Dear investors and analysts, good afternoon. Welcome to the ICBC 2025 Q3 earnings call. I'm Xin Zou from the Strategic Management and Investor Relations Department. On behalf of ICBC, I would like to extend my sincere gratitude to all investors and analysts who have long cared for and supported our bank. Joining us today are Mr. Guan Xueqing , Board Secretary and Chief Business Officer of ICBC, along with heads of relevant departments and institutions. Our directors, Lu Yunjun, Cao Liqun, Dong Yang, Zhong Mantao, Herbert Walter, and Li Weiping, are also attending today's briefing online. Now, I'll give a brief overview of ICBC's key performance indicators for the third quarter of 2025.
Facing a complex and challenging external environment, ICBC has continued to uphold its role as a key pillar of the economy, steadily advancing its five transformations: intelligent risk control, modernized structure, digital driver, diversified operation, and ecosystem development, achieving a dynamic balance between scale, profitability, and risk management. First, profitability stabilized and rebounded. In the first three quarters, ICBC achieved operating income of RMB 611 billion, up 2% year-on-year, with positive quarterly growth in four of the past five quarters, indicating a clear recovery trend. Net profit reached RMB 271.9 billion, up 0.5% year-on-year, turning positive from the decline in the first half of the year, pushing annualized ROA and ROE up to 0.71% and 9.3%, respectively. The cost-to-income ratio stood at 26.55%, maintaining a strong efficiency.
The NIM decreased by 2 basis points from the first half, but the single-quarter decline narrowed compared to Q2, providing stable support for the revenue growth. Second, steady growth and in business scale. As of the end of September, total assets exceeded RMB 52.81 trillion, up 8.2% from the end of last year. Loan issuance and bond investment both remained strong, providing over RMB 4 trillion in incremental funding for the real economy. Among this, customer loans reached RMB 30.45 trillion, up 77.3% by the end of last year. Bond investment totaled RMB 16.01 trillion, up by 16.2%, and customer deposits amounted to RMB 37.3 trillion, up 7.1%. The number of corporate clients exceeded 14 million, and individual customers surpassed 770 million, further solidifying the bank's customer base. Third, risk control remained sound and improving. The NPL ratio stood at 1.33%, down 1 basis point from the end of 2024.
The CAR was 18.85%, and the Provision Coverage Ratio rose 2.3 percentage points to 217.21%. The risk management in key areas and effective mitigation measures have kept asset quality stable. In the future, ICBC will continue to strengthen its development foundation by serving the real economy, safeguarding stability through intelligent risk control, and fostering new momentum through comprehensive transformation. Looking ahead, we will remain committed to delivering sustained and high-quality returns to our investors. Now, we'll open the floor for questions. We'll welcome all investors and analysts to raise questions. Please identify your institution and the name before speaking. Thank you.
Now, the first question.
Thank you for the opportunity for the first question. I'm Ma Kunpeng from China Securities. We have noticed that the operating income and net income have recorded positive growth. Congratulations on that. So what are the measures you have taken, and what is your outlook for the full year and the future several years? Can you maintain such growth? Thank you.
For your question, I'd like to invite the General Manager of Finance and Accounting Department, Mr. Tao Donghong, to answer this question.
In the first three quarters, as Mr. Guan has mentioned, the indicators have progressed noticeably. The net income has been up 0.52%, returning from negative to positive. And net and operating income was up by 1.98%, continuing such positive growth. We have taken several measures to reduce costs and increase income.
First, to stabilize NII fundamentals, which is our main source of income impacted by the recent year's impact. Net interest margin compression is the issue commonly faced by the market. NII has been decreasing in Q3. We have been trying our best to reduce the decrease to stabilize our fundamentals through quantity and pricing balance. Our NII has performed very well. From the data, we can see that the reduction was - 0.7%. Among our comparable peers, such data is the best. In the measures of pricing and volume balance, in volume, we serve the demand in major strategies and new developments and serve the new productive forces to provide the effective credit demand with ample loan growth and debt investments, which increased by RMB 2.04 trillion and RMB 1.97 trillion, respectively. In volume, it has paved the way for the performance of NII.
In pricing, we optimize the asset structure and risk pricing capabilities based on the high-yield asset increase. In deposits, we increase the proportion of term deposits and current deposits so as to contain our interest payment ratio. Benefited from our efforts in both asset and liability sides, our net interest margin was 1.28%, down by only two basis points than H1. The narrowing rate decline. So this has played a very important role to contribute to our operating income. Second is to cultivate new drivers for growth. If we want to achieve positive growth in operating income, we have to enhance our efforts in fee-based income. We have taken a lot of measures and grasped market opportunities in fee-based income. Benefited from the capital markets in enlarging wealth. We have seen high growth in main business, and also we played well in containing the costs.
So the fee-based income recorded RMB 90.9 billion, up by 0.6%. A quarterly improvement throughout the year we expect, and the volume has been leading the peers. And for ICBC fee-based income, if we see specifically, there is no one-time factors. This is what we have achieved through normal achievements and can be tested by the markets in other non-interest income, which has attracted high attention from the markets from this year. The SOE banks have increased remarkably in this regard. We have seen the fluctuations in stock, bond, and forex markets, especially from the Q3. We have seen remarkable changes, which provided opportunities for ICBC in trading. Our financial markets department and capital markets investment department have received these opportunities and recorded a RMB 46.7 billion increase in this regard, up by 45.7%, providing support for operating income increase.
What is worth mentioning is that the diversified operation has achieved remarkable results. The domestic subsidiaries' operating income has been up 34.5%. The contribution was increased from 2.7% last year to 3.6% by 0.9 percentage points, forming a more diversified income structure. Because of this, in stabilizing NII fundamentals, our operating income achieved positive growth. Thirdly, we effectively contained risk costs. We continue to enhance our risk management. We coordinate high-quality developments and high-level security, and we deepen intelligent risk control and play the role in the comprehensive risk management and increase our risk resilience and control capabilities, especially in key regions. Our risk cost has been effectively contained by the end of Q3. NPL ratio of the group was 1.33%, down by one basis point the last year. The asset quality has been increasing. Provision coverage ratio was 217.21%, up by 2.3 percentage points.
Loan loss provision ratio was 2.89%, up by two basis points. So when we effectively contain our costs, we continue to enhance our risk resilience capabilities. Our control of the risk costs can be seen in our operating income, which paved the way for the management of the risks, which has played an important role in balancing the risk and income. So because of the operating income and the net income, these three aspects are the main factors. When we look to the future and to the full year, the Q4 will be the time for 14th Five-Year Plan's end and the beginning of the 15th Five-Year Plan. So the package of financial incremental policies continues to be implemented. You may have noticed that the trade frictions of China and the U.S. are well contained, paving the way for the good external environment for the development.
When the policies are implemented and the vitality is unleashed, we are fully confident of ICBC's high-level development, and we will continue to give full play to the measures and balance the quantity and pricing and cultivate the diversified growth drivers and grasp chances in the volatility of the market and effectively stabilize the non-interest income and net interest income and achieve sustainable growth for the future. We will continue to increase our operating strategies, following our strategies, and promote our sustainable growth and create a solid and impressive annual and future results for investors and create satisfying returns for all of you. Thank you.
Now, we'll take the second question. Please identify yourself.
Thank you for this opportunity. I'm from UBS. My name is Yan May. First, I want to congratulate ICBC for your amazing results, and I want to raise a question about NIM.
You have already mentioned the narrow NIM. So could you share the current pricing for corporate and retail loans? How do you see the NIM trending going forward? When do you expect to see an inflection point? And is there still room for rate cuts? Thank you.
We'll have the asset and liability management department to answer this.
Thank you for your question. On corporate and retail loan pricing, this year, interest rates on newly issued loans continue to decline. The pace of the decrease has narrowed significantly on a quarter-on-quarter basis. From January to September 2025, the average interest rate on newly issued RMB corporate loans fell to 2.7%, with quarter-on-quarter declines of 16 basis points, 4 basis points, and 4 basis points in the first, second, and third quarters, respectively.
The average interest rate on newly issued RMB personal loans was 3.01%, with quarter-on-quarter declines of 29 basis points, 4 basis points, and 2 basis points. Overall, the downward trend in both corporate and retail loan rates has moderated. On NIM trends, overall, NIM remains under downward pressure but has shown signs of stabilization, as you mentioned. In the first three quarters of this year, our NIM stood at 1.28%, down 14 basis points year-on-year, with the rate of decline narrowing by 4 basis points compared with the previous year. We expect the full-year NIM to remain around 1.26%. The main considerations are as follows. First, the impact of monetary policy adjustment on NIM is manageable. In May, the 10 basis points cut in the LPR was accompanied by a coordinated reduction in deposit rates, effectively mitigating the downward pressure on NIM. Second, changes in asset supply and demand have improved the pricing rationality.
In the first three quarters, our credit resources were precisely allocated to key areas under the five priorities. The average rate on newly issued RMB loans was 2.78%, a relatively strong performance among our peers. Third, refined liability cost management helped narrow the NIM decline. Deposit volume and pricing remained well aligned, with the average interest rate on RMB deposits at 1.32%, down 30 basis points from the end of last year. Fourth, optimized balance sheet structure is enhancing medium to long-term profitability. The share of bond investments in our total interest-earning assets has increased from 22.4% in Q4 2019 to 28.4% currently, up by 6 percentage points. This unrealized gains in our own balance sheet RMB OCI and AFS bond portfolios can withstand a 7 basis points upward interest rate reversal, helping to strengthen medium and long-term profitability.
On the NIM inflection point, we believe that the NIM is likely to stabilize in the coming one or two years, and the NIM will gradually reach an inflection point. First, regulators have recognized the continuous NIM compression, and the People's Bank of China has recently emphasized the need to balance supporting the real economy with maintaining the financial sector's health. We have already seen marginal improvement with a smaller NIM decline so far this year. As deposit repricing gradually completes, liability costs are expected to decline further. Our medium to long-term profitability remains solid. We continue to optimize asset allocation, focus on meeting genuine financial need, and proactively increase bond investment to build resilience and long-term earning capacity in a low-rate environment.
On room for further rate cuts, externally, the U.S. Federal Reserve cuts its benchmark rate by 25 basis points in September to 4%-4.25% range, in line with the market expectation. The European Central Bank has kept the policy rates unchanged for now, but the market expects a rate cut in December. This external development provides more room for monetary policy adjustments in China. Domestically, given that deposit and lending rates are already at relatively low levels, whether further cuts will be implemented will ultimately depend on overall macroeconomic conditions. That's all my answer. Thank you.
Thank you for your answer.
The third question.
I'm Ni Jun from Guangfa Securities. My question concerns non-interest income and other non-interest income. In the first three quarters, we have seen fee-based income turn positive. What are the major drivers? And what is the outlook for future trends?
We also noticed that, as you have mentioned, we have seen volatilities in bond markets. What's your outlook for your scale of bond investments and strategies?
You have raised two questions. The first question is about fee-based income. I'll invite Mr. Tao Donghong to answer this question. And for the second question of bond investment, I'll invite Mr. Zheng Fupeng from the Financial Markets Department.
Our fee-based income turned positive in the first three quarters, which is not easy, I have mentioned just now. If we see by breakdown, achieving positive growth is attributable to the diversified support in income side and the control in the expenditure side. So that the fee-based income has achieved positive growth. First, the wealth management business has achieved remarkable results. We grasp chances. The corporate wealth management, personal wealth management, and private banking-related income has been up by 25% and 3%.
Pension business-related income has increased by 43%. So in this sector, it has contributed a lot to the non-interest income. Second, we increased the effectiveness of the fundamental services with high growth by optimizing our efficiency of services and experience of customer. The third-party payments achieved QoQ growth of 0.7%. Bank card business increased by 0.8%. These are the fundamentals of the non-interest income providing basis for the fee-based income. Third, in expenditure side, the expenses are effectively contained. In the first three quarters, fee-based expenses were down by 17%. The main reason is that merchant acquiring and business documentation has seen reduced costs. All the three aspects contributed to the year-on-year growth in fee-based income. By QoQ, we have seen that the fee-based income has been increasing.
Looking to the future, faced with the policy environment of interest concession, we are unleashing the new vitality of income drivers. In three aspects, we will continue our efforts to support fee-based income. First, wealth management. Now we see in this aspect, the related business has contributed a great potential in terms of pension finance and opportunities in capital markets and create new drivers in wealth management, hoping that they can provide more returns in fee-based income. Second, continue to enhance the advantages of fundamental products. We will continue to optimize our payment settlement system and cross-border services and the coverage of our products and increase the resilience in this regard and enlarge our fundamentals. Third, deepen the industrial finance. We will focus on major strategies and modern industrial system and innovate SCF.
We are confident to leverage our advantages in customer basis, our network, and comprehensive services in fintech and to achieve high-quality and sustainable development in fee-based income. Thank you.
Thank you for your question. In bond investment and income, in Q3, faced with interest rate upside trend, we analyze and grab chances in a timely and proper manner. We adjusted pace and scale by diversifying strategies. We proactively increased the comprehensive yield of bond investment. Looking to the future, the market interest rate may still fluctuate within a range. On the one hand, the central bank will still sustain ample liquidity and the demand of allocation from institutions. This will support interest rates and constrain its upside space. On the other hand, Sino-U.S. relations and the stronger stock markets may still bring impact to the fluctuation of the markets.
So against such backdrop, we will adhere to the principle of being stable, flexible, and forward-looking. First, scientifically managing pace and scale. We will continuously and closely track changes in the macroeconomy, policy signals, and market sentiment, dynamically optimizing the overall scale, variety structure, and maturity distribution of bond investment to balance current returns with medium to long-term interest rate risks. Second, optimizing allocation and trading strategies. We will deepen fine-grain research on various bond types to optimize the allocation structure. We will flexibly employ strategies such as duration-based trading to capture market opportunities. Third, balancing immediate and long-term considerations. We will always prioritize asset safety and income stability. While pursuing reasonable returns, we will place high importance on the long-term healthy development and risk resilience of the investment portfolio.
Facing a complex and volatile market environment, our bank's bond investment business will continuously deepen market research, strengthen fine-grained management, scientifically manage investment pace and risk exposure, and flexibly utilize diversified strategies to enhance comprehensive returns. Under the premise of effective risk control, we will strive to achieve stable and sustainable contributions from bond investment to the bank's overall operating income and mitigate the short-term impact of market fluctuations on financial performance. Specific execution will be dynamically adjusted and optimized based on policy guidance, market evaluation, and the bank's overall operational objectives.
Thank you.
Now we'll take the fourth question.
Thank you for this opportunity. I'm Winnie Wu from BofA Securities. We've seen the large growth in the corporate loan.
I want to know whether this suggests a lack of effective credit demand from the real economy and also how did ICBC's cope in retail loan insurance performance in the first three quarters. In the third quarter, this trend will continue in the third quarter.
Thank you for your question. First, I'll brief you on the credit loan insurance in the first three quarters. Overall, we did a great job. It mainly attributes to the upward economic expectation in China. The aggregated term, RMB loan maintained a solid growth momentum driven primarily by corporate lending, while retail loans also achieved a year-on-year increase. At the end of September, RMB loan balance at domestic branches reached RMB 28.7 trillion, up 8.5% year-on-year, 1.9 percentage points higher than the average for all financial institutions. RMB loans increased by more than RMB 2 trillion in total.
Of this, corporate loans rose by RMB 1.9 trillion, representing an 11.3% year-on-year rise, 2.9 percentage points higher than the system average. Personal loans increased by RMB 175.7 billion, up RMB 28.9 billion year-on-year with a 2.8% growth rate. In terms of loan allocation, manufacturing stood out as a key factor. We have continued to strengthen credit support for key sectors such as technology innovation and SMEs. In the first three quarters, tech loans increased by RMB 1.25 trillion. Inclusive finance loans increased by RMB 596.9 billion. Loans to strategic emerging industries, Little Giant specialized enterprises, and the core digital economy all grew by over 20%. Notably, manufacturing loan rose by RMB 1.1 trillion from the end of last year, accounting for 54% of total new loans, an increase of RMB 450 billion year-on-year.
Structurally, while the share of short-term financing has risen, the trend is consistent with the broader macro environment. There are two reasons. At a macro level, fixed asset investment has been weaker than expected, leading to a higher proportion of short-term loans and DAO financing across the economy. At a micro level, enterprises' willingness to expand reproduction has weakened. While the demand for short-term working capital remains strong, we have actively adapted to these shifts in economic activity and clients' needs, providing tailored finance products and services accordingly. It is worth noting that, unlike rate discounting, direct-to-bill discounting provides direct funding to corporate clients, serving as an effective means for financial institutions to support the real economy. In the first three quarters, direct-to-bill discounting accounted for 92.5% of our new bill financing, providing loan support for SMEs and manufacturing firms.
Second, on credit demand, although we are facing temporary weakness in both corporate and household loans, I believe it is expected to gradually recover as macro policies take effect. Both corporate and retail credit demand have shown short-term softness. However, as macro policies are implemented, credit appetite is likely to improve progressively. On the retail side, fiscal interest rate subsidy programs for consumption and business loans will help unlock retail credit potential. On the corporate side, policies aimed at curbing rat race-like competition and resolving overdue receivables will likely stimulate credit demands among high-quality enterprises. Going forward, we will proactively seize policy opportunities, strengthen alignment with the needs of the real economy, and further consolidate the foundation for sustainable credit growth. We also mentioned the reverse repos. This business is positioned primarily to balance liquidity needs, and its scale fluctuates or is cyclical.
The third quarter, reverse repo operations have remained stable, with both end-of-period and average daily balance declining from the end-of-2024 levels. Thank you for your question.
Thank you for your answer.
The fifth question.
Thank you. I'm Wang Jianhua from CMS Securities. My question concerns asset quality. How do you see the asset quality of this year for ICBC in corporate banking? What are the impacts of tariff policies, and what is the progress of debt resolution participation in retail banking? What are the reasons for the high NPL ratio, and how do you view the future trends?
Your question consists of two parts. First, about corporate banking, I'll invite credit and investment management to answer. For the second part, I'll invite the personal banking department to answer as well.
In the first three quarters, the core indicators of credit asset quality remained stable with positive trends.
The NPL ratio was 1.33%, down by one basis point. The NPL ratio for domestic corporate loans was 1.35%, down by 15 basis points, reflecting further enhanced risk resilience. Key sectors, including manufacturing, wholesale, and retail, energy and water conservancy, achieved two reductions in both NPL and NPL ratios. New NPLs were primarily concentrated in the real estate sector. The impact of U.S.-China trade policies and tariff negotiations on our corporate borrowers has been limited. Affected clients were mainly those with weak industrial chain resilience and thin profit margins. Borrowers engaged in U.S. export businesses account for a low proportion of our corporate loan portfolio, and their resilience on the U.S. market is generally limited. We have made the stress tests and analysis for the tariff policies on the asset quality of corporate loans. The impacts will be limited.
ICBC conducts financial support for debt resolution work prudently and orderly in accordance with market orientation and rule of law principles. We collaborate with banking peers to strengthen coordination, secure repayment sources, and enhance credit guarantees to contain risks. On the other hand, we use diversified approaches, including debt restructuring, asset revitalization, to resolve risks. We support platform companies with fundamentally sound operations, good repayment willingness, but temporary liquidity problems. We have adjusted loan tenors and optimized repayment structures to alleviate concentrated maturities. Our exposure to such risks, such as loans, is minimal, and rates are already at reasonable levels, with limited room for reduction, ensuring a manageable impact on our net interest margin. The interest rate reduction primarily targets high-cost bonds and non-standard financing.
In recent years, the personal finance asset quality has been facing pressures with rising NPL ratio.
The trend is in line with peers and maintaining a reasonable range comparable to other banks, so we continue to strengthen three gateways. First, entry gateway. Rigorous pre-lending controls via data modeling and feature attribution analysis across dimensions to dynamically optimize rules and eligibility criteria in terms of products, clients, regions, and strategies. Second, monitoring gateway. Advanced digital collection systems integrated for retail and inclusive finance loans, deploying multi-channel collection strategies to increase the effectiveness, and we also enhance data infrastructure with a wire table format for personal credit information, covering fundamental data risk profile, behavioral patterns, and value metrics to enable data-driven decision-making. Third, in exit gateway, proactive NPL management and disposal, emphasis on cash recovery during loan servicing. Write-offs mainly target legacy issues and aged NPLs. Pilot programs include NPL securitization and bulk transfers of retail NPLs to achieve timely risk clearance.
So in the future, we will leverage big data algorithms and AI to build end-to-end risk control models, covering onboarding, credits, approval, pricing, post-lending, and collection through data model-based risk control plus expert loan governance. We will shift from manual controls to smart controls, achieving full progress in smart risk management. This will continuously elevate intelligent risk control capabilities and solidify our end-to-end personal loan risk prevention system. Now, we are undergoing the important transformation time for personal loans. In the future, we will continue to enhance our products in its innovation and risk control so as to establish the system of housing and non-housing personal loans and meet the demands of personal finance and create a pattern of housing and non-housing personal loans and create a high-quality development in personal finance. Thank you.
I'll take the next question.
Thank you for this opportunity. I'm analyst Xu Ran from Morgan Stanley.
I have questions about inclusive loans because now in the market, we're very concerned about the risk in this sector, so what is the current situation of inclusive loan insurance and risk control? Given the relatively credit demand, what are the future development directions and the risk outlook for inclusive finance? We can see that in the 15th Five-Year Plan, we want to expand the inclusive finance business, and that's the reason why I want to know the future development direction.
Thank you for your support for the inclusive finance on loan insurance. ICBC has taken the inclusive and the retail loans as the important aspects of our transformation. By the end of the third quarter, the balance of inclusive loans reached RMB 3.5 trillion, an increase of nearly RMB 600 billion from the end of last year, representing over 20% growth and a further rise in the share of total loans.
Market expansion through coordinated SME mechanism, leveraging coordinating system among the head office, branches, tier two branches, and outlets. We actively participate in local financing coordination task forces and launched a special campaign. We visited over 3 million SMEs and issued RMB 2.8 trillion in loans, effectively driving the bank's inclusive finance growth. Second, we will accelerate new client acquisition in key sectors. We rolled out action plans such as support private enterprises, implement mechanism, and empower business and agriculture. We optimize our inclusive finance layout in technology innovation, advanced manufacturing, trade and service rule revitalization, and small-scale foreign trade sectors, and proactively expanding into new markets and clients. In the first three quarters, we added 84,000 first-time borrowers, 11,000 more than the same period last year. Inclusive agricultural loan increased by RMB 230 billion from the end of last year, strongly supporting overall credit growth.
Third, we will work on our loan products to enhance adaptability. We'll accelerate the upgrade of three major product lines: credit-based, collateral-based, and digital supply chain loans. Depend on the regional innovation mechanism for mechanism products and enrich our Inclusive Finance portfolio and application scenarios. By the end of Q3, digital Inclusive Finance products accounted for 90% of both balance and incremental Inclusive Finance loans, while the region-specific products also maintained rapid growth. Accessibility and convenience of Inclusive Finance services has been further enhanced. We will enhance client stickiness through credit plus services. We have improved our credit plus integrity financial service system that combines lending as a core with diversified supporting system. Through platforms such as Global Matchmaking Hub and Agri Matchmaking Platform, we help enterprises to identify new business opportunities and grow stronger.
In collaboration with All China Federation of Supply and Marketing Cooperatives, we'll advance the supply and the marketing plus finance initiative and further strengthen the market influence. On risk management this year, some SMEs have faced operational challenges, and across the industry, the asset quality of inclusive loans has shown a modest rebound. ICBC has consistently placed risk management at the forefront, adhering to the intelligent control plus human oversight approach to build a comprehensive, proactive risk prevention system. At the end of September, our NPL ratio for inclusive loans remained better than the industry average, and overall asset quality remained generally stable. We have a stricter credit interim management. We have optimized the key products and credit models, improved model review and decision-making mechanism, enhancing multi-dimensional data cross validation and strengthened coordination between online and offline risk control.
We enhanced ongoing risk monitoring by improving coordination among front, middle, and back office. We have strengthened refined risk management, reinforcing anti-fraud and risk detection measures, crackdowns on illegal intermediaries, and upgraded our intelligent risk control system across key digital processes. We've accelerated the resolution of non-performing assets. We have broadened disposal channels such as the asset securitization and stepped-up cash recovery of NPLs, consolidating the foundation for the sustainable development of inclusive finance, and on future outlook, going forward, we will continue to follow the principle of ensuring volume-improving quality, stabilizing price, and optimizing structure. We will step up efforts to support the high-quality development. The first is that we will achieve the asset supply, and the second is we will have a more refined product. We will make them online smarter, and we will have an ecosystem.
We will have tailor-made financial products for our clients, improving the efficiency of our business. And thirdly, we will have this comprehensive business operation mechanism. We will work on the inclusive finance and as a leading bank. Thank you.
Thank you for your answer.
The next question.
Thank you. I'm Shen Jun from Great Wall Securities. My question is related to deposits. We have seen that this year, the capital market has great changes. So what's the latest development of deposit competition against such backdrop? Has the trend of deposit terminization eased? Has ICBC observed deposits migrating to the WMP or the stock market? Thank you.
The first question regarding deposit will be answered by asset and liability department. The second question of deposit migration will be answered by personal banking department.
Thank you for your question about deposit terminization.
Before answering the question, I'd like to introduce to you this year's ICBC's deposit development. Deposit growth this year demonstrated a favorable overall improvement in volume and cost dynamics. In volume, by the end of September, the balance of domestic RMB deposits reached RMB 38.5 trillion, up by 8.5%, 0.5 percentage points higher than the industry average. In the first three quarters, domestic RMB deposits increased by RMB 2.8 trillion, a year-on-year growth of RMB 840 billion. By segment, savings deposits rose by RMB 1.6 trillion, up RMB 350 billion year-on-year. Corporate deposits grew by RMB 880 billion, up by RMB 670 billion year-on-year. On pricing, ICBC maintained its comparative cost advantage. By the end of September, the interest payment rate was 1.32%, down 35 basis points, the lowest rate and deepest decline among China's big four banks. As you have noticed, the deposit term-inization has eased with sequential declines narrowing gradually in Q2 and Q3.
The quarter-on-quarter decline. The average daily share of general demand deposits was 0.6 percentage points and 0.2 percentage points respectively, conducive to controlling interest payment rates for banks. As for the trend of deposits shifting to non-bank institutions, we think it remains under observation. Now, the market liquidity is loose, and capital market transactions are active. We have seen that some deposits have shifted to other markets, but no sustained trend has materialized. For example, in September, non-bank deposits across all financial institutions fell by RMB 1.1 trillion, while household deposits rose by RMB 760 billion year-on-year. The trend is still fluctuating. For WMP-related questions, I'll invite my colleagues from the personal finance department to answer.
I am Zeng Zhaoxu from the personal finance department of ICBC. I'll make some supplements.
In savings deposits, in the first three quarters, the savings deposits continued the rapid growth in recent several years. Mr. Fu has introduced the data just now in savings deposits from quarter on quarter. The savings deposit was up by over RMB 300 billion by the end of September compared with the data of half one. So there is no remarkable change over our expectation. In terms of deposit terminization, I'd like to make some supplements. From the data, we have seen that such trend is not that remarkable or remains to be seen in the future. In interest payment ratio, the RMB interest payment ratio was down by 20 basis points, just now mentioned by Mr. Fu, and the decrease is even larger for demand deposits. The reason is that against the backdrop of interest rate decline, the scale of ICBC has brought the decline of interest payment rate.
What is also worth mentioning is that the current deposit interest rate decline is even larger year-on-year. It is attributable to ICBC's implementation of five transformation strategy in terms of personal finance. We have seen fruitful results. Our customer structure increments and the scenario expansion among others in the first three quarters have achieved remarkable progress. Thirdly, in deposit migration, from our general observation, my view is that it is not remarkable, but it still remains to be seen in the future. It can be reflected in the growth of savings deposits. The growth of savings deposits was over 9% this year. Having said that, we have seen that the wealth management product scale by the end of September, the daily average balance was RMB 2.16 trillion, up by almost RMB 150 billion than the end of last year, up by 7.4%. In third-party custody, the growth was 16.4%.
Because the scale is not that large, the balance was over RMB 600 billion, up by more than RMB 80 billion. From these data, we can see that as the savings deposits are growing fast, the WMP and the third-party custody balance are also increasing fast. There is no data remarkably to support deposit migration, but we will continue our observation towards that trend and communicate with the market.
Thank you.
Next question. Due to the technical issue, we cannot hear from the questioner now. But we've received her question. This question comes from Ms. Lilivi from the JP Morgan. And her question is, how was the quality of ICBC's corporate real estate loans in Q3? Can asset quality remain stable in the future given the significant decline in housing prices this year? How are mortgage assets performing, and what is the outlook?
There are two parts in this question.
As we mentioned before, in the corporate real estate sectors, this sector has been under pressure. In the third quarter, the overall asset quality of ICBC's corporate real estate loan portfolio remained stable. From its peak in June 2023, the real estate loan portfolio has shown a steady downward trend. In the future, I would like to talk about this trend from several perspectives. In terms of the market, we are seeing the transformation from the old sector to the new one. We've seen a narrowing decline of housing prices. We believe the impact of the sector on the real estate loans will also be narrowed in the future. At a structural level, ICBC continues to build a diversified, balanced, and well-distributed investment and financing portfolios. Corporate real estate loans totaling RMB 889 billion, accounting for less than 3% of the bank's total loan portfolio.
The bank also maintained adequate loan loss provisions to fully cover the potential risks. In terms of asset selection, ICBC adheres to the region, client, projects integrated standards. Loans are primarily concentrated in key cities with strong population inflows and solid industrial bases. The bank focuses on high-quality projects in core areas, and loans are granted strictly under certain standards such as sufficient project value, normal developer operations, and proper management of closed-loop fund flows. In addition, the mitigating effect of collateral remains sound, and recovery rates for distressed exposures are highly high. I want to talk about the personal mortgage loan by the end of Q3. At the end of the third quarter, the NPL ratio of ICBC personal housing loans in January aligned with industrial trends. We are at this leading position, normalizing for write-offs and securitization disposal.
We continue to advance the construction and application of the digital risk control system. Monitoring models have been developed for risk indicators such as collateral quality, excessive leverage, hidden borrower linkage. This model triggers tiered risk control measures and covers the entire loan life cycle, pre-lending, on- lending , post-lending, and this enables real-time or near-real-time health monitoring, perpetuative risk management, and precise resource allocation. With the real estate market further stabilizing and the policy effect gradually taking hold, some collateral valuations have declined, and the bank continues to closely track changes in property values. As macroeconomic stabilization policies take effect and policies to boost domestic demand and consumption continue to be implemented, ICBC says the deterioration trend of the mortgage asset quality is to moderate with no sign of accelerated worsening.
The last question.
Thank you very much for giving me the opportunity to raise questions.
I'm Xiao Feifei from CITIC Securities. My question is about internationalization in the low-interest environment. People are discussing about expanding non-interest income and advancing internationalization. So could you outline ICBC's direction, strategy, and advantage of internationalization?
I'll invite Ms. Wang Shun from the International Banking Department.
ICBC's internationalization has evolved over three decades. We align with global and going global strategy. ICBC has consistently anchored its global expansion to national strategies. We ensure overseas network deployment, product development, and strategic focus serve national priorities while enhancing global capabilities. Today, as China integrates more deeply into the global economy and accelerates the dual circulation, ICBC, as a primary cross-border financial service provider, will leverage its strengths to bridge the dual circulation through financing innovation, driving high-quality development. For your question about the strategy of internationalization, now we are focusing on a 15th Five-Year Plan.
We align closely with the national strategy to improve our internationalization and improve our service landscape. And we also adhere to compliance and safeguard the security. And also, we promote transformation in promoting internationalization. We will increase the landscape of RMB business and increase the value creation of and strengthen clearing settlement, payment, custody. And also, we will connect internal and external environments and provide services. And we will provide financial product lines to the international market and use the dividend of the national strategies to respond quickly to customers. About our advantage, our colleagues have mentioned we have a strong customer base, diversified business structure, and strong innovation and competitiveness. Our network has covered 69 countries and regions by becoming the shareholder of Standard Bank Group. We have covered 20 African countries. We have established 250 subsidiaries in Belt and Road countries.
And we also have 12 RMB clearing banks. So we have become a Chinese bank that serves the domestic circulation and the international circulation. And also, we are the first to establish the integrated global system so as to provide timely funds for the global customers. Also, we can provide cross-border funds in terms of custody settlement, forex transaction, and the comprehensive financial services. And also, we have a great international reputation. We are the chairperson of the BRICS countries. We are also the chairperson of the China-Europe alliance and the Belt and Road. And we are also the partner of B&R, which has covered 77 countries and regions. And in the eighth CIIE, we are the comprehensive partner in these activities. So in serving these activities, we provide a bridge for the partners. Thank you for your question.
Thank you for Ms. Wang's answer.
Dear investors and analysts, for the interest of time, this is the end of the Q&A session. Today, with Board Secretary Mr. Guan , we have responded to your questions candidly. And thank you for your professional and insightful questions. Thank you for the remarkable answers. In the future, in our strategy and operation, we will absorb your suggestions and promote our high-quality developments so as to submit a solid annual answer sheet to all the investors. We will continue to hold reverse roadshow and seminar IR activities. If you have other questions, you are welcome to communicate with our IR team. Thank you for your participation. Best wishes for. [Foreign language] The meeting has ended.