Industrial and Commercial Bank of China Aktie

[Interpreted]

Dear investors, analysts and friends from the media. Good afternoon, and welcome to ICBC's 2026 Interim Results Announcement. I am Dong Jenn. Our interim results have been released. We'd like to thank Global shareholders for your recognition and support for our investment value. We've attached great importance to IR media relations and market capitalization management we've been maintaining open, candid and efficient communication with global investment research institutions in the media.

For 20 years since our listing, we've always worked together with our investors Here, I'd like to express our sincere thanks to all shareholders and friends from the media for your long-term support. Today's announcement is held both on site in Beijing and through a global webcast. We are also pleased to have some investors, analysts and media friends here with us in person.

First, let me introduce the members of our senior management and the directors attending today's announcement. President VP, Mr. Wang Change Laminor, Tangshan and Sage, Board Secretary, Mr. Ken Fuling; and our Directors Mr. Don Manta and Lian, Ms. Water Horn and Mr. Cianna.

Now I'd like to invite our Board Separator, Mr. Tim Folin, to present our interim results.

Investors, analysts and friends from the media, good afternoon. Welcome to ICBC 2026 Interim Results Announcement. Thank you for the continued interest and support. Let me walk you through the highlights of our operations for half 1. This year, guided by party building and driving our transformation, we had a strong start to the first half of 5-year plan. The trades of being large, stable axon and strong shining through the foundation for high-quality development and high-level security is more solid.

Our value creation, market competitiveness marketing influence and risk management capabilities keep improving, resulting in a high-quality midyear inter sheet that shows clear upward momentum. First, steady progress in business with stronger resilience. By the end of June, our total assets were CYN 57 trillion for half 1. Operating revenue was CYN 446 billion, up 9% and Y-o-Y. Fee income had been CYN 69 billion, up 3.3% and net profit reached CNY 176 billion, up 4.54% -- our NIM was at 1.29%, up 1 bp from last year.

The NPL ratio was 1.29%, down 2 bps from the end of last year show improvement in asset quality Capital adequacy ratio was 18.57% provision coverage ratio to 217.58% keeping our risk buffering capacity solid. On the balance sheet side, the loans reached nearly CYN 32 trillion. Investments had CNY 18.63 trillion, up CNY 1.73 trillion or 10.2% and deposits were CNY 39 trillion, up CYN 1.86 trillion or 5% to give investors an even better sense of reward impacted by the strong results.

We raised our interim cash dividend payout ratio to 31% for 2026 after Corporate governance procedures will pay out CYN 1.51 per 10 share, tax inclusive totaling about CYN 53 billion based on the average share price in half 1, the dividend yield for A&H shares at 4.22% and 5.36%. This sustainable shareholder returns underscores our long-term investment value, second, solid progress in fire transformation.

Our intelligent risk control, we are speeding up the shift to smart risk management following the path of comprehensive management, proactive prevention and intelligent control, we are strengthening our plate risk management framework, constantly improving our forward-looking early warning and bottom line controls, building out a comprehensive risk management system, our enterprise level smart risk control platform now fully live views measurements, early warning and decision-making the 4 centers are established.

Our NPL ratio was 1.29. The loan provision ratio was 2.8% and Provision coverage ratio was 217.58%, up 3.9 percentage points, keeping our risk defense robust. Among this, we are strengthening core responsibilities to our growth potential we are going deep into 5 major articles in tech finance our loans hitting our loans to the car companies, CYN 3 trillion inclusive finance, the balance reached almost CNY 4 trillion in tension finance, total assets under management hit CNY 6.52 trillion, up 10.29% in digital finance loans to core digital economy industries reached CYN 1.26 trillion, up almost 12 -- 20%.

We rolled out our RMB CFS. We were also approved by jointly served as the R&D Clearing Bank in Africa with Standard Bank of South Africa. -- expanding our RMB clearing network to 19 African countries where the Sanand group operates. We have 1 cross-border RMB business volume hit CYN 5.5 trillion. on digital and intelligent momentum, we are fast tracking the building of AI ICBC and creating 1 plus One last system. The first 1 is enhancing ICBC GroTech Foundation, rolling out the pilot AIs initiative. So that ICBC stays in the top tier of domestic fintech development.

The second 1 is building out the ICBC data base forming an enterprise-level data application equals system supporting our business. The 3 refers to building 3 smart platforms, forming an ICBCIagent matrix for corporate clients, retail clients and our employees, while giving our 400,000 employees and new tool to boost economy, the AI agent for personal relationship manager delivered over 22 million service interactions in half 1 on comprehensive services, where Centurion client needs to provide CF.

The incremental growth in loan and bond investment of $3 trillion, we're deepening the ICBC Tech Finance equity service brand and pushing under AIC equity pilot business, our cost by scale CYN 33.7 trillion, ranking first in industry of securities investment insurance assets, pensions and QD products.

We have provided treasury services to 17,000 core enterprises. overseas institutions had total assets of USD 51 billion in pretax profit of CYN 3 billion, up Y-o-Y. Net profit was CYN 12.9 billion, up 55%. On the eco technological system were made alerting fundamental GBCs projects to drive balanced growth, we saw a net increase of 2.9 million retail clients with AUM over 10,000 events -- our average per branch general deposits and free profit are leading the industry.

Through our 10,000 miles marketing campaigns and 3 of GBC are driving traffic to each other and mutually empowering 1 another, building a great internal circulation funds, we are organically integrating ESG and sustainable development into our operations.

Looking ahead, ICBC will step up as a leading bank as main for serving the real economy of the blast for financial stability, the trailblazer for operational excellence and the benchmark market for strengthening core responsibility will keep our strategic focus, execution, we will make sure we get a 55-year plan off to a great start to ensure a sustainable value return for domestic overseas shareholders. to give you more opportunity to raise questions, please suggest each question for 1 guest and please identify yourself before raising questions.

Now for the first question, the lady on the left in the first row.

Thank you very much. I'm Shinji from Hansa Securities. Congratulations. ICBC achieved impressive results. My question is -- could you highlight the highlights for half 1 and for the full year, what is your outlook for revenue and net profits. We have seen that since this year. the banking has entered into deposit repricing trends. Could you share with us the change? And what is your outlook for NIM trajectory?

For your question. Regarding the half 1 results, the Board and management rate them as proactive and progressive. This is not only because we further consolidated our operational foundation in a contract environment but also because of our strategic transformation is continuously turning potential into momentum. Here, I'd like to expand on Board Secretary cantons overview.

First, this progress benefits from the full recovery of our value engine in half 1, the group achieved operating revenue of RMB 446 billion up 9.1% Y-o-Y, approaching double-digit growth on such a high base is not easy. While deposit repricing helped it is fundamentally the result of synchronized revenue boosting measures across into chain. Structurally, NII noninterest income and net fee income all rebounded all 4 segments, domestic overseas subsidiaries in head office and retail corporate, institutional and markets achieved positive revenue growth.

Behind the strong restart of this value engine is our consistent principal shared responsibility of business lines and regional blocks. We anchor the business orientation of both lines and blocks on value creation. We built a strong link between process and results. We earn the trust of the market shareholders and employees.

Second, our proactive approach demonstrates confidence and disciplined risk management from the data in half 1, we embarked RMB 1.9 billion of resources for NPL write-offs, representing the strongest efforts in recent years as a result, NPL ratio was reduced to 1.29%. Provision coverage ratio increased by nearly 4 percentage points.

Our attitude is that we do not seek short-term gains. We focus on addressing existing risks. We do not pursue absolute targets alone, we aim for sound and stable fundamentals. We do not see 0 risk. We pursue a rational balance between returns and risk cost finance, automator reflects the real economic changes in the real economy will inevitably be reflected in bank's financial statements with an asset base of CNY 57 trillion our approach to balancing development and security is fundamentally not about speculative bets is about comprehensive allocation.

The Ultimate reference framework for our asset allocation a national balance sheet -- this means ICBC has embedded the stabilizing foundation of the Chinese economy into the core of our asset allocation framework, allowing us to capture the long-term growth opportunities arriving from China's development.

Third, this progress is rooted in the conversion of growth drivers through reform and transformation at grows rely more on scale. Future developments rely on depenreform to reshape the growth equation through the rising contribution of noninterest income overseas and subsidiary revenue in recent years a year trajectory have emerged. ICBC is accelerating its shift away from the single growth curve of traditional credit seeking new drivers in the vast blue oceans of comprehensive international and digital intelligence operations.

Diversified operation converts licensing advantages into capabilities to serve the real economy. We have made the -- for example, we support charging stations, energy storage and computing power procurement of our financing plus leasing. We convert network advantages into financial infrastructure that serves R&D rationalization and facility the circulation. We broke the deadlock with direct RMB conversion through a syndicated loan, cutting the clients comprehensive financing costs from over 20% to 5.7%, relying on the group self-built clearing system, we achieved second-level instant cross-border and clearing.

We have seen the changes in 1980s or '90s, if internationalization means the flow of other currencies. Now the internationalization means the efforts around RMB and the going global of RMB. ICBC is providing financial score for enterprise going go digital intelligent operation converts technological variables into core constant, the reshape productive productivity, the fully self-controlled ICV feature large model platform has not only take routing over 600 scenarios, but also spills over to industry partners.

Helping SMEs harness AI at a lower threshold from the point of sale impairment to plan of eco impoirment. This is the underlying hold for our digital intelligence drive to convert old and new growth drivers. These assets are not just visual to ICB transformations, but also mark true growth metrics on our financial statements. New tracks are continuing converting into revenue inflows hedging against the headwinds of narrow interest rate margin and building new pillars for ICBC's future development.

Regarding margin, the data shows a trend of marginal stabilization with deposits repricing being the most crucial supporting factor. This is a common value factor for the banking industry and large banks with their fundamentals of scale, channels and customer base can more smoothly achieve synergy among volume, price and risk -- of course, the maturity volume of existing time deposit decreases and the interest rate spread between old and new products narrow.

The supporting effect of the repricing dividend on NIM will gradually weaken. Therefore, we will continue to deepen the proactive fuel management of assets and liabilities by optimizing the structure and capital the potential for liability cost reduction, we will strive to consolidate margins to a trend. We are confident for the full year in continuously forging long-term value that present cycles for our shareholders and investors.

I will take the second question. Sir, on the road 2 in the middle than for the opportunity was the Everbright Securities. My question is about asset quality. What is the overall asset quality in the first half of the year? Can you elaborate on the situation of the asset quality, especially on the retail banking and inclusive finance, what risk control measures have you taken regarding that? And can you also elaborate us on your risk control transformation and there is any new measures taken for the enterprise-level intelligent risk control platform.

EVP, Mr. Wang will take your question.

Thank you for your question. In the first half of this year, although the international environment remains complex with many uncertainties. The China economy has demonstrated strong resilience and vitality. Against the macroeconomic backdrop of new driving force and optimizing structure. ICBC has deeply implemented the spirit of the Central Economic Work Conference adhere to the main working line of preventing risk, strengthening compliance and promoting high-quality development.

Anchored the goal of becoming first class and persisted in seeking progress while maintaining stability and improving quality and efficiency. We align with the national strategies to lay our total asset, optimize credit structure and advance various tax of asset quality control. The core integrators steadily improved with the NPL ratio at 1.29% at the end of H1 this year, a decrease of 2 bp from the beginning of the year, further consolidating the foundation of high-quality development.

And in the corporate sector, the asset quality continues to improve at the end of H1, NPL ratio of corporate loans was 1.2%, dropping another 9 BP on the base of the 21 BP decrease in the previous year. We continue to focus on serving a national modern industrial system. We conduct in-depth research on industrial planning and supporting policies and fully support development of advanced manufacturing.

We have an investment in financing policy system for the manufacturing industry covering 7 major sectors and 22 key areas. lay out, technological innovation industrial chains such as AI and connected with many projects of the 15, 5-year plan, such as 6 networks. The credit structure is deeply integrated into the national strategy for coordinated regional development. And we have the structure of large, medium, small macro individual has been further improved.

And for the retail and inclusive finance segment, judging from the current situation, there is still pressure on the asset quality control, which is a common problem faced by the banking industry as a whole. From the perspective of internal management we implement the stabilizing growth, expanding the domestic demand and preventing risk philosophy and adopted serious measures such as institutional mechanism optimization, full process risk control.

And at the institutional mechanism level, we adopted -- we optimized the organizational structure and the assessment constraints continue to train high-quality talents adapted to the transformation development. comprehensively strengthened promotion from customer acquisition to risk control implemented intensive post lending management and advanced the construction of integrated collection system for retail and inclusive finance.

The front, middle and back office head office and branches and various business segments have jointly formed a synergy for control. And the foundation for high quality development. At the third process very functional level, we continue to strengthen these 3 passes and 7-color risk control system.

In the access phase, we optimize product risk control design connect innovative services with high-value business scenarios, improve the access management and valuation mechanism for partner institutions to deepen the applications of large models and perfect multidimensional credit strategies. By improving the accuracy of risk identification and response efficiency, we make efforts to screen and block risk at the entrance.

In the duration management phase, we strengthen the iterative optimization of risk mogrmodels, investigates, potential risk heading centers through various methods such as negative behavior identification and cross verification of key nicators, improved the quality and efficiency, front-end risk screening and reduce existing reexposure. At the same time, we continue to depend the classification, management of retail and inclusion and credit assets and move the risk resolution gateway forward by setting differentiated risk control strategies.

In the risk disposal phase, we accelerate the disposal of nonperforming assets, broadband market oriented disposal channels and use multiple disposal method to speed our risk clearance. At present, China continues to introduce policies to benefit people's livelihoods, expand massive demands and promote consumption. And we build a new model for real estate development and vigorously promoting high cat development of inclusive finance and continue to improve the market environment.

The asset quality of retail inclusive finance loans expected to remain within a reasonable range. For the intelligent risk control transformation, we continue to iterate and upgrade our platform and constantly improve integrity, synergy and systemicity of risk management. After platform successfully transitioned from focusing on construction to paying equal attention to construction and application in '25. In the H1 of this year, we continue to improve platform functions. -- deepen application of AI technology strengthened coverage of retail business scenarios and in power asset quality monitoring and risk prevention control.

First, we upgrade the risk control toolbox, strengthen the asset quality monitoring of retail businesses, such as inclusive finance, personal loans and costs in homes, cross-selling, crosstalwarnings, improved rig screening efficiency, optimize risk control revenue deployments. And second, depending on the application of AI technology, we put into production, the risk control AI agent, providing Digital and intelligence services such as risk knowledge, Q&A, intelligent customer health checks and risk control data analysis for the first lines of defense, risk officers, risk managers, reducing the workload at the front line; and third, strengthening full scenario coverage.

Currently, the enterprise level, intelligent risk control platform has been promoted and applied in all domestic branches, some subsidiaries and overseas institutions covering 323 business scenarios such as found trading, product access, channel touch on intense risk resolution and encompassing various business processes such as product access, credit granting, lending and collections. It has achieved critical risk control results and multiple aspects such as risk prevention and control.

The third question the lady on the right in the first row.

I'm from Phoenix team. How did ICBC's international business before may have 1 recently, PBLChas been stepping up afford liquidity support and expanding offshore asset supply and ICs overseas clearing network has also been expanding. Could what measures has taken to help drive internationalization of RMB and what results you've achieved.

Thank you. ICBC has been aligning our internationalization with the country's opening up strategy. We are balancing growth with security and doing our part to support the domestic international circulation, -- this shows in 3 areas. First, our international business has been grown steadily. By the end of June, our overseas network reached 69 countries and regions with branches and Belgian road countries, covering 6 continents and major global financial hubs.

By the end of June, our total overseas assets topped USD 500 billion 11% Y-o-Y and 4% in the year meaning pretax profit made up around 10% of the total group's total contribution to the Group is telecon asset quality remains stable. Second, global service capabilities kee getting better, we are steadily boosting our ability to provide global integrated, coordinated versus we are giving business CFS, we've rolled out signature products like ICBC speed remittance, ICBC transfer.

All this helps companies speed up their settlements and fix the financing in points when expanding overseas. Using our clearly settlement, payments and cost the services along with new platforms like prices and third-party payments. We are constantly improving experience of the customers. The total credit balance for foreign trade companies grew by 12%. The international settlement handled by our domestic branches jumped 41% Y-o-Y, the FX hedging ratio for our corporate clients climbed to 36%, ranking first among the Big 5, our global direct overseas service now covers 42 countries.

Our cross-border and offshore custody assets broke the CNY 3 trillion mark. Third, we continue to deepen our International Corporation platform. We've actually -- we've performed our role as the Chinese Chair of the Brick Business Council for Sitin corporation. We've also kept expanding and upgrading the China, Europe with union, which covers 136 countries across 20 countries, including 51 Fortune Global 500 firms.

Through BRB, we are supporting the high-quality development of the meter initiative, our members and observers have grown to 216 institutions, covering 79 countries and regions. -- like the CIIE, the Canton Fair the China fare, we leverage major international exports. We are helping build the export China brand.

About RMB internationalization. This has always been a strategic priority for our international business. Since this year, we've been pushing hard on 3 main fronts. First, we keep broadening the use cases of cross-border RMB, we launched the campaigns, rolled out comprehensive cross-border IMB Financial Solutions, including 10 major services focusing on new quality productive forces, digital trade and Chinese companies going global for key clients, groups like SOEs, commodity traders, multinationals and SOE, we have tailored services plans.

We have on our group handled CNY 5.5 trillion in cross-border MB. The cross-border RMB segment jumped by CNY 299 billion, a 34% increase ranking first among for central SOE settlement volume grew by 34% and for bulk commodity fierce by 70%. Second, we keep improving the cross-border RMB payment and clearing network. We're building up our clearing infrastructure, upgrading our service capabilities, strengthening the role our RMB clearing bank play in nurturing offshore MB market.

We already had RMB clearing banks in 12 countries. In July were approved to serve as a joint RMB clearing bank for Africa, meaning our clearing network now stretches into 19 African countries where standard bank operates. Our clearing capacity keeps growing year-by-year and have 1 occurring the clearing volume handled by us rose by 16% Y-o-Y.

Third, we keep steming up our ability to serve the offshore RMB market. We closed first offshore bond investment deal in Shanghai FTZ involved investors from trade -- free trade accounting units boosting Shanghai's push to become International Financial Center. We rank top in the market for trading volume, number of participating institutions. We have on our group's offshore RMB ForEx market making and client-driven trading volume grew by 36%, client base expanded by 16%.

We are actively serving overseas institutional investors across 70 countries and regions. The volume of interest rates of ForEx trades we made with these investors jumped by 23%. Our market share had 15%, up almost 1 percentage point. We've also been actively involved in building Hong Kong International gold trading center as a directing institution for Hong Kong Gold, we executed the very first batch of trade.

Looking ahead, we'll keep focusing on serving the real economy and the new development paradigm will strengthen our A&T great operations performance abroad and keep enhancing our ability to provide global allocation through all this, we aim to contribute build even more to the country's high center opening up. Thank you.

Thank you. The first question. We'll take questions online. Can you hear me? Yes, please.

Thank you. This is BA Securities and we need -- congratulations on your first half results. I have a question for the fee-based or the noninterest income. What are the main driving factor of the growth in the fee in the first half of the year? How about other noninterest income? What is the outlook for noninterest income for the whole year? What are the core revenue-generating parts and growth strategy of SBC Wealth Management business.

As CVP, Mr. Ya will take your question.

Thank you for your question. In the first half of this year, our bank responded to the changes in the compact external environment continuously improved financial services, comprehensive financial services capabilities and space market opportunities, achieve noninterest income RMB 104.9 billion, Y-o-Y increase of 9.9%.

In terms of fee and commission income, we achieved income RMB 69.2 billion in the first half, a Y-o-Y increase of 3.3% to volume manifested maintain its market first position and the increment achieved leading position. First, the wealth management sector continues to lead in efficiency enhancements.

Our bank til correlated the comprehensive plus digital and intelligent synergistic wealth management system sees opportunities to capital markets recovery in warming gold allocation, strengthen core investment research capability. The income from Corporate Wealth Management, Personal Wealth Management and the private banking business increased by 24% and 15% Y-o-Y, respectively.

Among the income from agency pressures pet business, from sales agency in WM sales agency increased by 103%, 60% and 7%, respectively. Scale of pension business expanded rapidly driving a 38% increase in related income. Second, the basic product sector built a solid and stable support, relying on the huge China channel networking customer base, the basic product sector continue to consolidate of the bank serving the real economy in people's livelihood.

The income from settlement of cash clearing and cash measurement business increased by 0.9%, mainly because our bank sees opportunity to exchange rate fluctuations active responding to complex changes in international situations and the income from the foreign exchange settlement of sales for customer fording exchange trading increased by 7% income from the bank acceptance bills and letters of credit, corporate international settlements and international and domestic factoring increased by 20%.

In additional scale of asset costs grew well with in coming by 8%. But as a service sector transform upgrade is quality. In the first half of 2026, the group securitizing service income increased by 7% Y-o-Y. Bond underwriting, underwriting and insurance income increased by 1.4%, income from investment banking and advisory and consulting syndicated loans, et cetera, remain stable.

In terms of other noninterest income we achieved online interest income of RMB 35.7 billion, significant Y-o-Y increase of 25.3% and in terms of bond investment liquidity condition may lose in the first half and the center of the bond yields moved down. Taking a 10-year government bottling example or the yield dropped by 11 bps from 1.85% at the beginning of the year to around 1.73%.

Our index rose by 19.8% in Shanghai Composite Index rose by 3.2%. Our bank strengthened the guidance of investment research focused on key areas we focus on key areas such as the 5 major priorities and new quality productive forces to optimize the equity investment layout achieved income RMB 15 billion, while serving the real economy well an increase of RMB 9 billion compared to the same period a wireline increase of 140%.

Looking ahead, opportunity and challenges for development of noninterest business are intertwined. On the 1 hand, proactive macro policy continue to expect for the support for stabilizing growth and expanding domestic demand concerning increasing, driving the transformation and upgrading the real economy. The fundamentals of the capital market is generally improving and the pace of domestic consumption recovery is certainly advancing.

So the foundation for the development of noninterest business continue improving. At the same time, the patient capital investment is in hot technology sectors are gradually entering the harvest period and supporting role of equity investments become increasingly significant. On the other hand, affected by the continuous implementation of policy to reduce corporate comprehensive financing costs.

And -- regarding the development of WM business, we will focus on buying biothinking, adjusted transformation, online, offline integration to create new growth engines and enhanced revenue contribution of WM business promote high-quality development of the WM business. In terms of transformation actions, first, transform from a product-oriented seller thinking to a customer demand-driven buyer thinking focus on the customers' real demand rather than 1 side is institutional supply.

We combine the use of diversified tools such as WM farm insurance and private equity to achieve dynamic adoption of the customers' all-dimensional needs, such as asset preservation appreciation. And we adhere to the overall requirement of promoting the synergistic transformation of the VM business from product sales to account business, hotel management and brand management build a value system of panoramic insights, metical research and selection, intelligence allocation and long-term companionship, actively advanced renewal and upgrade our SBC Wealth brand.

And comprehensively enhanced brand recognition, professional approval and customer perception of our banks, wealth management business. Second, digital empowerment and optimized companionship guided by better meeting customer assets, allocation needs, taking the construction scenario-based full life cycle comes as the mainline relying on the digital tools to empowered service chains sticking to our original aspiration of cusa finance.

So the upgrade the platform strengthens support build a 4-dimensional comprehensive wealth management platform. Take products, investments, research and brands as the core service pillars enhanced differential development capabilities continuously strengthen customer stickiness and drive the high call developments.

The fifth question, let's come back to the audience here in the room. The lady in the middle in the second row.

News agency, how is your half 1 investments in financing, what specific steps you've taken to enhance support for tech finance. How will you further tailor our services to better support heart tech companies, start-ups and other innovative tech businesses?

AluLite, SVP, Mr. Zhang Shotan to answer this question.

In half 1, we actively implemented countercyclical and cross-cyclical adjustment policies, aligning with the real economies financing needs -- we act early and precisely to help stabilize in employment, businesses, markets and expectations. Our investment in financing business showed 3 main features with high-quality.

First, steady growth in total volume with both credit lending and bond investments are 2 investments growing faster than last year by the end of June. Our onshore RMB 2 investments reached nearly RMB 47 trillion, up by over RMB 3 trillion from the end of last year and 11.1% Y-o-Y, which is percentage points higher than the national average. Total onshore RMB loans grew by over RMB 1.4 trillion, 6.4% Y-o-Y increase. 2 percentage points ahead of the national average point providing strong financial backing for the real economy.

We also boosted financial supply areas like consumer business and auto finance, personal business on top RMB 2 trillion and personal consumer loans surged by 22%. Second, precise and well-adapted allocation, keeping us ahead in 5 major article loans. We deepened our modern corporate credit layout consolidating our traditional base while creating new growth drivers, making our credit structure better match the broader economy.

Our 5 major article loans were RMB 14.5 trillion ranking first among peers up over RMB 1 trillion. We also wrapped up support for major projects in key areas like the 2 heavies to us and 6 networks using mega projects to anchor investment. Loans for the 2 heavies exceeded RMB 70 billion at the top of the industry and equipment renewal loans reached nearly RMB 200 billion.

We also effectively rolled out the joint fiscal financial policy package to boost domestic demand by the end of June, loans in the 4 fiscal subsidy areas grew by over 10% year-on-year. Third, consolidating our core business advantages, leading the industry in multiple manufacturing metrics.

On industry side, we served manufacturing clusters. called ICBC hitting initiative covering all 8 national level manufacturing clusters, our manufacturing loans balance exceeded RMB 5.8 trillion leading comparable peers in both balance and growth -- both our corporate manufacturing loans and mid-to long-term manufacturing loans are market leading.

On the commerce side, we teamed up with the Ministry of Finance, Mr. Commerce and PVC and key commercial enterprises and associations to hold events that both circulation and consumption helping build a robust domestic market. Our trade finance balance topped over RMB 1.2 trillion. We served over 9 million commercial clients and our applications for service consumption and pension relending rank first among peers.

We will take a lit in implementing both existing and new policies in the future. We will focus on major national strategies, key areas and weak spots, making sure we precisely match high-quality corporate projects through high-quality investment and financing services, we aim to contribute more to high-quality economic and social development. We'll keep innovating in retail products and both in our digital finance capability to our consumer potential.

Regarding our specific actions and highlights in tech finance and how we will further target Hardtech and startups. We pay high attention to TAC finance. We refined our 5 special survey mechanism, featuring specialized institutions, targeted campaigns, exclusive products, dedicated risk control and specific safeguards, safeguards.

First, we serve national strategies and boost high-level tech self reliance. We're taking the initiative to serve the 3 major international tech innovation centers among emerging pillar industries. We've strengthened our industry research, product, innovation and marketing constantly improving our ability to spot promise in tech and pick the right tracks.

We are deeply involved in the national major tech breakthrough systems strongly supporting tech, R&D among the companies that won the 2025 National Science and Technology Awards, our service coverage reached over 90%. We are actually aligning with National PPRD P&D plants tilting more towards basic research and reaching the financial supply for major national tech tasks. We stick to the concept of investing in people and have set up an entrepreneur scientist service framework to provide customized services for tech start-up teams.

Then driving the innovation. The integration of tech finance and manufacturing finance to support a modern industrial system leveraging our synergies, we are focusing on our core manufacturing business to help tech innovation and industrial innovation merge deeply. We are optimizing credit supply by innovating credit products. We refined star products like R&D loans, Hot loans, base credit loans and special loans for disruptive tech innovation, keeping our tech loan scale at the top of the market.

We are strengthening investment loan linkages implementing the 4 investment requirements. We're working closely with BC and industry fund use early in the company's life cycle ensuring we can land when we see an investment and use lending to boost investments. In half 1, our group's subsidiaries provided over RMB 100 billion in equity financing to tech companies.

We are also using the financing plus leasing feature of financial leasing to strongly support the rapid growth of companies in integrated circuits, computing power, aviation and distributed energy and have our tech financing financial leasing disbursement surged by over 150 Y-o-Y, is facilitating the commercialization of tech achievements by building a tech finance vehicle system platform.

This can draw the channels, products, tech, we've built a digital platform for the commercialization and ecosystem services directly targeting pain points of turning research into reality. It creates an integrated ecosystem combining all these factors so that these pushes our finance services from single point breakthroughs to ecosystem building, expanding the bank's role from excited intermediaries to a resource intermediary.

From a financial provider into an ecosystem in neighborhood right now, 12 top-tier institutions have signed on, including Ken versus like Sojan University and Wuhan University of Technology. 2 high-tech zones and 6 tech companies and more. We have a lot of reserves that is to sign.

Looking ahead on CBC will keep optimizing our investments in financing logic, continuously improving our risk control and proactively deepening our service transformation to support the heart, tech and start-ups. First, we will use CFS to provide all around financial services, a comprehensive financial solutions, paying client centers and market-oriented supported by innovation and talent. We tackle the pain points of the tech companies.

We are accelerating a shift from just offering traditional credit to providing a full suite of services that cover financing adviser, advisory tech support and connectivity before integrations the CFS is an important part of 5 transformations. And it's also a big and important channel for serve our clients.

Second, we are perfecting a full chain full life cycle tech finance product system. We are refining innovative financial products and really leveraging the synergies across equity, loan bonds, insurance leasing businesses. This helps us better serve tech companies of different types in at different stages, especially guiding more financial resources toward early-stage start-ups.

Third, we are comprehensive. We are upgrading our digital and intelligent risk control and serve capabilities. at identifying a company's capabilities and refining our tech company evaluation models, which are based on tech innovation metrics, investments and financing behaviors and business growth indicators. We use AI and big data to run smart evaluations on tech innovators, ensuring risks and returns are well matched and using smart finance to serve Arte. That's all from me. Thank you.

Thank you for your answer. Let's take the sixth question in the row 3, please.

And was a strong high Securities News. I want to know what are the key application scenarios for ICBC current fintech investments how does ICBC leverage AI technology to empower business transformation? What measures are taken regarding the reserve and cultivation of tech talents?

This is the SVP, Mr. Zhao answering your questions.

I will answer your question from 3 aspects. First, in the building of AI ICBC and advanced technology platform system in the nation is the foundation ICBC profoundly addressed the general trend of the digital network and intelligent development and actively integrated international AI+ initiative. -- we have upgraded digital SABC to AI CPC focusing on building a 1+13 system. The first 1 is to consolidate SCPC Duo technology foundation.

We continue to implement the pilot Austin make forward-looking layouts for computing power supply, enhanced professional capabilities of large models for the AI agent factory create Fotec-independently controllable large model technology system in response to endogenous defect and the external attack risk of large models -- and to ensure that the intelligence is safe, reliable and controllable.

Second 1 is to strengthen the ICBC data repository data space, consolidated data foundation, deepen data management to high-quality data assets, optimize the development application tool platform, expand the high-value data products matrix. Build an enterprise-level trusted data service platform create an open and integrated data ecosystem promote a compliant sharing and efficient circulation of data elements.

Those 3 is to build 3 types of platforms for corporate, personal and employee services, relying on ICBC and ICBC data space, focusing on serving customers and power employees, we actively create new paradigms of 1 customer, 1 adviser financial services and a new weapon for improving quality and efficiency in cost on system continuously creating more incremental value for custom employees.

Second, business innovation application is key in building we appear to application orientation, strengthen value guidance and overall application of AI technology, maintaining a leading position in the industry at present, more than 600 large model scenarios that we implemented and workload undertake AI is in the first half reached 30,000 person years, promoting more precise service to the real economy.

First, improving transaction efficiency in financial market sector, we built the global dealing intelligent dialogue training system, achieving an inhegent-cost loop for the entire transaction link. With the intelligent inquiry transaction ratio exceeding 96%. In asset liability sector, we have the AI plus asset liability Inteligente management hub assisting accurately predicting the trend of capital changes in promoting efficiency, capital allocation.

Second, innovating customer services, online and off-line channels, we upgraded and launches the UniFi customer-facing assistant ICBC. Taking the lead in passing in among peers in the mobile banking on platform, we create a conversation and service one-stop convenient experience. And third, optimizing marketing and customer acquisition. In the personal finance sector would depend a new model for human machine corporate as marketing, the inhere assistance for personal customer management searching data making analysis and engineering plans.

The number of service exceeding RMB 22 million in the private banking sector, we built a comprehensive financial service agent, deeply mining customers' potential financial needs and shortening the time for generating service plans from several days to 3 hours for strengthening risk prevention and control.

In patents review assistants output 360,000 compliance review suggested in the first half of the year. nonterreview of opinions proposed by compliance personnel is has increased by 130% is improving operational efficiency. The processing speed of single entry 25x faster than many work and review processing efficiency, hammer applications.

Third, talent team is a guarantee for ICBC, the key to digital intelligent transformation is in people. We strengthened innovation drive here to time leadership promoted deep integration of business technology and data and build a financial technology and data management talent team with an adaptable scale, reasonable structure and excellent professionalism.

In terms of total value, we promote steady growth of talent team scale. Continuous increase in construction talent in key areas such as AI, data science and separate security strengthen the cultivation of composite talent in business technology and data, do measures payer to individuals to promote person post fit. In terms of mechanism, we implement the IT business partnership program to promote 2 way empowerment between technology and businesses.

At present, AI is accelerating its evolution to the finance is booming. As with a huge long term, maintain strategic determination, continue to deepen the building of for a long-term sustainable value for the volume of investment to make greater contribution to a financial powerhouse.

The last question I'd like to invite the gentleman on the left in the second row.

Thank you very much. Congratulations I'm Du China from Cosan Securities. My question concerns dividend. Could you walk us through ICB dividend policy and the thinking behind raising the payout ratio this time. Can we maintain this dividend level going forward? And how do the management view the balance between capital management and shareholder returns?

lite for Secretary, Mr. Kanfa, in to answer your question.

To give investors a better sense of reward, we've raised our interim dividend payout ratio to 31%, which comes to 1.51 per ton share tax inclusive. Rewarding investors has always been a top priority for us and through consistent and stable cash dividend -- we're committed to sharing the fruits of our growth with shareholders. It's been 20 years since our IPO in 2006, and our annual total dividends have kept -- we have paid out over RMB 1.64 trillion in cash dividends in total, the top dividend payer in the Asia market by total amount.

Our total dividend -- our annual total dividends have kept growing steadily -- our total dividends far exceed the total amount we've raised from ordinary share issuances over the years, and we've won the best shareholder return award multiple times. Meanwhile, we are constantly improving our dividend mechanism since 2024, following the regulator's call, we started paying dividends twice a year, combining interim and annual payout.

We also now give it share investors the option to receive their dividends in RMB. All of this has made our dividends much more timely and flexible. As for why we are raising the payout ratio here is when we went into our thinking first, we want to actually address what the market investors are asking for dividends are a key metric. The market watches closing. As a large cap bluechip stock, our management team has always prioritized giving investors a fair return and listening to the listening to the voice of capital market raising the interim payout ratio is a big step for us in optimizing how we reward shareholders while keeping our dividends consistent and stable.

Second, our solid performance growth gives us a strong foundation for this. Since this year, we've adapted well to market changes and steps stepped up our support for the real economy, deposits and loans are growing steadily. Fee income is bouncing back and our key operating metrics for half 1 are looking much better than the same period last year. This upward trend in our performance and our solid capital base are exactly what makes it possible for us to comfortably raise the dividend ratio.

Third, we need to strike a balance between rewarding shareholders and our long-term growth. When we set our policy, we always try to find a sweet spot between shareholder interest, business growth and capital adequacy please a reasonable amount of retained earnings is a crucial part for our internal capital reserves and vital for our long-term future.

It is certain to raise the payout ratio was made very clearly. We made sure it wasn't hurt our capital adequacy or our ability to keep growing sustainably. Looking ahead our dividend policy is setting so. It needs to adapt dynamically to the broader economy regulatory guidance and how our business is actually doing Capital management and shareholder returns go hand-in-hand and support each other.

Capital is a bedrock for a bank to manage risk, serve the real economy and grow over the long haul without enough capital, shareholder returns are like well running dry on the flip side stable and predictable returns are key to keeping our market value steady and boost investor confidence, which actually opens up more channels for us to raise external capital when we need to.

Going forward, we'll keep striking balance between capital management and our policy and work hard to keep our business on steady footing. We'll look at the whole picture, fair share holder returns, retain earnings and external capital raising to figure out the right payout ratio. By doing so, we will keep sharpening our financial services and competitive edge, making sure investors share in the full solid high-quality growth.

Thank you for the question. answers. Dear investors, analysts and friends from the media due to the interest of time, we'll conclude the Q&A session. Thank you for your insightful questions, and thank you to our management team for the detailed and professional answers.

Today's announcement has provided a comprehensive review of our operating performance in half 1. As I -- it has also been an in-depth dialogue on long-term is and value investing time proves value we have created through dedicated work. We'll continue to move forward this into mantos shows our progress towards higher quality and stronger performance reflect our confidence in driving high-quality developments.

We will continue to stay true to the fundamentals of finance and improve our operating performance. We will continue to create long-term, stable returns for global investors through Investor Communication meetings reverse roadshows, global roadshows and press conferences. We will maintain close an ongoing interaction with the market, if you have any further questions, our IR and PR team will be available at any time.

Thank you for your continued trust and support. We look forward to continuing to work together with you and writing more new chapters of share value and to success. We look forward to seeing you again. That's all for today's announcement. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[Audio Gap] Q1 Earnings Call. I'm [indiscernible].

Today, we're honored to have with us Mr. Ken Fong Lin, Board Secretary of ICBC, along with heads from key departments and subsidiaries including corporate banking, personal banking, institutional banking, inclusive finance, credit management, finance and accounting, assets and liability management, International Banking Technology, Data Management Research Institute, Financial Markets, Asset Management, investment banking, personal loans, credit card and ICBC Wealth Management.

Now I will briefly outline our key performance indicators. ICBC Q1 results have been officially released. Overall, the bank achieved its strongest start in recent years, exceeding expectations. First, key profitability indicators showed positive growth with higher Y-o-Y increases. In Q1, group revenue reached RMB 222 billion, up 8.4% Y-o-Y. Net profit was RMB 88 billion, up 3.9%. Net interest income as a core revenue driver rose 7.5% Y-o-Y, its first growth since 2023. Net interest margin was 1.29%, up 1 bp, its first increase since 2009 -- 2019. Net interest income grew 11.6% with net fee and commission income up 5.2% and other non-interest income surging 38.9%.

Second, assets and liabilities grew steadily. Proactively supporting national priorities and policy packages, ICBC strengthened its role in serving the real economy. By quarter end, total group assets rose 4.3% from year-end to RMB 55.77 trillion, making ICBC the world's first commercial bank to exceed RMB 55 trillion in total assets. Total loans reached RMB 31.7 trillion, up 3.8%. Financial investments was RMB 17.87 trillion, up 5.7%. Deposit competitiveness improved with customer deposits at RMB 38.59 trillion, up 3.4% from year-end and average daily balances up 4.19%. Personal and corporate deposits grew in a balanced manner.

Thirdly, risk management remained robust. Intelligent risk control capabilities and comprehensive risk governance was enhanced. NPL ratio was stable at 1.31%. Provision coverage ratio rose to 214.38% and, NPL disposals totaled RMB 70.5 billion in Q1, up RMB 15.1 billion Y-o-Y. The write-off efficiency ratio reached 2.2. Risk resilience and NPL resolution capabilities strengthened further.

That concludes the overview of our Q1 performance. We now begin the Q&A session.

[Operator Instructions]

I'm Meizhi Yan from UBS. My question concerns loan growth. I have seen the disclosed results. I should congratulate all of you for the robust results, better than expectations from the market. My question is, according to the monthly social financing data from the Central Bank, Q1 saw slower Y-o-Y growth in corporate loans, continued contraction in bill financing and an ongoing downward trend in credit expansion. We have also heard that in April, the Central Bank will hope that the bank can grow more credit. I don't know whether it's true.

For ICBC, how did you perform on loan deployment with your full year outlook?

Thank you. For this question, I will invite asset and liability departments to answer with supplement with corporate banking department.

On the corporate loan growth, I have two observations for your reference. First, for total financing, we have seen that overall corporate financing growth remains stable. According to PBOC Q1 data, total financing to corporate sector loans, bonds and equity combined grew by 8.3%, up 0.4 percentage points from the same period last year. This growth rate has been broadly stable at around 8% since H2 of 2024 for our bank. As of end March, corporate financing under the same definition grew by 11.5%, in line with the overall trend.

Second, from loan growth, corporate loan growth has indeed moderated by the end of Q1. Outstanding corporate loans nationwide grew by 8.6%, down 0.7 percentage points from last year. We see a similar pattern on our bank, Domestic RMB corporate loans grew by 10.7%, down 1.8 percentage points Y-o-Y. We believe there are 2 main reasons behind this. First, the base effect, during the 14th 5-year plan, countercyclical policies were strengthened and large state-owned banks took on greater responsibility and credit supply. As a base has risen rapidly, loan growth is naturally normalizing.

Second, there has been a positive shift in the financing structure. In the current low interest rate environment, corporates are more willing to issue bonds, which has partly substituted for traditional bank lending and helping reducing finance costs, easing pressure for bank, which is conducive to reducing financing costs for corporates. According to PBOC data, in Q1, corporate loans increased by RMB 60 billion less Y-o-Y, while bond financing increased by over RMB 500 billion more. In response, we have also stepped up our bond investments. At the end of March, our corporate bond investments grew by 37.9% Y-o-Y, significantly faster than corporate loans.

Therefore, our credit extension in Q1 reflects steady overall growth with a more optimized structure by end March. Our domestic RMB loans grew by 6.9% Y-o-Y, higher than the national level at 1.2 percentage points. Corporate loans grew by 10.7%, 2.1 percentage points above the market. Lending to key areas manufacturing, inclusive finance, green finance, strategic emerging industries, agriculture-related sectors and private enterprises, all grew faster than the average.

Looking ahead, we will place greater emphasis on balance and targeted credit allocation, total volume. We aim to maintain steady growth in pacing, will avoid front-loading and ensure more even deployment in allocation. We'll focus on major national strategies, key sectors and weak links while strengthening financial support for consumer spending. Meanwhile, we'll actively adapt to changes in the overall financing structure and maintain solid growth in bond investments. Our supplement from the corporate banking.

For ICBC, our credit to the credit -- to the corporate we grasp the window for the corporates after the spring festival. First, the volume increased with high growth of loans. In Q1, the corporate loans has increased by has increased by RMB 300 billion. The balance was over RMB 18 trillion, the first of its kind, providing solid foundation for the real economy.

Second, the structure is optimized, meeting the requirements for the industries. Our supply of credit to the industrial -- to the technology finance was over RMB 4 trillion. We are increased to two majors, have increased by RMB 70 billion. Thirdly, our reserve has been strengthened. We continue to solidify the medium-to long-term credit extension, which is balanced our supply for the projects has accounted for 90%, which laid the foundation for the total.

So looking ahead, ICBC will fully implement the spirit of the April 28 Intrapolitical Bureau meeting, and we will continue to enhance both intensity and precision for our support for the economy. We'll further increase corporate lending to ensure the loan growth remains aligned with the economic growth and effective credit demand. In terms of allocation, we'll focus on the need during the 15th 5-year plan period, we will optimize our corporate lending structure, strengthen our core responsibilities and increased support for consumer services and will support the water networks, net generation power grids, computing networks, new generation communication networks.

With our comprehensive financial services, we will focus on major projects under the 15th 5-year plan, including more than 100 key projects with targeted measures, we will continue to optimize our reserve and credit. Thank you.

[Operator Instructions]

I'm from CITIC Securities. I'd like to congratulate on ICBC's stellar performance. My question relates to the fee and commission income. We saw the continued growth momentum. There's a continuation in the equities, but there's a continuous fluctuations. So what is your outlook for the growth of fee and commission income? We can recognize there's significant amount of unrealized gains from the sale of AC assets. How should we view it?

The questions will be answered by finance and accounting department.

Thank you for your questions. In the first quarter, we actively responded to the complex changes in the external environment, continuously improved a comprehensive financial service capabilities and achieve a steady growth in net fee and commission income. And we expect to maintain the top position in total income, laying a solid foundation throughout the year. In terms of retail and corporate, we actively seize the favorable opportunities in the capital market, according efforts across different business lines to improve our research capabilities.

We achieved double-digit growth in Wealth Management and Pension Services. And also, we had doubled our income from agency precious metals. On the other hand, we implement the policy of expanding domestic demand and supporting consumptions, improved customer experience, and we have coordinated peak season marketing and we further develop our ecosystems to increase investment to promote consumption driving a positive year-on-year growth in domestic third-party payment income.

And from corporate side, we continue to strengthen the foundation of corporate clients, promote the development of new financial infrastructures for settlements and digital empowerment and continuously optimized asset services such as bond underwriting and investment guarantees and syndicated loans, leading to a slight increase in income from cash management and settlement services and investment banking. There, we actively seized favorable opportunities in the capital market.

We achieved double-digit growth in Wealth Management and Pension services, we will support steady growth of fee and commission income from corporate clients. Looking ahead, as positive macroeconomic policies kicked in, capital market expectations remain positive. Expanding domestic demand is expected to support the recovery of consumption. ICBC will leverage our strength in customer base, extensive channels, comprehensive services, and financial technology to respond to risks and challenges and create value through service. We will provide over 14 million corporate clients and over 780 million individual clients with a broad range of financial products, high-quality financial services.

Overall, we are optimistic about fee and commission income for the entire year, and we expect a positive growth trend, and we will focus on three areas to improve quality and efficiency. First, seize opportunities and enhanced wealth management. Second is the strength in customer relationship and the quality of core products. Third is to enhance synergy and achieve breakthroughs in comprehensive services, combining financial insight and AI integration, connectivity and funding explore comprehensive financial solutions and around the entire life cycle.

For the other noninterest income and the high base, last year, we have diversified growth drivers for noninterest income. Our noninterest income comes from active investment, bond and exchange profit and loss. In the first quarter, our noninterest income continued its high growth trend. Other -- we still face pressure throughout the year. As you mentioned, the geopolitical tensions and capital markets -- and we'll seize the opportunities and to leverages the strength in order to capture the market opportunities to improve our revenues.

Regarding bonds, we strictly follow accounting standards, study the market, seize volatility opportunities and optimize trading strategies, investment structure. In terms of equity, we seize structural investment opportunities and tap into the potential of emerging business such as asset management and wealth management. Regarding exchange gains and losses, we'll closely to monitor exchange rate trends and conduct in-depth market monitoring analysis to achieve sustainable development.

I'm Richard Xu from Morgan Stanley. The question concerns asset quality. How did ICBC's NPL formation perform last year? And what is the outlook for this year? Your NPL formation and the trend of NPL, especially now we see the Middle East geopolitical conflict. What specific impact it has on ICBC's asset quality?

For this question I'll invite credit management department to answer with supplements from international banking department.

As you have seen last year, our annual report has been released previously. The -- our NPL formation ratio was relatively -- for the past years from the annual report, we have seen that it was relatively strong among peers. For Q1, you have seen from the Q1 report, if we compare with ourselves the DPO ratio was relatively stable. According to the pattern, every year's Q1 NPL formation was higher, so from this perspective, we are confident that for the full year, our asset quality will be stable.

You can see that ICBC has been in credit risk management. We have been outperforming other banks. In this year, we continue to promote the Three Gateways and Seven-color Pools. In managing onboarding, we do proactive prevention of risks and enhancing the disposal of NPLs with high quality unchanged to address the changes of the market to keep stable of our asset quality.

For your second question, about the Middle East situation. After the exposure of the risks, the impacts in the short term have limited impact on our asset quality. First, our direct credit exposure to the Middle East is relatively limited in both size and concentration, the exposure accounts for a small share of the group and are mainly to sovereign-back entities, large SOEs and high-quality multinational corporations.

And second, after the exposure, we have formed the special forces. We do analysis on the risks and do inspection of risks on time. And based on the list of customers and case-by-case, do the analysis of the risks. So up to now, we see limited impact on ICBC's asset quality.

I'll introduce to you the situation of Middle East. After the breakout of Middle East conflict in February, we followed the situation and developments of Middle East situation. We performed the necessary work to keep the stability of our work, the safety of our employees and assets. As in short, the Middle East is also a very important region for our internationalization of the group, and we will coordinate the development in security. Thank you.

[Operator Instructions]

I'm analyst from CICC. Congratulate ICBC on your performance and exceed expectation. I'd like to ask about NIM. Although we did not disclose NIM figures, but we can infer that this figure has stabilized and even rebounded. What are the reasons behind this? If the first quarter figures is very impressive, can this trend continue throughout the second and the third quarters? Can you break it down further on the asset and the liability side?

The questions on NIM will be answered by asset and liability management department.

Thank you for your question. For the first quarter, the NIM is 1.29% and is stabilized with a slight increase of 1 bp and the increase of about 2 bp compared to the previous quarter. The factors behind the change is due to four factors. It is because of our joint effort of both timing and our effort. First is monetary policy remained moderately loose and largely stable, creating favorable external environment for stabilization of NIM.

In the first quarter, the Central Bank did not cut reserve requirement ratio or interest rate. The OMO rates remained stable. With the decline in key term [ shipper ] within 10 bp, the nominal LPR deposit rates have remained unchanged for 11 months. A relatively stable monetary policy interest rate environment, alleviated the downward pressure on bank asset returns, which was a substantial positive factor for NIM.

Second, the comprehensive cost of liabilities continue to decline, supporting the improvement of the NIM. On one hand, high-interest products issued earlier matured with the amount of fixed term deposits over 3 years, maturing in the first quarter, accounting for 35% of the annual total which led to a decrease of 13 bp in the interest rate of various deposits. On the other hand, due to the continued availability of liquidity, market interest rates declined moderately, resulting in a 15 bp decrease in the interest rate of interbank liabilities.

Third, efficiency of assets and liability allocation has been further improved. On the asset side, we focused on loans and bonds with the average daily proportion on these two investments increasing by 0.5 percentage points, and the structure of major assets continued to improve, which enhanced the overall interest-bearing asset returns. On the liability side, we avoided evolution, striving to enhance the stability of funds, strictly implemented the interest rate adjustment safeguard clause and the self-discipline initiative for Interbank deposits for the reducing costs, improving efficiency.

Fourth, the postponement of interest rate cuts by major economies is beneficial to the stability of the NIM in overseas operations. Affected by the rising global inflation risk intensified geopolitical conflicts, major developed economies have postponed their interest rate cut schedules, improving the environment for commercial banks, international operations and enhancing the stability of overseas operations. And the first quarter, with the contribution of foreign exchange in overseas segments increased by 0.6 percentage points.

In terms of the trend of the NIM throughout the year, we maintain our view from the beginning of the year. The NIM will turn positive year-on-year and the NIM will continue to decline slowly. This is based on the following two factors. On one hand, NIM, the interest margin between deposit loans and traditional sectors is expected to stabilize or even rebound. There are signs of marginal stabilization in loan yields. Loan yields on a comparable basis are roughly in line with the interest rates on newly issued loans. And with the repricing progress of existing loans reaching 91%, the decline in loan yield is expected to continue narrowing.

Second, there's still room for the deposit interest rate to decrease. Interest rate on newly absorbed time deposits remains low and significantly lower than that of existing time deposits. Assuming policy interest rates remain unchanged, the deposit costs expected to exceed that of loan. On the other hand, when the interest margin between deposits and loans stabilized, the price of bonding to bank liabilities will affect the NIM level. Currently, the repricing cycle for bond assets is longer than that of credit assets and the yield on new bond investments still declining. Therefore, bond investment will become the main factor, in fact, the trend of NIM in the next phase.

At the same time, under the background of diversified liability structures, commercial banks increasing their efforts to absorb interbank liabilities, although the interest costs of interbank liabilities has decreased at present. If market interest rates experienced significant fluctuations or reverse and rise in the future, it will also affect NIM level. Thank you.

[Operator Instructions]

I'm [indiscernible] from China Securities. My question concerns retail AUM, wealth management and deposits. Could you introduce the retail AUM growth in Q1 and the AUM mix evolvement? What is the current product mix in Wealth Management? What are our client preferences and what is the future development plan? Also are we seeing any signs of accelerated deposit outflows into wealth management or other asset management products? What was a maturity and rollover situation of deposits in Q1? And what targeted measures have been taken to stabilize and grow deposits?

This question will be answered by personal banking department with supplements from ICBC Wealth Management.

Thank you for your question. Our retail AUM growth in Q1 -- the growth is strong following the changes of the market in Q1, the average -- daily average AUM reached -- was up by RMB 1.78 trillion to RMB 25.8 trillion. The AUM balance was over RMB 26 trillion at the end of Q1. Such aggregates make us the leading position as a commercial bank managing the largest amount of personal financial assets.

For the mix, we also do analysis. In the personal financial assets, savings deposits accounted for 77.5%. The non-deposit AUM, 22.5%. Stabilizing from the end of last year, the change of AUM mix is controllable by ICBC. So for the product mix, client preferences and how do we see future plans for the product structure, our products is centered on deposits, WMP, funds, insurance and private banking selected products and also private banking products.

For deposits, we have products which have guaranteed principle and interests for funds. We follow a broad access, selective screening approach to build a long-term and high-performing core allocation. Our private banking platform offers quantitative index enhanced strategies with differentiated products. For insurance, we are shifting from investment oriented products towards protection oriented solutions. Life insurance, commercial pension products and health and medical insurance are growing remarkably. From such mix, our wealth management products, funds and insurance are the important nondeposit projects -- products are growing strongly.

In Q1, we have seen some new changes in WMPs in terms of clients. We have 784 million personal customers. They have different -- they are categorized into different segmentations. They prefer low volatility, stable return products such as wealth management and fixed income funds. Ofcourse, deposits account for more. High net-worth clients have more diversified needs with. In Q1, the private quantitative strategies cross-border allocation family trust were growing remarkably.

Meanwhile, demand for full life cycle wealth management is becoming more evident. For example, we have seen the elderly, children segments have strong needs for retirement planning, health protection and wealth, inheritance. For the future of wealth management business, the personal financial wealth management is the main battlefield of commercial bank. We will continue to put clients into the center of our business. We will promote wealth management into every family. We aim to build a full life cycle scenario based service model powered by digital capabilities by integrating financial services into clients everyday ecosystems.

We are moving towards a one entry point full service model, so as to build differentiated competitiveness and support the steady growth of client wealth. We are fully confident to achieving so. You also raised questions about changes of deposits, the rollover after maturity. From our observation in Q1, the daily average deposits increased by RMB 1.46 trillion, maintaining stable growth. The savings deposit growth remains within a reasonable range. We have not seen any unexpected acceleration of outflows in line with the market change.

For the maturities, as mentioned by Mr. [ Fu ] from assets and liability management, we have the maturity ratio of 35%. From the perspective of savings deposits, the rollover ratio was over 90%. Therefore, for the matured funds, the rollover to the demand deposits was remarkable without no remarkable outflows or migration of deposits. On measures to stabilize and grow deposits, first, we give in to fully ICBC's group-wide advantage from GBC dimensions to empower personal finance to develop, to grow and stable our deposits.

First, we are strengthening coordination between corporate and retail business to expand funding sources at the origin. We focused on payroll services, individual merchants and social security cards as strategic entry points. We have seen robust growth, and we will continue our efforts in this regard.

Second, we are building out scenarios to expand customer fund flows through fund flow management to stabilize and grow our deposits, especially the cash flow can bring fee-based income. Thirdly, we improve customer [ segmentation ] capability. We will make good use of AI and getting to full play the online and offline coordination and our strategic capabilities to enlarge the reservoir of our personal finance funds to enhance our capabilities and competitiveness, to solidify the foundation for deposit growth.

I'll make some supplement for the deposit migration. According to the data from financial service, the nonbanking deposits increased by RMB 2.3 trillion. People's savings grew by RMB 0.78 trillion, reflecting that some of the savings deposits flow to WMPs. From the WMPs, the aggregates remained stable. By Q1, the industry's WMP, our growth increased by over 9%, increased by seasonal reasons. So compared with the end of last year, the volume was down by 3.8%.

For ICBC Wealth Management, the WMP volume was increased by 4% more. Next, we will continue to enlarge our CFS to improve our capabilities to serve the customers. Thank you.

[Operator Instructions]

I'm analyst from Guosen Securities. My question is related to retail asset quality. How is the asset quality of various retail products? When can we see improvement in NPLs? What is the current situation regarding mortgage loan defaults?

The question will be answered by Personal Finance Department.

Since the beginning of this year, China's economy has shown steady profit structure improvements, but there's external instability and uncertainty. And there are still some challenges in domestic economic operations. So the asset quality of personal loans at ICBC faced certain pressures with a slight increase in non-performing loan rate. However, after considering factors related to risks disposal, our situation is consistent with the market. In the first quarter, personal loan non-performing indicator remained stable, and the overall risk was under control.

And the personal loan non-performing rate remained within the [ reasonable ] range compared with counterparties. For personal housing loans since 2022, it is mainly due to the combined impact of factors such as slowing growth in resident income, declining asset price and structural pressures in job market. The non-performing rate of mortgage loans discounting a short-term upward trend and remains -- but it remains within a reasonable range, after -- but it is still important source of our revenue.

Our advantages are their genuine transactions and high-quality collateral. Short-term fluctuations do not affect the fundamental attributes and it is remaining a high-quality credit assets for our bank. As macroeconomic policies kicked in, the economy is showing signs of stabilization and recovery. The President's confidence in future income growth is gradually being restored. The Politburo's conference has mentioned to mitigate risks and to push forward organization. We are seeing signs of housing price stabilizations in the Tier 1 cities, and we are confident that the asset quality of mortgage will be restored and the systemic risk is controllable.

For the mortgage loan default, in terms of asset, we see whether there's continue -- whether there's an increase in default rate, but we see they're stabilized. We are not seeing a default rate at a massive scale.

And we also like to brief you on the personal consumer loans. We have seen a double decline in both the amount and the rate. In last year, we focused on adjusting the risk control models and onboarding standard. The optimization of strategies and product reinforcements yielded preliminary results. And the deferred default rates for various terms have been gradually reduced to lowest levels in recent years. For the non-performing rate of personal business loan has also slightly decreased, affected by a combination of factors such as macroeconomic environment, policy support the ongoing adjustment of real estate market. The asset quality of personal business loan has shown periodic fluctuations.

The historical disposal of personal business loans has been lower than the other peers in ICBC and with minimal write-offs, we have maintained the current quality level, demonstrating the high quality of our customer base, precise risk control and strong resilience in business development. In the next phase, will continue to strengthen and solidify the 3 gateways in credit risk management, establish a comprehensive risk control system for the entire process. We comprehensive, [indiscernible] and continuously optimize product access. And we will further have daily infrastructure capabilities and to be risk control models cover in the entire process.

With the continued implementation of macro control policies and effectiveness of structural fiscal support, it's estimated that the rate of loan deterioration will slow down.

[Operator Instructions]

I'm [ Jing ] from Guangfa Securities. I want to ask about the results mix. We have seen the operating income increase, which is remarkable. For the full year performance, will you see front load a loaded one or relatively smooth? On the profit side, will profit generally stabilize and improve within the year? Among scale NIM fee income, financial markets provisions, which item do you believe has the most certainty in contributing to the full year performance and which item is most likely to become a major source of volatility?

For your question concerning forecasts of profitability, I'll invite finance accounting department to answer.

For Q1, the key indicators achieved the best start in recent years. Our operating income if we do break down the net profit continue to play the bedrock of the revenue. It accounts for 75% to 80% of revenue for Q1. It is the first time to -- growth turning positivity since 2023. It has come from our work and the maturity of the high interest rate deposits. So the Q1, the interest expense was down by over 10%, driving the increase 7.5% of net interest income.

For the non-interest income and continue to play a strong support, up by 11.6%. Fee-based income was increasing the best of its kind in recent years. The other non-interest income increased by almost 39%. It comes from the dividends from the policies, also comes from our actions and the market window, which is temporary. Bringing our profitability, which is good in Q1.

Now the operating environment is still complicated. First, the net interest margin was stabilizing, but it's still in the downward pressure. For non-interest income, it also -- for example, fee-based income also face pressures from policy changes and market changes. We still face pressure brought by the fee concession to the real economy and also the geopolitical tensions and the interest rate trend of bond market, Forex bond market also faces uncertainties. Now we will make our efforts to tackle the uncertainties of the markets.

We will increase our main business. We will take into effect three aspects of measures. First to solidify the fundamental base of net interest income. We will balance total growth with structural optimization, increase the volume of substantive loan, optimize the structure and pace of new interest-earning assets. And also we will enhance management of both interest-bearing and liability yields and strictly control high-cost liabilities, so as to ensure the stable growth of interest income.

Second, we will increase the contribution of noninterest income. We will seize opportunities in retirement finance, in Capital Markets to create new growth drivers for wealth management, update the payments and settlement cross-border services and customers custody systems and to serve the customers needs with CFS.

Third, we will strengthen asset quality management to contain risk costs. We will continue to enhance a comprehensive risk management system, coordinate risk prevention and controlling key areas persistently, prevent delinquencies and control NPL, strength collection disposal efforts to better contain risk costs. We are confident that building on a strong performance. In Q1, we will continue to deliver results, which is sustainable for the shareholders. Thank you.

[Operator Instructions]

I'm analyst from [ Shan ] Securities. I'll congratulate ICBC on the impressive performance. ICBC has long been active in Science and Technology Finance. And there's a lot of layouts in this regard aligned with the national strategy, especially the 5 major priorities of finance. The 15th 5-year plan emphasized digital and intelligent transformation. ICBC's business has developed rapidly, how can ICBC articulate the strength to the capital market from the perspective of digital and intelligent transformation?

The strategy will be answered by Urban Finance Research Institute.

Thank you for your question. As we mentioned, ICBC business long been integrated into the national development strategy. We have the first layout of ICBC business because we recognize that technology innovation requires patient capital and through diversified tools such as equity investment debt to equity swaps. We have provided long-term and stable capital support to many science and technology enterprises. By the end of first quarter, the balance of loans in this regard reached RMB 5 trillion. This figure make us the market leaders in this regard.

As you mentioned, the 15th 5-year plan has mentioned in the digital intelligence 5x. We know there's a twofold meanings to improve the supply of finance and to adapt to the changes. And the second is to improve the digital and intelligent transformations of ICBC and to restructure our procedures and our business. And in this regard, we are building a new differentiated competitive advantages.

We would like to leverage our comprehensive licensing advantages. We are building multiple scenarios and to providing comprehensive financial services to our clients. We give special attention to the role of IC in providing patient capital. We have onboarded 53 projects. In terms of providing insights and intelligence, we have undertook more over 2,400 investment banking projects, an increase of 14%. And we actively empower the digital transformation of enterprises.

We have provided support in terms of ICBC Treasury, global pay and fund supervision cloud, offering account service to fund supervision, technical consulting to technology output. We embrace AI and accelerate the transition from ICBC to AI ICBC. We use our self-developed models to embrace artificial intelligence and to establish the systems of AI ICBC. So the intelligent and digital transformation is going into more depth. We believe that with the support we will have more economy of scales and to support the quality development of ourself.

I'm Juan Shen from Huatai Securities. First, congratulations on your strong results for Q1. My question concerns from the investment. We have seen that last year, there was a notable increase in income contribution from bond investment. Given the recent increase in bond market volatility and shifts in the interest rate environment, how do you view the outlook for the bond market? And what will be your investment strategy going forward?

Your question will be answered by financial market department.

Thank you very much for your question. Our financial market business centered around serving the real economy. We centered on quantity, pricing, including RMB and ForEx. We increased our capabilities of business and market competitiveness. The interbank market making share was stable at 20%. The share in the four big banks was 31%. This is a recognition from the market for ICBC. Thank you very much for your support for financial market business. In the future, we admit that the external environment is still complex, influenced by geopolitical conflicts. Our economic foundation is strong. Our policy will be sustainable.

Our monetary policy will continue to support the real economy. Against such background, our bond investments will continue to have both feeling and floor with contained risks. In such backdrop, faced with complex environment, our financial marketing business will continue to give in to full potential and balance our pricing quantity and risks and optimize our investments and income mix.

First, we will continue to fulfill our role as a major bank by actively support bond financing for the real economy. We will continue to support the government bond issuance and support the key national priorities. The 5 key areas to contribute to China's modernization through bond investments. Second, we'll further optimize portfolio structure to build up value reserves. We will allocate across types, tenors, portfolios and currencies to enhance sustainability and resilience of portfolio.

Third, we will strengthen our trading capabilities and aim to translate market volatility into earnings. We will continue to promote digitalization and actively capture opportunities from spread across instruments, maturities and credits. We will balance carry income and trading gains while managing both short-term performance and long-term value creation.

Finally, we'll balance development and risk control by strengthening risk identification and management, enhance our forward-looking countercyclical risk assessment capabilities, optimize duration, positioning and improve the portfolio's resilience to interest rate fluctuations.

[Operator Instructions]

I'm from Changjiang Securities. When it relates to internationalization in the context of escalating geopolitical tension, what are the opportunities and challenges for the international operations as the largest bank in China and globally? How can ICBC leverage this strength to promote internationalization of the RMB?

The question will be answered by International Banking Department.

Thank you for your questions. In terms of opportunities, the trend of economic globalization remains unchanged despite the geopolitical tensions. The interest of countries are [ intertwined ] and open [indiscernible] remains the mainstream. China continues to make new progress. We are the hub of manufacturing centers. And the total foreign trade increased by 15% year-on-year. The RMB has become the top 3 trade financing and payment currencies globally. And the 15th 5-year plan outline proposes to steadily expand institutional opening up, build a new high-level open-ecoeconomic systems, promote the high-quality development of Belt and Road initiative.

We have also noticed that when the per capita GDP exceeds $10,000, there will be experienced a big enterprise globalization. The China's figure has about $30,000 for 3 consecutive years. And our direct investment [ abroad ] remained around USD 150 billion and the total overseas assets exceeded $9 trillion. We can provide comprehensive financial services for business going abroad and business going in. We've seen that geopolitical situations are characterized by long-term complex and certain features. Geopolitical conflicts are frequent and there is a profound changes international balance of power.

And there is disruptions in global economies and the major economies have going into the rate cutting cycles, has bring more intense competition for our international -- from international peers. Our bank's overseas operation maintained a stable and progressive development trend. During the 15th 5-year plan period, we will continue to deepen our international operations.

And for the second question for the internationalization of RMB, the ICBC Bank after 40 years of development, we have established a solid foundation for global network, clearance systems and technology systems as of the end of 2025. We have built a global financial service network covering 69 countries and regions through self-development, strategic acquisition and equity partnership. We have established business cooperation relationship with over 1,400 foreign banks in more than 140 countries, covering all 6 continents and major financial centers.

We offer services to over 40 million (sic) [ 14 million ] corporate clients and 770 million individual customers. We offer -- we are the clearing bank in 12 countries, offering 24/7 RMB clearing services. And through our core banking systems, we achieved seamless integration. We [indiscernible] the principle of providing global service to global customers. And we have done a lot of work in internationalization of RMB. We use the BRBR. China Euro business console and other multilateral mechanism to expand the RMB's friends circle and solidify the foundation of cooperation.

We also work together with CIPS and mBridge and cross-border QR code payments to enhance the digital intelligence service capabilities of cross-border RMB and improve new financial infrastructure such clearing payment and custody. For 6 years in a row, we used the [ stringent ] actions to launch the cross-border RMB comprehensive financial solutions. We have dedicated RMB 1 trillion to domestic and foreign banks for a special financing quote, providing comprehensive support to eligible domestic and foreign enterprise. We will support new quality productive force, digital trade and enterprises, high-quality development.

[Operator Instructions]

I'm Shao Xing Chen from Industrial Securities. My question concerns AI. In what specific ways is AI currently empowering ICBC? How do you quantify the benefits or cost savings from AI applications? In the future, what are your plans for AI investments? And looking ahead, how do you see AI reshaping the banking business model?

I'll invite Fintech department to answer your question.

Just now Mr. Yang from finance research institution has introduced our arrangement for the digital drivers, which is one of our strategies. We have four perspectives in empowerment. First, reducing costs and improving efficiency that is to improve the working efficiency of employees. For example, we launched trade dealing supporting employees in interactive dialogues, in trading so as to increase the efficiency and number of tradings.

Second risk management. We use the empowerment of big models from the -- in the anti-fraud links. We train the model to automatically identify the risks out of the risks so as to increase our capability of detection. Second, we refine the personal characteristics of AI use in mobile banking, the machine in the outlets through natural language interaction. We achieved 1:1 interaction for the customers with -- company to the customers.

Another is the empowerment of the decision making to make it more digital. We have developed tool in investment bond. On a daily basis, it can -- in trading data, it can make a judgment to conclude investment report and to improve the design-making in bond investment, empowering over RMB 100 billion investment of bond. How to quantify the investment of AI or the application of AI? Because AI progress is very fast as a [ blue seas] , its investment has the market consensus, which raised attention from the market.

We have made some acceleration in mechanism...

[Audio Gap]

...group to have the sufficient computing capacity.

And second, we will step up talent development to ensure we have the expert team. Thirdly, we will strengthen the mechanism, insurance. We will integrate the group team so as to ensure the organization in the group and also we use external institutions like college, and companies to make our technology advanced. How do we see its future?

We believe AI is not just a tool for improving efficiency but it also reshapes the fundamental logic of commercial banking. First is the change of service models with AI. The financial services are more targeted and personalized. The end-to-end services will be a new normal for the services of customers. The coordination of financial and non-financial services will be possible. The new shape of the financial services is expected in the future.

Second, the organizational effectiveness, we will look to the employees from the standardized and repetitive tasks while supporting complex decision making so as to ensure a personal efficiency to a group-wide efficiency improvement. Thirdly, as automatic this year, making a link of AI agents is progressing, so that we can have more controllable and smarter AI. This is also a focus of our future work.

We believe these three aspects our highlights of our future work for ICBC. We will follow closely the development of the technology in the market, so as to promote the construction of AI and improve our efficiency work and the competitiveness of the AI agents. Thank you.

Due to time limit, we shall conclude the Q&A session. If there are any questions, please feel free to contact our investment relations teams for further communication. Thank you for your questions. and thank you for the response. Next, we will invite Mr. Tian Fenglin, the Board Secretary for the conclusion.

Dear investors and analysts, thank you all for joining our first quarter performance briefing. We've had an open and professional exchange on topics such as operating conditions, business development, risk control, future planning, and AI application, which yielded very positive results. This year, fees in a complex and changing external environment, ICBC adhered to the steady operations and compliant development with all business areas proceeding smoothly and steadily.

The overall quality of our assets remain under control, and the support for the real economy and key areas has continued to strengthen, leading to a steady improvement in operational efficiency. These achievements would not have impossible without the long-term trust, understanding and support of our investors. At the same time, we are also keenly aware that our current business development still face many challenges regarding issues that you are concerned about such as performance results, business layout, capital replenishment, risk management, dividend policies, we will further organize and study them 1 by 1 and continuously optimize information disclosure and respond properly to market concerns and continuously improve our management level in order to better repay the trust of our investors with more solid performance.

The capital market is a market of confidence and also a market of long-term value. In the next step, we will continue to adhere to the fundamental nature finance focus on our core responsibilities and main business, promote the five transformation, consolidate the foundation of compliance and risk control and start to achieve higher quality and more sustainable development.

Finally, once again, I would like to thank all of our investors and analysts for your continuous support for ICBC. I look forward to continuing to work hand-in-hand with you, building confidence together, promoting and sharing achievements together.

The meeting today is now concluded. Thank you. the holidays are approaching, we'd like to wish you a happy holiday. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Respected investors, analysts and media friends, good afternoon. Welcome to the ICBC 2025 Earning Results Presentation. I'm [indiscernible] representing ICBC. Our 2025 annual results announcement has been published online. We sincerely appreciate global shareholders' recognition of ICBC's investment value. ICBC consistently prioritizes investor and media Relations as well as market value management, maintaining proactive communication with global stakeholders.

Today's presentation is hosted in a hybrid format, on site in Beijing and Hong Kong with global live streaming.

Allow me to introduce ICBC's senior management and attendees. In Beijing, we have President, Liu Jun; Vice President Yao Mingde; Board Secretary, Tian Fenglin.

In Hong Kong, we have Vice President, Mr. Wang Jingwu; Vice President, Mr. Zhao Guide. Also present are Dr. Madam [ Cao Liqun ]; Mr. Dong Yang; Madam Chairman [indiscernible]; Mr. Dr. Wei; Mr. [indiscernible].

Now we'll invite Board Secretary, Tian Fenglin, to present ICBC's 2025 Annual Results.

Dear investors, analysts and media friends, good afternoon. Welcome to ICBC '25 Annual Results Presentation. Thank you for your continued attention and support. Our report on ICBC's operation performance in '25.

In '25, ICBC successfully concluded its 14th 5-year plan, guided by its 5 transformations pathway, intelligent risk control, modernized structure, digital capabilities, integrated services and ecosystem development. The bank enhances value creation, market competitiveness, influence and wealth management by supporting economic recovery. ICBC achieved high-quality development, delivering a benchmark performance as a leading bank for steady progress in performance with enhanced resilience. By end of last year, ICBC total assets exceeded RMB 53 trillion. Customer loans surpassed RMB 30 trillion, up RMB 2.13 trillion Y-o-Y, investments reached RMB 16.91 trillion and customer deposits exceed RMB 37 trillion, up RMB 2.5 trillion Y-o-Y, while maintaining industrial leadership.

Operating income rose 1.9% Y-o-Y to RMB 800 billion with net fee and commission income at RMB 111 billion, up by 1.6% Y-o-Y. Provision per fiscal by 2% Y-o-Y and net profit reached RMB 370 billion, about 1% Y-o-Y. The NIM stood at 1.28% with [indiscernible] declines. So now 18.76% and provision coverage ratio, 213.6%, reflecting robust risk resilience, both on strong performance, asset discipline and total cash dividends of RMB 110.6 billion in 2025, including interim dividend of RMB 50 billion.

Following corporate governance procedures a final dividend of RMB 60 billion will be distributed. Based on average annual share prices, A share and H share dividend yield reached 4.22% and 5.99%, respectively. Sustainable shareholder return demonstrate the effectiveness of ICBC market value management measures.

Second, stable asset liability growth was improved, service quality, customer loans, bond investments and deposit grew by [ 7.5%, ] 19.6% and 7.1% Y-o-Y, respectively. Credit structure further optimized. Our corporate loans rose by 7.8% Y-o-Y with accelerated growth in loans through key national strategies, major projects in underdeveloped sectors. Retail transformation advanced rapidly. Personal business loans up by 15% and customer loans up 18.5%. Upon proactively capturing market opportunities by deepening its 5 key areas. Technology, finance, total loans hit RMB 6 trillion. Gross finance reached -- gross loans reached RMB 6.7 trillion, ranking #1 in the industry. Inclusive loans totaled RMB 3.6 trillion. Gross rates was 22.8%.

Pension assets under management hit RMB 5.9 trillion. Loans to core digital economy industry exceeded RMB 1 trillion. Through accelerated 5 transformation and mission reform momentum. Last year, ICBC strengthened capabilities to reform, aligning with the financial sector's theme of preventing risks, strengthening regulation and promoting high-quality development.

The 5 transformation drove new progress in high-quality development and security. In Intelligent risk control, we will enhance a comprehensive wealth management system with holistic oversight, proactive prevention and intelligent control, strengthened the [indiscernible] risk framework and [indiscernible] collaboration and risk committees, officers and departments. So enterprise-wide intelligent risk control platform, the [indiscernible] center covered all branches. By end of last year, the NPL ratio stood at 1.31%, down 3 bps Y-o-Y. And special mature loans fell to 1.95%, down 7 bps Y-o-Y. Provision coverage remained robust at [ 213.97%. ]

In terms of modernized structure, we'll support our national strategies, key sectors and undeveloped areas. Manufacturing loans rose to RMB 5.24 trillion, mid- to long term loans, RMB 2.38 trillion. Equipment [indiscernible] loans exceeded RMB 150 billion. Corporate RMB settlements valued at [ RMB 2,248 trillion. ] Trade finance stood at RMB 1 trillion and merchant acquiring volume reached RMB 2.85 trillion, seizing on the international opportunities on the ICBC became [ Turkey's ] RMB clearing bank, expanding its global clearing network to 12 centers.

Cross-border RMB settlements grew 8% Y-o-Y to RMB 6.3 trillion. RMB global payment now stand at [ 44 ] countries and regions, up by 23% Y-o-Y. Digital and intelligent capabilities, advanced ICBC initiatives. Personal mobile banking users hit 630 million. The [indiscernible] was 290 million. Corporate internet banking served 18.94 million clients, monthly active users, 8.36 million, both leading the industry. AI wealth assistant, ICBC AI, was launched for personalized services. Over 500 AI applications were deployed across 30-plus business areas, boosting transaction automation to 96%.

Integrated services provided comprehensive financial solutions across clients' life cycles. ICBC investment established 48 [indiscernible] equity funds, committed capital of RMB 108 billion, ranking #1 in the industry. The M&A loan growth surged 37%, led pioneering bond insurance for U.S. and U.K. firms, maintained #1 position in asset custody and RMB FX market, making ICBC global trading set 15,500 corporate growth, up by 24 Y-o-Y. The personal loan exceeded RMB 25 trillion.

The ecosystem development [indiscernible] Ecosystem, corporate clients reached 14.75 million. Retail clients hit 780 million. Payroll disbursement volume exceed RMB 6 trillion, leading in scale and growth. Integrated urban and rural services and mobile banking empowered ecosystem synergy.

ESG governance and disclosure frameworks will also have further enhanced. We'll also deepen the infrastructure of our financial services. We'll also raise empowering between ecosystem and our ESG governance.

And outlook for '26. As the 15th 5-year plan begins, ICBC will uncover main goals, advance steady and prioritize quality. The bank will deepen its 5 transformations, balancing progress with stability to deliver sustainable value for global shareholders. Thank you.

Thanks for Mr. Tian's introduction. Let's enter the Q&A session. [Operator Instructions]

The first question comes from Beijing meeting room, the first row lady, please.

Question one. Congratulations to the ICBC sustainable robust growth amidst complex changes. Did ICBC achieved more shifts in performance? What were the sales achievements for '26? Where is ICBC's strategic priorities? How do you project full year revenue and net profit?

This is President Liu speaking. We believe that 2025 marked the successful culmination of the 14th 5-year plan. ICBC navigated changes, structural optimization, a new growth driver advancing this 5 transformation. We continue to improving our indicators. We didn't stop pursuing the probabilities. And we have delivered a very good growth curve among challenges. Investors pay attention to our asset quality and our management of the nonperforming loans.

I will introduce in 3 aspects. The first is that you can see our growing resilience in probability, our fee based income and 4 core profit metrics achieved positive growth despite sector wide pressures. The stablized interest margin, the net interest income serve as anchor with net interest margin contracting to continue to narrow, and in the structure, the Chinese economy is also stabilizing. Although there is narrowing in our NIM, but we can see declines. The fee based income grew by 1.4% and made a great contribution to our operating income. We can see it also adds to the sustainability of our probabilities.

We can also see our asset has exceeded RMB 53 trillion, and RMB has rose 8.1% to RMB 28 trillion. The RMB bank investment rose by RMB 2.5 trillion, making a record high. We also optimized our structures, focus on our transformation and 5 priorities, our main balance ratio was 67%, up by 3.6 percentage points. We continue to serve the economy. And thirdly, we will look at our asset quality. The NPL ratio was 1.31%, down by 0.03 percentage points. The coverage of provision, the provision coverage was 213.6%.

If you continue to follow asset basis operation, you can see that we have a very [ rash ] increase in our provision ratio. We create more room for our business development and also to dilute the impact coming from the cyclical pressure. We'll also continue to strengthen our disposal of the risks. We have a good asset quality and prudent risk appetite, which also have built a very solid foundation for our long-term development.

And also '25, our A share price rose 14.6% and A share price rose 20.7%. Our cash dividend yield and [indiscernible] were top tier in the market, and we'll maintain our position as high as cash dividend paying A share listed company.

And looking to '26. First, we'll continue to do well in the financial services to build a world-class bank. We have the standards for the world-class bank. We do not define our own standard. And going on our balance sheet, how can we realize the goal of becoming the world-class bank. My understanding is that if we still focus very much on the credit business, and we're still lagging behind the goal of becoming world-class require us to grow stronger in our financial services to place a trail of our own in providing better financial services to focus more on the technology driven financial service.

Finance is the bloodline of the bank. If we cannot provide enough finances to the real economy, then we didn't leverage all of our strengths. We should combine the scale and also our services and to provide better services in all our overseas markets. So our first measure is to build stronger international operation. We integrate the full life cycle financial services, smart services and focus on the technological innovation and strengthen the commercial banking, investment banking, clearing banking services to provide a comprehensive financial solutions to our customers, continue to create -- to bring more value creation.

If you look at the internationally strong banks that they rely less on the credit business and rely more on the financial services and a lot of income comes from financial services. And thus, their market value is higher than us. So ICBC will try to combine our credit business and with the financial services and try to balance well the 2 proportions and to be strong in both legs.

And second, we'll also build a comprehensive service new engine. ICBC, as a large commercial bank, we also balance well both domestic and international markets. So we rely on our strength of international network, continue to mobilize resources and accessing more markets and to find our indulgence driver to provide more RMB product, provide all around business service, certainly on RMB, and continue to help the internationalization of RMB in terms of the pricing.

From the 1990s to now, when we talk about the internationalization of our financing institutions, we talked a lot about the foreign exchange business. If in the 1990s, if they have more overseas institutions, if they can provide more foreign exchange business, that means it has higher internationalization level. But what I want to say here is if we take a closer look, take a second sight, when we talk about the global strategy, it has to be the globalization of RMB. And ICBC is the biggest market maker here, and we are strong in the RMB business. So going forward, we will become this cornerstone in building strong the RMB business.

And certainly, we will continue to build this digitalized drivers. We are strong in technologies. We build a lot of systems, which are also iterating. And to power all of our business, we'll also pay attention to the application technologies, the new technologies, but the new technologies has to be tested before. If the technology is not safe, we do not dare to use the technologies in our bank because the data security, the privacy security of our customers is our top priority. So if we apply technologies to our system, we'll first do the safety check. We also want to make commitment to the market that we will study all of the new technologies and to conduct the safety checks and to use the safe and also cutting-edge technologies to serve the real economy, to serve the Chinese people.

As you all know that the current situation is ever changing and very complicated. '26 is a year of deliveries. ICBC has achieved good results in the past 2 years. We are also confident to provide good results to you. And we also hope that the market can have more confidence in us.

[indiscernible] may proceed to the Q&A session.

First of all, [indiscernible] security, concerned about the asset quality [indiscernible] Could you provide an overview of the overall situation with a focus on the latest asset quality and personal credit as well as future trends. Thank you.

I'd like to ask Mr. President, Mr. Liu Jun, to answer this question.

Thank you for your question, and we appreciate your support, interest from our investors. In recent years, ICBC has consistently balanced high-quality development with robust risk management, prioritizing risk prevention is a core principle. Adhere to a steady and progressive approach, we have maintained stable and improving asset quality. We want to [indiscernible] period, the group's NPL ratio has consistently improved by at least 2 bps, [indiscernible] in 2025. The group's NPL ratio stood at 1.31%, 3 bps decline Y-o-Y. [indiscernible] successful conclusion to our asset quality targets for the 14th 5 year plan. [indiscernible], where asset quality pressures have risen [indiscernible] the industry, ICBC has proactively managed the risks, ensuring overall controllability and [indiscernible] provisioning.

ICBC has [indiscernible] implemented its national strategy, comprehensively advancing the major task of inclusive finance, while also supporting the allocation of resources to the real economy, enhancing services for key customer segments, expanding the [indiscernible] product portfolios, strengthening operational support, and providing integrity service system and seller refined management foundation. ICBC has continuously expanded the coverage, accessibility and satisfaction of inclusive financial services, while maintaining healthy and sustainable development.

Regarding the asset quality that consumers [indiscernible], ICBC has consistently improved the risk management foundation for inclusive loans in recent years. First, it [indiscernible] digital risk controllers expert [indiscernible], continuously applying risk management strategies and mechanisms. Second, it applies digital intelligent means to enhance the full site of risk management and the [indiscernible] of risk management in [indiscernible].

Third, apparently, [indiscernible] external risk characteristics, [indiscernible] and strengthens collateral management. First, it takes [indiscernible] to improve the resolution of potential risks and the management efficiency of [indiscernible] nonperforming assets in [indiscernible]. Last, risk controllers have made a solid foundation for ICBC to maintain peer comparable asset quality in inclusive loans. Looking ahead, we're confident that the asset quality of [indiscernible] will gradually stabilize. It is [indiscernible] phase, we're trying to build on past achievements in asset [indiscernible] against the backdrop of consolidating [indiscernible] economic environment, [indiscernible] for inclusive loans will continue to strengthen internally.

[indiscernible] development, the professional capabilities of ICBC's [indiscernible] teams have significantly improved in digital intelligence and centralized risk control mechanisms have been continuously refined, both in internal and external advantages will support ICBC in delivering high quality inclusive financial services.

In terms of personal loans, ICBC has [indiscernible] implemented the national strategy, focusing on its core responsibility and actively align with the existing policies. It has consistently enhanced market comparables, value creation and the risk management capabilities of its personal loans business. In terms of the development, ICBC has strengthened loan and cost profit management, continuously fostering a sustainable growth momentum to achieve both quality improvements and reasonable positive growth.

Specifically, first, it analyzes the development trends of the real estate market and [indiscernible] management policies [indiscernible] environment [indiscernible] affordable housing and stabilizing the real estate market. Second, it emphasizes policies supporting [indiscernible] financial service models and increases consumer [indiscernible] diverse and differentiated consumption potential.

Third, it addresses gaps in financial services for the real economy, improving service quality [indiscernible] agriculture and commercial sectors. The qualitative implementation of these measures has driven a high quality development of ICBC's personal loans business, which was noted best consumer credibility in China, [indiscernible] in 2025.

Regarding asset quality, ICBC's personal loans has historically attained strong performance. However, in recent years due to economic transformation, [indiscernible] adjustments and temporary supply/demand imbalances, the PL ratio has entered a short-term upward trend aligning with industry wide patterns. However, China's economic fundamentals remain stable, resilient and full of potential with long-term positive conditions and trends unchanged. Thus, personal loan risks remain manageable.

From a policy perspective, in 2025, [indiscernible] introduced policy to boost consumption such as subsidies for personal consumer goods and physical interest discounts for personal loans. The 15th 5 year plan outlines [indiscernible], stimulating consumption and for the first time, significantly raising the household consumption rate as a key socioeconomic development goal. As these policies take effect and the benefits are realized, the market foundation for personal loan will improve, and asset quality will return to [indiscernible] level.

In response to market changes, ICBC adjusted our internal structure in 2026 by establishing also personal credit business deployment, further enhancing centralized and professional operations, simultaneously strengthened digital and intelligent capabilities, diversified product innovation and supply and personal consumption and business financing, balancing development and security and proactively addressed risks while improving the nonperforming asset disposal. Through the joint efforts of [indiscernible] the funds, the upward trend in personal loan deterioration has slowed. ICBC will always uphold high-quality risk control as a constant to adapt to market changes, ensuring stable asset quality across the group and injecting financial resilience into the high-quality development of the real economy.

The question comes from the Hong Kong meeting room, please?

I'm Meizhi, UBS. First, I want to congratulate ICBC to achieve such good results in a complex environment. My question is about the NIM. President Liu also mentioned last decline in NIM [indiscernible] comparing to '24. What are the current pricing trends for corporate and retail loans? How do you project NIM trajectory in 2026? And when might an inflection point occur?

Okay. This question goes to President Yao -- Vice President Yao.

Thank you for your questions. You have 2 questions. I will first answer your first question about the pricing trend. The loan -- we project that the NIM will continue -- the pricing will continue to go down but the pace will significantly moderate. The latest [indiscernible] adjustments in May '25 occurred nearly a year ago. And this repricing effect has been largely digested. The [indiscernible] rates is stabilizing, the corporate loans, residential mortgages and individual business loans show early signs of stabilization. So from the first 2 months of '26, the new loan growth declined by 2 bps Y-o-Y, a notable improvement from the 20 bps Y-o-Y drops. The potential [indiscernible] costs in '26 may continue to pressure loan yields downwards.

And your second question is about the NIM, '26 NIM outlook. We project it will be an [ L-shaped ] trajectory. In '25, the performance in '25 was 1.28%, down by 14 bps Y-o-Y. The rate of declined narrowed by 5 bps versus 2024. So although the NIM is going down, but the decline has narrowed. If we put aside the [indiscernible] cuts, then we believe that there will be inflection points this year. Assuming no significant additional [indiscernible] deposit rate cost, the NIM decline will narrow further and the net interest is projected to achieve positive Y-o-Y growth.

And about the 4 pillar driving the stabilization, the first is adaptive asset liability portfolio. We have enhanced sensitivity management to offset rate pressures, along with the [indiscernible] metric monetary policy balancing real economy supporting bank health. And secondly, liability cost optimization of the funding diversification will leverage leadership in custody and settlement services to attract low-cost deposits. And for the pricing discipline, we have strict enforcement of deposit rate for the classes and interbank pricing guidelines. And will sustain the volume price synergy and deposit growth.

As a lot of high-cost time deposits matures, we also have pressure relief, benefits of '25 deposit rate cost is materializing. And so strategic long-term asset allocation for loan growth, the customer loans up by 7.5% in '25, above system average. The bond investment surged up by 19.6% in '25 with a system-wide 7.1% growth. The trade-off, for the trade-off analysis, the short-term lower yields and new bonds per share NIM, the bond repricing cycles is larger than the loan cycles. And the long-term with those high quality assets results to future probabilities. So in the short term, it will have impact on the NIM. And in the long term, it will have contribution to our value creation and the [indiscernible] global expansion synergy.

For the overseas growth, we're continuing to open up to the international market and also for the global strategy of RMB growing globally. The international assets of ICBC was RMB 491.6 billion, up by 12.4% Y-o-Y, outpaced group average of 9.5%. And for the NIM impact and the short-term NIM compression continues amid global rate cuts. And for strategic value, accelerated RMB internationalization enhanced group synergy. We believe going forward, ICBC will adhere to a strong focus on industrial expertise and commercial innovation. We continue to optimize asset allocation and credit deployment. And thank you for your question.

Now we will be back to Hong Kong. The [ fourth ] question.

[indiscernible] conference, management presented the achievements of digital ICBC construction, analyzed ICBC's [indiscernible] were branded as smart ICBC, [indiscernible] strong emphasis on intelligence. Has ICBC upgraded its strategy in the fintech sector? What were the key achievements in artificial intelligence application in 2025 and [indiscernible] in 2026.

I ask the Vice President, Mr. [indiscernible] to answer this question.

Thank you for the question. Now I'll answer this question from 3 perspectives. First, regarding the development of smart ICBC. ICBC [indiscernible] strategy, [indiscernible] transformations, consistently positioning itself as the forefront of financial innovation. We will upgrade the digital ICBC, the digital ICBC to AI ICBC. This is planned business considerations, mainly with the tune of the AI actively placing the mega trend of digitalization, we're working on intelligent development, implementation strategies, advancing the AI plus initiative along with local conditions, [indiscernible] digital transformation, injecting strong momentum into building ICBC into world class financial institution. This app will signify ICBC's business commitment to advancing alongside AI innovation, further embracing artificial intelligence to elevate its digital and intelligent environment to new heights.

Second, achievements in AI applications. AI presented unprecedented development opportunities for ICBC. Digital and intelligent transformation is not an option, but an accessible, a strategic choice to seize the initiative and gaining a competitive edge. In '25, we launched the [indiscernible] initiative, combined with top level design, [indiscernible] innovation to drive technological advancements in [indiscernible] application and to actively foster quality financial productivity.

As well, we became the first in the industry to receive the highest level of certification across all capability domains in the [indiscernible] assessment, the technical level to continue to breaking new grounds and continuously strengthen our technological support, focusing on acquiring such as computing power, algorithm data and security. We have launched the ICBC smart search technology system. And, features 4 key characters, efficient computing power. We have built a large scale [indiscernible] solutions [indiscernible] scale and [indiscernible] we have integrated over 10 industrial models conducted in-depth and developed an enterprise level foundation metrics that better understand financial finance in ICBC.

Additionally, we created an industry-leading intelligent [indiscernible] platform [indiscernible] resources. We have established an enterprise-level AI knowledge system, constructing a high-quality, large-scale and comprehensive training token financial data set to provide ample management for the large LLM training. ICBC is the only bank selected for National Data Administrations 2025 Trusted Data Space Innovation Power Program.

Security and reliability. We have enhanced the government's efficiency by building a full chain security protection system for AI applications, effectively [indiscernible] infrastructure security, data security, security and application security.

[indiscernible] business pain points with tangible solution guided by [indiscernible] principles. We successfully implement our [indiscernible] intelligence in over [ 50 ] scenarios. For example, investmentin training. We successfully deployed an intelligent pricing assistant in financial [indiscernible] ratio and the 50% [indiscernible] in transaction volume.

Customer acquisition and marketing [indiscernible] developed the personal client management, [indiscernible] assistance according to human AI collaborative working model that drove billions in additional sales for key products. With management, we introduced [indiscernible] an intelligence assistant, providing an end to end support for over 4,000 credit officers across the bank. Operational efficiency by [indiscernible] operational assistance with [indiscernible] [ 370 ] [indiscernible] introductions in 2026, improving efficiency by reducing operational risks are notable achievements.

Third aspect pertains to fintech planning and the key initiative for the current year. Along with the 15th 5 year plan framework grounded in practical realities, ICBC has formulated a preliminary draft of its group wide 15th 5-year plan. As a core component of this plan, we have defined the guiding principles for building digital intelligence in ICBC as well as [indiscernible] refers to digital intelligence driven, low quality productive forces. And [indiscernible] include ICBC's high quality development with the overarching goal of the initiative. The second high is group wide high level security, the foundation building line. And the third high is high-efficiency governance via business technology, data integration, the system safeguard. [indiscernible] framework will serve as the central theme for ICBC fintech efforts in the coming phase. We maintain an open mindset, deepen insight and practice, refine strategies for innovation and continuously expand the pathways to realizing the AI ICBC.

To ensure a solid implementation and deployment [indiscernible] is crucial. ICBC adheres to the 5-year plan [indiscernible] this year's objectives for the [indiscernible] building AI, ICBC's key focus of this effort will concentrate on 4 aspects, intelligence smart capabilities [indiscernible] platform and continue implementing the initiative to strengthen digital intelligent momentum.

First, accelerate intelligent transformation. Continuously optimize ICBC [indiscernible] enterprise level data space, enhancing [indiscernible] agents. Second, strengthen the smart foundation, upgrade ECOS 2.0 smart banking ecosystem, advance toward an AI native architecture and shift the role of technology from backstage support to a frontline driver.

Third, expand intelligent computing capacity, proactively optimize the computing power system to provide advanced, efficient and superior support for digital intelligent development. Fourth, develop shared platforms, enhance key platforms such as mobile banking and accelerate [indiscernible] well advanced service mode, offering customers seamless access and bank-wide responsive high-quality services. In summary, we must pursue innovation with determination, take proactive action and accelerate the construction of AI ICBC and deepen the integration of artificial intelligence with [indiscernible]. We aim to be unique in how to replicate competitive edge and robust momentum into ICBC's vision to become a first-class leading integrated driven bank. Thank you.

Are there any questions from Hong Kong?

[indiscernible] Morgan Stanley. My question is about the capital replenishment and profit distribution. What are the ICBC's capital replenishment plans for 2026? How will dividend policies evolve? We also noticed that other banks are increasing their profit distribution. Will ICBC consider raising its cash dividend payout ratio to further enhance investor returns?

I will ask the Board Secretary to answer your question.

Thank you for your question. ICBC has always placed high importance in capital management, maintaining industry-leading capital metrics in '25, adhering to the overarching principle of balancing value creation market position, risk control and capital constraints. ICBC rigorously implement its new capital regulations and continuously improved capital management effectiveness.

First, capital management initiative. In '25, we optimized long-term capital replenishment mechanism. We returned earnings, added RMB 246.9 billion to CET1 capital, issued RMB 230 billion in capital instruments and RMB 10 billion in TLAC bonds. We reduced weighted average interest cost of existing instruments by 42 bps. At the end of last year, ICR was 18.76%, the Tier 1 capital ratio of 14.94%. The CET1 ratio, 13.57%. The TLAC risk weighted ratio, 21.47%. TLAC leverage ratio, 10.79% maintained regulatory buffer. Then for '26, our strategic actions are the first to have this 15th 5-year plan capital strategy. We'll develop a forward-looking capital plan to support the real economy, advance ICBC 5 transformations.

And second, we'll deepen the [ EVA ] integration and that [ EVA ] matrix into business units, valuations to drive better driven decision-making. And third, we'll have this proactive capital management. We will execute the capital and TLAC insurance plan flexibly based on capital supply demand dynamics, market liquidity conditions and the policy support. We'll issue this -- the states is RMB 300 billion special treasury bonds for systematic banks pending official announcements. Our commitment is delivering sustainable returns while balancing strategic growth. And since our listing, we have cumulative cash dividends of RMB 1.58 trillion. Our pay out ratio consistently higher than 30%, the highest among Asia listed company. And for the frequency, we have this semiannual dividends since 2024, both interim and final dividends. We have twice dividend distribution over the year. And for the H share flexibility, we add this RMB dividend option since 2024. And for the dividend yield advantage from 2023 to '25, the average is yield is [ 5.22%. ] The average H share yield is 7.29%. And in 2025, the yield -- the A share yield is 4.22%. The H share yield is 5.99%, significantly exceeded 1 year deposit rates of 1.5%, and average was management yield of 3.2%. So we believe the shares of ICBC has its long-term value for our investors.

And for '25 dividend execution, we have this interim dividend of RMB 50.4 billion, which was distributed in August 2025. And our proposed final dividend is RMB 60.2 billion subject to AGM approval. The '25 total payout is RMB 110 billion. In future direction, ICBC will dynamically optimize dividend policies by [indiscernible]. Shareholders' return expectation, capital retention needs, external financial condition. Our goal is to sustain top-tier dividend yield while preserving strategic flexibility.

Mr. Liu Jun wants to supplement that ICBC has the highest capital among other peers, and the changes in our capital will bring signals to the industry. We'll continue to commit to the market that we will manage our capital well. We have this rolling capital management plan. We will make good use of our indulgence and external capital replenishment. And second, see from our [indiscernible] and from our bond yields, from our share yields, that the share yield is higher than the [ WM ] products. This means ICBC is available for investment. We'll not stop here. We'll continue to create more values to showcase our value for investments and bring returns to our investors.

So secondly, we will continue to bring more income by building solid finances, we will have more capital return replenishment. We want to be strong, both in our credit business and our noninterest income businesses. And we will have this dynamic changes to the market demand so as to secure a healthy development in the market. If the market wants higher payout ratio, ICBC will also take into consideration of the market demand. If the adjustments will bring healthier development markets, then ICBC will take the lead in maybe increasing our payout ratio. And we'll also look up to our international peers to make better capital management, and we will monitor the demand from the current market in terms of the payout ratio. That's all from me.

Now we'll take the follow-up question.

[indiscernible] My question is about the corporate banking. Corporate banking has always been the traditional strength of ICBC in 2025. What achievements are associated [indiscernible] and consolidating the foundation of the real economy as the top of its 12 strategic tasks? How will ICBC optimize its corporate credit allocation structure in 2026? And through comprehensive financial services contribute to building a leading industrial system?

May I ask President [indiscernible] to answer this question.

Thank for your question. About your first question, ICBC's achievements in supporting industry, commerce and technological innovation. Industrial and commercial credit is the traditional strength in 2025 5. ICBC [indiscernible] implemented guiding principles on national strategies. We proactively aligned with existing policies and a package of incremental measures focusing on the wants and the needs of industry system development.

By building a highly adaptable corporate credit framework, we continuously enhanced the high-quality financial support for the world economy. As of 2025, the bank's corporate loan balance reached CNY 18.8 trillion, maintaining a leading position in the industry with a full year increase of CNY 1.4 trillion. Lastly, we achieved solid results in serving sectors such as manufacturing, commerce and technology.

First, manufacturing loan balance [indiscernible] exceed CNY 5 trillion, reaching new heights. We actually support the manufacturing power strategy, launching specialized financial plans for new industrialization. Along with large-scale [indiscernible] initiative, we conducted the ICBC benefit cluster campaign in the [indiscernible] to serve [indiscernible] manufacturing clusters, fostering intelligent, green and integrated development. By the end of 2025, the manufacturing loan balance reached CNY 5.2 trillion, a 20% increase with both balance and growth within the industry. Equipment loans CNY 150 billion in disbursements.

Second, we serve [indiscernible] commercial and trade customers, expanding our reach even further. We prioritized building a robust domestic market by deepening [indiscernible], such as [indiscernible] and domestic bulk communities, trade logistics, e-commerce and service consumption to boost domestic demand and stimulate consumption. Under the guidance of the [indiscernible], we'll engage in the high quality level retail list project collaboration, providing nearly CNY 10 billion in funding support for over 30 retail projects, including Beijing's [indiscernible] commercial streets. We also innovated and upgraded the merchant e-loan product to enhance financial support for SMEs in the trade sector.

By end of 2025, the RMB corporate segment volume in the trade sector exceeded CNY 220 trillion, leading the industry. While the trading financing balances surpassed CNY 1 trillion. Additionally, the number of commercial and trade customers grew by over 1 million in 2026 -- in 2025. And third, the means of solving technological innovation have been further refined with stronger momentum for upgrading and through innovation.

Science and technology finance development plan was formulated to support the optimization and upgrading of traditional industries as well as cultivation and expansion of emerging and future industries. We have the ICBC science and technology innovation product brand, innovative exclusive financial products such as disruptive technology loans, credit score based loans, R&D loans and intellectual property financing were introduced to provide customers with more diversified financial support. By the end of 2025, the balance of technology-related loans reached [ CNY 86 trillion, ] the coverage ratio of credit services for [indiscernible] specialized and sophisticated SMEs 30%, an increase of 22 percentage points from the beginning of the year. [indiscernible] science and technology innovation bonds surpassed the CNY 100 billion.

The second question is about ICBC's plan to support the modernization of the industrial system in 2026. Since the beginning of this year, ICBC has actively implemented physical and the financial policies to boost domestic demands, adhering to the principle of acting ahead in this recession to stabilize investment and [indiscernible] consumption. On the other hand, we see the early year construction peak collectively engaging with 2 -- with priority projects and low policy based financial instruments.

In the first 2 months, corporate loan disbursement exceeded CNY 2 trillion with over CNY 60 billion allocated to support key initiative projects. On the other hand, we supported the Spring Festival consumption boom on February 17, 2026, ICBC collaborated with [indiscernible] and the People's Bank of China and key enterprises in the commercial sector to host the financial support for commerce to facilitate [indiscernible] and boost consumption symposium.

We also launched the heavy shopping from New Year campaign to stimulate consumption and contribute to building a robust domestic market. Moving forward, ICBC will continue to align with the needs for the real economy monitory policy development actions and the bank's operational realities, maintaining a strong cooperation lending momentum.

[indiscernible] oriented approach to better serve the construction of the industrial system. [indiscernible] a key component of our banks 5 transformations. We will accelerate the development of modern corporate credit framework tailored to the financial needs of the industrial system construction, providing services that better align with the economic structure.

For the transformation and upgrading of traditional industries, we will enhance financial support for key areas of rural industrialization. We'll deepen the ICBC [indiscernible] initiative to support advanced manufacturing clusters comprehensively serving 80 merchant level clusters to strengthen their core competitiveness. We will also back large scale equivalent [indiscernible] and upgrading to priority effective investment expansion, [indiscernible] emerging and future industries, we will refine our specialized service system to better support the development of 3 international sci-tech innovation hubs and national regional sci-tech innovation centers.

We'll build the ICBC science and innovation ecosystem platform, offering in full circle financial services to high-quality innovative enterprises, including little [indiscernible] companies.

For fostering high-quality and efficient modern services, we will leverage our strength in trade finance, focusing on key modules in modern services. By utilizing policy tools such as service consumption and elderly care lending as well as interest subsidy programs for service sector businesses, we'll ensure precise product service alignment, develop industry specific models and drive high-quality developments.

Second one on [indiscernible] projects to advance national strategies. We will focus on [indiscernible] major projects outlined in the 15th 5-year plan, actively aligning with the priorities such as major projects and major reforms, [indiscernible] urbanization initiative, more policy [indiscernible] financial instruments and the central government's budgetary investments. [indiscernible] prioritize development of the national comprehensive [indiscernible] transportation network, systems, [indiscernible], urban and rural products. Those efforts will accelerate the establishment of modern infrastructure system to boost national strategy goals.

Third, client-centered approach will accelerate the enhancement of full integration with service capabilities. We will rigorously promote our comprehensive financial solutions, closely tracking evolving clients' needs while strengthening the financing -- the intellectual empowerment technological enablement and ecosystem synergy to elevate our integrated services capability and build differentiated competitive advantage. By deeply embedding ICBC premium service into clients, industry chains, supply chains and business ecosystem, we aim to become the trusted financial partners of choice.

Due to time limits, that's the end of Q&A session. I want to thank all the investors, analysts and friends from the media for your communication with the management. We believe this is not only an important results announcement, but it's also an in-depth and professional communication. It only reflects our 2025 results, but it also shows our confidence for the future years. And in the future, we will have road shows and some other ways to keep a close communication with the market. If you have further questions, our IR team and PR team are very happy to communicate with you. ICBC will stick to its core business, improve its efficacy and efficiency and create long-term and stable value for our investors. Thank you for your support. Now that's the end of the 2025 annual results announcement. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Dear investors and analysis. Good afternoon. Welcome to the ICBC 2025 Q3 Earnings Call. I'm Xin Zou from the Strategic Management and Investor Relations department. On behalf of ICBC, I would like to extend my sincere gratitude to all investors and analysts who have long cared for and supported our bank.

Joining us today are Mr. Tian Fenglin, Board Secretary and Chief Business Officer of ICBC, along with heads of relevant departments and institutions. Our directors Lu Yongzhen, Cao Liqun, Dong Yang, [indiscernible] Herbert Walter and Li Weiping are also attending today's briefing online.

Now I will give a brief overview of ICBC's key performance indicators for the third quarter of 2025. Facing a complex and challenging external environment, ICBC has continued to uphold its role as a key pillar of the economy, steadily advancing its 5 transformations, intelligent risk control, modernized structure, digital driver, diversified operation and ecosystem development, achieving a dynamic balance between scale, profitability and risk management.

First, profitability stabilized and rebounded. In the first 3 quarters, ICBC achieved operating income of CNY 611 billion, up 2% year-on-year, with positive quarterly growth in 4 of the past 5 quarters, indicating a clear recovery trend. Net profit reached CNY 271.9 billion, up 0.5% year-on-year, turning positive from the decline in the first half of the year pushing annualized ROA and ROE up to 0.71% and 9.3%, respectively. The cost-to-income ratio stood at 26.55%, maintaining a strong efficiency. The NIM decreased by 2 bps from the first half, but the single quarter decline narrowed compared to Q2, providing stable support for the revenue growth.

Second, steady growth in business scale. As of end of September, total assets exceeded CNY 52.81 trillion, up 8.2% from the end of last year. Loan insurance and bond investments both remained strong, providing over CNY 4 trillion incremental funding for the real economy. Among this, customer loans reached CNY 30.45 trillion, up 7.3% by the end of last year. Bond investment totaled CNY 16.01 trillion, up by 16.2% and customer deposits amounted to CNY 37.3 trillion, up 7.1%. The number of corporate clients exceeded 14 million and individual customers surpassed 770 million, further solidified the bank's customer base.

Third, risk control remains sound and improving. The NPL ratio stood at 1.33%, down 1 bp from the end 2024. The CAR was 18.85% and the provision coverage ratio rose 2.3 percentage points to 217.1% Targeted risk management adherence and effective mitigation measures have kept asset quality stable. In the future, ICBC will continue to strengthen its development foundation by serving the real economy safeguards stability through intelligent risk control and foster new momentum through comprehensive transformation. Looking ahead, we will remain committed to delivering sustained and high-quality returns to our investors.

Now we'll open the floor for questions. We welcome all investors and analysts to raise questions.

[Operator Instructions]

I am [indiscernible] from China Securities. We have noticed that the operating income and net income have recorded positive growth. Congratulations on that. So what are the measures you have taken? And what is your outlook for the full year and the future several years? Can you maintain such growth?

For your question, I'd like to invite the General Manager of Finance and Accounting Department, [ Mr. Tao ] want to answer this question.

In the first 3 quarters, as Mr. Tian has mentioned, the indicators have progressed noticeably. The net interest -- the net income has been up 0.52%, returning from negative to positive. And operating income was up by 1.98%, continuing such positive growth. We have taken several measures to reduce costs and increase income. First is to stabilize NII fundamentals which is our main source of income impacted by the recent year's impact. Net interest margin compression is the question -- is an issue commonly faced by the market. So NII has been decreasing. In Q3, we have been trying our best to reduce the decrease to stabilize our fundamentals through quantity and pricing balance.

Our NII has performed very well. From the data, we can see that the reduction was minus 0.7% among our comparable peers, such data is the best in the measures of pricing and volume balance in volume, we serve the demand in major strategies and new development and serve the new productive forces to provide the effective credit demand with ample loan growth and debt investments, which increased by CNY 2.04 trillion and CNY 1.97 trillion, respectively. So in volume, it has paved the way for the performance of NII. In pricing, we optimize the asset structure and risk pricing capabilities based on the high-yield asset increase.

In deposits, we increased the proportion of term deposits and current deposits so as to contain our interest payment ratio benefited from our efforts in both assets and liability sides. Our net interest margin was 1.28%, down by only 2 bps than half 1, the narrowing rate decline. So this has played a very important role to contribute to our operating income.

Second is to cultivate new drivers for growth. If we want to achieve positive growth in operating income, we have to enhance our efforts in fee-based income. We have taken a lot of measures and grasp market opportunities in fee-based income benefited from the capital market enlarging wealth. We have seen high growth in main business. And also, we played well in containing the cost. So the fee-based income recorded CNY 19.9 billion, up by 0.6%. A quarterly improvement throughout the year, we expect and the volume has been leading the peers. And for ICBC fee-based income, if we see from the -- if we see specifically, there is no onetime factors. This is what we have achieved through normal achievement and can be tested by the market in other noninterest income, which is -- which has attracted high attention from the market.

From this year, the SOE banks have increased remarkably in this regard. We have seen the fluctuations in stock, bond and ForEx markets. Especially from the Q3, we have seen remarkable changes and which provided opportunities for ICBC in trading. Our financial markets department and capital market investment department have received these opportunities and recorded CNY 46.7 billion increase in this regard, up by 45.7%, providing support for operating income increase. What is worth mentioning is that the diversified operation has achieved remarkable results.

The domestic subsidiaries' operating income has been up 34.5%. The contribution was increased from 2.7% last year to 3.6% by 0.9 percentage points, forming a more diversified income structure because of this in stabilizing NII fundamentals, our operating income achieved positive growth. Thirdly, we effectively contained risk costs. We continue to enhance our risk management. We coordinate high-quality development and high-level security, and we deepen intelligent risk control and play the role in the comprehensive risk management and increase our risk resilience and control capabilities, especially in key regions.

Our risk cost has been effectively contained by the end of Q3, NPL ratio of the group was 1.33%, down by 1 bp than last year. The asset quality has been increasing. Provision coverage ratio was 217.21%, up by 2.3 percentage points. The loan loss provision ratio was 2.89%, up by 2 bps. So when we effectively contain our costs, we continue to enhance our risk resilience capabilities. Our control of the risk cost can be seen in our operating income, which paves the way for the management of the risks, which has played an important role in balancing the risk and income.

So because of the operating income and the net income, the 3 aspects are the main factors. When we look to the future and to the full year, the Q4 will be the time for 14th 5-year plan and the beginning of the 15th 5-year plan. So the package of financial incremental policies continue to be implemented. You may have noticed that the trade frictions of China and U.S. are well contained, paving the way for the good external environment for the development. When the policies are implemented and the vitality is unleashed, we are fully confident of ICBC's high-level development, and we will continue to give into full play the measures and balance the quantity and pricing and cultivate the diversified growth drivers and grasp chances in the volatility of the market and effectively stabilize the noninterest income and net interest income and achieve sustainable growth for future.

We will continue to increase our operating strategies, following our strategies and promote our sustainable growth and create a solid and impressive annual and future results for investors and create satisfying returns for all of you. Thank you.

Now we'll take the second question.

I'm from UBS. My name is [indiscernible] First, I want to congratulate ICBC for your amazing results. And I want to raise a question about NIM. You have already mentioned the narrow NIM. So could you share the current pricing for corporate and retail loans? How do you see the NIM trending going forward? When do you expect to see an inflection point? And is there still room for rate cuts?

We'll have the asset and liability management department to answer this.

Thank you for your question. On corporate and retail loan pricing, this year, interest rate on newly issued loan continued to decline, though the pace of the decrease has narrowed significantly on a quarter-on-quarter basis from January to September 2025, the average interest rate on newly issued RMB corporate loans fell to 2.7% with quarter-on-quarter declines of 16 bps, 4 bps and 4 bps in the first, second and third quarters, respectively. The average interest rate on newly issued RMB personal loans was 3.01% with quarterly -- quarter-on-quarter declines of 29 bps, 4 bps and 2 bps. Overall, the downward trend in both corporate and retail loan rates has moderated.

On NIM trends, overall, NIM remains under downward pressure but has shown signs of stabilization, as you mentioned. In the first 3 quarter of this year, our NIM stood at 1.28%, down 14 bps year-on-year with the rate of decline narrowing by 4 bps compared with the previous year. We expect the full year NIM to remain around 1.26%. The main considerations are as follows: First, the impact of monetary policy adjustment on NIM is manageable. In May, the 10 bps cut in the LPR was accompanied by a coordinated reduction in deposit rates, effectively mitigating the downward pressure on NIM.

Second, changes in asset supply and demand has -- have improved the pricing rationality. In the first 3 quarters, our credit resources were precisely allocated to key areas under the 5 priorities. The average rate on newly issued RMB loans was 2.78%, a relatively strong performance among our peers. Third, refined liability cost management helped narrow the NIM decline. Deposit volume and pricing remained well aligned with the average interest rate on RMB deposit at 1.32%, down 30 bps from the end of last year. Fourth, optimized balance sheet structures, enhancing medium- to long-term profitability. The share of bond investments in our total interest-earning assets has increased from 22.4% in Q4 2019 to 28.4% currently, up by 6 percentage points.

This unrealized gains in our on-balance sheet RMB [ OCI ] and AC bond portfolios can withstand 7 bps upward interest rate reversal, helping to strengthen medium- and long-term profitability. And on the NIM inflection point, we believe that the NIM is likely to stabilize in the coming 1 or 2 years and the NIM will gradually reach an inflection point. First, regulators have recognized the continuous NIM compression and the People's Bank of China has recently emphasized the need to balance supporting the real economy with maintaining the financial sector's health. We have already seen marginal improvement with a smaller NIM decline so far this year.

As deposit repricing gradually completes, liability costs are expected to decline further. Our medium- to long-term profitability remains solid. We continue to optimize asset allocation focused on meeting genuine financial needs and proactively increase bond investment to build resilience and long-term earning capacity in a low rate environment. On room for further rate cuts, externally, the U.S. Federal Reserve cuts its benchmark rate by 25 bps in September to 4% to 4.25% range, in line with the market expectation. The European Central Bank has kept the policy rates unchanged for now, but the market expects a rate cut in December. These external developments provide more room for monetary policy adjustments in China.

Domestically, given that deposit and lending rates are already at relatively low levels, whether further cuts will be implemented will ultimately depend on overall macroeconomic conditions. That's my answer.

The third question?

I'm from [ Niju ] from Guangfa Securities. My question concerns noninterest income and other noninterest income in the first 3 quarters, we have seen fee-based income turned positive. What are the major drivers? And what is the outlook for future trends? We also noticed that, as you have mentioned, we have seen volatilities in bond market. What's your outlook for your scale of bond investments and strategies?

You have raised 2 questions. The first question is about fee-based income. I will invite Mr. [indiscernible] to answer this question. And for the second question of bond investment, I'll invite Mr. [indiscernible] from Financial Market Department.

Our fee-based income turned positive in the first 3 quarters, which is not easy. I have mentioned just now. If we see by breakdown, achieving positive growth is attributable to the diversified support in income side and the control in the expenditure side so that the fee-based income has achieved positive growth. The first, the wealth management business has achieved remarkable results. We grasp chances, the corporate wealth management, personal wealth management and private banking-related income has been up by 25% and 3%. Pension business-related income has increased by 43%. So in this sector, it has contributed a lot to the noninterest income.

Second, we increased the effectiveness of the fundamental services with high growth by optimizing our efficiency of services and experience of customer, the third-party payment achieved Q-on-Q growth of 0.7%. Bank card business increased by 0.8%. These are the fundamentals of the noninterest income. providing basis for the fee-based income. Third, in expenditure side, the expenses are effectively contained in the first 3 quarters, fee-based expenses was down by 17%. The main reason is that merchant acquiring and business documentation has seen reduced costs. All the 3 aspects contributed to the year-on-year growth in fee-based income. By Q-on-Q, we have seen that the fee-based income has been increasing. Seen from looking to the future, faced with the policy environment of interest concession, we are unleashing the new vitality of income drivers. In 3 aspects, we will continue our efforts to support fee-based income.

First, wealth management. Now we see in this aspect, the related business has contributed a great potential in terms of pension finance and opportunities in capital markets and create new drivers in wealth management, hoping that they can provide more returns in fee-based income. Second, continue to enhance the advantages of fundamental products. We will continue to optimize our payment settlement system and cross-border services and the coverage of our products and increase the resilience in this regard and enlarge our fundamentals. Third, deepen the industrial finance. We will focus on major strategies and modern industrial system and innovate CFS. We are confident to leverage our advantages in customer bases, our network and comprehensive services and fintech and to achieve high-quality and sustainable development in fee-based income. Thank you for your question.

In bond investment and income in Q3 faced with interest rate upside trend, we analyze and grab chances in timely and proper manner. We adjusted pace and scale by diversified strategies, we proactively increased the comprehensive yield of bond investments. Looking to the future, the market interest rate may still fluctuate within a range. On the one hand, the Central Bank will still sustain ample liquidity and the demand of allocation from institutions. This will support interest rate and constrain its upside space. On the other hand, Sino-U.S. relations and the stronger stock market may still bring impact to the fluctuation of the market. So against such backdrop, we will adhere to the principle of being stable, flexible and forward-looking.

First, scientifically managing pace and scale. We will continuously and closely track changes in the macro economy, policy signals and market sentiment, dynamically optimizing the overall scale, variety structure and maturity distribution of bond investment to balance current returns with medium- to long-term interest rate risks. Second, optimizing allocation and trading strategies. We will deepen fine-grained research on various bond types to optimize the allocation structure. We will flexibly employ strategies such as duration-based trading to capture market opportunities. Third, balancing immediate and long-term considerations. We will always prioritize asset safety and income stability while pursuing reasonable returns we will place high importance on the long-term healthy development and risk resilience of the investment portfolio.

Facing a complex and volatile market environment, our bank's bond investment business will continuously deepen market research, strengthen fine-grained management, scientifically manage investment pace and risk exposure and flexibly utilize diversified strategies to enhance comprehensive returns. Under the premise of effective risk control, we will strive to achieve stable and sustainable contributions from bond investment to bank's overall operating income and mitigate the short-term impact of market fluctuations on financial performance. Specific execution will be dynamically adjusted and optimized based on policy guidance, market evaluation and the bank's overall operational objectives. Thank you.

Now we'll take the fourth question.

I'm Winnie Wu from BofA Securities. We've seen the large growth in the corporate loan. I want to know whether this suggests a lack of effective credit demand from the rural economy. And also how did ICBC's corporate and retail loan insurance performance in the first 3 quarters? In the third quarter, this trend -- will they continue in the third quarter?

Thank you for your question. First, I'll brief you on the credit loan insurance in the first 3 quarters. Overall, we did a great job. It's mainly attribute to the upwarding economic expectation in China. In aggregated term, RMB loan maintained a solid growth momentum, driven primarily by corporate lending, while retail loans also achieved a year-on-year increase. As end of September, RMB loan balance at domestic branches reached CNY 28.7 trillion, up 8.5% year-on-year, 1.9 percentage points higher than the average for all financial institutions. RMB loans increased by more than CNY 2 trillion in total. Of this, corporate loans rose by CNY 1.9 trillion, representing an 11.3% year-on-year rise, 2.9% points higher than the system average. Personal loans increased by CNY 175.7 billion, up CNY 28.9 billion year-on-year with a 2.8% growth rate.

In terms of loan allocation, manufacturing stood out as a key factor. We have continued to strengthen credit support for key sectors such as technology, innovation and SMEs. In the first 3 quarters, tech loans increased by CNY 1.25 trillion. Inclusive finance loans increased by CNY 596.9 billion. Loan to strategic emerging industries, lately joined specialized enterprises and the core digital economy all grew by over 20%. Notably, manufacturing loan rose by CNY 1.1 trillion from the end of last year, accounting for 54% of total new loans, an increase of RMB 450 billion year-on-year.

Structurally, while the share of short-term financing has risen, the trend is consistent with the broader macro environment. There are 2 reasons. At a macro level, fixed asset investment has been weaker than expected, leading to a higher proportion of short-term loans and financing across the economy. At a macro level, enterprises' willingness to expand production has weakened. While the demand for short-term working capital remains strong, we have actively adapted to the shift in economic activity and the clients' needs, providing tailored finance products and service accordingly.

It is worth noting that unlike with discounting, direct bill discounting provides direct funding to corporate clients, serving as an effective means for financial institution to support the real economy. In the first 3 quarters, direct bill discounting accounted for 92.5% of our new building financing, providing loan support for SMEs and manufacturing firms. And second, on credit demand, although we are facing temporary weakness in both corporate and household loans, but I believe it is expected to gradually recover as macro policies take effect. Both corporate and retail credit demand has shown short-term softness. However, as macro policies are implemented, credit appetite is likely to improve progressively.

On the retail side, fiscal interest rate subsidy programs for consumption and business loans will help unlock retail credit potential. On the corporate side, policies aimed at curbing in vol -- at curbing rat race like competition and resolving overdue receivables, would like to stimulate credit demand among high-quality enterprises. Going forward, we will proactively seize policy opportunities to alignment with the needs of real economy and further consolidate the foundation for sustainable credit growth.

You also mentioned the reverse repos. This business is positioned primarily to balance liquidity needs and its scale fluctuates are cyclical. The third quarter reverse repo operations have remained stable with both end of period and average daily balance declining from the end 2024 levels. Thank you for your question.

The fifth question.

I'm [indiscernible] from CMS Securities. My question concerns asset quality. How do you see the asset quality of this year for ICBC? In corporate banking, what are the impacts of tariff policies? And what is the progress of debt resolution participation in retail banking? What are the reasons for the high NPL ratio? And how do you view the future trends?

Your question consists of 2 parts. First, about corporate banking, I'll invite credit and investment management to answer. For the second part, I'll invite personal banking department to answer.

In the first 3 quarters, the core indicators of credit asset quality remained stable with positive trends. The NPL ratio was 1.33%, down by 1 bp. The NPL ratio for domestic corporate loans was 1.35%, down by 15 bps, reflecting further enhanced risk resilience, key sectors, including manufacturing, wholesale and retail, energy and water conservancy achieved due reductions in both NPL and NPL ratios. New NPLs were primarily concentrated in the real estate sector. The impact of U.S.-China trade policies and tariff negotiations on our corporate borrowers has been limited. Affected clients were mainly those with weak industrial chain resilience and thin profit margins. Borrowers engaged in U.S. export businesses account for a low proportion of our corporate loan portfolio and their resilience on the U.S. market is generally limited.

We have made the stress tests and analysis for the tariff policies on the asset quality of corporate loans. The impacts will be limited. ICBC conducts financial support for debt resolution work prudently and orderly in accordance with market orientation and rule of law principles. We collaborate with banking peers to strengthen coordination, secure repayment sources and enhance credit guarantees to contain risks. On the other hand, we diversify -- we use diversified approaches, including debt restructuring, assets revitalization to resolving risks. So the for platform companies with fundamentally sound operations, good repayment willingness, but temporarily liquidity problems, we have adjusted loan tenors and optimized repayment structures to alleviate constructed maturity.

So the -- our exposure to such risks, such loans is minimal and rates are already at reasonable levels with limited room for reduction, ensuring a manageable impacts on our net interest margin. So the interest rate reduction primarily target high-cost bonds and nonstandard financing. So in recent years, the personal finance asset quality has been facing pressures with rising NPL ratio. The trend is in line with peers and maintaining a reasonable range comparable to other banks. So we continue to strengthen 3 gateways. First, entry gateway, rigorous pre-lending controls via data modeling and feature attribution analysis across dimensions to dynamically optimize rules and eligibility criteria in terms of products, clients, regions, strategies.

Second, monitoring gateway, advanced digital collection systems integrated for retail and inclusive finance loans, deploying multichannel collection strategies. to increase the effectiveness. And we also enhanced data infrastructure with a wire table format for personal credit information, covering fundamental data risk profile behavioral patterns and value metrics to enable data-driven decision-making. Third, in exit gateway, proactive NPL management and disposal emphasis on cash recovery during loan servicing, write-offs mainly target legacy issues and aged NPLs, pilot programs include NPL securitization and bulk transfers of retail NPLs to achieve timely risk clearance.

So in the future, we will leverage big data algorithms and AI to build end-to-end risk control models covering onboarding credit, approval, pricing, post-lending and collection through data model-based risk control plus expert loan governance, we will shift from manual controls to smart controls, achieving full progress smart risk management. This will continuously elevate intelligent risk control capabilities and solidify our end-to-end personal loan risk prevention system.

Now we are undergoing the important transformation time for personal loans. In the future, we will continue to enhance our products in its innovation and risk control so as to establish the system of housing and non-housing personal loans and meet the demand of personal finance and create a pattern of housing and non-housing personal loans and create a high-quality development in personal finance.

I'll take the next question.

I'm analyst Xu Ran from Morgan Stanley. I have questions about inclusive loans because now the market is very concerned about the risk in this sector. So what is the current situation of inclusive loan insurance and risk control? Given the relatively credit demand, what are the future development directions and the risk outlook for inclusive finance. We can see that in the 15th 5-year plan, we want to expand the inclusive finance business. And that's the reason why I want to know the future development direction.

Thank you for your support for the inclusive finance on loan issuance. ICBC has taken the inclusive and retail loans as the important aspect of our transformation. By the end of the third quarter, the balance of inclusive loans reached CNY 3.5 trillion, an increase of nearly CNY 600 billion from the end of last year, representing over 20% growth and further rise in the share of total loans. Market expansion through coordinated SME mechanism, leveraging coordinating system among the head office branches, Tier 2 branches and all. We actively participate in local financing coordination task forces and launched a special campaign visiting -- we visited over 3 million SMEs and issued CNY 2.8 trillion in loans, effectively driving the bank's inclusive finance growth.

Second, we will accelerate new client acquisition in key sectors. We read out action plans such as core private enterprises implement -- mechanism and empower business and agriculture. We optimized our inclusive finance layout in technology innovation, advanced manufacturing, trade and service revitalization and small-scale foreign trade sectors and proactively expanding into new markets and clients. In the first 3 quarters, we added 84,000 first-time borrowers, 11,000 more than the same period last year. Inclusive agricultural loan increased by CNY 230 billion from the last year, strongly supporting overall credit growth.

And third, we will work on our loan products to enhance adaptability. We'll accelerate the upgrade of 3 major products line, credit-based collateral based and digital supply chain loans, deepen the regional innovation mechanism for mechanism products and enrich our inclusive portfolio and application scenarios. By the end of Q3, digital inclusive finance products accounted for 90% of both balance and incremental inclusive loans, while the region-specific products also maintained rapid growth. Accessibility and convenience of inclusive finance services has been further enhanced. We will enhance client stickiness through credit+ services. We have improved our credit plus integrated financial service system that combine lending as a core with diversified supporting system.

Through platforms such as global matchmaking happen and agri matchmaking platform, we help enterprise to identify new business opportunities and grow stronger. In collaboration with our China Federation of Supply and Marketing Cooperative, we advance the supply and marketing plus finance initiative and further strengthen the market influence. On risk management, this year, some SMEs have faced operational challenge. And across the industry, the asset quality of inclusive loans has shown a modest rebound. ICBC has consistently placed risk management at the forefront, adhering to the intelligent control plus human oversight approach to build a comprehensive proactive risk prevention system.

At the end of September, our NPL ratio for inclusive loans remained better than the industrial average and overall asset quality remained generally stable. We have a stricter credit entry management. We have optimized the key products and credit models, improved model review and decision-making mechanism, enhancing multidimensional data across validation and strengthened coordination between online and offline risk control. We enhanced ongoing risk monitoring by improving coordination among front, middle and back office. We have strengthened refined risk management, reinforcing anti-fraud and risk detection measures, crack down on illegal intermediaries and upgrade our intelligent risk control system across digital processes.

We've accelerated the resolution of nonperforming assets. We have broadened disposal channels such as the asset securitization and set up cash recovery of NPLs, consolidating the foundation for the sustainable development of inclusive finance. And on future outlook, going forward, we will continue to follow principle of ensuring volume improving quality, stabilizing price and optimizing structure. We will step up efforts to support the high-quality development. The first is that we will achieve the asset supply.

And the second is we will have a more refined products. We will make them online more smarter, and we will have an ecosystem. And we will have a tailor-made financial products for our clients, improve the efficiency of our business. And thirdly, we will have this comprehensive business operation mechanism. We will work on the inclusive finance and as a leading bank.

The next question?

I'm Shen Juan from Huatai Securities. My question is related to deposits. We have seen that this year, the capital market has great changes. So what's the latest development of deposit competition against such backdrop? Has the trend of deposit termination eased? Has ICBC observed deposits migrating to BNP or the stock market?

The first question regarding deposit will be answered by assets and liability department. The second question of deposit migration will be answered by personal banking department.

Thank you for your question about deposit termination. Before answering the question, I'd like to introduce to you this year's ICBC's deposit development. Deposit growth this year demonstrated a favorable due improvement in volume and cost dynamic in volume by the end of September, the balance of domestic RMB deposits reached RMB 38.5 trillion, up by 8.5%, 0.5 percentage points higher than the industry average. In the first 3 quarters, domestic RMB deposits increased by RMB 2.8 trillion, a year-on-year growth of RMB 840 billion. By segment, saving deposits rose by CNY 1.6 trillion, up CNY 350 billion year-on-year. Corporate deposits grew by CNY 880 billion, up by CNY 670 billion year-on-year.

On pricing, ICBC maintained its comparative cost advantage. By the end of September, the interest payment rate was 1.32%, down 35 bps, the lowest rate and deepest decline among China's big 4 banks. As you have noticed that the deposit termination has eased with sequential declines narrowing gradually in Q2 and Q3. The quarter-on-quarter decline in the average daily share of general demand deposits was 0.6 percentage points and 0.2 percentage points, respectively, conducive to controlling interest payment rate for banks.

As for the trend of deposits shifting to nonbank institutions, we think it remains under observation. Now the market liquidity is loose and capital market transactions are active. We have seen that some deposits have shifted to other markets, but no sustained trend has materialized. For example, in September, nonbank deposits across all financial institutions fell by RMB 1.1 trillion, while household deposits rose by RMB 3 trillion, up by RMB 760 billion year-on-year. So the trend is still fluctuating.

As for WMP-related questions, I'll invite my colleagues from Personal Finance department to answer.

I am [indiscernible] from Personal Finance Department of ICBC. I'll make some supplements. In savings deposits, in the first 3 quarters, the savings deposits continued the rapid growth in recent several years. [ Mr. Fu ] have introduced the data just now in savings deposits from quarter-on-quarter, the savings deposit was up by over CNY 300 billion by the end of September compared with that of half 1. So there is no remarkable change over our expectation. In terms of deposit termination, I'd like to make some supplements. From the data, we have seen that such trend is not that remarkable or remains to be seen in the future. In interest payment ratio, the RMB interest payment ratio was down by 20 bps, just now mentioned by [ Mr. Fu. ] And the decrease is even larger for demand deposits. The reason is that against the backdrop of interest rate decline, the scale of ICBC has brought the decline of interest payment rate.

What is also worth mentioning is that the current deposits interest rate decline is even larger year-on-year. It is attributable to ICBC's implementation of 5 transformation strategy in terms of personal finance. We have seen fruitful results. Our customer structure, increments and the scenario expansion, among others, in the first 3 quarters have achieved remarkable progress. Thirdly, in deposit migration. From our general observation, my view is that it is not remarkable, but it still remains to be seen in the future. It can be reflected in the growth of savings deposits, the growth of savings deposits was over 9% this year. Having said that, we have seen that the wealth management product scale at the end of September, the daily average balance was CNY 2.16 trillion, up by almost CNY 150 billion than the end of last year, up by 7.4%.

In third-party custody, the growth was 16.4% because the scale is not that large. The balance was over CNY 600 billion, up by more than CNY 80 billion. From these data, we can see that as the savings deposits are growing fast, the WMP and the third-party custody balance are also increasing fast. There is no data remarkably to support deposit migration, but we will continue our observation towards that trend and communicate with the market. Thank you.

Next question?

Due to technical issue, we cannot hear from the questioner now. But we've received her question. This question comes from [ Ms. Lee Lei ] from JPMorgan. And her question is, how was the quality of ICBC's corporate real estate loans in Q3? Can asset quality remain stable in the future given the significant decline in housing prices this year, how are mortgage assets performing? And what is the outlook?

There are 2 parts in this question. As we mentioned before, in the corporate real estate sectors, this sector has been under pressure. In the third quarter, the overall asset quality of ICBC's corporate real estate loan portfolio remained stable. From its peak in June 2023, the real estate loan portfolio has shown a steady downward trend. And in the future, I would like to talk about this trend from several perspectives. And in terms of the market, we are seeing the transformation from the old sector to relative new one. We've seen a narrowing decline of housing prices. We believe the impact of the sector on the real estate loans will also be narrowed in the future.

And at a structural level, ICBC continued to build a diversified balance and well-distributed investment and financing portfolios. Corporate real estate loans totaling RMB 889 billion, accounting for less than 3% of the bank's total loan portfolio. The bank also maintained adequate loan loss provisions to fully cover the potential risks. In terms of asset selection, ICBC adheres to the region client project integrity standards. Loans are primarily concentrated in key cities with strong population inflows and solid industrial basis. The bank focus on high-quality projects in core areas and the loans are granted strictly in the standards such as the vision project value, normal developer operations and proper management of closed fund flows.

In addition, the mitigating effect of collateral remains sound and recovery rates for distressed exposures are highly high. I want to talk about the personal mortgage loan by the end of Q3. At the end of the third quarter, the NPL ratio of ICBC personal housing loans generally in line with industrial trends. We are at this leading position after normalizing for write-offs and securitization disposal. We continue to advance the construction and application of the digital risk control system. Monitoring models have been developed for risk indicators such as collateral quality, excessive leverage, paid and borrower linkage. This model triggered tiered risk control measures and cover the entire loan life cycle pre and post lending. And this enables real-time or near real-time health monitoring, perpetual risk management and precise resource allocation.

With the real estate market further stabilizing and the policy effect gradually taking hold, some collateral valuation have declined and the bank continues to closely track changes in property values. As macroeconomic stabilization policies take effect and policies to boost the domestic demand and consumption continue to be implemented, ICBC suggest a deterioration trend of the mortgage asset quality to moderate with no sign of accelerated worsening.

The last question.

I'm Xiao Feifei from CITIC Securities. My question is about internationalization in the low interest environment, people are discussing about expanding noninterest income and advancing internationalization. So could you outline ICBC's direction, strategy and advantage of internationalization?

I'll invite [ Ms. Wang ] from International Banking department.

ICBC's internationalization has evolved over 3 decades. We align with global and going global strategy. ICBC has consistently anchored its global expansion to national strategies. We ensure overseas network deployment, product development and strategic focus serve national priorities while enhancing global capabilities. Today, as China integrates more deeply into the global economy and accelerates the circulation, ICBC as a primary cross-border financial service provider will leverage its strength to bridge the dual circulation through financing innovation, driving high-quality development. For your question about the strategy of internationalization, now we are focusing on fifth 5-year plan. We align closely with the national strategy to improve our internationalization and improve our service landscape, and we also adhere to compliance and safeguard the security. And also, we promote transformation in promoting internationalization.

We will increase the landscape of RMB business and increase the value creation of and strengthen clearing settlement, payment custody. And also, we will connect internal and external environment and provide services. And we will provide financial product lines to the international market and use the dividend of the national strategies to respond quickly to customers. About our advantage our colleagues have mentioned, we have strong customer base, diversified business structure and strong innovation and competitiveness. We -- our network has covered 69 countries and regions. By becoming the shareholder of Standard Bank Group, we have covered 20 African countries. We have established 250 subsidiaries in Belt and Road countries, and we also have 12 RMB clearing banks.

So we have become a Chinese bank that serves the domestic circulation and the international circulation. And also, we are the first to establish the integrated global system so as to provide timely funds for the global customers. Also, we can provide cross-border funds in terms of custody settlement, ForEx transaction and the comprehensive financial services. And also, we have great international reputation. We are the Chairperson of the BRICS countries. We are also the Chairperson of the China Europe Alliance and the belt and we are also the partner of BRBR, which has covered 77 countries and regions. And in the eighth CIIE, we are the comprehensive partner in this activity. So in serving these activities, we provide bridge for the partners. Thank you for your question.

Thank you for [ Ms. Wang's ] answer. Dear investors and analysts, for the interest of time, this is the end of the Q&A session. Today, with the -- with our Secretary, Mr. Tian, we have responded your questions candidly. And thank you for your professional and insightful questions. Thank you for the remarkable answers. In the future, in our strategy and operation, we will absorb your suggestions and provide and promote our high-quality development so as to submit a solid annual answer sheet to all the investors. We will continue to hold reverse roadshow and thematic IR activities. If you have other questions, you are welcome to communicate with our IR team. Thank you for your participation. Best wishes.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]