ICBC (SEHK:1398) Net Interest Margin Compression Tests Bullish Profitability Narrative

Simply Wall St.03-29

Industrial and Commercial Bank of China (SEHK:1398) has wrapped up FY 2025 with fourth quarter revenue of CNY 183.6b and basic EPS of CNY 0.27, while trailing twelve month revenue stands at CNY 668.4b...

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Over recent periods, revenue has moved from CNY 190.2b in Q4 2024 to CNY 183.6b in Q4 2025, and quarterly EPS has shifted from CNY 0.27 in Q3 2025 to CNY 0.27 in Q4 2025. 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Over recent periods, revenue has moved from CNY 190.2b in Q4 2024 to CNY 183.6b in Q4 2025, and quarterly EPS has shifted from CNY 0.27 in Q3 2025 to CNY 0.27 in Q4 2025. This gives a clear sense of how the top and bottom lines are tracking into this latest print. With these results set against high reported net margins and a well established income profile, the focus now turns to how sustainably the bank is converting its large loan book into earnings. See our full analysis for Industrial and Commercial Bank of China. With the headline numbers on the table, the next step is to see how this earnings story lines up with the widely followed narratives around growth, income, and risk for Industrial and Commercial Bank of China. See what the community is saying about Industrial and Commercial Bank of China SEHK:1398 Earnings & Revenue History as at Mar 2026 AdvertisementHigh Margins With 1.28% Net Interest Margin Pressure  On a trailing 12 month basis, ICBC is reporting a 53.4% net profit margin with a 1.28% net interest margin and a 29.48% cost to income ratio. This shows strong overall profitability while the core lending spread sits at a relatively low level. Bulls argue that digital transformation and green finance can support higher quality earnings, and the current numbers partly back that up but also show where pressure sits:\n     The high 53.4% margin and CNY 356.8b of trailing net income line up with the bullish view that profitability is resilient, even as the model assumes margins could compress from about 52% to around 40% over time. At the same time, the 1.28% net interest margin is below the 1.42% level seen in the prior year period. This fits with management commentary around margin pressure and challenges the idea that profitability improvements are straightforward for the bullish side.    Over the last year, high headline margins and a low 1.28% net interest margin give bulls and skeptics very different talking points about how much earnings resilience is already priced in. 🐂 Industrial and Commercial Bank of China Bull Case Loan Book Growth With Around CNY 399b Non Performing Loans  Total loans on a trailing basis are reported at CNY 30.5b and non performing loans at about CNY 399.0b, compared with CNY 28.4b of loans and CNY 379.5b of non performing loans in Q4 2024. This indicates that credit exposure and problem loans have grown together. Bears focus on this combination of a larger loan book and sizeable non performing balances, and the current data gives them clear support alongside some pushback:\n     Cautious investors highlight that non performing loans have moved from about CNY 379.5b to CNY 399.0b over the last reported year. This sits alongside commentary on exposure to real estate and policy driven lending that could keep credit costs important to watch. On the other hand, trailing net income of CNY 356.8b and references to strong provision coverage in the broader narrative indicate that, so far, this larger pool of non performing loans has not prevented ICBC from maintaining very high reported profitability.    Rising loan balances and roughly CNY 399b of non performing loans keep credit quality at the center of the cautious view on ICBC. 🐻 Industrial and Commercial Bank of China Bear Case Mixed Growth Versus Market With 5.31% Dividend Yield  Earnings have grown about 2% per year over five years and 1.7% over the last year, with forecast earnings growth of roughly 4.04% a year and forecast revenue growth of about 11.4% a year, while the stock offers a 5.31% dividend yield. Consensus narrative talks about steady but not rapid growth, and the figures here both support that and show why views differ:\n     The combination of 2% multi year earnings growth and a 1.7% recent growth rate sits well below the Hong Kong market forecast of 12.1% earnings growth. This aligns with the idea that ICBC is more of an income and stability story than a high growth name. At the same time, the 11.4% revenue growth forecast and 5.31% yield, alongside a P/E of 5.8x roughly in line with the banks industry, explain why some investors focus on the income stream and valuation gap rather than on growth comparisons alone.    Next Steps To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Industrial and Commercial Bank of China on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves. After weighing the different narratives on growth, income, and credit risk, the next move is to test the numbers yourself and decide how they stack up. To see the optimism already reflected in the data, review the 4 key rewards Explore Alternatives ICBC combines high margins with a low 1.28% net interest margin, rising non performing loans around CNY 399.0b, and earnings growth that trails broader market expectations. If you want bank style income but feel uneasy about credit quality and slower growth, compare this profile against companies in the solid balance sheet and fundamentals stocks screener (384 results) to see stronger balance sheets today.  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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