INDUSTRIAL BANK(SH:601166) Zhong Guo Ji Jin Bao·2025-08-30 09:11Core Viewpoint - Industrial Bank reported a turnaround in net profit, achieving positive growth after a previous decline, and demonstrated effective management of interest margins [2][3]. Financial Performance - As of June 30, 2025, Industrial Bank's total assets reached 10.61 trillion yuan, a 1.01% increase from the end of the previous year [2]. - The bank's revenue for the first half of the year was 110.46 billion yuan, a year-on-year decrease of 2.29%, with the decline rate narrowing by 1.29 percentage points compared to the first quarter [2]. - Net profit was 43.14 billion yuan, reflecting a year-on-year growth of 0.21%, marking a recovery from negative growth in the first quarter [2]. Interest Margin Management - The net interest margin for the first half of the year was 1.75%, down 7 basis points from 2024, which is within the expected range for joint-stock banks [3]. - Interest income was 73.7 billion yuan, showing a slight decline of 1.5% year-on-year, consistent with industry trends [3]. - The bank anticipates that the decline in net interest margin will be controlled within the initially projected 10 basis points for the year [3]. Asset Quality - The non-performing loan (NPL) ratio stood at 1.08%, unchanged from the first quarter, with a provision coverage ratio of 228.54% [2]. - New non-performing loans in the real estate sector decreased by 45.72% year-on-year, while credit card NPLs fell by 7.5% [5]. - The bank expects a decrease in the overall scale of new non-performing loans for the year compared to the previous year [5]. Loan Structure and Strategy - Retail deposits grew by 148.3 billion yuan, reaching 1.72 trillion yuan, positioning the bank as the second-largest among joint-stock banks [6]. - Corporate loans (excluding bills) increased by 227.1 billion yuan, with significant growth in green, technology, and manufacturing loans [6]. - The bank is focusing on reducing exposure to real estate and local government financing platforms, with respective loan balances decreasing by 21.15 billion yuan and 28.90 billion yuan [6]. Market Outlook and Policy Impact - The "anti-involution" policy is expected to provide both opportunities and challenges for the banking sector, potentially alleviating downward pressure on asset yields [7]. - The bank aims to achieve a new loan target of 300 billion yuan for corporate finance and improve retail loan performance while managing risks [7]. Convertible Bonds - The bank is optimistic about the conversion of its convertible bonds, with a remaining balance of 41.35 billion yuan, following a full conversion by the Fujian Provincial Finance Department [9]. - The current stock price is above the conversion price, indicating potential for further valuation recovery [9].