Bank of China Limited (3988) Earnings Call Transcript & Summary

Hello, investors, analysts, media friends, good afternoon. Welcome you and my big thanks to you for participating in 2026 BOC interim results release amid this [indiscernible]. And my name is Liu Chenggang, EVP and Board Secretary of BOC. And today's release will be co-hosted by me and BOC spokesperson, Madam [indiscernible], and this release is well broadcasted simultaneously. Welcome friends online. I want to introduce the leaders of BOC. Vice Chairman, President and Chief Compliance Officer, Mr. Zhang Hui, [indiscernible] and we have directors online. The 2026 interim results of the bank have been announced externally and the PBTs can be downloaded from our website. Today, all the financial data are compiled according to IFRS. Now I want to give the floor to Mr. Zhang Hui to introduce you the interim results of the bank.

Dear investors, analysts, media friends, good afternoon. Welcome you to BOC 2026 interim results announcement. It's a great pleasure to meet old and new friends. 2026 is a meaningful year for BOC. On the one hand, as the first A+H dual listed bank in China, this year marks the 20th anniversary of our IPO. After 20 years of continuous operation, our bank with a history of more than 100 years have achieved a better corporate governance, globalized operation and diversified business transformation with asset scale grew by 8x and overseas insurance coverage expanded from 27 countries to 64 countries. And we are coming from bigger brand -- a bigger bank to a stronger bank. And this year also marks the end of the 14th 5-year plan and the beginning of the 15th Five-Year Plan. In the past 5 years, BOC continuously improved its comprehensive strength, operating revenue, net profit and the NIM stabilized first among peers and the net interest income contribution increased to 33%. Asset and liability grew by more than 50% and the globalization advantage has been further consolidated. Overseas profit contribution improved by 4.6 percentage points. NPL, the lowest among peers and CAR ratio ranked as #8 among [indiscernible]. In the first half of the year, we have accumulated our operating targets with good quality enhancement. First, financial performance achieved a steady growth. In the first half, operating revenue RMB 357.1 billion, profit before provision, TWD 230.4 billion, an increase of 8.41% and 9.77%, respectively. Net profit Net profit attributable to shareholders of the bank grew by 4.67% and 5.10%, respectively. And the growth rate achieved Q-on-Q growth since 2025. NIM stabilized 1.27%. Net interest income grew by 10.2%. Cost income ratio decreased by 1.68 percentage points. Operating efficiency further enhanced. Asset and liability continuously improved its quality. Total assets exceeded RMB 40 trillion, an increase of 47% as compared to the end of last year. Loan and bond and other high-yield assets improved by 1.32 percentage points. Domestic RMB loan grew by RMB 1.2 trillion, a growth of 5.98%. Total liability reached [ RMB 66.95 trillion ], a growth of 5.11%. Overseas current deposit percentage also increased. Domestic RMB deposit interest rate reduced by 22 basis points. Liability cost is within control. Asset quality is stabilizing. NPL ratio 1.22% down 0.01 percentage points. newly include NPL reduced. NPL balance also reduced. And provision coverage ratio 285%, up 0.48 percentage points by the end of last year. CAR ratio, 18.31% and 8 basis points higher than the previous quarter. And BOC stick to the principle of creating value through prudent operations. and generate shareholder trust through stable returns. Since IPO, BOC have made pay out a cash dividend of more than RMB 1 trillion with payout ratio maintained at a high of 30%. To mark the 20th anniversary of our IPO, we suggest that the payout ratio to be increased to 31%, and we declared a cash dividend of RMB 1.19 per share. We saw in spring and reaping autumn, hard work will be rewarded. At the end of March, in our annual results release, talk about our 6 orientations. In the first half of the year, our good performance demonstrates the correctness of our thoughts and the effectiveness of our 6 orientations. First, I want to introduce you optimization. Our global competitiveness has been further improved. Globalization is within the of DOC and also the strength of our operation in 100 years. In the first half of the year, we focused on 3 advantages of global operation, further polish our brand and create a pillar for our performance. Overseas net profit contribution maintained above 27%. We continuously expand our global network. Our global network covers 64 countries and regions and #2 in terms of institutions within the world. And in Hong Kong and Macau, we maintain a leadership position. In [indiscernible], countries, BRIC countries and 10 Asian countries and 21 APAC economies, we all have institutional presence. BOC have provided high-quality globalized financial services, which were market recognition. In this year, we won clearing status for RMB in Inland, Sri Lanka and Indonesia. And RMB clearing network covers 19 countries and regions. We underwrite a bond of RMB 38 billion and assist overseas issuers to get RMB direct financing exceeding RMB 110 billion. Cross-border advantage are overwhelmingly leading the peers. And cross-border RMB business is scale ranked as #1 in the world. We fully leverage our global service ecosystem and serve companies going global and investing into China. We iteratively upgrade our multilayer, multidimensional global services and we help the country contribute to the establishment of overseas comprehensive service system by the country. And we rely on our network in 64 countries and regions to provide cross-border investment promotion endeavors of the government. And we provide services to 90% of the Fortune 500 companies in China, and we provide 724 multicurrency cash pool services. We provide across-the-clock services and transfers and settlements can be done within seconds. We take the lead in established the first Chinese global custody bank. overseas and cross-border custody scale increased by 16.20%, 19.38%, respectively. We upgrade DOC global salary payment and provide stock incentive services to listed Chinese companies, the overseas market. And we have global organizational strength. In the past 100 years, we have accumulated capacities in corporate governance, tenant team compliance system and risk control capacity. This is our most precious assets. In the first half, we further strengthened regional intensive and integrated development. We further consolidate Hong Kong regional headquarter, strengthen BOC Europe regional headquarter, and we have established an expat roster with more than 10,000 talents on the list. In international settlement, ForEx transactions, AML compliance, we have a large talent reserve. And also, we further promoted overseas compliance management overseas compliance management momentum is stable. We further established a bank-specific risk management policy, and we review this policy on a regular basis. We align risk appetite with our strategic goals and development capacity so as to elevate our risk control capability to a new level. Second, we expand into new businesses to serve the real economy. We focus on the 5 financial priorities, and we are a leading bank in tech finance. Tech loan balance take up more than 1/3 of our total corporate loan. In total, served 200,000 tech companies. We have a full chain presence across key technology sectors. We provide services to 5,200 core AI companies. And in total, green finance balance grew by 13.32%. Green bond underwriting scale, investment scale rank among the top in the industry. And inclusive finance provided to micro and small enterprises grew in amount and the customer number by 10.6%, 8.19%, respectively. Individual pension contribution grew by 54% and elderly care industry loan balance grew by 50%. Digital finance empowerment enablement has been further enhanced. MAU of mobile banking increased by 6.86%. Cross-border e-commerce transaction amount grew by 24% year-on-year. Digital RMB consumption amount are among the top in the market. And also POE loan balance grew by 9%. We also support the domestic consumption. Mortgage loan in the first half, RMB 200 billion and have to stabilize the real estate market. In total, we provided individual consumption loan to 3 million customers. We also provided interest rate subsidy for installment payment. And we make a continuous movement to create value. We meet -- we cope with opportunities and challenges in external environment, and we actively promote volume and price synergy, optimize domestic and overseas asset and liability structure, fully leverage our global presence and multicurrency businesses. NIM stabilized in the first half. And NIM improved by 2 basis points as compared to the first quarter. That's for RMB. And for foreign currency NIM, it improved by 13 basis points, contributing to group NIM stabilization. We continuously optimize our revenue structure and expanding into wealth management, payment settlements, transactions, custody and other capital-light businesses. We expand the source of noninterest income to generate higher comprehensive return. Individual customer wealth management, custody business, settlement and clearing fee income grew by 22%, 10%, and 4%, respectively. Noninterest income percentage was more than 13% among the top in the peers. We stick to capital-intensive operation, and we focus on the philosophy of capital and create value at the same time. We optimize our off-balance sheet and within balance sheet asset structure to the management of capital, reduce and optimize capital consumption of businesses and expand capitalized businesses. Fourthly, we want to be stronger in many businesses to provide comprehensive services to our customers. The total number of corporate customers exceeded 9 million, a growth of 7.54%. [indiscernible] government clients and connected party access to provide an ecosystem of services who are providing banking plus ecosystem for open-ended financial services, well, also expanding 7 customer segments. And effective individual customers have expanded to RMB 409 million for mid- to high-end individual customers. There's been 5.84% over the end of last year. And we have enhanced key business products and services such as third-party custody, payroll services, fast payment and social security cards like products for cash management accounts and the daily as deposits, we have grown by 7.9% and 10.6%, respectively, for asset cost this year, the business, the total size has reached [ RMB 26.75 trillion ] with 10.27%. And for the comprehensive financing project, there's been a 20% year-on-year growth. Number five, but we have made our business element even more stable with the balance between development and to security, underpinned by comprehensive risk management, we have pushed forward the look through the risk management for domestic overseas decisions, making risk management a more capable effective Second, we have a strengthened asset quality management by optimizing longer-acting mechanism for loan management intensive and centralized measures and the resolute measures to dissolve and NPL assets. Thirdly, we have further optimized the internal controls and compliance management with a 3-line defense system with compliance and risk management always in place. Number six, we are more tied towards what we call intelligence, we are pressing ahead with the digital intelligence empowerment and the technology underpinning technology stack, we are pressing ahead with the 40 technology, strategic projects. The delivery cycle has been reduced by 15% in terms by timing, and we are expediting the plan of [ AI plus ] for BOC AI large language models, there's been over 32,000 customers covering 3,800 scenarios. Number three, we are making our channels more efficient and the papers processes have been expanded to 70%. And number four, we are deepening science and technology innovation and expansion of results we have deployed over 190 innovative results with 37 high-value achievements being incorporated into rollout programs. Last but not the least, the Board meeting this morning adopted an existing Five-Year Plan for the BOC establishing our priorities and directions for the next 5 years of high-quality development we are building ourselves into a strong financial institution, focusing on 6 areas of capacity building. We are going to improve our capabilities to serve the real economy global footprint and interaction competitors were enhancing comprehensive customer service a management abilities, integrated operational capabilities and a high-caliber talent pool. For the second half, we are going to press ahead with our targets orientation, mid- to long-term planning while -- and focusing -- and the focus on tech financing and other key areas of priorities. We are going to better serve the real economy while giving full play to our globalized footprint and strength with comprehensive customer services, and we will firmly guard the bottom line of no systemic financial risks ever happening. So going to leverage, its good momentum to roll out of the [indiscernible] Five-Year Plan, while pricing had with high-quality development with sustained long-term value so as to pay back to our customers, investors and the entire [indiscernible]. Thank you for listening Now let's kick off the Q&A for please ask one question every time. [Operator Instructions] [indiscernible] to analysts and investors later from the sixth row.

From [ Guotai ] Securities, [indiscernible], my name. I have a question about asset and liability management since the beginning of 2026. Lower speed or quality has become the new normal. I would like to invite management to talk about assets and liability management for the second half of this year and key loan expansion direction, especially the balance between domestic and overseas, the loan expansion from -- for the mid- and longer-term future in this new development stage of the balance. How do you find our balance between growth and quality?

Well, thank you for your questions. We have continued to play the role of serving the real economy as a key player while transmitting the relatively easy monetary policy with multiple measures. For example, for the first half of this year, we grew our R&D loan by 5.96% higher than the industry average. And we are also adding up to a bond investment with 10.6% growth rate in our domestic business higher than that of last year. And we focused on green and inclusive finance with higher than average exchange rate growth rates, we have also -- we're also seeing opportunities of foreign trade development and Chinese companies going global. And our overseas commercial banking loan has created a Five-Year high [indiscernible] for overseas RMB denominated loans. We are shifting gear in economic development and restructuring. As you have pointed out, low speed and how quality has become a new normal. We're going to catch us these trends while final write-down is between domestic and overseas markets and the right balance between volume and price support for balanced development of asset and liability management. How do we find the right balance between domestic and the overseas loans? Let me focus on the following assets. Automatic business, with the stable overall volume and a better service for the key areas we're going to make our support for real economy more efficient and effective. We going to make sure that RMB loan growth rate is higher than average will continue optimizing loan structure while supporting more and more new productive -- new quality productive forces. We're going to focus on the 5 priorities with tech innovations, green development and mid- to long-term manufacturing as the key areas of loan support. We align ourselves with the key projects of the 15th Five-Year Plan of the country. And we are also implementing the synergistic tools between fiscal and monetary policies such as making use of fiscal industry -- interest rate subsidy tools. For overseas business, we will continue to regard globalization as a core mandate while maintaining a good growth momentum for loan expansion serving -- bringing in and going out initiatives. We'll focus on smart manufacturing, renewable energy, new materials and the biopharmaceutical industry as key industry software support. We are also providing more and more and better financial services for foreign companies in this way, we are providing comprehensive and the better quality of comprehensive for financial services for [indiscernible] companies and the leading time companies. We are assisting in the buildup of RMB ecosystem with -- in showing a high-quality business environment of overseas institutions. Talking about how are we going to find the right balance between growth on one hand and the quality on the other during the 15 Five-Year Plan. during the morning session, the Board adopted our 15th Five-Year Plan establishing Bluegreen for next 5 years of development and growth in order to implement our own plan analyzing opportunities and the risks and the external environment and solution extensive opinion, we will continue to focus on the 5 priorities of the financial sector in the comprehensive risk management and compliance management or going to strengthen our global talent pool, and we're going to further promote global international use of the RMB, priority task. So we have broken down those tasks into specific projects. We are going to peace with implementation of the 15th Five-Year Plan and latent blueprint and translated into high-quality results. Talking about asset and liability business, we're going to focus on full strategies with better balance between scale and quality. First of all, continue to optimize asset liabilities. On the assets side, we will strengthen the varieties the industry targets and the duration management of loans while focusing on the 5 tasks and loan support for key industries and sectors, we will give a better play to loan investment in our asset location with the right scale and issuance temple on liabilities. We're going to focus on payroll services fast payment third-party custodian cash management and other key products and services. We're going to expand the sources of low-cost funding while optimizing deposit structure and lowering -- optimizing our liabilities, cost. Secondly, we are going to create capabilities of value creation with comprehensive coverage of particular modalities of financial industry, we're going to transform our revenue structure by sparing no effort to develop payment settlement, treasury management, underwriting, global carton services and agency trading. We will go all out to expand the noninterest revenue. Thirdly, we're going to expand our global footprint and the strength we will continue to optimize our global footprint and the service mechanisms while further enhancing profit contribution from overseas institutions are going to further help with internationalization of the helping Chinese companies go global and help create benchmark brands for Chinese companies on global. We are going to provide comprehensive financial services for our clients in the overseas markets. And we will continue to [indiscernible] financial market business activity. Number four, we will continue to solidify risk management and compliance management with comprehensive capabilities and deployment we are further strengthening our look through risk management compliance capabilities. especially in terms of key sectors and the business areas. So as to ensure the overall stability of our asset quality at the same time, we will continue to provide for forward-looking adjustment analysis for market risk and liquidity risk, et cetera. I hope that would -- also your question about our asset and liability management and implementation of the 15th Five-Year Plan. Next question, please.

The gentleman on the second row.

I'm from [indiscernible] by name. Over the past several quarters, we could see that BOC's NIM has continued to stabilize. Could you help analyze the drivers, how do we identify the short-term impact, the long-term impact for the second half 2026, what are the sources of pressure and support respectively for the NIM development? There are great expectations for rate [indiscernible], what's going to be the impact on our overseas NIM and investment returns?

As I'm in charge of asset and liability business, I'm going to provide you with ounces. Now the RMB market rate is kept at a reasonable low level, while key foreign currencies are observing higher interest rates. Global diversified currency allocation has been further brought to play starting from Q2 2025. We have -- we started stabilize our NIM. And for the first half of 2026, it's improved by 1 basis points to 1.27%. In the shorter term, the negative impact is on the control. And there has been a repricing of mature long-term deposits of the RMB. So for the mid- to longer term future, we have exercised comprehensive management striking a balance between volume and price. For the first half of this year, with reasonable targets, we are highlighting the synergy between volume and price. [indiscernible] maintained flat and demand goes and also newly incurred loan deposit stabilized loan interest rate stabilize the marginal with yield remarkable in compared to the first half of the year and also group foreign currency NIM includes [indiscernible] compared to the beginning of -- as compared to last year, contributing to stabilization of group NIM. Overseas core assets maintained faster growth. Well, foreign currency interest rates are maintained at a relatively high level. That's why in the first half, overseas institutions loan growth are better than the previous year and the bond investment grew faster. Well, for overseas low-cost capital and the fund the acquisition capability gradually in housing, in global [indiscernible], care services, cash management, and we are improving. And also in pending such treasury funding agency businesses, the contribution from this business and also customer deposit interest are declining. In the first half, domestic institutions overseas institutions, current deposit contribution are increasing. Well, foreign currency deposit and loan side, margin may improve. Overseas intrusion operation mainly rely on the foreign currency NIM and it is higher than the massive the name. Well, in terms of pressure, RMB new loans, interest rates are stabilizing, we were credit slowing down and quality improving overall asset yield is under pressure. On the supporting factors, R&D liability costs are reducing. And we will gradually control the high cost deposits. by volume and by price and continuously optimize deposit structure. In the latter half of the year, we will continuously lower our deposit cost. On asset side, we will optimize the asset structure and high yield businesses will gradually grow and risk-based pricing capability enhancement will further enhance our asset yield. And foreign currency contribution will continue. Following currency assets, a percentage of the bank is rather high. with foreign currency NIM higher than RMB NIM. And the U.S. dollar interest rates may be uncertain in the near term. And we're confident that the active adjustment of asset and liability, we will continuously improve the resilience of our net. Thank you. That's all my answer to your question because we have many [indiscernible] analysts online.

Now we will invite our meeting assistant to connect [indiscernible] online to ask a question.

My name is [indiscernible] from JPMorgan. My question is about noninterest income. BOC's 9% performance was very stable in the first half of the year. Can management tell us the drivers of net interest income growth? Can you set out to analyze the features and the drivers of noninterest income by business line and by region. And what is your prospects for the latter half of the net interest income?

Thank you for your question. the economy of the country is stabilizing with a positive formented growth and also active transactions in the capital markets contributing a good environment for net interest income growth of the bank we will actively promote business transition and expand net interest income sources. In the first half of the year, no interest income stabilized and improved for the better. And the noninterest income of the bank was RMB 120.38 billion, an increase of 5.04% year-on-year. The percentage of noninterest income to total income was 33.71%, mainly benefiting from settlement clarianagency sales and the financial markets performance. In terms of the drivers, I want to leave the full. First, we continuously optimize the supply of high-quality financial services with a steady growth in sentiment and clearly by the end of total corporate customer costs and total corporate settlement accounts grew by 7% respectively, and leading to 6.83% growth of domestic carpet settlement fee and also the data card payment amount exceeded RMB 4 trillion. Commission fee growth grew by 6.5% in this category. And the cost order set international settlement amount, e-commerce transaction amount grew by more than 20%, respectively, contributing to continuous growth of corporate international settlement fee and commissions. Second, we continuously enhance our wealth management capacity and satisfy customers' demand to upgrade their asset allocation. we established a global integrated asset allocation systems. And provide more products to our customer agency sales fund and wealth management products exceeded 7,800 and individual customer investment category financial assets grew by 7.16% and fund agency sales fee grew by 31%, and Agency Wealth management fee grew by 17%. In Macau and Hong Kong, and they are working hard to increase their fund agency sales income by 4.6%, and our integrated operation companies also strengthened their fee income by interaction with headquarter stock sales fund and wealth management products. We also improved our global custody service system, where the first Chinese bank to of global custody service among Chinese players. And in the first half of the year grew for fast asset scale grew by 10.27%, leading to 10.29% increase of our customer business revenue. Domestic asset custody and wealth management achieved top growth with the fee income grew by 12%. Overseas custody asset -- cross-border custody assets grew by 16% to 19%, respectively. Still ranked as #1 among Chinese peers, leading to cross-border class fee business grew by 13 points [indiscernible]. But on to leverage our strength in global financial market. with steady growth in investment and transaction business. We strengthened our professional judgment about the macro economy and the financial markets trends effectively balance risk and investment opportunities. And for a 24-hour and interrupted services to our customers. Looking into future, the macro economy will be stable in China and the structure will be better. In a low interest rate environment, wealth management need will be further released. We will continuously consolidate the foundation for [indiscernible] business. So domestic and oasis opportunities to rely on domestic operation and create international global synergy to maintain the contribution of noninterest income. So total revenue mid-low interest environment. we will steadily enhance payments and settlement business. This is the cornerstone of our noninterest income. We will further expand our leadership in international settlement R&D settlement and also promote faster payments and credit card business enhancement, thanks to the solid foundation for noninterest income. Second, we will further expand wealth management, asset management, cost to services. And the customer has a need to upgrade their asset allocation and allocate more to wealth management, asset management products. will rely on our global advantage and channel resources expand agency sale of sand insurance products, wealth management products and purchase metal products. Beyond our asset custody and wealth management capability to do further faster contribution from wealth management and understand management. Third, we will continue to enhance our competitiveness in financial markets to meet the market volatility and we will further enhance our client payment transaction business revenue. And we see market assessment and strengthen active management of fund holdings and enhance business synergy for bond enhancement businesses so as to generate more noninterest income. Now we welcome more questions.

My name is [indiscernible] Clare from [indiscernible]. I asked a question about globalization of the bank, the global competitiveness of the bank is further consolidated in the first half of the year. And looking into the latter half of the year and the 15th Five-Year Plan period, what are the opportunities of the back half in global operation and how can you turn this advantage into profitability?

And recently, we hold [indiscernible] to further expand our globalization. Globalization is within the of and also pursuance of the bank in our past 100 years of operation. In recent years, global operation of the bank further strengthened, and contribute to our income amid low interest environment. In the first half of the year, we found 3 highlights. First, financial contribution maintained at a high level in the first half 2026, overseas net profit, USD 6.4 billion contributing to 27.21% of total group net profit. Our cost/income ratio are better than domestic performance. And overseas NIM increased by is for Q-on-Q on basis point year-on-year and supporting the stabilization of group NIM. Second, maintain high-quality growth in various businesses. Overseas asset sale exceeded USD 1.34 trillion up 5.7% year-on-year and the loan grew by USD 26.1 billion ARPU. The growth rate was 5.82%. Asset currency was stable. At the end of June, overseas net prefunding loan amount and payout ratio reduced by RMB 5.3 billion and 0.2 percentage points, respectively. In Hong Kong and Macau, the NPL ratio was better than peers, looking into the record half and the next 5 years. And there are many tenders confidence going global and the man influential globally during the 15th Five-Year Plan period, BOC will continuously take globalization as a hardware priority and turn our globalization advantage into traffic growth. During the Five-Year Plan period, we will continue to maintain overseas business contribution to the group and the contribution rate for overseas institution in terms of net profit, we will make new breakthroughs any following aspects and the forward-looking way. We're going to make arrangements our overseas assets exceeded to USD 1 trillion for 22% of our total assets with interest spread between RMB and foreign currencies. We are carrying out cross-border asset allocation to hedging growth on the asset side. overseas institution loans and bond business continued to grow on liabilities. Current savings are accounting for a bigger share in the deposit structure for our overseas institutions with lower cost. We have put in place leading amongst Chinese peers group-wide funding pool for global allocation. At the same time, we will continue to strengthen interest rates and exchange rate risk management by optimizing business structure, giving full play to the interest spread between RMB and foreign currency and assisting high quality development of asset liability development for overseas. Secondly, we're going to further leverage the global network and the infrastructure enhancing noninterest business competitiveness. And for international financial institutions, the [indiscernible] members, 5 countries of the group in ASEAN countries and APAC members. We have achieved complete coverage. Our payment and clearing network has covered 60 countries and regions. RMB -- number of RMB clearing bank is #1 amongst our peers, is the only LCH designated PPS settlement bank. And the first Chinese number. And our global consulting service covered hundreds plus the countries and regions with extensive infrastructure and the layout. It is one of our unique advantages able to provide a complete suite products and services. In terms of the financial markets, business, we're going to further expand customer-driven trading and global [indiscernible] services to further add up to a contribution of this business lessens. Thirdly, we are going to drive up further synergies between domestic and overseas business by giving good play to our global services for our master branches, they are also important bonds for global connections such as Sanha International Financial Center and financing trade port and the Hong Kong, Macau and Guangdong is a bay area deployments. It will help us further enhance our comprehensive revenue. Thanks to the cost you mentioned 3 pathways, we are going to turn global opportunities into concrete financial returns and shareholder value. Let's go back to the on-site. Q&A.

Next question, the lady from the left as well.

I'm from Citic Securities. [indiscernible] I'd like to congratulate you on your business performance. Question about asset quality for the first half. There's been a very good asset quality. The question for management is that what are your views on sector-specific risks? And -- so what about the provision levels for the entire year?

Thank you [indiscernible] from Citic Securities VP in please answer this question. Thank you for your question. It's fair to say that since the beginning of 2026 conformed with contacts. Contacts changes at home and the Board. The Chinese economy has displayed a development momentum of overall stability and trends towards new sectors and higher quality development in this process, we have carried out proactive management of credit risks with even more effective measures. It has -- we have further enhanced the refined demand management measures. And the collection and the resolution quality has been better and higher. So for risk management for the first half, it is -- the results have been good, resulting in overall stability in asset quality. By the end of June this year, the NPL ratio stood at 1.22 plant, 0.1% lower than the end of end of the last year. continuing to stay at a low level. And for overseas institutions, the NPL ratio and NPL balance both to. And our provision coverage ratio exceeds 200%. And therefore, our risk resilience capabilities and the preparations are adequate and reasonable so far as we take a look at the sources of cash share for risk management. There are 3 of them. First, domestic individual business or personal banking business. We'll continue to pay attention to personal loans, asset quality evolution with the strengthened the management of overdue and NPL management. Second for domestic corporate business, we will do a better job in forecasting risk developments. So as suppress had with the risk resolution in an orderly way. Thirdly, our overseas business, we will continue to strengthen risk analysis, response and resolution in key areas and sectors while continuing to solidify our global advantages. Looking forward to second half of 2026, despite persistent complexities in external environment, the Chinese economy will continue to grow in a stable way with further improvements. In this context, the Bank of China will continue to balance between development and security by strengthening risk analysis and guarding against regarding the bottom line of [indiscernible] financial risks. And we will continue to optimize the loan structure while further support the infrastructure development and a higher level opens. Second, we will be very stringent with the bottom line of asset quality by controlling incremental growth and optimizing existing sort of the business. We will focus on key business lines, key areas, key sectors and key customers. with the forward-looking identification, proactive management and precision resolution. -- we will continue to hear to the principle of prudential provision making Thirdly, we're going to strengthen intelligent and smart capabilities in risk management by leveraging data-driven technologies and other new technologies with technology employment, we are better able to identify risks with early winning and resolution making risk management more effective. Number four, we will continue to focus on key areas and sectors in terms of overseas business risks. In particular, we will pay attention to overconcentration of loan expansion in overseas business as to ensure overall quality and stability of asset quality for our overseas business. We have every confidence in maintaining stable asset quality throughout 2026 with adequate risk provision and the compensation capability. In the interest of time so much for questions from investors and analysts. If you have any further questions, please talk to Investor Relationship Management department. Let me hand back to [indiscernible], our spokesperson for Q&A by media [indiscernible].

Thank you, President, Mr. Liu. I'm spokesperson at [indiscernible] Bank of China. I'd like to welcome all of you to our press conference with the Golden autumn around the corner, we are scaling new heights in our stable development. I'd like to thank all of you for your consistent support and interest. We're going to leverage this opportunity to conduct an effective Q&A. [Operator Instructions] Lady from the first row, please.

I'm [indiscernible]. Tech finance is one of the 5 priorities for financial sector in China as well as the key factor for BOC, and the pinning out of the Five-Year plan in head finance, what are going to be the breakthrough and what are going to be the future plans?