Net profit soars by 179%! Industrial Consumer Finance makes a crucial leap from "initial decline to subsequent rise"

Ask AI · How Industrial Bank Consumer Finance Achieved a Net Profit Turnaround Through Non-Performing Asset Disposal?

Produced by | China Visitor Network

Reviewed by | Li Xiaoyan

On March 26, Industrial Bank Consumer Finance Co., Ltd. (referred to as “Industrial Bank Consumer Finance”) released its 2025 annual “report card” alongside its parent company, Industrial Bank. Under the new normal of stock competition and compliant operation in the consumer finance industry, this financial report exhibits distinct structural optimization features: although revenue and scale slightly contracted, net profit experienced an explosive growth of 179.07%, successfully reversing from the performance lows of 2024, becoming a typical example of licensed consumer finance institutions achieving high-quality development through proactive transformation.

Looking back over the past two years, the operational trajectory of Industrial Bank Consumer Finance can be described as a “first suppress, then rise” transformation epic. In 2024, influenced by multiple factors such as risk accumulation after rapid expansion, industry cycle downturn, and stricter regulatory environment, the company entered a deep adjustment period. To resolve historical burdens, it significantly increased risk provisions that year, causing net profit to plummet by about 78% year-on-year to only 459 million yuan, hitting a recent low. Meanwhile, the company proactively shrank its strategic footprint, with total assets and loan scale declining for the first time in recent years, marking its departure from extensive growth toward a “quality-first” development model.

Entering 2025, after a year of strategic adjustment, Industrial Bank Consumer Finance reached a performance inflection point. The annual report shows the company achieved operating income of 8.89B yuan, a decline of 11.71% year-on-year, but profitability significantly recovered, with net profit reaching 1.2 billion yuan, nearly 1.8 times the previous year. By the end of the year, total assets stood at 77.99B yuan, with a loan balance of 75.47 billion yuan. While scale slightly contracted, asset return rates and capital efficiency greatly improved, successfully transitioning from “scale-driven” to “efficiency-driven” growth.

This astonishing rebound in net profit is not a short-term financial adjustment but a concentrated reflection of systemic risk resolution and operational efficiency enhancement, driven by two major strategic engines.

First, bold disposal of non-performing assets clears profit obstacles. During the industry expansion cycle of 2021-2022, Industrial Bank Consumer Finance’s business grew rapidly, but overdue and non-performing pressures gradually emerged. By the end of 2024, the non-performing loan ratio rose to 2.93%, and the special mention loan ratio exceeded 4%, with asset quality pressure becoming the core bottleneck restricting profitability.

Faced with these challenges, in 2025, the company adopted industry-leading non-performing asset disposal strategies. Throughout the year, it transferred 32 batches of non-performing loans via the China Banking and Insurance Regulatory Commission’s Credit Asset Registration System, involving a principal and interest of up to 40.1B yuan, accounting for 34% of the industry’s total non-performing transfer scale, ranking first in the industry. Through a combination of “collection + write-off + bulk transfer,” the company successfully offloaded hundreds of billions of risk assets, achieving “double reduction” in non-performing loan balance and non-performing rate. This move not only released massive risk provisions but also significantly reduced the impact of credit impairment losses on profits that year, laying a decisive foundation for the V-shaped profit reversal.

Second, lean cost control and structural optimization release profit space. While resolving historical risks, the company also promoted cost reduction and efficiency enhancement across the board. On one hand, it actively optimized credit structures, reducing the proportion of high-risk, low-yield assets, and reallocating resources toward high-quality customer groups and scenarios; on the other hand, it strictly controlled operating costs, improved the efficiency of offline direct sales teams, increased the proportion of online automated approval, and optimized funding costs.

Moreover, leveraging the strong shareholder background of Industrial Bank, the company enjoys significant cost advantages at the funding end. On the asset side, through refined pricing and differentiated product strategies, it maintained a stable net interest margin. Against the backdrop of industry-wide revenue decline pressures, Industrial Bank Consumer Finance successfully achieved high-quality growth with “efficiency from management, profit from risk,” characterized by “revenue decline, profit rise.”

As a nationwide licensed consumer finance institution jointly initiated by Industrial Bank (holding 66%), Quanzhou Cultural Tourism Group, Xtep, and others, Industrial Bank Consumer Finance has been rooted in inclusive finance since its inception, building a unique business system combining offline direct sales and online services. By the end of 2024, the company’s operations covered over 50 cities nationwide, serving more than 24 million customers, with total loans exceeding 390 billion yuan, helping millions of families and individuals upgrade their consumption through financial support.

The core product matrix precisely targets essential livelihood needs: “Xingcai Plan,” as a strong supplement to national student loans, provides educational credit support for college students and families, having issued nearly 50k yuan in loans to over 50k students, and established the Xingcai Inspirational Growth Base to fulfill the dual missions of “student aid + education.” The “Start Business Plan” focuses on young new urban residents, offering rental, training, and other consumer credit, with flexible repayment methods to help young people settle in cities. The “Family Consumption Loan” targets broad salaried families, providing pure credit, unsecured daily consumption funds, with a trusted offline “face-to-face, door-to-door” service model.

While experiencing a strong performance rebound, Industrial Bank Consumer Finance also recognizes the challenges ahead. As a primarily offline consumer finance institution, in the wave of accelerated online and digital transformation industry-wide, the company is continuously increasing investment in financial technology, optimizing online approval and risk control models, and improving service efficiency and customer experience.

Additionally, in response to higher consumer rights protection requirements, the company is upgrading its entire loan process—pre-loan, during loan, and post-loan—strengthening compliance management of partner institutions and channels, standardizing collection behaviors, and striving to build a more transparent, fair, and friendly consumer credit ecosystem. Under stricter regulation and fierce competition, only by adhering to compliance and deepening customer service can sustainable core competitiveness be built.

From the proactive “self-healing” in 2024 to the “phoenix rebirth” of performance in 2025, Industrial Bank Consumer Finance has completed a profound supply-side structural reform in two years. Behind this performance reversal lies precise industry cycle grasp, firm risk bottom-line defense, and unwavering commitment to inclusive finance.

Currently, the consumer finance industry is shifting from “incremental land grabbing” to “stock refinement.” Industrial Bank Consumer Finance’s practice proves that proactively shrinking scale, clearing risks, and optimizing structure are far more valuable in the long term than blind expansion. With the thorough elimination of risk burdens, continuous improvement in asset quality, and ongoing product and service upgrades, this leading licensed consumer finance institution has shed its historical baggage and is moving forward lightly. In the future, guided by national strategies to serve the real economy and promote consumption recovery, Industrial Bank Consumer Finance is expected to leverage its prudent risk control, strong offline foundation, and ongoing innovation to steadily advance on the path of high-quality development, contributing more replicable and promotable transformation experiences to the industry.