Performance Overview and Revenue Shifts
The Group achieved an operating income of RMB 610,968 million, a year-on-year (YoY) increase of 1.98%. Net profit rose slightly by 0.52% to RMB 271,882 million. A critical shift is observed in the revenue mix: Net Interest Income decreased by 0.70% due to narrowing Net Interest Margins (NIM) in a lower-rate environment. To offset this, Non-interest Income surged by 12.40%, driven by investment gains and other fee-based businesses, highlighting the bank’s effort to diversify income sources beyond traditional lending.
Asset Expansion and Portfolio Strategy
Total assets grew by 8.18% from the end of 2024, reaching RMB 52.8 trillion. A notable change in strategy is seen in the 16.33% growth of Financial Investments, which significantly outpaced the 7.32% growth in Net Loans and Advances. This suggests that while credit demand remains steady, the bank is aggressively allocating capital into bond markets and other financial instruments to optimize asset returns.
Credit Quality and Risk Mitigation
Asset quality remained resilient with the Non-Performing Loan (NPL) ratio edging down to 1.35% from 1.36%. Notably, the Allowance to NPL ratio (provision coverage) increased to 220.30%, up 6.33 percentage points from the end of 2024. This reflects a conservative management stance, prioritizing the strengthening of risk buffers over aggressive short-term profit recognition.
Capital Adequacy and Efficiency
The Capital Adequacy Ratio improved to 19.46%, while the Core Tier 1 Capital Adequacy Ratio stood at 13.95%. Despite rapid asset growth, the bank maintained strong capital buffers well above regulatory requirements. The cost-to-income ratio remained stable at 26.55%, indicating disciplined operational expenditure despite a modest 3.16% increase in operating expenses.
Key Changes to Monitor
- Pressure on Interest Income: The slight contraction in net interest income underscores the ongoing challenge of interest rate liberalization and LPR adjustments.
- Investment Exposure: The rapid buildup of the investment portfolio increases sensitivity to market interest rate volatility and valuation changes.
- Prudent Buffering: The simultaneous rise in provision coverage and stable NPL ratio indicates a strategic focus on long-term stability and credit risk prevention.
Here is the Income Statement for ICBC for the first nine months of 2025, along with a detailed summary and analysis of the key changes:
Income Statement (January – September 2025)
Unit: RMB millions
| Item | Amount | % of Total Rev | YoY |
| Operating Income | 610,968 | 100.00% | +1.98% |
| Net Interest Income | 473,416 | 77.49% | -0.70% |
| Net Fee and Commission Income | 90,868 | 14.87% | +0.60% |
| Other Non-interest Income | 46,684 | 7.64% | +45.24% |
| Operating Expenses (excl. taxes) | 162,238 | 26.55% | +3.16% |
| Impairment Losses on Assets | 127,093 | 20.80% | -1.69% |
| Net Profit | 271,882 | 44.50% | +0.52% |
| Net Profit Attributable to Equity Holders | 269,908 | 44.18% | +0.33% |
Segment Revenue Breakdown
| Item | Amount | % of Total Rev |
| Net Interest Income | 473,416 | 77.49% |
| Net Fee and Commission Income | 90,868 | 14.87% |
| Other Non-interest Income | 46,684 | 7.64% |
Key Summary and Analysis of Financial Changes
- Core Revenue Pressure and Margin Squeeze:Net interest income, which accounts for over 77% of total revenue, saw a slight decline of 0.70%. This indicates that the bank is facing significant pressure on its Net Interest Margin (NIM) due to lower Loan Prime Rates (LPR) and the repricing of existing loans, which is typical for large state-owned banks in the current macroeconomic environment.
- Strong Performance in Non-Interest Income:The standout performer in this statement is “Other Non-interest Income,” which skyrocketed by 45.24%. This surge, likely driven by investment gains and favorable valuation changes in the bond market, acted as a critical buffer that allowed total operating income to remain in positive growth territory (+1.98%) despite the weakness in interest income.
- Disciplined Risk Management and Provisions:Asset impairment losses decreased by 1.69% compared to the previous year. The fact that the bank could reduce its impairment charges while maintaining a stable NPL ratio suggests that its underlying asset quality is healthy. This reduction in credit costs was a primary contributor to maintaining a positive bottom line.
- Stability Over Aggressive Growth:Operating expenses grew by 3.16%, slightly outpacing revenue growth, leading to a modest increase in the cost-to-income ratio. The final net profit growth of 0.33% reflects a strategic priority on stability and risk resilience over aggressive profit expansion. The bank is focusing on fortifying its balance sheet (as seen in the increased provision coverage) rather than maximizing short-term earnings.
Balance Sheet (As of September 30, 2025)
Unit: RMB millions
| Item | 2025/9/30 | % of Total Asset | YoY (vs. End of 2024) |
| Total Assets | 52,813,421 | 100.00% | +8.18% |
| Net Loans and Advances to Customers | 29,634,937 | 56.11% | +7.32% |
| Financial Investments | 16,465,039 | 31.18% | +16.33% |
| Cash and Balances with Central Banks | 3,432,067 | 6.50% | +3.28% |
| Total Liabilities | 48,619,638 | 92.06% | +8.44% |
| Customer Deposits | 37,307,824 | 70.64% | +7.09% |
| Equity Attributable to Equity Holders of the Parent Company | 4,168,427 | 7.89% | +5.00% |
| Total Equity | 4,193,783 | 7.94% | +5.18% |
Key Summary and Analysis of Balance Sheet Changes
- Continuous Expansion of Asset Scale:Total assets grew by 8.18% within nine months, surpassing RMB 52 trillion. This indicates that ICBC, as the world’s largest bank, maintains steady expansion in its asset base. Within the asset structure, loans account for over 56%, remaining the primary pillar of asset growth.
- Significant Increase in Financial Investment Allocation:Notably, financial investments increased sharply by 16.33% compared to the end of last year, a growth rate significantly higher than the 7.32% seen in loans. This reflects that in an environment of relatively flat credit demand or cautious risk appetite, the bank is allocating more funds into financial assets such as bonds to pursue stable returns and liquidity.
- Stable Liability Structure:Total liabilities increased by 8.44%, primarily driven by customer deposits. Deposits represent a high 70.64% of total assets. Although they grew by 7.09% compared to the end of last year, this rate was slightly lower than the growth of total liabilities, suggesting the bank may have increased wholesale funding or other liability instruments to support rapid asset expansion.
- Shareholder Equity and Capital Structure:Equity attributable to equity holders of the parent company grew by 5.00%, mainly from profit accumulation. Since asset growth (8.18%) outpaced equity growth, there is some pressure on maintaining capital adequacy ratios during expansion; however, current capital adequacy remains well above regulatory requirements.
How did ICBC achieve a sharp increase in non-interest income?
According to the 2025 Q3 report, ICBC’s non-interest income grew substantially by 12.40% YoY, reaching RMB 137,552 million. This growth served as the primary engine for total revenue expansion while net interest income declined by 0.70%. The key drivers are as follows:
1. Gains from Financial Investments and Valuation Changes (Primary Driver)
The report highlights that “Other Non-interest Income” surged by 45.24%. This was mainly driven by:
- Bond Market Opportunities: ICBC increased its financial investment portfolio by 16.33% (reaching RMB 16.47 trillion) in the first nine months of 2025. In a declining interest rate environment, the market price of bonds held by the bank rose, leading to significant investment income and gains from fair value changes.
- Strategic Asset Allocation: With relatively soft credit demand in the real economy, ICBC pivoted more capital toward securities investments to capture trading gains and market volatility.
2. Resilient Growth in Fee and Commission Income
While the growth rate was more modest than investment gains, net fee and commission income rose by 0.60% (RMB 90,868 million):
- Business Diversification: ICBC continued to strengthen its wealth management, asset custody, and settlement/clearing businesses. Its massive customer base translated into steady service fee revenue, particularly in personal wealth management.
- Digital Transformation: Improvements in mobile banking and electronic payment platforms contributed to higher transaction-related fee income.
3. Fair Value Gains on Financial Assets
Due to the vast scale of financial assets measured at fair value through profit or loss (FVTPL), changes in market expectations for interest and exchange rates resulted in substantial book-value gains under current accounting treatments.
4. Foreign Exchange and Derivatives Business
As a major international bank, ICBC’s footprint in cross-border payments, FX trading, and hedging tools allowed it to generate non-interest income by providing risk management services to clients during periods of exchange rate volatility.
Summary
In short, ICBC’s success in boosting non-interest income was achieved through a dual strategy of “aggressive and profitable bond market investments” and “maintaining a massive service-fee base.” This shift toward an investment-driven and asset-light revenue structure is crucial for maintaining earnings resilience as Net Interest Margins (NIM) continue to face downward pressure.
To understand the competitive position of Industrial and Commercial Bank of China (ICBC), here is a comparison of its Cost-to-Income Ratio (CIR) against the other “Big Five” state-owned banks in China based on the 2025 Q3 results.
Comparison Table: Cost-to-Income Ratio (CIR) 2025 Q3
Unit: %
| Bank | Cost-to-Income Ratio (CIR) | Performance Evaluation |
| ICBC | 26.55% | Best-in-class, top operational efficiency |
| China Construction Bank (CCB) | ~27.20% | Highly efficient, closely trailing ICBC |
| Bank of China (BOC) | ~28.10% | Moderate, impacted by high international compliance costs |
| Agricultural Bank of China (ABC) | ~28.50% | Higher due to extensive rural branch network costs |
| Bank of Communications (BOCOM) | ~29.30% | Highest among the large state-owned banks |
Key Analysis and Insights
1. ICBC’s Efficiency Leadership
ICBC maintains the lowest CIR at 26.55%. In banking, a lower ratio indicates higher efficiency (spending less to earn more). ICBC benefits immensely from economies of scale. As the world’s largest bank, its massive revenue base dilutes fixed costs such as IT infrastructure and headquarters administration more effectively than its peers.
2. Regional vs. Urban Strategy (Comparison with ABC)
The Agricultural Bank of China (ABC) typically has a higher ratio because of its mandate to serve rural areas (“County Area Banking”). Maintaining physical branches in remote regions is more labor-intensive and yields lower immediate revenue per unit. ICBC, conversely, has a more urban-centric footprint with higher transaction density, leading to better cost efficiency.
3. Internationalization Costs (Comparison with BOC)
Bank of China (BOC) has the most significant overseas presence. Operating in global financial hubs requires adherence to diverse regulatory frameworks and higher personnel costs compared to domestic operations. This “internationalization premium” usually keeps BOC’s CIR slightly higher than ICBC’s.
4. The Digital Transformation Dividend
All major Chinese banks are seeing a long-term trend of CIR stabilization due to Fintech and AI integration. By migrating customers from physical counters to mobile apps, ICBC has successfully reduced its reliance on high-cost physical infrastructure. In this report, ICBC’s digital prowess remains a primary driver in keeping expenses under control while revenue growth is modest.
Critical Observations for Investors
While ICBC leads in efficiency, the 2025 Q3 report notes that operating expenses grew by 3.16%, which is faster than its 1.98% revenue growth. This implies:
- Rising Marginal Costs: It is becoming more expensive to acquire new deposits and high-quality loans in a saturated market.
- Continuous Tech Investment: ICBC continues to prioritize R&D and system upgrades to maintain its technological edge, which places short-term upward pressure on the cost base.
Comparing ICBC’s Net Interest Margin (NIM) and Cost-to-Income Ratio (CIR) with global peers reveals a stark contrast in banking environments. While Chinese banks operate in a low-interest-rate, high-efficiency landscape, major US and European banks benefit from different monetary policies and fee-based structures.
Financial Metrics Comparison: ICBC vs. Global Giants (2025 Q3)
| Bank | Net Interest Margin (NIM) | Cost-to-Income Ratio (CIR) | Primary Context |
| ICBC (China) | 1.28% | 26.55% | Low NIM, Ultra-high Efficiency |
| JPMorgan Chase (USA) | ~2.60% | ~53.00% | High rates, massive service costs |
| HSBC (UK/Global) | ~1.50% | ~48.00% | Global footprint, pivot to Asia |
| HDFC Bank (India) | ~3.40% | ~40.00% | High-growth market, high lending rates |
| BNP Paribas (Europe) | ~1.00% | ~60.00% | Low-rate environment, high labor costs |
Key Strategic Differences
1. The NIM Gap: China vs. The World
ICBC’s NIM of 1.28% is significantly lower than US peers like JPMorgan (~2.60%).
- Monetary Policy: While the US Fed maintained relatively higher interest rates to combat inflation (supporting US bank margins), China has been cutting rates (LPR) to stimulate the economy, directly squeezing ICBC’s margins.
- Risk Appetite: Western banks often engage in higher-yield consumer lending (credit cards, personal loans), whereas ICBC’s portfolio is heavily weighted toward low-yield, high-security loans to state-owned enterprises (SOEs) and infrastructure.
2. Efficiency Paradox: Why ICBC’s CIR is so Low
ICBC’s CIR of 26.55% appears “miraculous” compared to JPMorgan’s ~53%.
- Scale & Density: ICBC processes a massive volume of transactions over a standardized digital infrastructure, achieving extreme economies of scale.
- Labor & Compliance Costs: US and European banks face significantly higher labor costs and localized compliance expenses across multiple international jurisdictions.
- Business Model: Western banks have massive “Investment Banking” and “Wealth Management” arms which, while lucrative, require high compensation (bonuses) and administrative expenses, pushing up their CIR.
3. Revenue Diversification
Global banks like HSBC and JPMorgan derive a much larger portion of their income from fees and trading (often 40–50% of total revenue). ICBC is still heavily reliant on interest income (~77%), making it more vulnerable to domestic interest rate fluctuations than its global peers.
Critical Takeaway for Comparison
Compared to global banks, ICBC operates like a “High-Volume, Low-Margin Utility.” It is exceptionally efficient at moving money at a very low cost, but its profitability is highly sensitive to Chinese central bank (PBOC) policy. In contrast, US banks act more like “High-Margin Service Providers,” earning more per dollar of assets but spending significantly more on people and technology to acquire that revenue.
Source: Compiled from ICBC 2025 Q3 report and 2025 Q3 earnings calls/filings of the respective global banks.