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

Welcome to 2026 results announcement. I'm very happy to be here with the [indiscernible] Bank of China [indiscernible] online. First of all, the operational performance of Agriculture Bank of China. 2026 is the third year of the 5-year plan. The Agriculture Bank of China implemented the decision arrangement of CPC Central Committee and the State Council [indiscernible] work to the main line of the pro high-quality development. Here, I would like to share with you the status for the operational performance of our bank. The profit growth rate exceeded 5% in the first half year. Net profit by 5.8%, an increase of 1 percentage point compared to the first quarter and our operating income increased by 11.2% year-on-year, an increase of 0.7 percentage points compared to the third quarter, showing good growth momentum. Also, we -- in the first half year, the return on net assets was 10.14%, maintaining a leading level among comparable peers. The set of data is that the increase in financing exceeded CNY 3 trillion in the first half year Agriculture Bank of China effectively tapped into the financing needs of the real economy with a large-scale financing increase, including loans and bonds reaching CNY 2.2 trillion, of which the increase in local and foreign currency loans amounted to CNY 1.69 trillion, increase of 6.2% increase in bond investment CNY 1.52 trillion with a growth rate of 1.6%. Average daily balance of deposits amounted to CNY 39.5 trillion with an increase of CNY 3.7 trillion, a growth rate of 1.2%. Thirdly, the net interest margin expanded by 2 basis points, benefiting from the continued effectiveness of our price management in the first half year, the net interest margin of Agriculture Bank of China was 1.28%, 2 basis points higher than that of the first quarter, showing stabilizing trend deposit cost of bank was 1.13%, down 21 basis points from the end of last year. The cost of liability improved steadily the nonperforming loans ratio decreased by another 2 basis points to 1.25%, down 2 basis points from the beginning of the year, the fifth consecutive quarter of decline that the expected net gap between nonperforming loans and total loans remained for 24 consecutive quarters, reflecting the strict standards for risk classification. The provision coverage ratio for loans was 18%, down 1 basis point from the beginning of the year. The provision coverage ratio was 29.1% with provision balance remaining above CNY 1 trillion. [indiscernible] capacity the dividend payout ratio was raised by 1 percentage point in order to actively reward investors, the share achievement of the bank's development, the Board of Directors proposed to pay the interim dividend for 2020 by raising the ratio by 1 percentage point to 31%. These are the achievements we have in the first half year, and these are the very important operational success, reflecting a balanced approach between profit growth and investment returns. It also represents a balanced consideration between expansion and net interest margin improvement. Second, I would like to share with you the main work of the management team. First of all, we continue to commit to the agriculture rural areas and farmers business and solidifying our position as a leading bank in rural revitalization. The agriculture and rural areas and farmers are the tensioned to AC has always carried forward with a fine tradition of serving agriculture and rural areas and aims to be a leading bank in rural revitalization. In the first half year, we focus on food security. Also, we focus on rural industry, rural development and other key areas related to strengthening and benefiting farmers and continue to increase the credit supply. Now as of the end of June, the balance of loans in country-level areas reached CNY 11.9 trillion, an increase of 9% over the beginning of the year. The balance of the banks exclusive product for farmers reached CNY 2.1 trillion, an increase of 14.2% over the beginning of the year. The balance of deposits in country-level areas was CNY 14.9 trillion with an increase of CNY 4.9 trillion. It contributed 40% to the bank's total deposit growth. proportion of level branches rose to 5.8%. The ABC has always taken as a vision to serve the real economy, focusing on the comp old and new growth drivers and the trend of industrial transformation upgrading continuously optimizing the allocation of financial resources. Fintech, we high-quality measures to support the building of a country with a strong technology foundation. The growth rate of loans to tech companies and small and medium-sized segment stood at 24% and 29%, respectively. [indiscernible] investment [indiscernible] have been established in total invested in 56 fintech innovation projects amounting to over CNY 5.7 billion. We will step up efforts in underwriting and investing in fintech innovation bonds with such bonds [indiscernible] half of the year and also the insurance exceeded CNY 120 billion. The balance of self- amounted to CNY 13.1 billion, up by 9.7% with a focus on inclusive financing, we strengthened the capacity for sustainable development. The balance of inclusive loan reached CNY 4.8 trillion with an increase of CNY 32.4 billion and the number of inclusive and borrowers reached 5.5 million with an increase of number of physical social security card users reached CNY 3.84 billion and the sale of pension trust management was CNY 43.6 billion with a 14.3% increase in the number of individual pension clients deposit amount rose by 26.7% digital finance and application of new generation communication technology cloud, computing, artificial intelligence and other industries with loans to the digital economy increasing by 15.1%. In response to the national policy to boost the consumption we focus on housing mortgage, daily consumption and other areas and kept increasing the credit supply the balance of personal consumption loans, including credit cards amounted to CNY 1.5 trillion with a decrease of CNY 49.054 billion. The country's high level opening up and the development of the the fourth quarter settlement reached CNY 1.9 trillion and the internal settlement volume of domestic branches amounted to 8.5 trillion. As of the end of June, the total number of personal customers of AD reached 90 million, maintaining the first place in the industry. The number of corporate customers exceeded 14 million with an increase of 10,000 since the beginning of the year. The number of credit card customers was 7.9 million with an increase of 2.2 million. The number of personal mobile bank customers 629 million with 282 million monthly active users and 29 million monthly active users on mobile devices has always been customer oriented and has continuously strengthened the construction of its customer service system, achieving common development with customers. In terms of individual customers, the business system of customer and customer groups such as individuals and citizens and providing differentiated services based on their needs. For the corporate clients based on the customers' needs, we provide comprehensive service to medium-sized enterprise customers and provide the customized service to the medium-sized clients and the convenience service for inclusive micro enterprises. We will also adhere to the technology-driven transformation. And based on different scenarios, we continue to optimize account opening process in which online product and enhance the capabilities of mobile and online service to further enhance client experience. We also stay true to our original aspiration and founding mission to serve the people with financial services, promote rural service project, introduce sells for rural services, provide quality financial service for special client groups. Fourthly, we must forge ahead with reform and leverage smart bank construction to drive business development. ABC actively embraces the ways of AI development to accelerate the construction of smart banks and take the application of intelligent agents as the starting point pro coordinated development of business technology and data and continue to improve the AI capability system, we will accelerate the digital business innovation. And in terms of product innovation, we have built a digital operations platform driven by AI technology and facilitated by tablet helping and increased online credit. In terms of channel innovation, we released the 11.2 version of personal online banking and continue to the personalized service of mobile banking app, exploring construction of for service impression. We will also enhance the intelligence of risk prevention control, innovating the AI risk control agent and to upgrade the entire process, the financing risk control to be more intelligent, we will deepen the AI application in compliance risk scenario and effectively enhance the quality and efficiency of the compliance management. We will also strengthen the support for frontline staff, and we need self-developed AI agents, the Dragon to adapt to the technical requirements of different scenarios and incorporate an AI digital assistance. And we have completed the [indiscernible] new model application and try to continue to enhance our AI capabilities. This effort is to strengthen the defense line and as for the high-quality development, preventing prevention and control is always our key task financial work, we will continue to focus on the risk prevention control. We adhere to prudent and stable business strategy, continuously improve the comprehensive risk management system. In terms of credit risk, we focus on control the increase, reduce the stock and strengthening the foundation, continuously optimizing the credit structure and constantly improving the risk prevention control system for inclusive retail with agriculture Bank in China. We will also continue to improve the market risk system, the annual policy for risk management and financial market business and interbank business and strengthen risk control requirements for market business. We track and study market changes, proactively optimize business strategies, strengthen risk control and keep relevant indicators stable. We closely follow international situations and market changes. Dynamically adjust response strategies and ensure risk control. On technology base, we the location of computer room and continue to enhance regional disaster recovery capabilities. We also improved the network security protection, actively respond to external shocks and new challenges. The average daily trading volume of the distributed core system is CNY 1.96 billion with a year-on-year increase of 17% and the serviceability during business hours is 100 hours. We [indiscernible] about the future development plan. I believe there are 3 changes of plans. And this has created great space of development for the Agricultural Bank of China. And also the economic structure is changing profoundly in the first 7 months of this year, the proportion of bond financing increased and this whole financial structure is changing. So this has imposed new challenges for the banks. We need to find new benefit spaces and possibilities. And also at the same time, we noticed that the AI technology is accelerating in its growth. So we need to integrate the AI system into our business management system. And also, we need to control the risks related to AI development and AI technologies. For ABC, we need to hold on to our all advantages, and we need to find our position in the whole economic development of China. and we need to focus on the economic upgrading of our country, and we will have more efforts put into the country-level economy and real economy development and focus on our 5 priorities of financial development and upgrade our own credit system in order to better serve the economic upgrading and transformation. And also, we will have more attention paid to the international financial market and how we cooperate with our partners. And also, we need to seize this opportunity of AI technology development to empower our whole process of system of development using AI technology. And looking into the second half of the business operation, our executives and our Board of Directors will coordinate the keys of works we have done in the previous half of the year of 2026, and we are going to increase our quality of asset, and we will try to improve the quality of our assets and also to create more value for our investors in the future. And that's my introduction. Thank you very much. Now let's go to the Q&A session. Let's give the floor to the Secretary of BOD, Madam Liu Qing.

Thank you very much, President Wang. Now let's go to the Q&A session. In this session Okay. Let's give the microphone to this madam.

Thank you very much. I'm from CCTV, and I've listened to President Wang's introduction. We noticed that the operation revenue and the net profit has increased a very high level of growth, and it's very resilient and a lot of growth are higher than the first season. So my question is for the executives, what are your expectations for the second half of year's growth? And what are the driving forces for the growth?

Thank you so much for the question. Just as you've mentioned, we have always stick to the path of high-quality development. We want to have a long-term development, and we want to have an active position in this changing dynamics of the economy. So in the first half of the year, while we are serving the real economy and while we are having this very good performance, we have also made a lot of progress in the indicators of financial performances. And all these progress have shown our very stable pattern of development and our strategy for stabilized development. And just as Mr. Wang has introduced, looking into the second half of the year, we are very confident to keep on to this track of faster development and maintain a good operation revenue. And if we look at the outside environment, we can see that the economy is showing a trend that the dynamics are towards the internal forces and also the whole structure of the economy is upgrading and optimizing. And that has shown there is a great resilience to the China's economic development. And this stable macroeconomic situation has created a very good environment for ABC's development for our high-quality development. And if we look into the past of our history's development and if we look at ABC's own situation of development, we can find that we have our competitive advantages always. We have always focused on how to combine our own advantage with the whole environment development. And also, we have a very great and profound basis of clients. We have very comprehensive products and a very solid capital and assets, which will be our support for future resilience and potential of development. So speaking of the specific driving forces, first of all, we will hold on to our advantage of asset operation, which will help ensure the income from the interest payment. The Bank of China have always stick to the large number of networks all over China, especially at country level. And now with this rural revitalization policy of China and to build a new type of rural area policy of China, we have our own driving force, and we will continue on this path. And of course, at the same time, we will have more diversified advantage being explored. And for the second half of this year, we will continue on this path. And secondly, we have already achieved the cost of liabilities continuing to decline, and that is in an orderly manner. And for the second half of the year, we will continue on this path. For the second -- first half of the year, this average daily increase in deposit is at a reasonable level and is providing a very good support for the real economy development. And on the other hand, it also helps us in reducing this cost of liability. And if we look at this whole trend of development, it seems that the existing debt will gradually mature during the second half of the year and the continuous decline in debt cost will continue for a long time. And yes, that's the trend we are going to stick to for the second half of the year. And thirdly, we have already provided more and more of financial services and solutions, and we have already made our contribution to the optimization of the economic structure. And this is the whole trend of the whole China's financial market. There is this changing in the financial structure. And so facing this trend, the ABC will, of course, consolidate our existing advantage. And at the same time, we will have more plans and strategies towards the future to have more long-term transaction capacities cultivated and to improve our capital management capacity, which can help us get through any kind of economic cycle. And fourthly, we have already achieved this improvement in risk control, and that will help us to have a more solid foundation for future development. We have always regarded this risk control as our foundation of all kinds of operation. And during the 14th 5-year plan, our NLP decline rate is ranking #1 in the 4 major banks of China. And also we have this very good performance, speaking of this allowance coverage and other aspects. And these have all set very good foundation and very solid boundary for us to control the risks within a certain field and level. So all these four factors have shown our achievements. They have helped us to gain a very solid growth in the first half of the year, and they will continue to help us in the second half of the year. Thank you very much for the introduction about ABC's profit-making ability. Now let's give the floor to this journalist in the middle.

Thank you. I'm from the Xinhua News Agency, Xinhua Financial News. Mr. Wang, you mentioned that the NLP rate have been declined for 5 consecutive years, and there is this growing capacity in terms of this allowance rate. So what is your expectation for the whole year's asset quality operation and especially for inclusive retail asset quality?

Well, thank you for your question. We have always -- ABC has always put the risk control in the core of all our works. We always stick to the path of prudent and stable operation. We want to have this very stable and very careful risk control, which can make our whole business operation more resilient and more sustainable. And our whole ABC's asset quality has the following features. First, this NLP ratio is dropping. The NPL ratio is dropping. By the end of June, this NPL rate is 1.65%. And while we stick to this category, very strict category of categorization, we still maintain this good level. And also, there is this BP dropping compared to the year 2025. So all these numbers have shown that we have quite good risk control in terms of the asset quality. And another feature of us is that the expected ratio is dropping compared to the beginning of this year and especially the expected [ Cesar ] gap is dropping. is dropping for a consecutive 24 seasons. And this negative number is very important for us because it shows the quality asset of us. And also, this allowance coverage rate is very high. This balance of the allowance coverage rate has exceeded CNY 1 trillion, and that's a very good foundation. And for the first half of this year, the growth in the whole size has reached 29%, and that is a very high level. And this number is ranking the top among other counterparts in China's banking market. And also, you've mentioned this retail asset quality, especially the inclusive retail banking services. well, speaking of the asset quality of this aspect, we have always put our attention on the risk control as always. And we will make more efforts to deal with the remaining nonperforming loans in this aspect, in this retail of the inclusive finance. And looking into the second half of the year, what we feel is that we still need to keep the credit and asset quality of ABC at a very good level. So speaking of all the indicators, no matter the nonperforming loan, the expected or the allowance coverage ratio and all the indicators, we still need to pay special attention to them. And we are going to do the specific things to achieve such goals. The first is we will keep optimizing the credit structure because we always say if you want to serve the macro economy, the finance, you need to understand the macroeconomic situation. And also, we always want to understand the situation of certain industries if we want to provide some financial and credit support for such industries. And that's why we will have more customized targeted design of the credit resources, which can suit the need of our country's economic strategic development. And we will pay special attention to the structural risks of all industries and to control disorderly competitive situations. And we will reduce the excess overcapacity, and we will try to control the low-quality loans for our customers. And also, another measure is we will have a long-term mechanism, which can help us to look into the future and analyze the situation of things that might happen. This is going to be a long-term mechanism for us, especially for the risks related to our customers and the high-risk customers and also the different categories of customers and how to manage the loans of those already exited the customers and also the loans that are about to do or are due to -- we are all going to pay special attention and strengthen the control of all these categories. And at the same time, we have already done a lot for the inclusive retail financing system. And now the whole society is paying special attention to the inclusive retail finance risk control. And we are looking at this whole situation. We are following it closely. We are having strict control of it, and we will have more policies and strategies based on our working reality like reconstructing our whole bank's credit system to manage the credit structure. A very important measure of us is that for any credit measures, we believe it is very important. It is the front line of risk control because it's the source of any other operation of businesses. And another important line for us is the risk control and legal compliance control. And this will help us to work with the real business of credit risk control and together to have a more effective outcome. Management is a very important line and the risk management department for second line of [indiscernible] risk manage policy system and effectively play the role of and talent on business lines with the platform from now functioning and the internal audit department of the bank as the third line of defense for risk management will focus on strengthening the independent evaluation effect of the first lines of defense and conduct the penetrating supervision to ensure that the risk management system does not lose. At the same time, we attach to external supervision on the fourth line of defense for the supervision and the focus of which is to form internal and external collaboration in risk control and joint [indiscernible] failure of control. Therefore, the fourth line to prevent the dispersion and others to prevent failure to control and others to prevent failure. The second step is to actively promote new business development models. We have also considered this repeatedly and have promoted the establishment of a new business development model with the top level design of the branch and operation of the second branch and the template marketing of the subbranch helps the business to focus more on local logistics financial ecosystem to develop credit plans to high-quality customers and standard marketing activities, creating proactive customer acquisition, batch customer acquisition and customer acquisition business development models. Compared with the past retail loans, there should be a big difference from fragment to proactive customer acquisition. The third is to promote integration between online and offline and we need to formulate the unique competitive advantage in ABC's credit management. This is mainly achieved to leverage [indiscernible] and widespread and the client manager team is strong. 400 employees and we feel that these employees can play their role as well, it is crucial for it and promote the model combining on-site and remote work and make great efforts to ensure that the onsite work is solid. We also realize that it is by relying on the models never relying on one model. Therefore, we adhere to the separation of examination and approval post restriction and mutual restrain business mechanism of supervision and and mutual intervention to make up for the shortcomings of model decision. We feel this ourselves because the important part of the bank's credit [indiscernible]. We simply use AI models, we feel that due diligence will be good due diligence should have at least 3 characteristics. The first one is that it should be on site. The second character that it should be able to ensure authentic and be responsible management. So we feel that in [indiscernible] those. But in the end results. We are very firm on this point. On the premise of [indiscernible] household loans by using [indiscernible] we also focus on the improvement of the responsible person for inclusive of the credit process and [indiscernible]. First of all, making sure the managers of branches fulfill the [indiscernible] loans or we shouldn't simply push the frontline employ. We also need to focus on the second tier branches, the management [indiscernible] and the [indiscernible] out. We have clarified risk due diligence exemption further strengthen the provision of the performance of management responsible and created management and lending. In our opinion to do a good job in lending, we need to ensure that loans [indiscernible] should be further optimized and strengthen the credit management is important. We need to [indiscernible] for the entire bank risk control is to strengthen [indiscernible] on rational and policies such as financial measures we need to strictly implement the presale and adopt a policy-based approach for each project and the plan for each project and we can reduce real estate risk and in the past development loans put a lot of pressure on banks and lead to some nonperforming loans. There are various reasons for this, but one of the reasons is the [indiscernible] in the first half year from the overall situation, we have learned the nonforming loan ratio of the estate industry of compared with the beginning of the year remained stable. On local government debt, we adhere to the principle of and standardize and support the market-oriented [indiscernible] of financing reforms. But at the same time, we also pay attention to strengthening the monitoring of the basis of the platform after the [indiscernible] handle new financing in a compliant manner and resolutely guard against the red line of not adding new hidden debt. We also realize that asset quality is always the lifeline of the bank's operational management. We [indiscernible] control and compliance management, there can be no high-quality development firmly establish and achievement to the bottom line. Also we need to [indiscernible] in addition to management and measures. We also need to promote the whole bank to build a good credit risk culture, including the culture based on the quality of organization culture and with matching the professional forward-looking management culture, risk control culture of human collaboration and digital empowerment and so on. By doing so, we can strengthen risk control measures, and we are confident for the long-term future development. Now let's welcome the next question. Analyst name is a bank analyst at China Securities.

I have a question about deposits. We know that deposit is the strength of ABC. We see that the repricing of the deposit is approaching, and we have maintained relatively good retention rate of the deposits. We also noticed that liability cost of has the first half of the year. However, we noticed that the overall pattern of social capital utilization has undergone profound changes the demand for wealth management among also increasing day by day. This question about the liability strategy.

Thank you very much for raising the question. We had closely focused on serving rural revitalization and the real economy actively aligned with the macro policies, regulatory requirements and market changes and continue to achieve the high-quality development in deposit business. To summarize, it mainly shows the following three features: First, deposit growth continued to show a good momentum of stable quantity and high quality. With the average daily balance of all deposit accounts reaching RMB 39.5 trillion at the end of the first half of the year 2027, an increase of RMB 3.67 trillion, up 10.2% year-on-year both growth rate and outperformed their competitors. The deposit ratio decreased by 3.6 percentage points year-on-year. It is the only bank among the competitors that has kept the ratio below 3% for 9 consecutive quarters. This has provided high-quality financial resources for real economy. Second, the core advantages of deposit business have been further consolidated from the perspective customer structure, the average daily balance of personal deposits in China reached CNY 212,800 accounting for 4.5% of all deposits in China with an increase of CNY 1.56 trillion in the first half of the year, maintaining the leading position in the industry for 18 consecutive quarters. From the perspective region structure, the average daily balance of country deposits in China stood at CNY 1.73 trillion accounting for 44.6% of all in China. Also the contribution rate has increased by 0.1 percentage points compared to the beginning of the year. It has further played role of the coordinated development of deposit quantity and price has been achieved and the efficiency has continued to be reduced due to growth of deposits in the past few years and the trend of maturity, the stock of time deposits with higher interest rate has entered a cycle of concentrated repricing, especially for 3 years deposits and the reduction of the benchmark interest rate up to 135 against the backdrop of interest expense ratio of deposits in the first half year decreased significantly compared with the previous year [indiscernible] continue to drive steady growth of deposits and provide high-quality financial guarantee for serving of the economy; secondly, we will continue to consolidate and different competitive advantage; and our third measure be taken is to have overall a range of all sources of our funding. We are going to follow the pattern of the social capital flow and also on the basis of successfully handling the transfer of regular funds due for maturity. And at the same time, we need to make a formulation for the general deposits and central bank loans and other interbank deposits and accelerate the transformation of the settlement payment and other deposits. And altogether, we want to optimize the growth structure of the source of capital. And fourthly, for the second half of our year, we are going to strive to maximize the benefits derived from the repricing of deposits. And also, we are going to strengthen the differentiated management of deposits throughout the whole bank to make the cost of the payment of interest to drop gradually.

Thank you for the question. I'm from China Business Newspaper. We know that the country level business is showing the advantage -- differentiated advantage of ABC's operation, and we know that there is a very large proportion of such part of business. So my question is, what is your plan for the next step of country-level business development? And are there any long-term or short-term plans?

Thank you for the question. I'm going to answer your question. And from the start of this year, ABC have followed the country policies to help the rural revitalization and support the rural and agriculture and the farmers development. As we have shared, according to the 15th Five-Year Plan of China, we should promote the high-quality development of rural area and the rural economy and to form a long-term mechanism of modern agriculture development and to better expand the great results already achieved by power alleviation efforts of China, and that is also the future direction of ABC's development. So for ABC, we will always hold on to our banner of serving the agriculture, the rural economy, the rural area and the farmers. We will always try to improve the contribution of coffee level business performance we hope that our country-level business can always account for about 40% of the whole business. And we are going to do the following things. First, to serve the agriculture, the rural area and the rural residents will always be our priority. We are going to have the provision of all kinds of resources to achieve this goal. And the financing at country level is mainly about credit and focusing on the important agriculture-related projects in the 15th 5-year plan of China, we should know that there are such some realities like the living condition in the country level is not that good, and there are very large demand for the credit. So we are going to have targeted policies and measures to deal with the real situation. And we hope our credit and our businesses can solve the real needs of the rural residents. And at the same time, we are going to work with like the government and other industries, especially in terms of the supply chain, the value chain and the industrial chain of agriculture. And at the technology level aspect of agriculture development, we are going to introduce more policies and technologies to the key cities and to introduce the key mechanisms of our bank and of the whole economy to the key counties and rural areas. And at the same time, we will know the exact goals of rural agriculture and rural area and resident development. We will make our efforts to build some products that can serve the construction of modern rural service center. And also, we need to follow the strategy of our country. We will make our 15th Five-Year plan to serve the rural area and to apply our policies, strategies and technologies to our agriculture and country-level service-related programs. And in terms of integrated service, we are going to have the special financial debt and programs offered to the rural area and agriculture related to the customers to better serve the rural revitalization and the rural residents. And of course, at the same time, we will always stick to the control of risk as our bottom line. While we are serving the real needs of the rural area, we should always implement the regulations in terms of all kinds of retail and other services, especially we are going to improve our level of supervision of future risks in certain industries. And also, we are going to pay attention to the legal compliance management of programs related to agriculture and rural residents to make sure that the country level economy remains stable. And at the same time, we are going to improve the mechanism of the agriculture rural area [indiscernible] department management. Management is always the foundation, and that is very important for us to improve the service quality we can provide for rural revitalization. And also, we are going to prioritize our country-level business in terms of the policy, resources and the future plans, including the financing, the human recruitment and the new channel development. And we are going to build more networks at town and country level this year. We are hoping to have 2,000 more of such points this year. And also, we are going to offer more online services to more county-level business customers. And also, we are going to use AI and other technology to empower our service for the rural area and the residents and agriculture-related business. And we hope we can improve the experience of our customers. Thank you so much.

Now let's invite a question from online participants.

My name is Peter Zhang. I'm from JPMorgan. I want to congratulate ABC on your performance. My question is about your retail business. We noticed that you have more than 900 million individual customers and the individual deposit is also achieving a very high level about CNY 3 trillion. So what will be the key of your future individual-related business, retail business?

Thank you for the question. I will give the floor to Mr. Lin to answer.