At its 2026 interim results briefing held on August 28, Industrial Bank Co., Ltd. Chief Risk Officer Lai Furong highlighted that current asset quality strain in the retail sector represents a shared challenge across the banking industry. Mirroring the broader environment, the bank's retail lending and credit card businesses both recorded a year-on-year uptick in newly emerged non-performing loans during the first half.
Regarding credit cards, Lai explained that the increase in new NPLs stemmed primarily from the adoption of more prudent risk classification standards, which has facilitated a more thorough exposure of potential risks. Looking ahead to the second half, he anticipates a decline in the volume of newly generated credit card NPLs relative to the first half; however, on a full-year basis, both new NPL formations and the NPL ratio for credit cards are expected to rise somewhat compared to last year.
Concerning retail loans, Lai noted that while new NPLs increased year-on-year in the first half, the overall collateral protection remains adequate and risk mitigation capacity is robust. Consumer loan NPL generation has stayed relatively stable. Consequently, the entire retail loan portfolio continues to operate within a risk release cycle, and the second half is still likely to see modest year-on-year growth pressure in new NPLs. Lai further emphasized that Industrial Bank Co., Ltd. retail lending is fundamentally anchored by mortgage-backed assets with strong loan-to-value ratios, keeping overall risk exposure well contained.
Comments