Industrial Bank Co.,Ltd. (SSE: 601166) disclosed its 2026 semi-annual report on August 27. The report showed that in the first half of 2026, the bank's total assets reached 11.46 trillion yuan, with operating revenue of 110.177 billion yuan, a year-on-year decrease of 0.25%, with the decline narrowing by 0.81 percentage points compared to the first quarter. Net fee and commission income grew 8.61% year-on-year, and its share of operating revenue rose to 12.89%. The non-performing loan ratio stood at 1.08%, with a provision coverage ratio of 225.67%, keeping asset quality stable. Judging from the interim report, amid a low-interest-rate and low net interest margin environment, the bank's first-half performance revealed notable structural changes: the revenue decline further narrowed, fee income maintained rapid growth, and the asset-liability structure continued to optimize, with credit resources further concentrating on key areas such as industrial finance.
Where things stand
In the first half, the bank's revenue decline narrowed further, with second-quarter single-quarter revenue growing 0.57% year-on-year, turning positive. Net interest income fell 1.29% year-on-year, with the drop narrowing 0.84 percentage points from the first quarter. The net interest margin declined 15 basis points year-on-year, with the decrease narrowing 3 basis points from the first quarter. In an environment where asset-side yields are under pressure, reducing liability costs has become a key lever for stabilizing the interest margin. In the first half, the bank's deposits increased by 298.4 billion yuan from the beginning of the year, with the average deposit payout rate falling 34 basis points year-on-year. Corporate, retail, and interbank payout rates declined by 35, 33, and 28 basis points, respectively. Brokers noted that liability cost improvement was a major factor behind the narrower interest margin decline. A research report from Huatai Securities indicated that the company further adjusted its asset-liability structure in the second quarter, which may ease the interest margin pressure for the full year.
On non-interest income, the bank strengthened collaboration within the group, seizing opportunities from a steadily improving capital market and shifts in client asset allocation structures. Wealth management sales revenue and custody income grew 16% and 11% year-on-year, respectively, driving net fee and commission income up 8.61% in the first half. Fee income's share of operating revenue rose 1.05 percentage points year-on-year to 12.89%. At the same time, amid bond market volatility and a high base effect, other non-interest income reached 23.172 billion yuan in the first half, down 1.93% year-on-year, with the decline narrowing 0.65 percentage points from the first quarter, demonstrating the role of diversified non-interest businesses in smoothing the operating cycle.
Industrial finance underpins loan growth
As of the end of the reporting period, the bank's total assets stood at 11.46 trillion yuan, up 3.31% from the beginning of the year, with both deposits and loans surpassing the 6-trillion-yuan threshold. In the first half, various loans (excluding bills) increased by 257.4 billion yuan from the start of the year, exhibiting a character of stable growth and optimized structure. Since the start of the year, the bank has defined industrial finance as its strategic focus for the next five years, identifying 21 key industries across four major categories based on national policy directions and regional industrial plans. It has advanced the construction of industrial maps and client sandboxes, formulated differentiated credit policies, and further enhanced its capability to serve key industries and client operations. By the end of June, the bank's key industry loan balance reached 2.63 trillion yuan, an increase of 155.2 billion yuan from the beginning of the year, accounting for over 60% of total loan (excluding bills) growth and serving as a major driver of credit expansion. The average deviation of mainstream industries narrowed to 12.72% from the end of last year, improving the alignment of asset allocation with the real economy's structure.
Industrial finance has also driven rapid growth in technology finance and green finance. As of the end of June, the bank's technology finance and green finance loan balances reached 1.24 trillion yuan and 1.21 trillion yuan, respectively, up 12.98% and 9.63% from the beginning of the year, both outpacing overall loan growth and retaining the top position among joint-stock banks. Among these, the combined technology-plus-industry and green-plus-industry loan balances stood at 1.09 trillion yuan and 771.6 billion yuan, respectively.
Asset quality steady, risk classification reinforced
In terms of asset quality, as of the end of June, the bank's non-performing loan ratio was 1.08%, with a provision coverage ratio of 225.67%, keeping core risk indicators broadly stable. In the first half, newly emerged non-performing assets shrank by 3.6 billion yuan year-on-year, and recovery of written-off but retained assets reached 6.1 billion yuan. By segment, risks in key corporate areas showed signs of easing. In the first half, new non-performing loans in corporate banking declined, new non-performing loans in the real estate sector continued to fall, and no new non-performing loans emerged from local government financing platforms. The retail segment, however, still faces certain risk pressures. In the first half, the bank adopted more prudent risk classification criteria for certain credit card clients with negotiated installment plans, increasing new non-performing loans and impairment provisions. This also further substantiated the risk asset classification, proactively exposing potential risks to reduce the buildup of substantive risks down the road. Meanwhile, forward-looking monitoring indicators suggest improving credit card asset quality: the average monthly entry-to-collection amount fell 19.46% year-on-year, and the entry-to-collection ratio dropped 0.5 percentage points year-on-year, easing new overdue pressure. Research from institutions such as Shenwan Hongyuan and CICC suggests that although more prudent risk recognition and provisioning may weigh on short-term profit performance, they help strengthen risk resilience.
Expanding off-balance-sheet operations and accelerating digital transformation
Against the backdrop of a declining interest rate center, the bank has deepened the integrated development of its investment banking, asset management, and wealth management businesses to broaden intermediate income sources. In the first half, its investment banking FPA balance reached 5.19 trillion yuan, up 6.14% from the beginning of the year, with non-financial corporate debt financing instruments maintaining second place in the market. Merger and acquisition financing balances and syndicated loan balances retained first and second place among joint-stock banks, respectively. Additionally, the investment banking business provided 207.053 billion yuan of high-quality assets to the wealth management segment, up 18.25% year-on-year. On the asset management front, as of the end of June, the group's asset management scale reached 3.65 trillion yuan, with equity-linked, index, and cross-border transition products reaching 651.6 billion yuan, up 37% from the start of the year. Public fund custody scale reached 3.19 trillion yuan, up 9% from the end of last year, with the industry's largest increment. At the same time, digital and intelligent transformation has further enhanced operating efficiency. In the first half, the bank advanced its smart banking initiatives centered on agility, experience, and security, with rapid progress in artificial intelligence capabilities. By the end of June, it had built and operated 345 intelligent agents across risk, marketing, customer service, and operations. Through digital operations, the bank deployed over 20,000 marketing strategies in the first half, reaching nearly 600 million customer interactions, effectively strengthening its client base. As of the end of June, corporate client numbers grew 3.41% from the start of the year, with value clients reaching 118,200, up 7.29%. Retail clients reached 117 million, an increase of 1.98 million from the beginning of the year, with dual-gold and private banking clients growing 5.39% and 8.29%, respectively, reflecting sustained progress in client upgrading and tiered operations.
Looking at the interim report, the bank's first-half operating performance displayed clear structural characteristics: the revenue decline narrowed further compared to the first quarter, fee income maintained rapid growth, credit scale grew steadily, and new lending increasingly tilted toward key areas such as industrial finance. Asset quality remained broadly stable, while the bank proactively absorbed some potential risks through more prudent risk classification and provisioning. From this perspective, these changes reflect that, in an environment where interest margins remain under pressure, the bank is accelerating its transformation to build momentum for high-quality development in the next phase. Whether these changes can translate into steady improvement in profitability will still depend on the trajectory of its interest margin, the effectiveness of retail risk management, and the sustainability of fee income growth.
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