INDUSTRIAL BANK(SH:601166) Jing Ji Guan Cha Wang·2025-09-02 09:19Core Viewpoint - The Chinese banking industry demonstrates strong operational resilience in a complex environment characterized by low interest rates and narrow interest margins, with overall stability maintained in the first half of 2025 [1] Group 1: Risk Areas and Management - The risk peaks in the three major areas of real estate, local government financing platforms, and credit cards have passed, as indicated by a significant year-on-year decline in new non-performing loans [2][3] - As of June 30, the non-performing loan ratio for the bank remained stable at 1.08%, with a notable 45.72% decrease in new non-performing loans in the corporate real estate sector and a 7.5% decline in credit card non-performing loans [2][3] - The bank's proactive response to national debt reduction policies and its continuous improvement in risk management capabilities have contributed to this positive trend [1][6] Group 2: Risk Management Reforms - The improvement in risk conditions is attributed to systematic enhancements in comprehensive risk management capabilities, including the establishment of a clear risk management framework [4][5] - The bank has restructured its risk management departments to enhance the independence and authority of risk reviews, ensuring a clear division of responsibilities [5] - Digital risk management tools have been developed to improve efficiency and accuracy in risk monitoring and management processes [5] Group 3: Industry Context and Outlook - The risk reduction observed in the bank reflects a broader trend in the Chinese banking industry, with effective control over financial risks, particularly in local government debt and real estate markets [6][7] - The average price-to-book ratio (PB) for listed banks has increased from 0.52 at the end of 2023 to 0.67, indicating a market shift in risk expectations [7] - The bank's assessment that the risk peak has passed suggests a potential transition for the Chinese banking sector, moving towards greater stability and reduced systemic risk [7][8]