Dear investors, good afternoon. Welcome to the ICBC 2026 Q3 earnings call. I am Dong Jianjun. Joining us today is Board Secretary, Mr. Tian Fenglin, and the heads of our head office departments, corporate banking, personal banking, inclusive finance, credit management, finance asset and liability management, tech, financial markets, investment banking, and personal loans. They will be interacting with you online. Our board directors, Dong Yang, Zhong Mantao, Liu Fang, Herbert Walter, Chen Guanting, Li Weiping, and Li Jinhong also participate online. Let me start with a brief overview of our first three quarters performance. The results were published on our website. Overall, ICBC delivered a high-quality first three quarters marked by volume growth, better quality, and improved efficiency. Our key indicators showed a QoQ improvement trend. First, profitability, resilience, and drivers. In the first three quarters, group operating income grew by 9.2% YoY. Net profit grew by 6% YoY.
NIM was 1.29%, up 1 basis point from last year, driving a 9.6% YoY increase in net interest income. Non-interest income grew 7.7% YoY. Second, the volume and structure of assets and liabilities. Total assets reached over CNY 57 trillion, maintaining our position as the largest bank globally. Onshore RMB loans stood at over CNY 30 trillion, up CNY 1.64 trillion, or 5.7%. Meanwhile, we increased our bond holding. The RMB bond balance reached over CNY 15 trillion, up by CNY 1.95 trillion, or 13.9%. For liability, customer deposits increased by CNY 2.44 trillion to over CNY 39 trillion, up 6.5%. Our funding base is more solid than ever. Third, the risk bottom line and asset quality. The NPL ratio was 1.29%, down 2 basis points from last year. Provision remain ample and prudent, asset quality stayed stable, and our risk absorption capacity strengthened further.
The disclosed data show the quarter three data and also the data of first three quarters. That is a brief of our performance. Now, I will hand over the floor to you. We will move to the Q&A session. Please identify yourself before raising questions. Thank you. The first question.
Thank you for giving me the chance to raise the first question. I am May Yan from UBS Securities. My question concerns net interest margin. With a rising share of direct financing and changing credit demand structure against the backdrop of shifting social financing composition, how do you see NIM trending this year and next? What measures will you take to stabilize and protect net interest income? Also congratulate you as the largest bank on the robust results you have achieved. Thank you.
I will invite the Asset and Liability Management Department to answer this question.
The first three quarters, total social finance increased by CNY 27.5 trillion. New bonds and stock financing accounted for 49.5%, about 7 percentage points higher than the share of new loans. This shift from indirect to direct financing is also reflected on our balance sheet. Our bonds investment average balance grew 18.8% from the beginning of this year, while average loan balance grew only 6.2%. This structural change is becoming a new variable affecting NIM. But thanks to lower liability costs, ICBC margin has shown signs of stabilization. The first three quarters NIM was 1.29%, up 1 basis point from last year and flat with the interim. For this and next year, our view is if policy rates remain stable, our margin is expected to stable and find a bottom this year, with slightly narrowing pressure next year. There are three key factors.
First, liability cost improvement has supported margin stabilization, which, however, was gradually fading. Since this year, ICBC has fully implemented the interest rate self-discipline initiative, applying refined management to maturing deposits. The liability interest expense ratio fell 20 basis points from the beginning of the year, providing strong support for stable margin this year. We are also aware that as the volume of high-rate time deposits maturing gradually declines, the temporary benefits from cost improvements is already weakening. The positive contribution to next year margin is expected to diminish. Second, downward pressure on asset yields has eased, but will still drag on margin in the first three quarters. Our loan repricing was basically completed, and new loans rates have stabilized, driving asset yields to decline 19 basis points less YoY, easing downward pressure on NIM this year. Looking ahead, the shift in social financing structure is a long-term trend.
The share of bond investments with longer repricing cycles will continue to rise, and asset yields will face continued downward pressure next year. Third, forex and overseas operations present both opportunities and challenges. Major developed economies are in a monetary tightening cycle, transmitting spillover effects to global markets through interest rates, exchange rates, and cross-border capital flows. The stability of our forex and the overseas operation is under test. ICBC liability side interest rate sensitivity is higher than the asset side. This structural feature will increase NIM management pressure. In the future, we will work to reduce the volatility of net interest income growth and fully leverage its role as a foundation for stabilizing revenue and profit.
First, we will continue to strengthen liability cost management with a diversified liability layout, strictly implementing the deposit self-discipline initiative, managing high-rate deposit rollover, and expanding low-cost funding through custody, settle, and other businesses to drive down interest expense. Second, we will well manage asset quality. We will optimize loan allocation, increase resource deployment in key areas, monitor risks in retail segments such as credit cards and personal business loans, and use intelligent risk control to safeguard asset quality and minimize yield losses. Third, we will firmly guard the interest rate risk bottom line. We will strengthen portfolio management of assets and liability scales, rates, maturities, and structure, keep rate and duration gap within reasonable range, guard against shocks from directional rate changes, and stabilize net interest income volatility. Thank you.
Thank you. Now, the second question.
First, I want to thank the bank for giving me this opportunity. I am Mr. Ni from Guangfa Securities. I want to congratulate that you have achieved very good Q3 results. My question is, under the overarching guidance of decelerating growth while enhancing quality in lending, will ICBC's bond investment growth continue to outpace credit growth going forward? How much pressure does the EVE change indicator face, and how should we expect the trajectory of bond investment yields?
I will ask to invite the Asset and Liability Department and Global Market Department to answer the question.
First, I want to thank you for paying very close attention to our bond investment. Since 2024, our bank's bond investment has grown in a rapid way, which is the result of multiple factors.
First, this is the objective manifestation of evolving structure of aggregated social financing and drive towards a higher quality and greater efficiency in lending. On the credit side, the focus has been shifted from sheer volume and speed to structure and quality. The resources have been channeled into sectors as sci-tech innovation, green development, and advanced manufacturing. Demand has decelerated in traditional high credit intensity sectors, and loan growth has naturally decelerated. The share of direct financing in the economic continues to rise, and bonds has become an important channel for credit creation. Second, this is also a close tie to the fiscal policy. In recent years, the scale of government bond issuance has increased, and the associated demand for bond allocation has risen, which is another important reason for the acceleration in bond investment growth.
Looking ahead, whether bond investments growth can sustainably outpace credit growth depends on multiple factors, three factors. First, the macro policy path. Bond allocation inherently carries a strong policy dimension, and we must take a holistic view incorporating fiscal budget arrangements, the scale, government bond issuance, and other relevant factors. Second, effective credit demand. If real economy investment and financing demand recovers, and the supply of high-quality credit projects increases, the pace of credit deployment will rise accordingly. Third, the trajectory of market interest rates. Our bank will dynamically adjust its bond allocation strategy in response to changes in market rates, seizing the right moment to collaborate the pace of allocation. We will adhere to a management approach of coordinating positioning between credit and bonds, continuously optimizing the incremental structure of credit, and fully leveraging lending as a primary channel for serving the real economy.
Through dynamic optimization of the positioning of both asset classes, we will maintain steady growth in total investment and financing, achieving organic alignment between serving the real economy and sound development. Regarding the EVE changes that you asked about. At the end of the third quarter, our bank's maximum EVE change stood at 14.15%, down by 0.26 percentage points from the beginning of the year and up by 0.06 percentage points from mid-year, operating smoothly within the regulatory threshold. Overall, the measurement pressure is controllable. The first reason is the adjustment of our regulatory parameters has delivered a substantive enhancement of the safety margin. Starting in 2026, the NFRA officially adopted the latest standardized interest rate shock magnitude. This adjustment reduced our bank's maximum EVE change ratio by approximately 1.1 percentage points. Second, the effectiveness of our bank's asset-liability mismatch management is evident, with net duration gap remaining broadly neutral.
While maintaining our deployment of long-duration government bonds and local government bonds, we have taken measures such as moderately increasing allocation to duration bonds, and extending liability duration, thereby reasonably continuing the expansion of the net asset-liability duration. Third, the subsequent capital injection will provide further room for indicator optimization. The denominator in the calculator of maximum EVE change ratio is Tier 1 net capital. As the capital injection plans progressively implemented, our bank's maximum EVE change ratio expected to decline by 0.35 percentage points.
Thank you for your question and your support to ICBC's work. First, regarding the bond investment, we have always adhered to serving national strategy and the need of the real economy, fully leveraging the important role of large state-owned banks in the transmission of macro policies. First, we serve the national strategies.
ICBC has approximately stepped up its investment in government bonds, local government bonds, and other instruments, to address the funding needs of the key sectors. At the same time, centered on priorities areas and five priorities of finance, we have continuously optimized the structure of our bond investment, supporting the new quality productive forces and transformation and upgrading of the economy, supporting the national strategy roles and real economy to promote the dynamic optimization of the bank's overall asset structure, taking into comprehensive consideration factors such as yield levels, capital consumption, and taxation. Bond assets offer relatively superior investment value. The bank's coordinated arrangements, the facilitation of the rational positioning and coordinated linkage between loans and bonds as two asset classes. At the end of Q3 2026, the RMB bond investment balance stood at CNY 16.7 trillion.
Next step, we will take into account the implementation of macro policy, bond supply, and the bank's overall asset-liability arrangements. Second, regarding the interest rate risk, we have consistently embedded risk prevention and controls throughout the entire bond investment process, continuously strengthening the portfolio's resilience against the market volatility. EVE changes in bond investment is the portfolio duration management. The bond market is in a low-rate, high-volatility environment. We place greater emphasis on coordinating investment returns and interest rate risk from a cross-cyclical perspective. First, strengthening the assessment of macroeconomic conditions and market trends. Second, continuously optimizing the maturity, instrument type, account, and the currency structure of the bond portfolio, enhancing portfolio diversification and stability. Third, reinforcing market monitoring, stress testing, and risk early warning.
In addition, this year's issuance of CNY 300 billion in special capital replenishment sovereign bonds to supply core Tier 1 capital will expand the room for maneuver in bond investment under the EVE change calculation framework. Overall, we uphold the equal emphasis on development and security. While maintaining a reasonable level of returns, we continue to enhance the proactive and forward-looking nature of bond investment risk management. Third, regarding the trajectory of interest rates going forward, we assess that the bond market in Q4 will remain in an environment where bullish and bearish factors are intertwined, with the factors centering on economic performance, the effectiveness of incremental policies, and the pace of the government bond supply. First, the domestic economy is experiencing marginal recovery. The price level is expected to rebound moderately, coupled with the continued deployment of a more proactive fiscal policy.
Second, the monetary policy is in a supportive way. The guidance of fiscal monetary coordination and the shift of the policy rate benchmark to overnight repo rate, market liquidity is likely to remain reasonable and ample. Third, on the bond supply front, the year's issuance pace has been more balanced. We project the Q4 government bond issuance of CNY 3.8 trillion and the local government bond issuance CNY 2 trillion. The issuance of ultra-long special government bond for this year will be completed in late October, and overall supply-demand structure expected to see marginal improvement in Q4. Fourth, the external environment amplifying market volatility. Take it together, Q4 bond market bullish and bearish factors are intertwined with limited room for interest rates to move sharply in either direction.
We expect the market to broadly maintain a range-bound pattern with particular attention warranted to the marginal impact of the pace of fiscal deployment.
Thank you. The third question, please.
I'm Gary Lam from HSBC. My question concerns credit extension in its speed. What is your outlook for credit growth in Q4 and next year? The PBOC cuts the rate on PSL by 25 basis points. How much incremental credit demand do you expect the six networks initiative to generate?
I'll invite the Corporate Banking Department to answer this question.
Thank you for your question. For outlook, I'd like to invite you to see the developments in the first three quarters and the foundation of our judgment. We have seen the opportunity presented by 15th Five-Year Plan steadily improve the alignment between our credit structure and the economic structure. In the first three quarters, credit expansion showed increased volume and optimized structure, laying a foundation for a smooth year-end close and the next year. From three perspectives. First, scale maintained steady growth.
By the end of Q3, the onshore RMB loans were up by CNY 1.6 trillion, 6.1% YoY, 1.3 percentage points above the national average. Cumulative corporate loan disbursements was CNY 8.1 trillion, over CNY 600 billion more than the same year last year. The balance exceeded CNY 18.5 trillion. Both volume and balance ranked first among peers. Second, the allocation structure continued to optimize. The balance of loans to tech firms exceeded CNY 3 trillion. Net new customers exceeded 30,000, both beating the industry. The balance and increments of manufacturing loans remained at the forefront. We provided cumulative financing support of over CNY 300 billion to 18 national level advanced manufacturing clusters. Loan growth in key areas such as green finance and inclusive finance both exceeded the average growth of all loans. The implementation of fiscal financial coordination policies was effective.
Our new disbursements of fiscal interest subsidies for equipment renewal exceed CNY 80 billion, leading among peers. First, new policy-based financial structure are being deployed faster, effectively supplementing the capital of a number of key projects. Second, the PSL rate was cut by 25 basis points, and the six networks were included in such support, guiding low-cost, long-term supporting financing. Third, the relending facility for tech innovation and technical transformation has been increased, better supporting enterprises in this regard. Fourth, the new model of real estate development has restructured the real estate credit system, effectively reducing tail risks in this sector and accelerating the transformation and upgrading. The effects of this package are expected to gradually materialize from the fourth quarter into next year, accelerating investment and the formation of physical workloads. We expect ICBC's full-year loan growth to be around 6%, consistently above the national average and GDP growth.
Next year, the credit environment will continue with slowing growth while improving quality, an objective feature of economic transformation and financing structure optimization, and an inevitable outcome of the transformation and upgrading of financial industrial system. ICBC is the largest domestic lender. We adhere to early planning, engagement, and reserve building, and we have started the survey, engagement, and reserve for next year in advance, and seized the window of the commencement of the major projects such as the six networks. We will focus on our core business in industrial, commercial, and tech finance, advance the five priorities, support the modern industrial system, align with and implement fiscal interest subsidy policies, and contribute to high-quality economic development through high-quality credit expansion.
We will balance the relationship among volume, structure, returns, and risks, closely follow policy guidance, address financing needs, grow loan with a reasonable range, and continue to create steady and sustainable returns for investors. We will continue to improve CFS, and we grow with customers and create values through services. We will continue to improve the all-scale financing support, so as to provide enterprises with more adaptive, competitive, and inclusive financial services. On the second question, the six networks involve a large investment volume. They are not only a powerful lever for expanding investment, but also an important support for accelerating a modern industry and cultivating new quality productive forces. These projects have long construction cycles. Some have strong quasi-public welfare features.
They require coordination of governments and the market using diversified tools such as central and local fiscal funds, government special funds, bank credit, corporate bonds, to help implement major national structures. PSL mainly addresses the mid and long-term funding needs of projects such as the six networks. For projects funded by PSL, ICBC will provide supporting financing funds, supervision, and other services. We focus on various financial needs scenarios of the six networks. Through CFS, we provide a package of financial services, including credit bonds, investments, banking, settlements, and leasing for six networks project construction. Thank you.
Now, the question four.
Thank you for giving me this opportunity. I am Mr. Yang from Goldman Sachs. How should we expect ICBC's operating revenue and net profit growth in the full year and for 2027? Because we see in the first half year and the first three quarters, we achieved great results. What are the main driving factors and potential disruptions underlying this assessment?
I will give this question to Finance and Accounting Department.
Overall, we are very confident about our yearly revenue and net profit. In the first three quarters, driven by the concerted contribution of the net interest income, net fee and commission income, and other non-interest income, the group achieved operating revenue of CNY 566.14 billion, up 9.2%. Net profit, CNY 288.28 billion, up 6% year-on-year. The pace of earnings growth further accelerated compared with the first half, reflecting continued improvement in operation.
Net interest income, 9.2% year-on-year in NIM, broadly flat versus the beginning of the year, sending stabilization trend. Net fee and commission-based income rose 1.6% year-on-year. Other non-interest income surged 19.5% year-on-year, providing strong support to revenue growth. The all three income segments are expected to sustain their favorable momentum in the full year, and we are confident in carrying forward this steady performance in both operating revenue and net profit. Looking ahead to 2027, objectively speaking, maintaining such a momentum still faces certain pressures on net interest income, given that the repricing dividend from existing time deposits is diminishing and asset side yields remain on downward trajectory. NIM continues to face some narrowing pressure. On net fee and commission income, it has broadly stopped declining, stabilized.
Whether it can achieve solid growth momentum next year will depend on our bank leveraging its competitive strength for seizing market opportunities. Other non-interest income, our bank has delivered rapid growth for several consecutive years, resulting in a relatively high base. Coupled with market vitality, whether this high growth trajectory can be maintained carries uncertainty. At the same time, on the asset quality front, the retail and inclusive finance segments are under pressure, a trend common across the country, and risk cost faced upward pressure. These are the common trends among these industries. Therefore, in the next year, if we want to achieve this momentum, we need to do the work as follows. First, further consolidating the fundamental base of net interest income, our bank will continue to optimize the asset liability structure, strengthen liability cost management, and strive to stabilize NIM. Second, stabilizing and diversifying income sources.
On the one hand, we will further unlock the growth potential of the four emerging business lines, investment banking, asset management, wealth management, and trading. On the other hand, we will rationally optimize the investment portfolio structure, strengthen trading, capital, deepen parent-subsidiary coordination, and equity investment management, and aim to make the contribution from other non-interest income larger. Third, maintaining broadly stable asset quality. We will continue to refine the comprehensive risk management system, continue risk prevention and controlling key sectors and key businesses, and continuously strengthen borrowing risk early warning and control, striving to keep asset quality generally stable. Through these approaches, we are confident that our operating performance will remain aligned with the industry peers and consistent with the market trends.
Thank you. That's all for question four. Now, the fifth question.
Thank you. I'm Winnie Wu from Bank of America. My question concerns deposits. How was deposit growth in the first three quarters, and what level are rates on new deposits? Now, the repricing of deposits have supported the stabilization of NIM. What is the scale of deposit repricing this year and next? And how much room is there for rate improvements, and what is the rationale behind the large state-owned banks' decision to restart five-year large denomination certificates of deposit?
Thank you. I'm from Asset and Liability Management Department. In the first three quarters, the deposits remained rapid growth. At end Q3, domestic RMB deposits rose by CNY 2.3 trillion from the start of the year, up 7.9% YoY, above the average of all FI, 0.4 percentage points. By type, savings deposits grew by CNY 1 trillion and corporate deposits, CNY 1.3 trillion, both outpacing the industry average.
Notably, deposit growth stability improved markedly. By end Q3, the daily average increment of total deposits reached CNY 2.4 trillion, CNY 1 trillion more YoY. Daily average increments across major deposit types all exceed prior year levels, indicating stronger fund retention and a more solid liability base. The interest rates on new time deposits remain low, further driving down interest expenses. We continue to refine and optimize deposit pricing. First, we followed policy rate adjustments and cut posted rates, facilitating the transmission of policy rates to deposit rates. Second, we strengthened deposit pricing management and advanced relevant self-discipline initiatives, promoting further declines in new time deposit rates and interest costs. Data shows that in the first three quarters, the rate on new RMB time deposits was 1.15%, down 11 basis points YoY.
Regarding deposit repricing, the repricing of posted demand deposit rate has been completed, and repricing of short-term time deposits is largely done. Going forward, the focus will be on the repricing impact of mid and long-term deposits. We have made some calculation this year and next year. The time deposits repricing volume is similar to that of this year. Thank you.
Question six, please.
Thank you for this opportunity. I am Analyst Yang Shu from CICC. I believe that our great results cannot do without the great management of the NPL ratio. In recent years, ICBC's NPL ratio has continued to improve. Could management elaborate on the bank's overall asset quality and new generated NPLs? What effective measures have been taken in credit risk prevention and control? What is the outlook for the NPL ratio for the full year?
Thank you. I will give this question to the Credit Management Department.
Thank you for your question. First, we take a look at the data. By the end of Q3, the NPL ratio is 1.29%, down by 2 basis points compared with the end of last year. In the first three quarters, our principle is pursuing steady progress, insisting on coordinating high-quality development with high-level security.
Under this guidance, the quality of our credit asset has been continuously consolidated, with core indicators steadily improving. Structurally, credit asset quality in the corporate sector has continued to improve. By end of Q3, the NPL ratio for onshore corporate loans was 1.16%, down by 13 basis points from the beginning of the year, with risk defense capability further strengthened. ICBC has remained focused on its core business, proactively adapting to the evolution of the financial structure. We have worked to elevate the level of full-chain diversified financial supply, ecologically empowering the modern industrial system. The alignment between client financial structure and the national economy has continued to improve across major industries, manufacturing, wholesaling, retail, energy, transportation, and so on. Both NPL balances and NPL ratios has achieved dual declines from the beginning of the year.
In terms of the newly generated NPLs, pressure remains relatively concentrated in real estate and related sectors, and this is consistent with the overall market picture. For now, we see that the overall NPL situation is controllable. From the internal management perspective, we have taken the following measures. We have the three-gate, seven-color post-intelligent risk control system. At entry gate, we have strengthened credit allocation guidance through multi-dimensional industry region industrial chain investment and financing policy framework. We optimize the structure of credit resource allocation. We have deepened our engagement with high-quality client segments, making every effort to screen and block risks at the point of entry. At the post-lending stage, we have enhanced the quality and effectiveness of ongoing portfolio management, strengthening risk control in key scenarios and for key products.
At the disposal stage, we have continuously reinforced the philosophy of managing risk assets as a business. Adhering to the principle of prioritizing substantive recovery, we have actively promoted restructuring, conversion, and market-based disposal. We have optimized the disposal structure and improved disposal efficiency. Second, coordinating the orderly resolution of risks in key sectors, focusing on real estate, local government debt, and small and medium-sized financial institutions. We adopt the early identification, early warning, early exposure, and early disposal approach solidly, executing credit risk management. In the real estate sector, we have implemented macro control policies and financing regulatory requirements, control new policy deployments with the prevention and resolution of existing risks. In local government debt sector, we have conducted financial support for debt resolution in an orderly manner, presently assisting local governments and financing platform companies in reducing debt scale.
In the small and medium-sized financial institution sector, we have improved joint prevention and control mechanisms. Third, accelerating the transformation towards intelligent risk control. We have leveraged LLMs, deepening the application of enterprise-level risk control platform. We have this next generation full process financing intelligent agent metrics to comprehensively empowering risk control scenarios, including client segmentation, sentiment monitoring, and risk assessment. The integrity coordination and the system of risk management has been improved. As for the trend you just mentioned, this year is the first year of the 15th Five-Year Plan. China's economy continues to develop towards new directions. Against this background, ICBC adheres to serving the real economy as the fundamental mission and uphold risk prevention as an eternal theme of the financial work.
In subsequent operations, we will effectively play our role as the main force and ballast stone, ensuring that all categories of group risk remain controllable and the core asset quality indicators remain stable. The risks in key sectors will be resolved in an orderly manner. Thank you.
The seventh question.
Thank you very much for giving me the chance to raise questions. I am Richard Xu from Morgan Stanley. My question concerns retail and inclusive finance asset quality, which is attracting attention from the market with some household side risks coming to light. What is your forward-looking view and response plan for the asset quality of retail loans, such as credit cards and consumer loans? What proportion of new mortgages qualify for the interest subsidy policy? How are the new policies affecting mortgage demand and asset quality? What is the outlook for inclusive finance loan quality as we see the rising NPL ratio in inclusive financing some banks?
I will invite the Personal Credit Business Department and the Inclusive Finance Department to answer the question.
I would like to answer your first question. For the response plan and forward-looking view, as the pricing of the assets is reducing and the pressure of structural employment, customer debt repayment stability has declined, and the retail credit risk control is under mounting pressure for the commercial banks. The retail portfolio is in a phase of clearing legacy risk asset quality. In our bank, the cash repayment is our major mechanism for resolution. The net deterioration rate in Q3 was flat versus Q2, with slower new risk formation and no sign of accelerated deterioration. Overall risks is expected to remain manageable, but under the current environment, NPL control pressures persist by product. Personal consumption loan asset quality continues to improve. Our consumer loans are predominantly unsecured, which is riskier than collateral-backed products, resulting in relatively higher NPLs. Since 2025, we have optimized risk models and onboarding criteria.
New loan quality has improved and expected to converge towards industry best-in-class levels over time, and its NPL ratio has been decreasing. The mortgage loans represent 80% of our portfolio. It is the anchor of our retail portfolio. Affected by the market rates and real estate adjustments, the NPLs has risen temporarily, but our mortgages are well collateralized with no concentrated or regional defaults. We will continue to strengthen mortgage risk control, selectively expand in premium regions, regulate intermediary management, enhance collateral management, and accelerate digital credit monitoring. As policy effects materialize, mortgage asset quality expected to gradually recover. For the business loans, we have inclusive departments and our departments both responsible for this. The earlier involution and downward customer segmentation has led to some risk accumulation. We have been tightening the onboarding, enhancing post-lending dynamic early warnings. We continue to increase support for inclusive finance. Payment relief policies.
The loan allocation and resolution have been taken to prevent risk spread. The regions are concentrated in Zhejiang, Guangdong, Shenzhen, and other economically active regions. As the regulations in place, we believe it will develop even better in the future. We expect our business loan NPL ratio will remain stable. In the future, we will coordinate the development and risks from three aspects. First, based on strengthened end-to-end credit management, we remain reasonable and measured credit extension. Second, we continue to refine pricing management mechanism, improve risk-based pricing, and the coordinated development of personal loan business in both volume and pricing. Third, we reinforce data-driven approaches, building an end-to-end digital and intelligent risk control model system. We are fully committed to screening and blocking risks at entry, applying digital intelligence, and simultaneously enhancing NPL resolution efforts to ensure overall asset quality.
For the share of new mortgages eligible for interest subsidies, since October 1, we have been applying interest subsidies to eligible loans in accordance with the fiscal subsidy policy. From the first 20 days of October, eligible subsidized loans, from volume perspective, account for 30% of all new loans, representing 50% of all loans in numbers. This is based on the regulations supporting the low small-sized houses. The support has been transmitted to the related customers. The activeness of the transactions has been improved. Due to the inherent lag between mortgage demand and property transaction timing, the full impact of the subsidy policy has yet to be seen. From what we have in hand, the applications for eligible subsidized loans grew remarkably YoY. As we improve the need for buying houses for the customers, we believe the policy will have positive impact on the asset quality.
Thank you for your concerns for inclusive finance. I would like to brief you on this. Inclusive finance is both an important component of serving national strategies and a requirement for ICBC to optimize our assets and clients structures. We place equal emphasis on business development and risk management. By the end of Q3, ICBC's outstanding inclusive loans was CNY 3.9 trillion, up by more than CNY 300 billion from the beginning. The number of borrower accounts reached 2.8 million. The NPL ratio increased slightly from the beginning, but remains stable and controllable overall. In risk management, we follow the principle of proactive prevention, intelligent control, and comprehensive management. We strengthen the inclusive finance risk management framework, deepen digital risk control, and iterated the models for onboarding, authorization, pricing, and early warning.
We have enhanced our coordinated planning capability, refined the categorized management of institutions and products, and integrated the development of offline and online channels. We have continuously improved centralized management, building a tailored portfolio management models, and strengthening centralized remote collection team, and diversified disposal tools, steadily enhance the operational efficiency of risk assets. Looking ahead, ICBC will adhere to the overall guidance of steady lending, structural optimization, and quality enhancement and sustainability. We will continue to centralize the risk control measures to improve the forward-looking, precise, and effective nature of risk management as the macro economy continues to solidify and build on its steady and improving momentum. As our digital intelligent risk control capabilities keep advancing, we remain firmly confident in the high-quality, sustainable development of our inclusive finance business. Thank you.
Now the question eight.
Thank you for this chance. I am Shen Juan from Huatai Securities. I have the question of the loan income rate. What is the marginal trends of newly issued and outstanding loan interest rates? We saw that the central bank has some new policies as the loan price of DR gradually gained traction. What impact will the change in loan pricing mechanism have on asset side yields?
This question will be given to the Asset Liability Department.
In terms of the low interest rate trends, the declines in both existing and newly issued loan rate has narrowed year-on-year. On the existing side, affected by prior LPR reduction and loan repricing, the yield on onshore RMB loans in 2026 continue its downward trend.
By the end of September, the decline in loan yields narrowed by 32 basis points year-on-year, broadly consistent with the situation of our peers. On the new issuance side, our bank has worked to enhance loan risk-based pricing capability. In the first two quarters, the interest rate of the newly issued RMB loans narrowed by 14 basis points. We just mentioned the DR new policy. The introduction of DR-priced lending is intended to promote the diversification of loan pricing benchmarks. Its directional impact on loan yields is not yet determined. At a recent Financial Street Forum, the PBOC noted the need to drive the transition from relatively singular reliance on LPR-based pricing toward a more diversified pricing benchmarks. As a loan pricing benchmark, the DR001 helps unblock interest rate transmission chain and better leverage the role of interest rate regulation.
Our bank has adhered to risk-based pricing in the course of business rollout, and the impact of the DR-priced lending on overall loan rates remain to be observed. It is worth noting that our bank has actively responded to and thoroughly implemented the policy direction of benchmark rate diversification. By the end of September, 25 branches within our system has been conducting pilot programs. We will demonstrate responsibility for a major bank and monitor the DR-based pricing.
Now we'll take the ninth question.
Thank you, management. I'm Ma Kunpeng from CSC. My question concerns fee and commission income. What is your full-year outlook for ICBC fee and commission income? What are the key priorities for our wealth distribution business going forward? Among funds, WMPs, and insurance, which category is seeing the strongest demand?
I'll invite the Finance Department and the Personal Banking Department to answer.
From Q1 to Q3, while implementing fee reduction policies, ICBC kept strengthening foundations. Our fee income has maintained a steady growth trend from half one, with both total volume and increment expected to rank number one in the market. With the regulations in place and our efforts, our advantage in multiple areas have been strengthened. We have three priorities. First, deepen wealth management and capture the current window. Our wealth management edge was further consolidated.
Agency sales of precious metals fund and WMPs revenue grew by 97%, 65%, and 6% respectively. Pension business scaled up, lifting related income by 35%. Guided by the refreshed ICBC wealth brand, we'll accelerate wealth management transformation, strengthen full category product system, seize capital market opportunities, meet clients' diverse needs, which are stable, retirement security, and cash management, and keep the strong income growth momentum. Second, lock-in base business and enhance the foundation. In the first nine months, we enhanced scenario-based financial ecosystem, accounts, cash, and settlement revenue, while delivering pro-business, pro-people grew 1% YoY. Bank acceptance bills, LCs, international settlements, with related revenue up 16%. Custody business advanced steadily up 8% YoY.
In Q4, we will keep building settlement, clearing, payments, and custody, leverage digital smart tools to upgrade services, active payments and settlements momentum, and keep full-year fee income stable based on fund chains and capitalizing on the year-end and earlier window. Third, optimize our comprehensive services and unlock synergies. ICBC actually serves the modern system, delivering integrated financial solutions across the corporate life cycles. Its role, IB equity services, financing, and advisory revenue up 17%, and guarantee fee income up 3%. For the full year, we will deepen transformation, use diverse products and services, connect business links, and use broader products, better services, and stronger synergies to expand, upgrade, and grow fee business, continue to reinforce the foundation for sustainable development.
Thank you for your question. Regarding the agency sales products of ICBC, the agency sales business, from the perspective of the customers, is the management of the private assets.
From what we have for Q3, the AUM of personal customers totaled CNY 27 trillion, continue to lead the industry. From this year's situation, we have seen that the agency sales fee-based income show the volatility, face the volatility of the capital markets and the shrinking appetite of risks and the reform of the fee-based interest and the report and execution rates. It is also benefited from the upgrading of the need of the customers and the upgrading of the asset allocation. The regulations, on the one hand, continue to lead the industry to management for its core, so the volume has shifted from the quality and long-term service of the business mode. The reform of the fund rates and the execution to report rates reform have shown the adjustment.
On the other hand, the investment return of the real estate and the decreasing interest rates of the deposits continue to push the allocation of assets of the customers from the real estate and traditional assets to public funds, while WMPs of banks and insurances and other diversified products. So the needs of the customers has shifted from the single return pro to the coordination of security, liquidity, guarantee, a comprehensive need. Especially this year, the pension and the increase of the returns have been increased. Based on these changes, ICBC's agency sales strategies and priorities have shifted from the sales of the single products to the allocation of customers' assets and the operation of the accounts and the companion for the customers. The pace of the shift has been accelerating.
Based on the ICBC new brand, we put fund, insurance, WMPs, including the precious metals, we include them into our integrated management. Through digital allocation, long-term company, and other assets, we help the customers to see through the allocation and make healthy allocation. We grasp the situations of their assets and the need of their families. Through selection, we improve the capability of investment in the products. According to the risk appetite, the fund characters, and the target of the customers, we make the coordination so as to carry out pre and pro management of the investment.
Overall, to help the customer to grasp the changes of the interest rates through the coordination of these capabilities, we promote the service of ICBC from the single product sales and agency sales to the business of agency, of business, so that to improve the value of the wealth management of customers and improve our fees. You have paid attention to the products specifically. We believe funds, WMPs, and insurance are not the simple substitutes of other products. They are chosen by the customers based on their risk appetite. They form supplements to each other. With other products of customers' investments, together with them, they form the complete system for the management of the family assets for customers. Now, the stable return and low volatility funds can match the needs of the customers in liquidity and stable returns, forming the basic foundation for the customers.
Insurance may be the substitute for pension and the long-term assets management. The equity index and FOFs and other related products can match the needs of the customers for long-term and diversified allocation from the first three quarters. The three kinds of products have been developed quite well. They have formed, from the Q3 report, ICBC's fee-based income source. In the future, we will continue to strengthen multi-product coordination with more channels and the life cycle services. We promote the sales of the products to the comprehensive financial solutions so as to create long-term values for the customers. For the fee-based income of ICBC, we provide the long-term support. Thank you.
Question 10. Because of the bad network, we just received the question of this investor. This is a question from JPMorgan, Megan Lee. It is about the AIC investment. The question is, "What is the accounting treatment for the Changxin Project and other AIC investments, and how much investment income have AIC-related equity positions contributed, and how do you view the sustainability of this contribution going forward?" I will give this question to Investment Banking Department.
Thank you for the question. According to the accounting regulations, the Changxin Project and other AIC investments are all classified under FVTPL, that is, financial assets measured at fair value through profit and loss. Currently, the Changxin share held by the group are all within the lockup period. As no disposal has occurred, they do not yet contribute to realized investment income.
The contribution to the group's operating revenue is reflected as book valuation income, with the revenue contribution exceeding CNY 10 billion. The equity business has become an important growth driver for the group's revenue and profits. At a strategic level, equity business serves as a key engine for the group's strategic transformation. Our bank has developed a comprehensive service model that uses equity investment as the anchor, linking full-scope resources across credit settlement, cross-border, and personal finance. It is deeply embedded across the client's full life cycle, characterized by strong business thickness and deep client relationships. At the income level, the stability of the equity business income contribution continues to strengthen. Our bank conducts equity investments through various subsidiaries, with projects spanning the full cycle of enterprises, from startup to growth to maturity, including over 1,500 equity projects in the technology sector alone.
As previously deployed projects progressively enter the harvest phase and new projects continue to be implemented, equity returns are transitioning from episodic to recurring, and the continuity of their contribution is steadily improving. At risk control level, our bank has continuously strengthened full-process risk management for the equity business. We have the AI-powered risk early warning platform, which achieves look-through monitoring and dynamic early warning for portfolio companies, providing strong safeguards for the risk prevention and control. Thank you.
We will have the 11th question.
Thank you, management. I am Wang Xianshuang from Guolian Minsheng Securities. With credit growth slowing and quality improving, and the consumption for capital is decreasing, and the four banks have increased the dividend payout ratio, will the ratio continue its upward trend over the next three to five years? Under what operating conditions or triggers would you consider raising it further? How does ICBC balance capital adequacy constraints, asset expansion needs, and shareholder returns?
I will invite Finance Accounting Department to answer your question.
ICBC has always made investor returns as a top priority, sharing our development gains with shareholders through consistent and stable cash dividends. Since listing, cumulative cash dividends exceeded CNY 1.6 trillion, the largest among A-share listed companies. This year, the interim payout ratio was further raised to 31%, enhancing investors' sense of gain.
On the future, we will continue to maintain dividend continuity and stability while balancing shareholders' current returns with long-term return capacity, considering three dimensions. First, staying closely attuned to market concerns and investor expectations. As a large-cap blue chip, our management has always placed high importance on investor returns and listens to the capital market's voice. The moderate increase in the payout ratio is an important step to further optimize our shareholder return mechanism based on continuity and stability. Going forward, we will keep putting investor interests front and center, factoring market expectations into our decisions. Second, sustainable profits growth as the foundation for dividends. In the future, we will continue to drive the steady improvement in profitability, providing sustainable profit backing for shareholder returns. Third, balance in capital management, shareholder return. We will find a balance between business development and capital adequacy and shareholder share interests.
We will keep balanced capital management with dividend policy, maintain regulatory requirements, and funding business growth first, then scientifically determining the appropriate payout ratio so that investor can share in the fruits and high-quality developments. Thank you.
Question 12.
Thank you for this opportunity. I am Analyst Madam Xiao from CITIC Securities. I have the question of the non-interest income. How much has the release of unrealized gains on financial investments contributed to other non-interest income, and how do you outlook the realization of investment unrealized gains for the full year and the next year?
This question will be answered by the Accounting Department.
In the first three quarters, we achieved the growth in other non-interest income of CNY 9.12 billion. This is mainly coming from the equity and fund investments. The income is CNY 27.2 billion, up by CNY 8.2 billion. On the bond investment side, benefiting from the continued decline in bond yields, taking the 10-year government bond as an example, the yield dropped 16 basis points from 1.65% at the beginning of the year to around 1.68%.
We also see a lot of challenges and opportunities. On the challenge side, the external environment uncertainty, capital market volatility, and the high base of interest rate returns may exert certain pressure on the other non-interest income. On the opportunity side, on the bond investment front, the share of the bond financing in aggregated social financing continues to rise steadily. On equity investment front, the institutional framework of the capital market continues to improve. Next step, we will continue to strengthen the financial investment portfolio management and risk control and optimize the allocation structure. We will closely monitor the equity investment side. We will strengthen the parent-subsidiary coordination, reinforcing integrated management of the group's commercial equity investment business, and keep a close eye on the interest rate changes, conduct in-depth market analysis, and capture the opportunity windows, striving to maintain steady growth in the other interest income.
Now we will have the 13th question.
Thank you, management. I am Ma Xiangyun from Changjiang Securities. My question concerns fintech. ICBC's fintech capabilities are at the industry forefront. Could you share the bank's AI mid-to-long-term deployment roadmap? AI-related investments have a longer payback period. What metrics does ICBC use to measure ROI and assess the overall strategic value of its AI initiatives?
I will invite the Fintech Department to answer your question.
Thank you very much for the development of the AI for the mid and long-term AI roadmap, the digital network and intelligence megatrend. We are participating in the National AI Plus Initiative in our 55-year digital finance and fintech plan, which is under the 55-year plan of the nation. We have upgraded Digital ICBC to AI-ICBC.
The core is based on the AI technology to create our new productive forces to advance high-quality development group-wide of management of risks to improve our high-quality developments. In this regard, we have to have supporting system and the high effective governance system. For ICBC specifically, we have executed a one plus three framework and the annual plan to ensure delivery. For the three numbers, the first one is ICBC enterprise-level AI engine, which is called ICBC Zhiyong. The second one is ICBC purpose-built foundation for AI, which is called ICBC Data Vault, which has high-quality data foundation. The three refers to the three high-value smart application platforms serving retail, corporates, and clients, and group employees, so that the customers can enjoy one role, one assistance efficiency booster, and the customer can enjoy one client, one advisor, and one role, one assistant for employees.
For the ROI and assessment of the strategic value, we are application-oriented and value-driven, steadily advancing AI at scale. At present, we have deployed LLM across more than 700 scenarios. The AI workload, the AI development is still advancing. We believe the forward-looking of investment is necessary, but scientific and calculated the ROI is still a difficult issue for the industry. We are exploring the life cycle assessment system for ROI of AI. First, pre-launch precision screening and value forecasting, which we have deployed. In flight, multi-dimensional measurements and process control have been established. For example, the token consumption user adoption, the security risks, and their impacts were monetary and identifying the efficiency. Third, post-launch periodic view and low efficiency exit, so as to put forward the iterative improvement of AI. Now, for the potential of AI, we have positive outlook, but for the strategic value, there are discussions.
We believe AI is not only a cost-cutting efficiency tool, but the core engine redefining commercial banks' underlying logic. We have multiple perspectives. One, reshaping client service. AI generates hyper-personalized thousand- clients, thousand- faces product solution. Agency also acts as connectors, linking government, healthcare, mobility, and commerce ecosystem, putting clients in the center. Two, reshaping employee workflows and the value creation model. Agency handle information gathering, preliminary screening, and compliance checks. The coordination of human and AI still have large potential. Three, reshaping organizational operations. Data and algorithm-driven agents sense business dynamics, which can accelerate the decision-making, so that it can have reactive response to proactive anticipation and in-process intervention. We will comprehensively deepen AI-ICBC construction and promote high-quality development of ICBC.
A question from Xin.
Thank you for this opportunity. I am analyst Ma Xin Xin from Guotai Haitong . I have a question about the capital injection, the use of the money, and the dilution. Following the capital injection, how will the related funds be deployed, and what is the impact of this private placement on financial indicators such as EPS and DPS?
This is Strategic Investment Department. Our bank's private placement plan has been approved by the board and shareholders general meeting and is currently undergoing regulatory approval procedures. The first about the use of the money. Our bank, while in accordance with the 15th Five-Year Plan, maintain total asset growth growing aligned with the economic growth, stabilizing reasonable growth in volume while placing greater emphasis on effective improvements in quality, ensuring that the resources are directly ensures areas aligned with the national strategic priorities.
The first, focusing on the five priorities to serve the broader context of national strategy. This is both an important lever for driving high-quality development and inherent imperative for financial services in the context of Chinese modernization. Our bank will deepen its engagement in this area with the operating with depth and precision. Second, we will precisely allocating resources. Our bank will further concentrate on our core responsibility in the business industry, commerce, and technology, and traditional areas of strength, such as manufacturing, placing good emphasis on cultivating new growth drivers and ensuring a smooth transition from the old to new drivers, and achieving our organic integration of what a country requires and what our bank excels at.
Third, accelerating international expansion with domestic overseas coordination serving the broader agenda for opening up, building the Belt and Road Initiative and RMB internationalization into our development planning, striving to achieve integrated domestic and overseas business operation. Fourth, deepening comprehensive services and strengthening parent-subsidiary coordination. We will mainly focus on the equity, loans, bonds, and leasing these on-balance sheet products, and our bank will expand off-balance sheet businesses, including custody, underwriting, agency distribution, and wealth management, to provide this integrated comprehensive financial solutions. Overall, whether serving national strategy, supporting the real economy, expanding the international footprint, or elevating the level of comprehensive operations, everything ultimately comes to the quality and efficiency. Our bank will continuously optimize asset allocation, rigorously develop low capital-intensive business, and at the same time, routinely clean up inefficient capital consumption, striving to ensure that every unit of capital generates better returns.
About the second question, in terms of the dilution impact. Upon the completion of this issuance, our bank's total share capital and net assets will increase accordingly. The EPS and DPS and other financial indicators will experience a certain degree of dilution. However, the scale of this issuance represents a relatively low proportion of our bank's net assets. The overall dilution is extremely limited, and the supplemented capital is gradually deployed into operations. Our bank's capital return profile will steadily improve, and the aforementioned dilution impact is expected to be offset relatively quickly. In the near term, in the period when our bank completes the private placement, the increase in share count will result in a certain degree of dilution in per-share indicators, such as the earnings per share. The issuance scale of the private placement is CNY 100 billion.
Assuming completion of the issuance on November 13, 2026, and using the A-share trading average price of CNY 8.44 per share over the 20 trading days prior to the board resolution announcement as the issuance price, the calculations is as follows. The first scenario, assuming the issued shares affect only the month of December, per CSRC's regulation, using weighted calculation based on the number of the shares issued, if the impact applies only to December and a profit growth rate of 3%, compared to the end of 2025, EPS will not be diluted. With the dividend payout ratio increased to 31%, DPS will likewise not be diluted. ROE will decrease by 0.27 percentage points. Scenario second, assuming the issued shares affect full-year indicators.
The profit growth rate of 3% compared with the year-end 2025, upon the completion of this issuance, with the dividend payout ratio increased to 31%, DPS will not be diluted. EPS will decline by 0.27%. ROE will decline by 2.48 percentage points. If our bank's 2026 attributed net profit growth reaches 3.3% year-on-year, the dilution of EPS from this private placement can be fully offset. Over the medium to long term, this private placement will have a positive and constructive impact on our bank's business development. The supplemented capital will be effectively deployed to support the development of various businesses across the bank, fully consolidating the risk defense foundation, and is more conducive to delivering long-term stable returns for shareholders. Thank you.
Dear investors and analysts, for the interest of time, we will conclude the Q&A session for today. Thank you all for your high-quality questions, and thanks the head office department heads for their professional answers. Now, please join me in welcoming Board Secretary, Mr. Tian Fenglin, to deliver his closing remarks.
Dear investors and analyst friends, and the board directors of ICBC, good afternoon. Thank you for joining ICBC Q3 earnings call. Your questions are active. Our discussion was candid. Your questions are closely related to the current macro environment and ICBC's operating fundamentals. My colleagues have given thorough responses on our Q3 performance. In summary, amid a complex and volatile external environment with multiple headwinds, ICBC maintains steady progress. Our profitability, resilience, risk foundation, and transformation efforts all continue to show positive momentum.
This year marks the opening year of the 15th Five-Year Plan and also the 20th anniversary of ICBC's simultaneous listing on the A- and H-share markets. On October 27, 2006, ICBC broke new grounds with its simultaneous listing in Shanghai and Hong Kong. 20 years on, we are not only looking back at our journey, we are presenting to the market our value growth logic for this era. Over these 20 years of steady progress, we have remained rooted in the real economy and committed to national strategy, achieving leapfrog development. The four characteristics of large, stable, optimal, and strong continue to stand out. First, scale. By the end of Q3, total assets exceeded CNY 57 trillion, 8.2x the pre-listing level. Corporate customers exceeded 15 million, 64x pre-listing. And personal customers exceeded 780 million, 5.3x pre-listing. Second, stability.
Asset quality has steadily improved, and our risk absorption capacity has continuously strengthened. The NPL ratio fell from 4.1% pre-listing to 1.29%. The provision coverage ratio rose from 16.37% to 211.64%. And the capital adequacy ratio increased from 10.74% to 18.5%. Third, quality and efficiency. We have long adhered to a balanced, coordinated, and sustainable development path. Revenue and profit have remained robust. Since listing, cumulative dividends have reached CNY 1.69 trillion, including the 2026 interim dividends, ranking first among A-share companies by the end of Q3. The cumulative total return on A shares and H shares with dividends reinvested was 577.93% and 635.76% respectively, with CAGRs of 10.07% and 10.53%. Our total market capitalization has long remained the highest among China's listed banks. Fourth, core business strengths. We fully leverage our advantages in industrial, commercial, and tech finance, actively serve major national strategies.
The manufacturing loans, trade finance, and tech finance all rank among the best in the industry. Standing at the new starting point, what will earn ICBC the market long-term trust? I would like to answer in four phrases. First, by our industry-leading risk control standards, building a strong defense for asset quality. Second, by inheriting and innovation, solidifying the stability of our earnings growth. Third, by deepening our advantage in industry, commerce, and tech finance, growing alongside with new quality productive forces. Fourth, by our internationalization and diversification, providing firmer foundation for valuation re-rating. We are clear-eyed about the challenges ahead in a more complex and volatile external environment, but we have firm confidence in our strategic direction, execution, and fundamentals. Going forward, ICBC will steadily advance our five transformations and better reward our investors' trust with solid performance, stable dividends, and long-term value.
Finally, thank you once again for your continued support and trust in ICBC. This concludes today's meeting. Thank you all.
Wish you a happy weekend. Thank you.