report shows that AIC Xingyin Investment’s total assets were RMB 116k, and net assets were RMB 10.02B; it achieved operating income of RMB 10B and net profit of RMB 0.04 billion.

Zeng Xiaoyang, a vice president in charge of corporate financial business, said that by the end of last year, the number of technology enterprises served by Industrial Bank reached 365k households. Financing related to technology-related industries exceeded RMB 2 trillion, with an approximate year-on-year growth rate of 16%.

He said that some small and medium-sized technology start-up enterprises hope for more than just support from capital—they also need support for the transformation of technology achievements. Therefore, in addition to loans, the bank should help enterprises find compliant sources of capital.

The establishment of Xingyin AIC (Xingyin Investment) meets this need to a certain extent. The bank can carry out debt-to-equity swaps and equity investments. Through coordinated “debt and equity plus lending” linkages, it can better balance risk and return, and also broaden the bank’s customer base.

After AIC is established, Industrial Bank will fully leverage the group’s strengths and the advantage of multiple licenses, focusing on three aspects.

First, leverage the advantage that Industrial Bank has a research company (or, the Xingyin Research). Deepen the “research, business, and risk” three-in-one research empowerment mechanism. Second, build a service circle within the ecosystem and link up all types of entities, including government departments, universities, research institutes, industrial parks, industry associations, investment institutions, as well as law firms and accounting firms. Third, construct a product and service system combining equity, debt, and lending, and open up service channels that connect and coordinate direct financing and indirect financing for synergistic development.

He said that the establishment of Xingyin AIC is not merely a simple addition of licenses for the group, but also a key variable for Industrial Bank to deliver high-quality development in technology finance. In the next stage, Industrial Bank will pool the group’s strength, grow alongside technology enterprises, and work to build technology finance into the bank’s fourth calling card.

On retail finance: key branches expand from 13 to 44

In recent years, Industrial Bank has been accelerating the development of retail finance and wealth management business.

Zhang Min, vice president of Industrial Bank, said that in terms of building a retail system, the bank began research and preparation in 2023. In 2024, it carried out corresponding pilots in 13 key retail branches. In 2025, it promoted the system-based construction of retail, expanding the 13 pilot branches to 44 branches within mainland China.

At the same time, the bank is shifting the focus of business from operations toward management. It mainly pushes forward retail wholesale-oriented construction, and the overall work is carried out systematically from six aspects.

From the organizational structure perspective, the “four beams and eight pillars” of the retail back-end platform at branches have basically taken shape, and the front-office business support capability has been significantly improved. From the talent team management perspective, the bank has continued to optimize the retail business operation and management team, further clarifying job functions and significantly improving personnel productivity. From the customer operations perspective, it has continued to deepen retail customer segmentation and classified operations, and opened up a mechanism for upward customer transfer. From the coordination mechanism perspective, coordination mechanisms such as public-private integration, parent-subsidiary integration, domestic-international integration, and the “two-card” integration have gradually emerged, and both the salary disbursement business and the capital markets business have achieved new breakthroughs. From the branch business standpoint, it has accelerated the implementation of “branch + hall” integration, initially enabling a transition of branch functions from small-scale operations centered on account transactions to large-scale operations centered on customer service. From the Digital Industrial Bank perspective, it has run the digital operations system for the head office and branches end to end, and promoted retail smart projects across the bank, accelerating deployment of artificial intelligence applications.

He said that in the subsequent system-based retail construction, the bank will continue to focus on quality improvement and drive the transformation of retail business from scale expansion to value creation.

At the beginning of 2025, Industrial Bank proposed its strategy for net fee and commission income: “forge two long boards and fill two short boards.”

When talking about wealth management, Zhang Min said that last year, the bank’s fee-based intermediary business income grew 20% year over year. Full-year, it created wealth gains of RMB 58.7 billion for retail customers, up 21% year over year, achieving a double improvement in customer returns and bank returns.

This year, Industrial Bank will mainly focus on two aspects—product systems and customer service—to promote the healthy development of wealth management business.

On one hand, build a precise yet comprehensive product system. In a low-interest-rate, high-volatility market environment, improve the cash and fixed-income product system, upgrade the “deposits+” product matrix, and ensure full coverage of short-, medium-, and long-term products, so that customers’ long-horizon funds can be more secure and stable. At the same time, optimize the “loose change+” functionality to make idle cash management more efficient and more flexible. On the other hand, open and empower. Seize the opportunity to activate deposits, build an open product shelf for the entire market, and establish a pyramid-style product system with optionality. By using small-amount optionality products to improve return elasticity, the bank can meet customers’ needs for diversified, full-scenario asset allocation.

In customer service, leverage the strengths of Industrial Bank’s wealth advisory and investment advisory team. Combine digital tools to interpret market conditions in a timely manner, guide diversified allocations, and help customers stay steady and hold their ground amid volatile markets.

On asset quality: expected to remain relatively stable in 2026

When discussing asset quality and risk management, Vice President Sun Xiongpeng said that over the past five years, Industrial Bank has withstood market tests and kept asset quality trending favorably. In 2025, despite facing many challenges, through measures such as structural adjustments and optimization, and strengthening risk control management, overall asset quality still met expectations.

He said that first, risk costs further contracted. In 2025, the bank’s non-performing loan formation balance decreased 6.82% year over year, and the formation rate fell by 0.17 percentage points. Overdue loans were compressed by RMB 2.3 billion; the bank strictly implemented the new rules for risk classification, with annual risk-asset losses of RMB 57.6 billion, reducing by RMB 2.5 billion year over year.

Second, overall risk in key areas remained controllable. The three major areas drawing market attention—corporate real estate, government financing platforms, and credit cards—showed a clearly downward trend in non-performing loan ratios. In 2025, the bank proactively reduced its corporate real estate loans by RMB 53.3 billion, and the amount of newly formed non-performing loans decreased by 41% year over year. It also compressed the scale related to government financing by RMB 46.6 billion, with only RMB 0.3 billion in newly formed non-performing loans for the full year. Credit card non-performing loans reached a turning point in 2023; from 2024 to 2025, the amount of newly formed non-performing loans decreased year by year, and in 2025, the non-performing loan amount decreased by 12.98% year over year.

Third, provisions for restructured loans were sufficient. The bank implemented full-process control over restructured loans. In 2025, the balance of restructured loans was RMB 37.8 billion, accounting for 0.64% of total loans, which remains at a relatively low level. Related loans were all downgraded to the “watching” and “non-performing” categories, and provisions were accrued at nearly 27%. For enterprises with insufficient repayment sources, the bank reinforced the second repayment source through measures such as adding collateral and strengthening guarantee responsibilities.

He said that currently, pressures on asset risk management remain high, with a complex and changeable internal and external environment. In the future, some enterprises and individuals may see further declines in repayment capacity due to market fluctuations. Risks may still exist in real estate, credit cards, and real-economy enterprises that have not yet completed transformation and upgrading. Asset quality risk prevention remains a long and arduous task. By relying on digital tools to enhance risk management capabilities, it is expected that asset quality in 2026 will remain relatively stable compared with 2025.

On artificial intelligence: moving toward Intelligent Xingyin

In recent years, Industrial Bank has been accelerating its move from Digital Industrial Bank to Intelligent Xingyin, and artificial intelligence applications have already shown certain results.

According to Lü Jiajin, at the organizational level, Industrial Bank has established an “Artificial Intelligence+” action leading group, with Lü Jiajin himself serving as the group leader. The bank has also issued an “Artificial Intelligence+” action plan to orderly advance the move from Digital Industrial Bank to Intelligent Xingyin. Meanwhile, it has leveraged artificial intelligence to innovate across multiple areas, with initial results seen across multiple departments, and more than 200 intelligent agents already in use.

At the same time, it is building the foundation through private, on-premises deployment of artificial intelligence, including computing power, data, knowledge, and models—called the “four major projects.” For example, in terms of computing power, Industrial Bank is accelerating the construction of data centers located in Gui’an and Changle, speeding up the deployment of its existing data centers and achieving multi-location, multi-center computing power layouts. In terms of data, Industrial Bank has set up a dedicated working team to carry out label-based governance of the bank’s data.

Finally, it is about driving management transformation. More and more silicon-based people have stepped onto their job posts, and more and more OPCs (“one-person companies”) have also played roles in different communities. Industrial Bank has established a Financial Technology Research Institute to lead the bank-wide research and planning work on its artificial intelligence series. In terms of work units, it encourages more employees to innovate, forming innovation studios. This enables cross-department, cross-line, and cross-level allocation and mobilization of resources—so everyone understands AI and uses AI.