IDCBY Q2 2025 Earnings Call

Unidentified Company Representative: [Audio Gap] ICBC's interim results have been released. We have been attaching great importance to IR management with dedication to frequent and effective communication with global investors, clients and media friends. We keep in close touch. We especially value your long- term trust and your recognition for ICBC's value. Today's webcast is exactly the practice of our communication commitment and the exchange with markets. With this opportunity, we want to interpret deeply our highlights of operation and strategic of -- and strategy of development. First of all, I'd like to introduce to you the members of senior management, President, Mr. Liu Jun; SEVP, Mr. Wang Jingwu, Mr. Zhang Wenwu, [indiscernible] Chief Business Officer, Mr. [indiscernible] Li; our Directors, Lu Yongzhen, Cao Liqun, Dong Yang, Zhong Mantao, Herbert Walter, Chen Guanting, Li Weiping are also joining online. At the same time, we also have general managers from relevant departments. First, I'll give the floor to SEVP, Mr. [indiscernible] to brief you on our interim results and the main characters.

Unidentified Company Representative: Thank you. Dear investors, analysts and journalist friends, good evening. Welcome to ICBC 2025 interim results announcement. Thank you for your concerns and support for ICBC. Now I'd like to report ICBC's 2025 interim results and the operation by half 1 guided by 5 transformations of intelligent risk control, modern layout, digital driver, diversified structure and ecological foundation. ICBC promoted its own high-quality development while supporting the economy's continued recovery and positive momentum. Staying focused on our strategy and capitalizing on our potential, the bank delivered solid interim results marked by steady progress. First, operating results growing steadily, demonstrating further enhanced development resilience. Our total assets were CNY 52 trillion. Loan exceeded CNY 30 trillion, up by CNY 1.8 trillion due to customers was nearly CNY 37 trillion, up by CNY 2.1 trillion, all leading the peers. Operating income was CNY 409.1 billion, up by 1.8%. The proportion of NII rose by 1.4 percentage points, steadily moving toward a more optimized income structure. PBOP was CNY 303.5 billion, up by 1.4%. Net profit reached CNY 168.8 billion, maintaining a leading position. ROA and ROE were 0.67% and 8.82%. Cost-to-income ratio 25.27%, a sound input/output efficiency. NIM was 1.3% decrease continued to shrink. CAR was 19.54%, provision coverage ratio 217.71%, further enhancing the bank's risk resistance. NPL ratio was 1.33%. Special mention loans accounted for 1.91% a stable asset quality. Based on robust performance, we distributed CNY 109.8 billion cash dividend. Based on average stock price of half 1, the dividend yield for A and H share is 4.44% and 6.16%. This year, we will continue to implement interim dividend with an expected amount of CNY 50.4 billion. Assets and liabilities growing steadily and the quality and efficiency of services further improved. Loans grew by 6.4%. Bond investments increased by 10.2% due to customers increased by 5.9%. Credit structure continued to be optimizing. Corporate loans increased by CNY 1.35 trillion, which are more targeted. We actively incentivized consumption with personal loans, maintaining rapid growth. We actively grasp market opportunities and enhance our work in 5 key tasks. In technology finance, sci-tech loans totaled CNY 6 trillion, up by 20%. In green finance, green loans exceeded CNY 6 trillion, up by 16.4%, leading the peers. In pension finance, pension inclusive loans, it's up by 17.3%. The customers is over 2 million. In pension finance, pensions under management totaled CNY 5.4 trillion, up by 7.3% serving 220 million customers over 55 years old. In digital finance, loans to core industries of digital economy was over CNY 1 trillion, up by 19.3%. Number of personal customers in mobile banking and users in eCNY continue to be market-leading. We adhere to major responsibilities in core business in the industry and professional characteristics in commerce, providing comprehensive financial solutions. Loan invested in manufacturing industry totaled CNY 5.2 trillion, of which the long term was CNY 2.4 trillion. Relending loans for equipment renewal was CNY 100 billion. We established a sci-tech finance innovation fund of CNY 80 billion. Corporate settlement business totaled CNY 1,060 trillion with domestic branches international settlement of CNY 1.6 trillion, cross-border RMB being CNY 5.1 trillion. Third, the 5 transformations advanced solidly further unleashing reform momentum in half 1, the bank accelerated its reform. The framework for the 5 transformations was continuously refined with measures upgraded and results steadily emerging. Intelligent risk control, following the path of proactive prevention control and comprehensive management, we continue to improve the group's comprehensive risk management system, deepen the application of intelligent risk control transformation, effectively manage 9+X risks. We enhanced risk control mechanisms and tools assigning risk officers to first-line departments at head office, domestic branches, overseas institutions and diversified subsidiaries, achieving full coverage of such officers in all second-tier branches by [indiscernible] The NPL ratio decreased by 0.01 percentage points and provision coverage ratio increased by 2.8 percentage points, further strengthening risk resilience. Significant progress was made in risk management for key areas. In modern layout, we focused on national strategies and financial capabilities drove the efficient alignment of financial resources, business layouts and development models with modernization. Consolidating traditional strength in the all 3 pillars of corporate, retail and technology, we accelerated the deployment in new tracks such as new financial infrastructure, new financial business and serving new quality product forces. Cross-bank RMB clearing volume exceeded CNY 2.9 billion. The number of direct SIP participants increased to 37 third-party payment [indiscernible] drove CNY 84 trillion consumption. SEBC treasury services clients exceeded 13,000. Custody business scale reached CNY 29.9 trillion. Investment banking and mega asset management business developed steadily. The mega wealth management platform was solidly built. Intelligent quantitative trading capabilities continued to improve. Personal client financial assets surpassed CNY 24 trillion, maintaining a leading position in market. The dominant position in wealth management was further consolidated. Supporting high-level opening up, our international network reached 69 countries and regions with over 400 overseas institutions serving as RMB clearing bank in 12 countries focusing on the [ One Core 3 Live ] strategy. We spearheaded 3 multilateral platforms. BRICS Business Council, China Europe Business Council, BRBR and 2 bilateral platforms, China Germany Economic Advisory Committee and China Spain Business Council. We diligently fulfilled our role as the Chinese Chair of the BRICS Business Council, promoting stable and sustainable greater BRICS cooperation. We continue to building the China Europe Business Council, expanding membership to 110 companies over -- covering 17 European countries. We deepened BRBR expanding to 190 members and observers from 75 countries and regions. We successfully issued a multicurrency carbon-neutral themed offshore green bond contributing financial strength to global economic cooperation and sustainable development. We will soon co-host the ASEAN-Plus Three Industrial and Supply Chain Connectivity Conference with the Ministry of Commerce. Digital drivers. We comprehensively deepened the digital ICBC initiative, strengthen technology and data support and new quality product forces, fortified 3 external platforms, upgraded 3 internal platforms. Mobile banking MAU exceeded 265 million. ICBC eLife MAU reached 21.50 million. Open banking digital finance partner transaction volume reached CNY 249 trillion. Counter clearing platform branch coverage reached 86.5%. We launched the corporate marketing intelligent agent and created a new mobile banking model for personal marketing. Leveraging the smart [indiscernible] marketing, we reached 167 million customers, driving CNY 1.18 trillion in incremental client financial assets. Intelligent inquiry trading ratio in financial markets reached 96% AI-assisted front, middle and back offices in credit serving over 20,000 credit professionals. User satisfaction reached 91%. In diversified structure, proactively responding to challenges like falling interest rate and narrow NIM, we optimized structures to forge a new development pattern for multiple pillars and efficiency synergy. Business products and asset liability structures were further optimized. The proportion of retail and inclusive loans increased by 5.3 percentage points. We coordinated the 4 major business sectors -- segments, continuously improving the internationalized and diversified management system overseas institutions. Total assets reached USD 460 billion, generating pretax profits of 2.6 billion. We drove domestic diversified subsidies -- subsidiaries to focus on their core responsibilities and further enhance client service capabilities, value creation and market competitiveness. Domestic diversified subsidies achieved a combined net profit of 8.3 billion. In ecological foundation, we deepened the chain of capital clients, service and value. We -- client ecosystem building advanced branch transformation continued. The GBC+ 10,000 miles campaign yielded significant joint banking results. Focusing on 22 head office level GBC+ key scenarios, we drove the deposit growth of CNY 192.2 billion and reach of 4.59 million people and payroll funding flows of CNY 668 billion. Online and offline channels accelerated transformation. Average AUM per branch for personal clients reached CNY 1.53 billion. Corporate clients exceeded CNY 14 billion. Personal clients surpassed CNY 770 million. Average financial assets per client and the proportion of young clients steadily increased. We built one-stop services, achieving million-level client acquisition and billion- level client activation. We integrated ESG and sustainable development concepts into operations, further solidifying the governance structure and continuously improving the sustainable information disclosure system. Looking ahead, ICBC will adhere to the decisions of the government, accelerate the exploration of comprehensive financial solutions, strengthen smart risk control, improve the modern layout, enhance digital momentum, optimize diversified structure and solidify the ecological foundation. We will elevate the traditional areas of strength in corporate retail and technology banking and broaden the new tracks. Through higher quality development, we will create stable and sustainable value returns for our shareholders worldwide. Thank you.

Operator: [Operator Instructions] Please identify yourself with name and institution. The first question.

Yi Wu: I'm analyst Winnie from Bank of America. I want to congratulate that amid the complex operating environment, in the uncertainties, you reached certain kind of certainties. What is the operation highlights in half 1 and for the whole year? Will you achieve positive growth in operating income and net profit?

Unidentified Company Representative: Thank you for your question. I will take your question. In this year's annual results announcement in March, I have made commitment that ICBC will go a path that is in line with the market and will be above the average of the market and creating reasonable returns for shareholders. We go aligned with the market, and we precisely demonstrate the growth of the country and people. If our development exceeded the normal line, it means that we comprehensively serve the real economy. Maybe there will be a mismatch. So what we're giving to full play to our role is to main force the stabilizer. If the pace of the stabilizer is exceeding one, then it will not be a good stabilizer. So our speed is the average one, balance may be the best. So with such philosophy, we promote our high-quality development and transformation. If you -- for our half 1 results, if you want to have deeper understanding, I would like to interpret from 3 dimensions. First, from financial analysis. With the dimensional comparison to see if our annual sheet is expected. And as what Winnie said, achieving certainties amid uncertainties, we primarily focus on operating income. We believe that I see this is the -- if we want to get into full play its role, our contribution of returns is prominent not only in China, but also comparable to the international peers. When we see revenues, we do not only see quantity, we also see quality. In half 1, we achieved CNY 409.1 billion, up by 1.8%, achieving positive growth, the best in the recent 3 years compared with the same term. If we see the past 4 quarters, in 3 quarters, we recorded the positive growth. That means this is the transformation or the transition of China's revenue growth. We see that net interest income accounts for a larger proportion of revenue which is the [ bottleneck ] is our revenue is down by 0.1%, relatively good results compared with big companies. It's conducive to the balance of quantity and pricing. On the other hand, when LPR was reduced, the nominal rate of deposits was also reduced, flattening the influence of net interest margin. That ensures the stability of net interest margin, but also delivered the confidence that when we reasonably support the real economy, we implement our business. Noninterest income was 95.5%. Fee and commission income was CNY 67 billion, down by 0.6%. As the onetime policy factor was eliminated, the decrease was rapidly shrinked. Other noninterest income was CNY 28.5 trillion, up by 38%, which is quite remarkable. Our control of asset quality in the cost side was also robust. Our NPL ratio was 1.3%, down by 1 bp. In the annual results announcement, I said that when we control our asset quality and increased provision coverage ratio, we have created an expanding trend. So our provision coverage ratio was 217.71%, up by 2.8 percentage points. What is worth mentioning is that our provision balance was exceeding CNY 1 trillion, the first of its kind in history. Everybody knows the implications, the significance of such balance. When we see -- from the market, when we compare such balance -- when we compare with such the sheet with other banks, we pursue the share of the creation results with stakeholders. Becoming ICBC's shareholder is quite happy in stock price. Last year, ICBC's A share and H share increased by 44.8% and 36.4%. In half 1, they are 9.7% and 94% higher than the average of the sector. Some analysts, journalist friends may ask that as a big ship, as ICBC is really hard to do transformation. When we are a good -- an important strength in our financial sector in China, we go along with the national economy. We try not to do the quick shift. If we do it, it means that our direction is wrong. When we go ahead, we adjust our direction to make this ship sale more stably. We do not pursue excess growth. If we do that, we believe that the reactions of the economy may not be positive. When we see dividend last year, our cash dividend was CNY 109.8 billion, the largest of its kind in A share. This year, we will continue to implement interim dividend with an amount of 50.4%, a dividend payout ratio of 30%. When we see dividend yield, after a certain time of increase, our dividend payout ratio may decrease a little bit. It's the same trend with the whole sector. When we calculate as of last -- of yesterday, our dividend yield in A share and H share was still 4.2% and 5.8% higher than the long-term fund cost of liabilities. It is still a good investment target as a large listed bank. We want to convey that the characteristics of our shares has some characteristics of fixed income products. We want to return to you with the dividend. Third, from the operation management, that is the structural factors, we always emphasize that our goal is to create ourselves as a world-class modern commercial bank. We are the leading in making ourselves a strong bank. Internationalization and diversification is a necessity for us. It is also a way to tackle the low NIM environment. From half 1 data, domestic branches are our major fortress, creating momentum -- stable momentum for our development. Internationalization and diversification is our new fortress supporting our new growth and incremental contribution as time goes on, which will be stabler. Their total contribution of operating income and pretax income was 9.8% and 13% higher than last year. Therefore, we will continue to promote our 5 transformation strategy and also in line with the 14th 5-year plan and 15th 5-year plan, we will continue our high- quality development. For example, in diversification, together with the AIC equity pilot work, we continue to cover all 18 pilot regions, and we lead the market in fund establishment and investment volume. In our assets, the debt proportion is higher. So we want to provide more products of equity and quasi equity so as to form diversified product and income structure in internationalization. We are trying to giving to full play our advantage of RMB -- of the biggest RMB bank, not only in China, but also around the world so as to create a new path for the transaction of RMB asset investment. In half 1, we have a good news for us. That is our -- the number of our clearing -- RMB clearing bank increased to 12, and we acquired -- and we become the custody bank of multiple global customers. Winnie said that if we can deliver a positive result in net profit for the full year, ICBC goes along with the national economy. In our balance sheet, national economy is demonstrated that is ICBC going to go with a similar path with the national economy. We hope that the full year's answer sheet can be improved than half 1. And we hope it is a solid one and in which we serve the real economy. Thank you.

Operator: Now we have the second question. Please identify yourself and your institution.

Unidentified Analyst: [indiscernible] from Economic Daily. On the first half of this year, ICBC's asset quality has remained generally stable. Could you share with us what measures were taken? At present, regulators are strongly encouraging banks to increase personal consumption loans. What is ICBC's measures?

Unidentified Company Representative: Let's welcome President Wang to answer this question.

Jingwu Wang: Thank you for your interest. On the first half of this year, ICBC thoroughly implemented the decisions and arrangements of the CPC Central Committee on Financial Operations, adhere to the principle of high-quality development and high-level security and follow the path of comprehensive management, proactive prevention and smart control. By taking early and effective actions in credit risk management, the bank has firmly safeguarded the financial stability. By midyear, the group's NPL ratio was 1.3%, down by 1 basis point from the beginning of this year. The provision coverage ratio rose by 217.71%. Risk resistance capabilities have been further strengthened. The improvement of asset quality embodies the results of our reform of the risk management system and mechanism. Specifically, we mainly focused on the 3 persistences to ensure secure and stable development. First, we persisted in deepening the optimization of investments and loans. We attach great importance to major national strategic, ensure effective alignment of a package of national incremental policy and build a modernized credit policy system that fit with the modern industrial system. We align with the central deployment ICBC strategies and regional layouts. In line with national balance sheet management, we allocate assets in large categories and large blocks, achieving balance across industries, regions, clients and products. We make credit resource allocation and capital utilization more efficient, enhancing the long-term foundation for improving asset quality. Specifically, to support modernization, the bank aligns with the funding needs of major strategies and key field renewal and trade- in, deepen and refines the 5 priorities facilitates faster development of new productive forces, use incremental structures to improve existing structure in manufacturing, scientific innovation, green-inclusive and agriculture-related key sectors, loan growth surpassed the bank average. Second, we persisted in improving the risk control system. We continue the comprehensive risk management system building, enhanced the functions of Risk Control Committee and the Chief Risk Officer. We further upgraded the 3 gates and 7 color post intelligent credit risk control system. At admission stage, we built industry's regions industrial chain policy framework to steadily advance in the Tier 2 branches, the new rules of credit approval and improve the risk identification and forecasting. During the ongoing management phase, we strengthened ongoing management during the duration, prevent and resolve risk in major areas. At the disposal stage, we carried out high-quality and director management of risk assets and further improve the quality and efficiency of risk asset operation and management with a series of measures, our ability to proactively prevent and diffuse risks has been further improved. Third, we persist in strengthening intelligent risk control. We firmly uphold the digital empowerment, deepen the application of AI and other emerging technologies in risk control and continue to raise the level of intelligent risk control. The enterprise level intelligent risk control platform has been applied to all the domestic branches and more than 130 risk control decision-making scenarios across foreign exchange balance, commodities, equities, the 5 major market. To identify the risk, we launched the industry's first AI-driven credit risk control, integrated model, Smartloan Connect with a function like intelligent monitoring and risk analysis. We also developed the AI-powered product review assistant, realizing fast analysis of systems and data. We also optimized ICBC prevention. The credit risk supervision system. We expand supervised accountants and upgrade digital tools. We expand satellite monitoring coverage areas, strengthen the application in agricultural sectors like forestry and crop planting. And in terms of the quality of personal consumption loans, ICBC carried out the requirements proposed by the CPC Central Committee and the State Council to stimulate consumption, we expand our resource allocation, innovate our service model and improve the consumption financing supply and ensure the policy truly benefit people. On the first half of the year, the personal consumption loan increased more than 10%. And in the pricing, ICBC followed the self- regulatory mechanism for market interest rate pricing. We stick to the commercial sustainability and balance the quantum enterprising to price reasonably. And in terms of the asset quality affected by the environmental -- the market environment, the banking industry facing the downward asset quality in the retail loan area. And we -- after we take full consideration of the risk disposal progress, our bank situation is basically the same as our peers within the reasonable range comparable to peers. And in the second half of the year, the external challenges and risks still exist, but China's economy has a strong foundation, great resilience and potential. The favorable long-term conditions does not change as we see a package of policies to stabilize the economy, taking effects, improved domestic demands and stimulate consumptions are affecting the markets, we estimated that the average trend will ease. We follow the principle of not raising costs and not undermining market honor. And we will expand our consumption loan and upgraded our management at the admission stage comprehensive dynamic and sustainable manner. We will conduct the full cycle management of the material risk in consumption debt. And we will take the data-driven approach and will segment the scenarios and the clients develop more intelligent models to control risk and to realize the long-term healthy development.

Operator: The third question.

Unidentified Analyst: I'm [ Ho A ] from Hong Kong Commercial Daily. My question concerning serving high-level opening up. In the results brief in March, President Lui, said that in the future, ICBC will create 3 key pillars. The first is internationalization and diversification. You have one, how did you advance internationalization and diversification in supporting foreign trade enterprises in going global and serving high-level opening up, what are your measures and achievements?

Unidentified Company Representative: I will invite Mr. Wenwu Zhang to answer your question.

Wenwu Zhang: Thank you. Promoting internalization and diversification of operation, as Mr. Liu said, for ICBC, it is our standard practice, but it is also the necessity for serving the real economy. It is also important to create a new model for financial services and enhancing our competitiveness and achieve high-quality development. In half 1 -- the operation is in steady progress in half 1. Our international network covered 69 countries and regions. In 30 countries, we established 250 subsidiaries. Under one bank, one policy, the overseas total assets was nearly USD 460 billion, pretax income contributed to 9.5%. Asset quality is stable. The regulatory rating is increasing. In half 1, we are newly approved at the RMB clearing bank in Turkey, the number expanded to 12 countries. In 37 countries, we are the incumbent President's Chinese business association. In diversification, we center around customers' needs going to full play the coordination of parent bank and subsidiaries and funds, leasing, insurance and so on to create the transition of comprehensive financial solutions. By the end June, the total net income of the domestic diversified companies exceeded RMB 8 trillion, up by 25%. They focus on core business and honing expertise, they play an important role in supporting 5 key tasks. For example, our AIC proportion in technology increased by 46%. ICBC Credit Suisse pension fund AUM exceeded RMB 1.1 trillion. ICBC Wealth Management has seen its average daily average products volume over RMB 2 trillion. ICBC-AXA played its role as a guarantee. The income of premium was 25x of last year, ICBC Leasing. New leasing assets increased by 14.1% in serving the high level opening up in half 1, we center around serving the establishment of Belt and Road and opening up. We serve the global customers. We have 3 aspects: first, we serve the foreign trade and capital to increase its quantity. We launched the Spring Bloom Action and ICBC e-trade in half 1. The cross-border e-commerce settlement totaled over RMB 280 billion, up by 9%. The number of small and micro e-commerce service businesses exceeded 100,000. We are the first to achieve full coverage of FTE account system in 5 free trade zones. The RMB transaction volume was up by 26%. The deposits and loans in FTE headquarter was over 120% and 46%. Our global cash management customers was over 19%. And the global settlement was up 27%. We focus on going global and the Belt and Road. We supported outbound projects with 500 projects and RMB 130 billion loans. Second, we promote RMB internationalization stably. We launched Spring Sunshine Action and support the global market players in their cross-border RMB demand in half 1, the cross-border RMB business, exceeded RMB 5 trillion, up by 6%. The settlement of Clearing Bank was RMB 60 trillion, up by 23%. We promoted Standard Bank to become the first CIPS participant, and we promote QR copayment between China and Vietnam. We also helped the overseas customers to issue RMB 57 billion Panda bond. Three, we deepened our international corporation. We fulfill our role as China's Chair of the BRICS Business Council. We promote the establishment of BRBR. The membership was expanded to 190 institutions in 75 countries. The membership of CEBC expanded to 110, covering 70 European countries. We also served CIIE and CISCE contributing to the global trade and cooperation sustainable development.

Operator: Now we take the fourth question.

Jian Wang: I'm Wang Jian from Guosen Securities. I have a question for NIM. We observed that ICBC's NIM decline in the first half of this year was smaller than the same period last year. Can this stable trend be sustained? And in May with the LPR reduction and the adjustment of the deposit benchmark interest rate, what impact did this have on ICBC's NIM? And in the first half, what measures did ICBC take in deposit cost control and what results were achieved? Looking ahead was ICBC's outlook on NIM for the full year?

Operator: President, [indiscernible] will answer this question.

Unidentified Company Representative: Thank you for your question. I will ask them one by one. First, about NIM you ask whether NIM stability can be sustained. In the first half of year, our NIM was 1.3%, down by 12 basis points year-on-year, down by 6 basis points compared with the previous half year. Looking at the trend, while still on a downward path, the rate of decline has begun to moderate. We believe the decline in NIM during the first half demonstrate that we have maintained competitive advantages through proactive and effective asset liability management and operations. We take 3 measures. First, we focus more on the asset liability portfolio duration management to face the external shocks. We extend the duration of RMB asset moderately, while maintaining a short net duration for foreign currency assets. We increase the sensibility of our balance sheet to enhance net interest income and maintain a stable net interest income base. To cope with the LPR cut in May, we proactively adjust our posted deposit rate to face the 1 bp downward pressure. And in -- to face the fund volatility, we take our advantages at this leading bank in the world to utilize our more diversified funding channels to stable our NIM. Second is that we focus more on the liability cost management. The overall cost advantage of liabilities can be sustained. By midyear, the average RMB general deposit rate dropped by 26 bp, more -- dropped more than 21 bp year-on-year and the interest rate on newly raised RMB term deposits dropped to 34 bp, down by 5 bp year-on-year. The operation of low-cost liabilities is sustainable. We have this thick foundation and excellent services in custody, settlement and depository. We have these advantages. And in terms of the strategy for exiting high-cost liabilities, these abilities -- this strategy can be continued. On the first half of the year, the interest expense savings exceeded RMB 10 billion. Third, we focused more on optimizing the asset structure which create a liter mover advantage for NIM recovery. We have this sound accumulation in the corporate inclusive and fintech financing. We have a large competitive advantages. On the first half of the year, the fintech loan increased by RMB 1.05 trillion and 20% high -- 12.5% higher than the industry average, for inclusive loans up by RMB 501.4 billion and 17.3% -- 11.5% higher than the industry average. Our loans are focused on the 5 priorities. It is not only strategic, important, but we have advantages in pricing. We focus on the marginal improvement of pricing we stick to the principles of risk-based pricing, comply with the series of requirements of the regulatories and prevent irrational declines in loan interest rates. In the second half of the year, the new RMB loan rate was 2.82%, down by 22 bp compared with 2024. And we also focus on precise risk control. And I also want to talk about our outlook on the NIM in the second half of the year. It is expected a downward trend in NIM will remain a current feature in the second half of the year, though the pace of decline is likely to gradually narrow. At an original level, banks face structural challenges of difficult growth incremental business and declining floor prices. And we -- and our -- the downward pressure on NIM is expected to persist for some time. Its trajectory is closely tied to 3 factors. Whether the monetary policy can exert balance effect on both sides, whether the social credit demand still has to recover, whether banks adjustment to asset structure become more targeted and meet sustainable financing needs. We are confident about our stable NIM in the future.

Operator: The fifth question.

Unidentified Analyst: [ Dong Xiao ] from China Business Times. My question concerns investments and financing. You have one ICBC's investment and financing lead world in the quantity. Please specify which sectors are they directed to, the Central Urban Work Conference that to create more vigorous cities. And my question is in supporting the new quality productive forces, what are the achievements and highlights? In half 1, AIC Equity Investment Pilot program continue to expand. What is the latest development in this regard?

Unidentified Company Representative: Maybe you need to repeat the last part of your question, as the connection is not good.

Unidentified Analyst: As AIC Equity Investment Pilot programs continue to expand, as you have mentioned. What is the latest development in this regard? And what strategic plans do you have in the future?

Unidentified Company Representative: I'll invite Mr. Zhang Shouchuan to answer your question.

Zhang Shouchuan: Thank you for your questions. You have noticed that in half 1 our investments in financing continue to maintain the leading position in the market. In fact, we rank first compared with other banks. We believe high-quality investments and financing is how we play our role and complete our financial mission and also how we create high-quality development and create values for shareholders. In half 1, we adhere to the decisions of the government and implement various old and new policies of the country. We support the stability of employment, company markets and expectation. We play our role as a main force and a leading bank. We have 4 features: First, in quantity, we achieved year-on-year growth. The loan growth and investment -- and the bond investment stepped into new stage. By end June, the total balance exceeded RMB 45 trillion, up by RMB 3 trillion. The quantity, the increments, both beat the world up by -- and a more increase of RMB 330 billion, of which domestic branches RMB loans increased by RMB 1.78 trillion, RMB bond investments increased by 1.23%. They all achieved year-on-year growth, injecting vigorous growth to the real economy. Second, when we see directions, we see it's quite targeted in two major areas to new areas, and technology finance, the loans achieved relatively high growth. Technology finance comes first in 5 key tasks: manufacturing, strategically emerging industries, inclusive finance, green finance, private sectors and agriculture-related loans all achieved over 10% growth. The balance and increment in technology green, both lead the world. We increased our financial services for the two majors, to new and food and energy security. The long-term -- mid- and long-term corporate loans was up by RMB 800 billion. Then the beginning of the year, the proportion was over 60%. We also coordinate -- we also actively participated in the real estate coordination. Third, our core businesses are more remarkable. The loans to manufacturing exceeded RMB 5 trillion industry as our core responsibilities. We focus on advanced manufacturing clusters and big equipment upgrading. By end June, our loans to manufacturing balance was over RMB 5.2 trillion, of which middle- and long-term loans balance was over RMB 2.4 trillion. The loans to equipment upgrading loan was over RMB 100 billion, ranking first in the market. We also strengthened commerce as our expertise we integrate ourselves in the coordinated market establishments in the nation. We coordinated with the platforms, supermarkets, support the domestic consumption. We concluded into one trade finance, 3 settlements. That means RMB settlement, cross-border RMB settlement and international settlement. The one and three, the four indicators all maintained market-leading for our service for domestic demands continue to be strengthened. The proportion of retail and inclusive loans continue to increase. We accelerate the transformation of personal loans business. We upgrade our service for consumption and the businesses. We focus on key consumption scenarios. We launched the ICBC interest shopping. The personal consumption loans increased by over 10%. Personal business loans over 11%. In the country level, agriculture-related areas, the inclusive finance increased by 17%, of which the corporate inclusive finance increased by RMB 320 billion, the highest in the history and the highest compared with the peers. Second, our support for sci-tech innovation and new productive forces, we implemented the difference in the work conferences and increase the improvement of the sci-tech system and support the innovation city, innovation ecosystem and the new productive forces in their development. You can see it from 3 aspects. First, equity loans bond are both strengthened to cultivate new quality development. We focus on the transformation of the traditional industries. We support 8 new emerging industries and 9 future industries in their development. In equity, we established the sci-tech innovation fund over RMB 80 billion, and we covered 18 AIC Equity Pilot regions. The volume continued to lead the peers. In loans, sci-tech loans, was over RMB 6 trillion, up by RMB 1 trillion. Strategic emerging industries was over RMB 4 trillion, up by RMB 700 billion. The balance and increments both lead the peers. In bond, we are the first to launch the sci-tech Innovation bond. The highest volume was RMB 20 billion. We lead the world in underwriting and investment. Second, we continue to improve our 4-level momentum and increase the coverage of sci-tech finance. We've given into full play the head office branch level, technology centers, and we actively serve the sci-tech companies in their in their whole process demand. By end June, the customers totaled [ 110, 11 ] up by 15,000 of which the high-end customers, little giants, the number of customers in this regard increased by [ 10,500, 6,000 and 2,000 ]. In the coverage of little giants enterprises was up by 16 percentage points to 44%. These indicators all lead the markets. Third, we continue to improve our 5 expertise mechanisms. I have mentioned 4-level institutions established. We also launched the ICBC InTech partnership campaigns in Suzhou, led by President Liu. We issued the comprehensive financial solutions of sci-tech. We innovated our special products with the finance of IPR and credit-based projects. We also strengthened our risk management. We launched the rating models, credit models and evaluation models. We also issued the systems in this regard, and we explore the transformation of the results and the platform establishment of financial services to better serve all kinds of innovation partners. Third, as for the AIC Equity Investment business, we actively implement such new policies. We think AIC business was an important point to support new productive forces. We coordinate with industries, local capital, social capital to precisely serve the sci-tech innovation and industries. Our AIC Pilot Funds signed volume was over RMB 150 billion. We have 28 funds, with funds injected over RMB 33 billion. We focused on circuits, new energies, high-end manufacturing and so on to achieve and we achieve ourselves as the biggest companies with the largest number, the highest capital and the most solid implementation. In the future, ICBC will continue to give into full play our advantage of the comprehensive financial services and strengthen the synergy establishment, we adhere to long-term capital investments, value investments and responsibility investments to -- I have 3 considerations. First, to enlarge investments, we continue to expand the volume of the AIC fund to satisfy the need of the sci-tech companies in equity. To increase the coverage of the high-quality companies, we focus on new industries, future industries. We increased our capabilities in analysis. We investments as early as possible, and we invest in more technology companies. Second, we coordinate investments in loans. We satisfy the various needs of the customers, and we improve the settlement credits, custody, investment banking and the comprehensive financial services. Third, we improved the risk management. We strengthened the risk appetite, risk identification and the evaluation of the risk management and improve the mechanisms in management and exit. We upgrade the subsidiaries in their independent risk management and promote AIC Equity Investment business in its high-quality development. In investments, we will continue to attached great importance to such business as Mr. Liu and other members mentioned, ICBC is establishing a principle that is to make customers at center. We have for financing to provide our comprehensive financial solutions through our advanced technology and professional services in national strategies implementation and the development of the real economy and in our own high-quality development, we continue to inject continuous momentum. Thank you for your questions.

Operator: Sixth question.

Shuaishuai Zhang: My name is Zhang Shuaishuai from CICC. I want to ask a question about capital and dividends. This year, we've already observed the 4 banks. They have already completed capital injection. May I ask about the capital planning of ICBC? Since last year, ICBC has started to implement a dividend payment twice a year to enhance investors' sense of gain. May ask about the future dividend policy and whether it is possible to increase the dividend rate?

Unidentified Company Representative: President, Yao Mingde will answer this question.

Mingde Yao: Thank you for your question. As you observed, on the first half of the year, BOC, CCB, BOCOM and PSBC successfully implemented capital injection, which was well received by investment institution and the capital market and achieved very good results. ICBC also pay high attention to this and has actively communicated with regulators and shareholders. We mainly focus on 2 areas of work. First, maintain the capital adequacy ratio at a leading level in the industry. By the end of 2025 June, ICBC's CAR was 19.54% up by 15 bp compared with the end of last year, ranking at the leading position amount peers at home and abroad, providing a solid capital support for the development in various businesses. These mergers include: first, optimize capital allocation. ICBC doubled on our efforts in 5 priorities and low capital intensive areas improved capital efficiency. Second, we balanced the capital supply and demand. On the first half of the year, the retained profit reached RMB 105.9 billion, which we used to replenish capital leading the industry in scale. And by the end of August, we issued RMB 119 billion of capital instruments driving the interest expenses on existing capital instrument to decrease by 24 bp compared with the beginning of this year. The bank strengthened capital constraints identifying potential capital improvements, clean up efficient capital. In the first half of the year, ICBC growth rate of risk-weighted assets was 4.4%, 2 percentage point lower than the loan asset growth rate. Second, conduct capital funding for the 15th 5-year plan. The balance we maintain a stable currency and stick to capital intensification approach. We will take the internal channel at core and external channel as a supplement. At present, the new round of capital instrument insurance has been supported to -- submitted to shareholder meetings. We will improve our capital layout and improve the efficiency of capital utilization to create returns for our shareholders. And in terms of dividends, since its listing in 2006, ICBC has maintained a relatively high dividend level in recent years, the dividend payout ratio has been stable simply above 30%. Since its listing the banking has accumulated to create a cash dividend returns of over RMB 1.5 trillion for shareholders, making it the listed company with the highest dividend amount in the Asia market. In 2024, the share price of ICBC's A-shares and H-shares increased by 44.8% and 36.4%, respectively. The increase in the in H1 also reached to 9.7% and 19.4%, significantly higher than the average annualized yield of wealth management product in the same period. In 2024, to further enhance the sense of gain for investors, the bank increased the frequency of dividends twice a year. Among them, the interim dividend was RMB 51.1 billion, the year-end final dividend was RMB 58.7 billion. The annual cash dividend per share was RMB 0.308 and the total cash dividend amount was RMB 109.8 billion, within the listed company the highest total A-share dividend in that year. In addition, in distribution plan for the final dividend at the end of 2024, we offer shareholders the choice of receiving dividends payments in RMB to cater to investors varying capital needs, further enhancing investment convenience and attractiveness. In future, ICBC will proactively adapt to the low interest rate environment to stimulate new drivers for high-quality development, take advanced approach to boosting operating income and management risk cost in order to strengthen financial services and market competitiveness. The bank aim to maintain a reasonable dividend payout ratio and create long-term, stable value for shareholders and investors through sustainable performance.

Unidentified Company Representative: For the interest of time, this is all for our Q&A session. I thank the management for their candid exchange and sharing, and thank you for your participation. We continue to openly, transparency communicate with investors. We value every opportunity to exchange with capital markets and the public. Our IR and PR teams are always happy to communicate with you. Thank you for your concern and trust. We will continue to improve our competitiveness and serve the development of the economy and create long-term sustainable and stable value returns. This is all for our interim result announcement. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]