Agricultural Bank of China Limited (1288) Earnings Call Transcript & Summary

Ladies and gentleman, good afternoon. Welcome to the annual results announcement of ABC. It's a great honor to meet our online on site International, domestic investors, analysts and media friends. With that, I'd like to express my appreciation to your active participation, and my thanks go to your long-term support and interest in the development of ABC. Today, we are with us Mr. Wanjun -- Mr. Lin Li, Vice President of ABC, Vice President of ABC, Liu Hong; and vice president of ABC, Mr. Xuguang Zhang; and vice president of ABC, Wang Wenjin; and Mr. Liu Qing, board of secretary of ABC and the directors. Some other directors are joining us online. I would like to present some of the picture facts, three aspects. First one is the operation results. In 2024, ABC implemented the strategies from the government and provide support to the agricultural development [indiscernible] every economy optimized our measurement strategies. Major operating indicators are performing good. First the growth rate in the first half of 2024 are turning from negative to positive. And second half of 2024 are continued to optimize. And the total net profit, CNY 222.7 Billion or 4.8%. And operating income, CNY 711.4 Billion or 2.3%. Interest income, CNY 580.7 Billion, 1.6%. And the second newly growth and loan, CNY 2.29 trillion or 10.13%. The growth of the corporate and individual loans or personal loans are leading our peers and also the individual loan where the discrepancy is 0.42% and also leading among the peers. Asset quality was sound. NPL ratio 1.3%, down by 3 bps from the year-end of last year. Special mention loan ratio, 1.4%, down by 2 basis points. And overdue loan ratio 1.18% and the ratio of overdue loan to NPL 90.9 and provision coverage ratio 299% and remain well capitalized and risk resilience. Capital adequacy or the -- is increased, we issued around CNY 320 billion, CNY 320 billion TLI and a capital bond and CAR increased by 1.5%. CET1 CAR was 11.42%. And also the return to investors has been increased. The dividend ratio and potential and the performance has been working nice by the investors. In 2024, the stock price of 8-year has been increased by 55% and 58%, respectively, and also ranking first among the comparable peers. Recommended by the Board of Directors based on the interim dividend payout. And there will be RMB 1.255 per ten shares plus the interim. So we have RMB 2.419 per ten shares. And we have around 90 -- CNY 80 Billion dividend payouts. Measures we have taken. The operating results or performance are attributable to the strong leadership of the CP Central Committee and the government. It also -- it is also a possible because of the interest in the customers, paid by the customers and the private sectors. We achieved to the high-quality development. More specifically, our job are done in the following 5 aspects. First, we focus on our main business and continue to strengthen our financial service to the agriculture, farm and rural areas and strategies development has brought special or broad room for the development of ABC. We focus on the agriculture area on county level and enhance our service capacity in the county level areas. In terms of the business growth scale, the county level growth exceed CNY 1 trillion, balance CNY 9.855 trillion, accounting for more than 40% of the domestic loan balance. And the annual growth rate of the daily balance CNY 1.1 trillion, and a balance CNY 12.53 trillion, accounting for 44% of the total loan balance. So the county level has provided a more and more important role in the development of ABC. We focus on food security and also consolidate the poverty evaluation and enhance our financial support growing and the loan balance to the important agriculture products more than CNY 1 trillion. And also, we have more than 15% growth rate of the agriculture area. And then in farmers, we also increased our coverage of the loan to farmers to help the farmers. Year long loan reached CNY 1.49 trillion, 37.7% of growth. And the second focus on the real economy to the 5 key chapters of finance, we focus on the rural economy, continue to enhance our financial supply with the reasonable growth rate of the volume, we focus on 5 chapters of our key areas of finance and enhanced investment in the key areas was the weakness of the economy to enhance the quality of financial service. And in fintech, we actively innovate our financial products as was the service mechanism to focus the fintech, where the technology companies, we established the specific credit service system. And for the technology companies at a different development stage, we built a whole life cycle matrix of the product, and we route out then the empowerment loan as well as the loan as well as external direct investment loan. And also, we established the equity investment pilot fund, and we signed a strategic agreement with the cities and relevant businesses were put into operation by the end of 2024. ABC's loan balance to city areas more than CNY 2.5 trillion, growth rate more than 22%. And in green finance, we implemented the green finance strategy focused on the clean energy and upgrading of infrastructures as well as energy conservation to enhance our asset supply and credit supply. And based on the features of ABC were rolled out in the 3 agricultural integrated development in household green growing agricultural development as well as the improvement of the environment in rural areas, enhance our credit supply as well as in the service to the growing investments. And we originate the green bond and also enhance the appropriate green bond investment and innovate the ESG theme, WMP. And the green bond balance, CNY 4.97 trillion, an increase of 22.9% from the year-end of last year. In green -- inclusive finance, we established ABC featured online, offline integrated as development model, create a multi-scenario credit products to lead the inclusive finance borrowers demand. And we implement the support to small and micro borrowers and visit the credit volume. And the borrowers we visited, those indicators were ranking #1 among the comparable peers. By the end of 2024, the inclusive finance loan balance increased rate more than 30% for 6 consistent years and balance CNY 4.66 trillion, #1 among the peers. The largest coverage and the sustainable development is the best among the peers. In pension finance, we support the multi-pillar pension fund development, the real search insurance card and the QR code, that number has been leading the peers. And the management scale and the number of the pension fund is increasing rapidly. And we actively supplement the supply, product supply, newly added 140 pension fund products and also pension funding finance has been developed. The loan has been grown at 68%. In digital finance, we use a digital class algorithm. We rolled out [indiscernible] year loan [indiscernible] year loan as well as other innovative products. We use the enterprise level architecture as well as digital tools to provide the bottom line to support to the customers. So we have online offline. And agricultural year long, the balance reached CNY 5.73 trillion and 34.8% growth rate. It is actually responded to the financing mechanism in the real estate sector. We approved more than 1,000 white laser projects and provide CNY 400 billion loan balance and Preemptly reached the major projects, equipment upgrading as well as we signed around CNY 130 billion and also loan balance is CNY 28.5 billion and support the cross-border RMB settlement, the growth rate is 13.7%. And the third, we focus on the people's livelihood. Finance for people's livelihood is the basic feature of finance while maintaining its own system and development. CCP stay true to its mission to serve people's well-being, to serve the immediate problems and the interest of farm people's livelihood. To provide people's livelihood, we enhance financial support in education, medical care and housing. And the loan balance has been -- individual loan has been increased by around 1.94%. Number one, in the major way, personal consumption loan and growth at 28.3% also #1 among the comparable peers. For the key customers, we optimize the aging population as well as the international friends living in China. We provide the channel optimization as well as other areas to provide a more inclusive and more convenient environment for payment and provide the wealth adonis of the people putting out of poverty, and we provide the people. We provided the benefits to around 580 million. And for the customer right protection, the mechanism for the whole life cycle of the products as well as the service provide the rights to now as well as other legitimate rights of consumers. In 2024, for 1,000 outlets and for 110 billion complaints are the least. And also the regulators comments for feedback has been improved for the consumer finance. And also, we responded to the jobs to enhance our headcount in hirement and to supplement vacancy since 2021 for each year. The newly added employees are among the peers. And in 2024, we hired 32,000 employees. In the future, we will continue to hire more employees. In 2025, we will increase our headcount. Recently, we noticed that the spring hirement, the hirement our headcount plan is an annual plan. So please look at the figure in the whole year so that they'll be more comprehensive and to get a new paramount picture about the employment by ABC. We focus on the risk control, focus on the development as well as risk control. Risk control is the top priority of ABC. Risk management focused on 3 areas. First one is a key area of risk control, market risk and technology risk control for the key areas, risk control, ABC focused on the preemptive deployment. We have more active and intelligent risk mechanism focus in new emerging areas, industries and retail and the inclusive finance to we have the borrower or the customer specific to do the risk mitigation and also province-specific mitigation measures. And also enhance the platform market risk control and enhance the oxygen see-through monitoring and also optimize the exposure and enhance the market risk, monitor is more targeted and really effective. And for the technology risk control, we put forward in the 3 areas: risk discovery or recovery. And also, we completed the distributive architecture, final accounting and enhance the cybersecurity mechanism, protection mechanism and also the daily transaction has been CNY 1.5 billion and also the service availability rate and the important time has been 99.9%, and to focus on the reform and innovation. Build the new driving force of businesses in 2024, ABC implemented the spot of the third plenary of MPC committee had explored in technology innovation. We build the intelligent banking system, and we put in the digital and AI application. While at the same time, explore the application of large language models, using technology to empower our internal management in improving the efficiency of internal management control. For business management, we deepen our reform of the agricultural development to ensure the support, and we coordinate the pricing and volume and make the pricing more targeted and also enhance the credit review, improve the credit granting efficiency. And for the first service efficiency enhanced in the CRM team, CRM has been increased to 113,000 and the queuing time at outlets has been reduced by 20%. Now I'd like to refer to you on the third part, that is in 2025, our outlook for 2025. So in 2025, the economy turned for the better and the momentum remained good. So we believe that with the continuing on leasing of the consumption boosting policies, we think that the consumption will remain stable and investment will continue to maintain fast growth. For our infrastructure investment, it will be supported. Housing market will continue to be improved. In terms of export, although there are some uncertainties, we estimate that will remain resilient. And in the meantime, also have more proactive policies, monetary policy and fiscal policy that will be strengthened to enhance macro management and control. So all this will actually provide a very good external environment for us. And also for 2025, it is also the end year of the 14 year plan. So the ABC will continue to strengthen risk management, promote growth to continuously improve our development and to serve the real economy and maintain the stability of the financial sector and also to provide sustainable and tangible return to our shareholders. Specifically, firstly, we will stick to our main business and to strengthen the county level agri-related development. And secondly, to support the macroeconomy policy and to further enhance the 5 priorities in the financial sector. And thirdly, to strengthen risk management control and keep the bottom line of risk management control and also to improve customer satisfaction in true reform and innovation, so much for my presentation. And now we're going to enter into the Q&A session. Ms. Liu will be hosting the session. Thank you.

Thank you, President Wang. Now going into the interaction session. [Operator Instructions] So now the first question. The gentleman, please.

I'm from CIC, Lin Qi. In 2024, operating income and the profit growth is the first among the peers. So I'm wondering what's the reason behind this? And what is your expectation for this seasonability of such a good momentum this year.

I'll take this question. Actually, in my presentation, I've already talked about the 5 focuses of our work, which, to some extent, have explained the reasons why we have such a good momentum in business growth. And also, I would like to share with you some specific experiences. So in the past year, we have done a lot of work in the refolding aspects. First one is to improve the credit structure. For example, we try to further strengthen the support to the real economy. And in 2024, the rural economy loans have increased by 10.1%, which accounts for 93.8% of the total domestic loans. So you can see that this improved credit structure have actually improved the returns for those loans. So this is part of the reason. And secondly, it's about the pricing and quantity balance. So while improving our quality of service, we try to optimize the pricing of our assets. And also to implement relevant requirement and also in order to maintain the NIM decline within a reasonable range. Last year is 1.42%. So we can see there has like 3 bps decline compared with that of previous year. And also for noninterest income, well, against the background of fee concessions, we're trying to seize the opportunity of consumption upgrading and focus on the consumption and needs of our customers. We can see that currently, the fee income is CNY 75.6 billion. And for our investment business, revenue increased by 8.5%, credit card businesses, 3.8% growth and wealth management business have also maintained very prudent growth. And also, we seized the opportunity in the bond market. The other noninterest income also maintained growth. And fourthly is we've controlled the risk cost. In 2024, the asset quality has been improved. The NPL is 1.3%, which is a little bit down like 3 -- 0.3% compared to the year beginning. Credit loans have also increased a lot, but decreased a bit. And for loan provision, it exceeded CNY 100 billion. The risk compensation capability has also remained high. So that is why of what drives our operating income and also profit growth. Looking to 2025, as I've just mentioned, what's our expectation for the market? As I just mentioned, we still have confidence in the future that we will maintain the profitability growth. And we will also try to do our work in the following aspects. The first 1 is we'll continue to seize the opportunity in the economic development and promote high-quality growth of ABC. And also, there are a lot of package of policies issued. This will actually bring us a lot of new growth point. So the key is when we can actually seize this opportunity to seize this development point. This is quite important. And also we need to build a modern industrial system, the green finance and all these opportunities for us in the future. So while serving the national strategy, we're trying to realize our own high codevelopment. So for the first 2 months of 2025, we can see that the loans and the deposits have maintained very good growth with improved operating efficiency. So basically, we can see that the growth in the key areas have been higher than the average. And here, I'd like to share with you some data. The first one is recently for PBOC financial inclusive loan, we have exceeded CNY 5 trillion threshold. And for personal loans, we are the first among our peers to realize the CNY 9 trillion. And also for private-owned enterprise loans, we've also exceeded CNY 7 trillion threshold. For country-level loans, we can see that the growth rate has become 47%. So from this, we can see that in the first 2 months of this year in 2025, we have really done a lot while serving the national economy, that is received we've realized our own growth. Apart from the opportunities, when we also try to strengthen management so as I mentioned, balance the pricing and the quantity and also to ensure the interest-bearing assets grow and to improve the interest -- gaining assets structure and to also seize the opportunity of the market and to strengthen the deposit base. So also, we need to balance the price and quantity and try to ensure the stable growth of NIM. And thirdly, we need to strengthen our judgment and analysis and to promote the growth of noninterest income. So we need to ensure the fee-based income to grow and improve its contribution to our total income. And we can see that there has been headroom for the noninterest income. And also, we need to strengthen the management to ensure the asset quality stability. So we need to balance our business and try to strengthen the risk management control specifically in the following -- in specific key areas so as to provide a sound foundation for the long-term and sustainable growth of our profitability.

Now the next question. The friends on the right.

I'm from Xinhua News Agency. My question is about deposits. Last year, the deposit growth in the banking sector is actually under pressure. So what's your judgment and estimates for the loan -- the deposit this year? And are there any further room of decline in terms of the interest-bearing assets. And also under such circumstances, in terms of -- what are the measures you will take in terms of optimize your liability side assets -- liability?

Thank you. Thank you for your question. to balance asset and liability business, this is quite critical for us. So I think the key is to ensure match. And also through constant internal pricing ability to promote the high-quality operation and development. In 2024, we have been supporting merger control, and we actively conform to the rules and changes of the market to promote the deposit growth. So this high-quality development of deposit shows 3 matching features. The first one is loan reserve increase, which is in line with the [indiscernible]. So we can see that the loan deposit growth is around CNY 2.2 trillion. We can see that we're still ranking among the top among our peers. And for personal loans, daily average volume have been increased by 1.74 deposit growth can actually ensure our credit extension in a balanced way. And third one is the asset utilization and return. So we can see last year, the interest paying ratio 1.5% 0.15 percentage points compared with the previous year. And for interest, there has been a reasonable difference between the interest-bearing and interesting. And for the future trend of deposit growth for us, we think that last year -- at the end of last year, the central government raised that we need to implement a moderately easy monetary policy. So we can see there has been modest monetary growth. And the deposit growth have also created very good monetary and physical policy. So we this year, the deposits will still maintain the balanced growth. And we will continue to build customer base to promote deposit growth as to better serve the rural rejuvenation and the real economy. In terms of the interest cost, last year, we can see there have been twice the lending rate downward adjustment. So we can see there has been improved mechanism in this aspect. So we estimate that the cost will be reduced to some extent, mainly based on the following 3 reasons. The first one is that since last year, the deposit rate downward policies will be further unleashed. And secondly, after these policies have been managed, we think that this will actually further reduce the pressure in this aspect? And secondly, there has been interest cut cycle. So we can see that the foreign currency interest cost has been decreasing. So to some extent, we think that the interest paying well or cost will be still going down. And last year, we can see the time deposit accounts for an increasing percentage. This increase has been like not as much as previously. But how do we look at this figure? This means that there has been more resilience in deposits. But if we look at the maturities, it actually relates to the trend of interest rate. When there's low interest rate, the long duration of deposits will be better for us to manage the full cycle of the deposit. And also, we can see it reflects the changes in people's wealth management behaviors and also interventional market. So with economy turning for the better consumers' confidence in the market -- better for the adjustment of the liability structures and looking in the future, ABC to meet the customers' requirements. And the demand will continue to optimize the liability structure to support the credit supply to the real economy, major 4 aspects. The first one is to focus on the customer base development. This is a priority of the priority. And to be more specific, I'm going to expand the customer scale, well, at the same time, we need to optimize the customer structure and third, to promote the deep rooted customer and to enhance the customer experience, use high-quality products as well as a convenient financial service to enhance the goodness or loyalty of the customers and also to strengthen the core competitiveness. To be more specific, to enhance our robust and inclusive finance, pension finance, to continue to consolidate ABC's country business as well as the retail business that is our comparative advantage. And third, we need to enhance the intelligent -- the IT management to have a stratified management to the customer so as to enhance the deposits products into the service, to enhance the revenue of the sources of low cost. And also we need to do the digitalization transformation in the digital development of ABC to participate and promote in the digitalization application in rural areas so as to provide a comprehensive and diversified financial service so as to enhances the high-quality development of the deposit business.

Next question, please, online question.

Thank you for the opportunity. I'm from [indiscernible] security. I'm an analyst. I've a question, it's about the increase of the credit. In 2024, the credit in '25 growth, the speed for ABC. What is the reason? And what will be the growth rate of the credit supply and the key areas of the credit granting.

Thank you for the question. I'd like to give the floor to Mr. Liu Hong, Vice President of ABC to take your question.

Thank you for the question. In 2024, ABC implemented the strategic deployment of the county focused on main business, and it focuses on 2 missions, to focus in key areas and key -- where the weakness of the economies provide high-quality service for the high-quality permanent economy. Credit granting maintained the stable growth in terms of scale and also optimize the structure. First, provided service to the rural economy, increase of the coverage and scale, non-balance reached CNY 24.9 trillion, [indiscernible] 2.3%, 10.1%. Corporate alone, CNY 1.4 trillion growth, 10.6%. And the customer was along 85,000 growth rates of 9.4%. Volume and speed are higher than that of the previous year, leading among the peers. And the newly added customer 785% contribute to the county level balance reached the ability county-level balance, more than CNY 1 trillion, accounted for more than 47% and growth rate, 12.3%. And 22% points higher than average of the ABC. And the rural and county level growth rate 21% and 14.8%, higher than the any of the average growth rate of the bank, and rural loan, 36.6%. And the 5 key areas of financial sector growth fast and the strategic emerging growing credit more than 22%, and the manufacturing growth rate 20.2% higher than average loan growth rate of the bank. Inclusive finance sector loan balance, CNY 4.68 trillion, newly added more than CNY 1 trillion. Private sector loan balance, 6.35% balance, and the growth rate or volume higher than the peer and also pension loan more than CNY 10 billion. And also faster response to the stimulus packages, implementing the financial mechanism on the rural areas, new sectors and also enhance the credit revenue, provide more than CNY 400 billion to the white list real estate projects and it provide in the SMEs financing 2024. Provide the companies within the list, CNY 704 billion and also providing services to the major infrastructure and projects and to provide in total more than CNY 740 billion. And infrastructure contractor volume is ranking them on the top of the peers in a credit card and an individual or personal loans, growth in speed and volume are also ranking them on the top. Retail credit advantage has been consolidated. And also with leverage on their outlets, white coverage in our areas to optimize the individual loan businesses. And the credit card and business card increased by more than CNY 94.8 billion. And also the credit card increased more than CNY 650 billion by the end of Q1 this year. The credit card loan balance exceeds RMB 9 trillion. And this year, there will be a more active monitoring fiscal policy and committed monetary policy. So there will be a credit amount in the real economy. ABC1 seek steady growth while at the same time, seek innovation for the key areas to enhance the financial service for the key areas and also to enhance their volume structure and the pace of credit granting. The total credit volume will be grown in a steady and balanced way, provide service to the rural areas and provide financial services to the planting in spring and also provided granted the credit support to the key areas of the agricultural development. And accelerate the long to the farmers as well as enhance the percentage of the county level loan balance. And also provide financial services to the domestic consumption stimulation. Provide service to the water system, urban infrastructure as well as transportation. And also to explore the traditional consumption and new consumption models, consumption demands such as tourism and a pension. And also enhance the benign growth of consumption loan and also meet the first-time buyers as was a bit demand for the replacement, demand of the housing needs. And third, promoting inclusive finance development as well as suspension risk to the private sectors and elaboration on our advantages in the rural areas and the group-wide leverage advantages as well as technologies to provide needed to the private sectors and small- and medium-sized enterprises and enhance the demand where the sector for the green finance focus on the traditional green upgrading as well as a growing development provide the credit supply to the environment cleanup as well as ecological protection sectors to enhance the growing credit in county levels as well as growing credit to the small- and medium-sized enterprises.

Thank you for the answer. Next on-site question, please.

Hong Kong One Weipa After listening to the opening remarks about the asset quality in 2024, but we saw some risk in some areas of management. What is the outlook for the asset quality management? And what are the sources and pressures? And what kind of measures will be taken to mitigate those risks?

Thank you for the question. ABC has always put risk prevention and management at the top of the agenda of the work. We focus on key areas, risk management and enhanced risk management base. And those asset quality has been ranking among the top of the -- among the peers. In overall NPL ratio 1.3%, special mention loan ratio 1.4% down from the year beginning. And the difference between overdue and NPOs has been negative for 18 months and also mitigate the risks and the provision coverage ratio is high. So we have maintained a high and strong risk offset capacity corporate loan. Asset quality is good. NPL ratio 1.5% and that has been maintained as a downward slope for 4 consecutive years. Individual loan, 1.03%, a little bit upward from the year beginning, but the overall asset quality is at a good level. We do believe that the trend is in line with the overall banking industry sector as well as our expectation. And for the key sectors, asset quality is stable while getting to the better for real estate sector NPL ratio has been down 2 bps from the year beginning. And in promoting the rally up and some development of the sector as well as combined with the risk management, we have achieved overall stable NPL ratio and the local government debt risk with the package measures from the central government and the financing vehicle customers ratio and the number has been going down and asset quality has been stable overall. Outlook for this year, asset quality of ABC will continue to be maintained at a stable level. NPL ratio will be kept at a good level among the peers. And the indicators like overdue ratio and NPL ratio, special mention loan ratio will also be at a control level and also will have a sufficient risk resilience. To be more specific for external environment, we do believe that China's macro economy is moving forward, that is the fundamental. Such kind of fundamental has not been changed and has provided more favorable condition for the operation of ABC for the asset quality management. ABC will continue to work on the development while manage the risk, but managed -- risk management always goes first. And also to provide support to the strategic development of China. And also we will be very stringent in terms of the customer eligibility and lending underwriting. And we'll continue to focus on risk management in key areas. And based on what we have done last year to enhance the key area management of the real estate sector and also to manage the large exposure with borrower-specific policies. And for local government debt, we have a provincial specific policy to mitigate the local government debt. And also we are doing the sweeping risk health check of the large customers, and we have a more proactive and more smart risk management system. But at the same time, we'll continue to enhance our risk management inclusive financial [indiscernible] business. In those areas, risk management has give [indiscernible] high attention priority from the bank, for example, eligibility management optimized our product model and also diversify our source -- data source. And also optimized our processes and policies, procedures. And what we have something organic integration between online offline operations as well as procedures, while sometime when you have the collection as well as a disposal. We do believe that with those above mentioned measures, we are capable of keep stable our asset quality. ABC will continue to work hard to work within the -- as best as quality and most sound development.

Next question, please.

Thank you, economic and daily. In the last 2 days, we mentioned the personal loan balances reached CNY 9 trillion as retail large bank. What are the development philosophy and strategy in retail business? I know consumption stimulus is a very important national policy. So based on this macro policy background, what is the outlook and growth point of the retail business of ABC?

Thank you for the question. Thank you. Thank you very much for your interest in the retail business development of ABC. Retail business is related to the households and the people and retail business is the most important part of inclusive finance. In recent years, ABC retail business, so we focus on high-quality development while complying with the one, [indiscernible] business line; and the two, [indiscernible] business model. So the main business line is the focus on customer management. Large wealth management and digitalization transformation are the 2 supportive pillars. So focus on the customer-oriented management operation and also focus on 3 transformations. First, the operation focus on the product to sell to the customer management experience enhancement. And for the management has been shifted from the traditional finance to new finance and also operation method has been shifted to digital driven. Well, so while focus will do a good job in the 5 key chapters of finance and provide service domestic amount as well as consumption. So that will have a reasonable volume growth as well as improvement of the service quality so as then to refresh their brand of people's finance for the people. Last year, the personal customers exceeded CNY 818 million. And personal loans, financial asset scale exceeded CNY 32.3 trillion, maintaining a leading position among our peers. For the whole year, the retail business income is CNY 390-or-so billion. So we have realized the fee income of retail business is CNY 40-or-so billion. And the personal loan deposit is around CNY 18.7 trillion. There has been 5 key indicators maintaining the top among the peers. For personal loans have also been increased for 5 consecutive years leading among our peers. For wealth management, private banking, credit card business, mobile phone business, these have also been maintained very good momentum. And in terms of the channel integration and et cetera, we have also maintained new achievements in this aspect. Among the international authoritative assessment. ABC has been for consecutive years been awarded the top of the best retail banking. And with China, still central government continue to promote consumption, we can see that many people are very -- pay a lot of interest in personal loans. So now I'd like to introduce to you ABC's personal businesses. For personal loan business, we mainly focus on steady growth, expanding demand, improve people's welfare and serve the rural rejuvenation. And also, we have a wide coverage in terms of services. So we actually achieved progress and meet stability and also seek optimization of our business and meet stability to satisfy customers' needs for consumption, small and medium-sized enterprises and private owned businesses, their needs. Last year, we extended personal loans, CNY 6.8 trillion, and with -- the total share is around 53% of the market. And we can see there have been 9.4% in terms of the growth rate. NPL is 1.03%. Provision coverage ratio of 296%. Generally speaking, the asset quality remains stable. And also about home loan, that is the CNY 600-or-so billion. For operational loan, CNY 3.2 trillion increased by CNY 600 billion or 35%. So excluding credit card business, the residential consumption loans is around CNY 500 billion, increased by 39.8%. For credit card business, the increase is around CNY 150 billion so increasing a lot. For credit card consumption, it exceeded CNY 2 trillion. NPL is around 1.46%, also leading among our peers, the best among our peers. So we can see there has been good momentum in our economy. And there's been favorable conditions, which will actually enable us to better serve the real economy. And also from this year's development, we can see the personal loan business has actually been maintaining very good momentum. So previously, on March 17, you may know that we have already exceeded a certain number in our business, but there is another information that has not been disclosed. Actually, our liability, the personnel side, we are also the first to exceed RMB 19 trillion. So up to now, we have accumulated extended CNY 2.07 trillion. In 2025, the focus of our personal loan business is on the following 4 aspects. The first one is to serve the customers with greater power. We also will implement a lot of the central government policies and to further enrich or diversify our financial products to enhance the financial supply and we organize these credit backup enhancement plan. And secondly, to ensure the resource. So in terms of the loan maturity, the interest rate. We are trying to provide more convenience for them. And thirdly, we'll try to incorporate this product plus ecology for key products, we will also try to do more in order to expand the new customer demands. And first is to serve the rural economy, the private owned enterprises and the rural development. On 1 hand, we implement the central government policies on the private owned enterprises, which is meant to promote or uphold the philosophy of financial neutrality. And on the other hand, we hope that through City plus country, to promote and optimize the agro-related products to upgrade and iterate the product model and to strengthen or enhance the credit extension in this aspect. And thirdly, to improve the business processes. So we'll have the tailor made policies provided to different regions and areas so as to improve our service to the small and medium-sized enterprises, private owned enterprises and et cetera, to improve the financial availability to them. And thirdly, to actively promote the recovery of the housing market. So seeing the opportunity of the housing market development, we will try to actually provide and optimize our product policies and to improve our services procedures, so as to actually enhance the mortgage loans to meet the first high or second-time mortgages and to further seize the opportunity of the potentials of the housing market and also to balance the development and security. So we will rely on the digitalization, the intelligent development so as to build a more secure or safer system. We will also strengthen risk management control and to improve the full process, full cycle arrangement system as to make it more effective and well coordinated. And thirdly, for personal loan pricing, what's our comments on it. Well, in terms of balancing development and security, we will stick to balance the management between pricing and quantity. And we will also try to stick to the risk pricing policy. For large bank, we should have our -- show our responsibilities. We will try to maintain the benign development environment. And also, we will try to ensure the authenticity in the long extension. We know that if there is the real customer with real needs and then the risk can be controlled actually. So the key is to ensure the projects, the borrowers are real and authentic rather than -- like rather than there is like fraud. So much for me. Thank you.

Next. Gentleman, please.

Thank you for this opportunity. So my question is about noninterest income. We noticed that last year, the fee income is turning for the better. I'm wondering what's your expectation for it in 2025? Where are the growth points? And for other noninterest income, they have also been growing really good. So what's your expectation for that this year?

Thank you for your question. I would like to invite our vice president to answer your question. Mr. Hong.

Thank you for the question. For 2024, ABC has been selling to rural economy and to stay customer-centered philosophy and to improve our comprehensive financial service and also we try to rise to the challenges of the financial volatilities or turmoil. As you mentioned, the net fee income is turning for the better. So the total net fee income is 75.6%. Although there has been a slight drop, but it's a 2 bps jump from the previous quarter. In 2025, we'll keep track of the market development, we will try to seize the needs of customers in wealth management and provide them with integrated our wealth management so as to promote the high-quality development of our noninterest income. So firstly, we'll try to stick to a consumption-oriented development, we will try to expand the consumptions in narrows, depend our cooperation with e-commerce platforms and also to consolidate value creation of our consumption-related business. Secondly, we will also try to seize the development opportunity of the capital market to better deploy our product, leveraging AI and also to better allocate our assets and improve our service. Thirdly, for integrated business, we'll continue to build a modern service system and to provide the syndicated loans, the consultancy, the bond underwriting and custody and [indiscernible] as to improve the integrated service capabilities of the bank for the free income or non-interest income. Last year, under the easy monitory policy, we can see there has been decrease in bond use. And in September, there has been a lot of policy issued. We actually drive the market to go up. We can see that the free income, the contribution to our profit has been increasing. For the whole year, we have realized CNY 53.4 Billion in terms of the free income with the growth rate of 26%. So I can see that there has been 1.4 percentage points growth in year-on-year. In 2025, while implementing easy monitory policy, and to promote the stock market development, with issue of the launch of the package of policies, it will actually promote the [indiscernible] market return for the better. But we are also aware that we -- the increasing complexity both internationally and domestically, there has been like 2 way fluctuation in the market as well. So we will seize the market opportunity, keep track of market changes and also dynamically adjust our asset allocation and to enhance our revenue generation capabilities. Thank you.

Thank you, Mr. Wang. So we have a video -- we have a question from video analyst.

Thank you. I am from Morgan Stanley. I like to ask a question about the county level business, which is an advantage of ABC. So for ABC, what kind of opportunities will such county related business ring to ABC so as to maintain your bondage in the market and -- okay, we do to better improve the business contribution to our profit.

Thank you for your question, We would like to invite Mr. Wanjun to ask your question.

Thank you for your attention to the county level -- related business. The total loan is RMB 9.85 Trillion. So the total increase in amount accounts for over half of the total incremental loans, that is 47% or so. So in 2024, the agro-loan growth is 36.6%. This is a really fast growth. To improve the integrated rural areas and urban areas, the system is also intended the new type of remuneratization straight to like stretch layout. And there are plenty of opportunities [indiscernible] coming to report this year have laid out important policy developments that has provided the business development of the county levels of ABC. Those are the policy windows as well as very favorable market opportunities for ABC. First, the new matured customers, for example, like broadcasting as well as rural related tourism as well as other experiences at ABC have more opportunities, has more opportunities to combine with the new entities in the county levels and rural areas to grow together with them. And second, the new quality development of rural areas versus special government bond and local government has going into the high center farmland as well as the urbanization of rural or the -- the people living in the rural areas and ABC will provide key areas of the revitalization. And there is a huge potential for us to develop. And also for the favorable policies and new news as well major projects, for example, the EVs and smart home appliance as well as rural area and tourism's potential has been revitalized. And also, demand will be very huge in rural areas as major state owned bank providing service to revitalizations, ABC will continue to cement businesses and also further tap into the rural areas and county areas and provide a better service, more focused, more solid and a more balanced service to tourists. Now one, we need to do our job well in the following 4 aspects. First, continue to enhance our financial supply in the county areas and implementing the development policy of rural areas, the country and also provide financial resources to the county level rural areas and also enhance the proportion of agro-related loans. And provide service into the revitalization and also the comprehensive rural vitalization. Provide the full life cycle supply chain and our ultra long-term government treasury bond and special government bond to sink down into the rural areas and also work strongly to consolidate our poverty alleviation work and also implement the no refinancing policy. And a balanced and by strong support and also no systematic falling back into poverty to provide support to those people who have been alleviated out of poverty and also to work comprehensively to provide consumption targeted health assistance as well as talent support and also the correlation between the Eastern Coast area and Western area of China. And also consolidating the key areas financial service to revitalization, provided the service to the high standard farmland as well as the model innovation in providing service to the farm agricultural machines and to provide support to them for the supply chain of the agricultural development, and to provide the dedicated financial service plan for the integrated development of rural areas and urban areas. And also provide credit support to the batched as well as the chained and group-based service model. to provide the new product forces of the agricultural areas. And also, we're continuing to focus on the channel person to sink down to the county in rural areas and also to the newly built outlets will be moved or tilted to the rural areas and also explore on the [indiscernible] were roaming were flown the service outlets and also upgrade our Sannong service models provided financial services to the township areas and also enhance the county or the CRM team building in providing services to rural areas to enhance the capacity and a level and the standards of was providing service to the rural areas.

Next question, please on the front row.

Thank you for the question. I'll take this question. ABC continues promoting the smart bank development as well as integrate into the digital China development initiative and also enhance the application of AI and accelerate development of technology, digital management of the bank and also improve the quality and efficiency of digital finance and initial results have been achieved 4 areas. First, digital products and the scenario ecosystem has been improved. For example, e-loan has been increased in terms of the scale by the end of last year, loan balance was RMB 5.73 trillion, an increase of 34.8% from the year beginning of 2024, and also put out [indiscernible] year loan. And as the torch loan as well as other credit products and also online finance and smart parks and pension financial service and also deepen our service in the health care, government service as well as other scenarios. Also financial services, digitalization in the service in the rural areas by the end of 2024, e-balance RMB 1.5 trillion. We upgraded our e-loan service and increase grain, cotton, tobacco as well as husbandry as well as other data and to creatively roll out a series of products to the farmers and also have ABC Holon cloud service platform. By the end of last year, this platform have 264 institutions and also provide 6.5 billion, covering 2,657 counties and provide total volume of around 10 million. And another one is online and offline channel coordination and the mobile banking dividend. We are the first one of my peers to match it to the Harmony OS system and wrote out 10.01 system and MAU for Personal Banking to 150 million and then this is leading among our peers. And also improving the super workdesk of CRM and also provides service to the mobile working to -- and also provide the all of the demand of our CRM in provide better service to our customers and also have our mobile or the centralized handling process. And also, we have around centralized 21 businesses also can save around 140,000 working hours of our workers. And also the digital base as well as the technology base has been further improved. We enhance the enterprise level digital assets organization and also built a taking center decision engine as well as other digital tools and lower down the threshold of digital application. And we also strengthened the technology security management and also build our basic algorithm as well as the maintenance of production as well as cybersecurity management to enhance the business continuity. Your second question is about the AI plus 1 policy. AI policy. AI now is hype now. And this policy rolled out by ABC has described in the integration between AI and to the banking system, including the road map, measures, advise strategies. There are 2 ways out, 8 areas and 6 aspects in the 3 phases. So this is a systematic layout to deploy AI plus work. To be more specific, first, a scenario development to build 8 smart areas. We improved the efficiency and quality, lower down the cost as well as enhanced risk provision, use the digital sensitivity of AI to provide a decision-making as well as the content generation support in credit management and risk management of channel operation as well as marketing and maintenance and work space, 8 scenarios. We deploy the AI plus application in house in the content operation as well as a service to our customers to provide a service to the high-quality development of the bank. And systematically build and implement AI plus the whole scenario application on 6 aspects. We built ABC application of system of AI business to accommodate or adapt to the changes by AI to build robot hands plus manual processing. In digital application, we use a high-quality data as well as a knowledge process to lay the foundation for the deep and comprehensive application of AI and also build an accommodative compatible AI computing infrastructure build AI plus data-driven structure in model, we build in multi mode and multi-type model matrix and build one stop model development and maintenance and monitoring so that the multi decision-making as well as operating model in terms of security, we build AI application infrastructure, security, model security, data security and application security system to ensure the data will go out of the domain, the model will not be connected to the Internet. And in terms of ecosystem based on the smart bank development to build, we will enhance open development so as to promote the AI application in financial sector. And so we have our face-based development by the end of 2025 and in the middle of 2027 and the end of 2029 will be 3 milestones to implement this policy according to time schedule with the high-performance model, DeepSeek rolled out and the financial sector also paid a lot of attention to this. And ABC also followed very closely to this. And with the integration of DeepSeek in the bank, for example, smart workplace and smart marketing, we have applied DeepSeek and initial results have been achieved. Looking forward, we will -- based on the guidance of this policy to form AI multi-scenario deep and wide application and further provide strong support to the development of ABC. Thank you. Thank you, for your explanation of the Smart Bank development of ABC.

Next question, please.

Jhonson Securities Analyst of medical Pension, pension Finance. We've noticed that aging population is a feature of China, and that has brought the opportunities for the pension finance of financial institutions. So in providing service, doing a good job in the key 5 chapters finance, what are the measures in pension finance and what are the key work areas in terms of pension finance?

I would like to give the floor to Mr. Lin to take this question.

Thank you for the question for doing a good job in the 5 key chapter 3 aspects. First, value driven, we implement people-centered value. First, enhance the 3 pillars of pension fund coverage, EPC outlets as well as the real social insurance as well as the 280, 180 million and 70 million and leading among the peers in terms of the physical social insurance card and health care QR code as well as the scale in those pension fund areas has been grown rapidly to 24% and 34.4% and we actively promote and explore the Pillar 3 pension fund, and we have provided service for 24 million. And we enhance the operating of the infra-formulated the dedicated work plan and invested in the fixed fund. And all of the outlets have been upgraded to make it elderly friendly. We've built almost 300 age-friendly outlets. Thirdly, we will promote the economic development. The head office have issued 12 differentiated credit policies in terms of pension, finance, the credit approval pricing performance evaluation, we will actually have certain consideration in terms of the policy side. And for pension loans, it is around CNY 11 billion, up by 68%, among which for primary and enterprises accounts for 61%. So we can see that the private enterprises have actually played a very important role in the pension finance area. So ABC has supported the pension rate value investment equity investments exceeding CNY 21.6 billion. And then we need to strengthen the reform driven and focus on innovation for us to serve the needs of the customers in terms of financial or in terms of the pension finance. And also, we hope that we can make progress in this aspect. In the past year, for offline online, we've accepted 100 million of customers for such services. And our hotline have also been trying to offer the one-click transfer service of the customers. And in terms of from mobile banking, we also have this online finance plus nonfinance scenario service philosophies. And also, considering ABC's philosophy, we have like [indiscernible] service station. This actually is located in different villages and counties. And also, we have like specific task forces as to improve the service coverage in rural area. In terms of the product, we focus on customer needs, and we also cover insurance, waste management, found, precious metal and et cetera so as to cover various types of products in terms of pension finance. So currently, we have a wide range of products offered to our customers. And also, we have launched different types of products in order to meet customers' needs in this aspect. And then for digital driven, we will keep customer-centered and use the AI and also data to promote the digital development of the pension finance. So we will try to build the intelligent pension homes and also, we would like to actually implement the smart intelligent pension system. So we will take into consideration the status of the life stage and the needs. We have like 16 subgroup in terms of the product configuration. And also for staff at experts in digital cloud which is one clear, which means if you ask them, then you'll get to understand quickly. So we will have such staff help us to actually better serve the customers. Going forward, we'll continue to be dedicated to promote the full product development and the full coverage. And also, we would like to serve our customers through multiple dimensions. So we think it's like a very full and comprehensive extensive coverage to our customers. So we would like to join hands with the public to better build a community for the elderly so as to provide quality service for them to improve their experiences so as to improve service in this aspect.

Next question, please.

I would like to ask not long ago, we have this seminar on private enterprises by the central government. We know that private enterprises in part accounts for 90% of our economy and ABC has been leading for us in serving this to groups. So I'm wondering, last year, in terms of financial inclusion and same in the private enterprises, what have you done? And also for this year, what is your targets and strategies for serving this group of customers.

President Liu, please.

Thank you for your question. So for ABC, we implement the severity of the central government meetings and also the financial work conference. We implement the policy to serve the rural economy and the real economy and to also deepen the agro-related development. So specifically, we will try to be better adapted to improve our service in serving the small medium-size enterprises and also to meet the diversified financing needs and also to improve the financial affordability and availability issue. And also for ABC, our loan balance is CNY 6.5 trillion financial inclusion loans, CNY 4.6 trillion. So we can see that this loan has been growing a lot. And for the borrowers for small medium enterprises has increased by 104 for us. And for private Enterprise deal, loan balance CNY 6.53 trillion, up by CNY 1.08 trillion. So we're also trying to better coordinate our service for these 2 customer groups. And we will look at different indicators, and these indicators also rank top among our peers. And recently, we have also been implementing the spirits of President Xi Jinping in this private business seminar. So for private owned enterprises, their loan growth have been increasing compared with the year beginning. And with the loans also exceeded the CNY 7 trillion threshold. Financial inclusion loans have also exceeded CNY 5 trillion threshold. And the borrowers have also exceeded 5 million. So for these 2 types of loans, we have the largest coverage and the sustainable development of these 2 businesses have also been strengthening in 2025. We will continue to implement the important spirit of the President Xi Jinping. And also the guiding opinions of the 3 council in improving 5 priorities in the financial sector. The following work, first, focus on the key areas to strengthen credit extension, especially for the private enterprises and also the financial inclusion or SMEs. So we believe that it will -- the loans to private enterprise will exceed CNY 7.5 trillion. And we'll also focus on rural rejuvenation, expands demand and boost consumption and serve our -- serve and improve the financial availability and accessibility in key areas. We'll also try to promote the coordination mechanism with the housing market and also make private enterprises, fintech, foreign trade enterprises be included into the SME, and we will also expand the service coverage for them. In addition, we'll also have dedicated credit resources. And also, we'll have more granular pricing capabilities and to improve the non-principal payment policy. And also for SMEs, we're trying to provide them with fast track or convenient services. On the other hand, in terms of the service model innovation and also the system development and also talent training. We will improve our service capabilities to private enterprises and SMEs so as to improve our service for them. Thirdly, we will have this bottom line philosophy to strengthen risk management control. We will also promote risk provision and also to promote our growth so as to seek a new model in this aspect for ABC. I must also consolidate the risk management control foundation and also to ensure compliance risk management. Thank you.

Thank you so much. So now we have this opportunity to the online participants. Please, the working staff, choose a question that is a about public concern or interest. So I'd like to announce the Internet questions. The first one is fintech. Fintech is actually a very important aspect. In 2024, where is the fintech development? And going forward, how can we better support technology companies or tech companies? Mr. Liu, please.

Thank you for your question. Also for fintech or technology innovation is quite important. It also plays a very important role in the development of modern enterprises. ABC is large state-owned enterprise. In China, so we are also a leading force in the real economy. We'll try to follow the general layout and also, we will make it a strategic priority for us. We also allocate a lot of resources to it. And we have differentiated supporting policies as well. By the end of 2024, the strategic emerging industry loans is around CNY 2.6 trillion, up by around CNY 470 billion, growth rate 2.2%, and compared with the other loan growth, it's 12.3 percentage points higher. So we've also tried to build the integrated service system. We'll try to follow these 19 Scientech emission Center and also try to build -- we have the special team and department. And also like a specific dedicated technology branches and et cetera, in order to actually invest enough resources in this aspect. Our technology outlets is around 300 or so. And also, we will improve our service capabilities and model, we focus on the key enterprises and also try to innovate the dedicated credit service system, optimize customer assessment or evaluation. And for different customers, we will offer diversified financing products. And also, we will try to serve the technology companies throughout their life cycle. We've also launched a series of detailed rules, strengthen the performance appraisal and also put in place a lot of mechanisms in place so as to improve the service quality for them. By the end of 2024, the total loan borrowers exceeded 2.4 trillion, and we can see there has been fast growth that is like 90% also. And then for equity investment supply. So we know that actually credit services' advantage commercial banks, but actually tech company also have interest in equity investment. So we were trying to cover our customers in this aspect to gradually established a dedicated team in this aspect. We have 18 trial of pilot cities. We have signed the framework agreement with them. Like in Suzhou, Hangzhou and et cetera, we will continue to accelerate the establishment of fund and also the project launch. And fourth one is agro-related or technology. We will still focus on the key areas in agro-related business so as to strengthen credit support and integrated services. We also have plans in place as to better serve the agro-related economies through technology innovation. And we've also have been awarded 1 of the 10 innovation models in China. For the agriculture tech parks, we rolled out the agricultural park loan products. And also for the first customers we have already provided -- granted the loans to them. Looking forward, ABC will focus on the financial service, high-quality service technology development and provide a service to development of the technology in the country as a whole and also optimize our portfolio offering and also leverage on AI and big data to cultivate expertise and personnel to enhance our service and financing support to the tech companies as well as other financial services. First promote the high quantity of the financing. In 2025, we'll have the dedicated policies and also provide resources, more resources so that the water of the finance will be flown to the tech companies and also promote the credit granting as well as the equity investment and also provide -- improve the quality of financial service. This year, we have optimized the fintech organization based on the 3-tiered service network and provide a dedicated financial service plan to the tech companies and different levels to provide the service personnel that are knowing technology as well as have a finance background so as to make the financial service more convenient to the tech companies. And also enhance the coverage of financial service, ABC, based on the different kinds of development stage of the financial needs of the companies to provide more suitable offerings to the companies and also promote the online -- dedicated online credit products for tech companies. And also provide the individual personal financial services to the people working in the tech companies for the investment bond and consulting as well as other whole package financial service so as to make the financial service more inclusive to the fintech companies. And we'll build an ecosystem. We will basically build a systematic philosophy so that the tech companies will play a very major role in innovation. We'll work with the research institutes, equity investment funds as well as the other universities so that we will build upon the synergy to provide a full life cycle comprehensive financial service to the tech companies.

We have a very productive session. For the sake of time, we will ask one last question. Please.

My question is how to prospect the NIM trend of this year, while the NIM head to the bottom and what are the measures taken by ABC to stabilize NIM.

Mr. Liu will take this question.

ABC's growing in front lane was 1.42%, down by 3 bps from the second half. In terms of the trend, the decline has been slowed down, which would be at the back of the ABC's adjustment for their policies benchmarking to the policies and optimize the balance sheet structure and also enhance the pricing management and realize the asset and liability coordinated development in terms of the quantity and the pricing. Looking towards 2025, macro speaking and the support and fundamentals of the economy to going for sound way will not change, but there are also external externalities, for example, weak domestic amount as well as other potential risks are still there. And the business operation of commercial banks are facing some challenges. So in 2025, the NIM of the banking industry will still be under pressure. For ABC, the change of NIM will also be the same or similar ways in the banking industry. In terms of the change of the NIM because in 2024, the existing lower downward of the interest rate of a housing loan as well as a downward movement of LPR, and also the yield on loan will also be going down. But also on the other hand, the liberalization of deposit interest rate has also been paid off. And also, there will also be room for the lowering down of interest pay down deposits. And that in the liabilities side, also the interest of paydown loans will also be moving down. Finance are living together with the economy, the men of the bank is still the way for the bank to yield the interest or concession to the real economy, while at the same time, we also balance the sustainable development of the bank with the development and moving upward and rally of the economy, the NIM of the bank will also bounce back. And the maintenance stable level in 2025, ABC will be more proactively concession -- the concession to their economy while at the same time benchmarking to combine with the demand of the economy, optimize our balance sheet structure and continue to enhance the management of our balance sheet structure and also enhance the system that provides to economy. To be more specific, in the asset side, we'll continue to do a good job in the balancing the volume, pricing and risk management as in the leaders said, the county level area and the 5K chapters of finance, we will enhance the balance sheet structure and also enhance the proportion of the high-yield assets and also enhance the effectiveness and targets of the pricing to balance the structure as well as the volume also balancing the pricing and volume in terms of liability with the digital management to enhance the group segment and management of the customer bases, so as to give more resources with low cost and also leverage on the liberalization of the interest rate and also optimize the term structure of loans and also to lower down the cost of deposits in terms of portfolios offering. When enhancing the dynamic management of asset liability, use the volume as well as pricing tools to coordinate the duration and structure of SME liability in terms of the interest rate risk and FX risk as well as mentioned, the credit risk to enhance the yield. Ladies and gentlemen, thank you very much for your participation in 2024 annual results announcement of ABC. Thank you, investors and analysts and friends of media for your long-term support in the development of ABC. Thank you very much for the senior management of ABC for your interpretation and sharing of the results. If you have any questions, please contact our investment relations team as well as our media or press team. With that, I will join today's announcement conference to a close. Please leave for the conference room from the right side of the conference room. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]