Industrial and Commercial Bank of China Limited

Investors, Analysts, Media, good afternoon. Welcome to the 2024 Annual Earnings Call of ICBC.

I'm Chen Hua from ICBC Strategic Management and Investor Relations Department. The 2024 Annual Report has Annual Announcement has already been released.

Thank you for the 880,000 investors for recognition. ICBC has been highly valued the IR and the market value management.

We have maintained a frequent and effective contact with investors and media. Today's earnings call will be broadcasted globally.

And now let me introduce you to the senior management of ICBC. In Hong Kong, we have Mr.

Liu Jun, President; SEVP, Mr. Duan Hongtao; SEVP, Mr.

Yao Mingde. In Beijing, we have SEVP, Mr.

Wang Jingwu; SEVP, Mr. Zhang Wenwu; SEVP, Mr.

Zhang Shouchuan; Senior Business Director, Mr. Song Jianhua; Directors, Mr.

Feng Weidong; Mr. Lu Yongzhen; Madam CAO Liqun, Madam CHEN Yifang, Madam ZHONG Mantao; Director, Don Yang; and Director, Herbert Walter.

And also we have department heads and heads of the branches and subsidiaries here today. And now let's I'll give the floor to SEVP Board Secretary for his introduction.

Friends from the Media, Investors and Analysts, good afternoon. Welcome to ICBC's 2024 Annual Results Announcement.

Thank you for your participation and support. Next, I will briefly report on ICBC's performance in 2024.

In 2024, ICBC celebrated its 40th anniversary. 40 years is the right time for a new start.

Our goal is to build a world-class modern financial institution with Chinese characteristics. We are committed to leading, serving the real economy, maintaining financial stability, building a strong financial institution and focusing on our main responsibility and business.

We are steadily promoting intelligent risk control, modern business layout, digital growth momentum, diversified business structure and ecological foundation. In short, five transformations.

We focus on enhancing the value creation, market competitiveness, market influence and risk control capacities in various business fields and have delivered a good result in maintaining stable operations while making progress. Several key points.

First, we maintained stable operating performance while making progress and further enhanced our resilience. As of the end of 2024, ICBC's total assets were nearly RMB49 trillion.

Customer loans exceeded RMB28 trillion, an increase of RMB2.3 trillion from the end of last year. Customer deposits were nearly RMB35 trillion, an increase of over RMB1.3 trillion from the end of the previous years, both maintaining a global lead.

The annual operating revenue was RMB786.1 billion, and the net profit was RMB366.9 billion both remaining at the forefront of the domestic industry. Net interest margin, 1.42%.

Cost-to-income ratio, 29.43%, maintaining a good cost and income efficiency. The capital adequacy ratio was 19.39%, an increase of 29 basis points from the beginning of this year as a year, ranking among the top global banks.

NPL ratio was 1.34% with provision coverage at 214.91%, laying a more solid foundation for our steady operation. Based on the good operational results, ICBC plan to increase -- in 2024, we increased the frequency and times of dividend payout.

And for the first time, we paid interim dividends, so two dividends per year and the interim dividends amount to RMB51.1 billion. After fulfilling the corporate governance procedures, we will arrange for a one more year-end dividend of RMB58.7 billion.

Second, we steadily grew assets and liabilities and further improved our service quality and efficiency. As of the end of 2024, the outstanding customer loans of ICBC increased by 8.8% year-on-year.

The investment balance increased by 20.1%, maintaining a steady and balanced pace. The scale of customer deposits increased by 3.9% year-on-year with stability further enhanced.

We focus on the five main areas to provide better financial services to give multifaceted, but connected and coordinated management system. We enhanced the policy implementation so as to enhance the service quality.

In terms of the technology finance, by the end of the 2024, the technology finance loans balance was more than RMB3 trillion. We maintained the market lead in this regard.

For sci-tech companies, the equity financing exceeded more than RMB70 billion. The green loan balance also maintained the domestic lead.

The underwriting scale of the green bonds maintains the market leader domestically. In terms of the inclusive finance, the balance was RMB2.9 trillion.

The customer growth exceeded 40%. In the pension finance, the AUM was nearly RMB5 trillion.

Customer above the age of 55 years old exceeded RMB200 million. And the pension fund account and the deposit amount maintained the market lead.

In terms of digital finance, the core industry loans maintained the market-leading position and the result was very significant. Third, we made steady progress in the five transformation and further released the reform momentum.

The five transformation is the pivot for ICBC to transform its growth driver efficiency and quality in the new macro background as well as a basic path for better coordinating high-quality development and high-level security. After a year of practice, we witnessed good results in transformation.

In terms of intelligent risk control, we adopt proactive prevention, intelligent control and comprehensive management, strengthen the overall coordination, improve the CRO mechanism, and enhance the empowerment of technologies such as artificial intelligence and risk control, thereby improving the overall risk management efficiency. By 2024, our asset quality remained stable with NPL down by two basis points for the whole year and the provision coverage up by 0.94 percentage points for the whole year, further enhancing our risk defense capacities.

Also, effective progress has also been made in risk management of key areas with the real estate NPL down by 38 basis points for the whole year. In terms of the modern business layout, we adapt to the requirements of Chinese modernization with its own characteristics, enhance support for key areas of economic and social development and serve the cultivation of quality productive force.

In areas such as manufacturing, strategic emerging industry and green industry, we provide special support for them and comprehensive service consisting of equity, loan, bond guarantee for sci-tech companies. We participated in the pilot program, widening the access for commercial banks financial investment subsidiaries and equity investment.

Also, the loans for specialized refined, differentiated and innovative companies, up over 54% for the whole year. In terms of the equity investment, ICBC has reached agreement of cooperation with enterprises in all 18 pilot cities across the country with the intended fund scale exceeding RMB100 billion.

Also, we have comprehensively paced up our business lines to enhance our service for private companies for their high-quality development and perfected the cross-border financial services. Participated in financial governance across the globe, served the higher quality opening up.

In terms of the digital growth momentum, we comprehensively implemented DICBC strategy, upgraded the digital service platform, further consolidated the two supporting systems of business and data technology, accelerated the digital and intelligent upgrade of financial services. As of the end of 2024, the MAU of our mobile banking application exceeded 200 million and also the MAU of ICBC e-Life application reached 19.3 million.

The annual transaction volume of the open banking exceeded RMB375 trillion. Several bank-wide OA system were upgraded, better empowering our employees in marketing and office efficiency.

At the same time, ICBC put into use the industry's first billion level large model Zhiyong into more than 20 business lines and 200 use cases, taking up the annual risk for more than 40,000 people. In terms of the diversified structure, we respond to the situation of falling interest rates and narrowing net interest margins by accelerating the adjustment of customers, business and segment structure, opening up new growth spaces.

On the customer side, we improved the structure of large, medium, small, micro and individual customer franchise with the proportion of micro customers up. Also the business product and asset liability structure have been further optimized, witnessing a decline in NIM narrowing from the previous years.

The share of retail plus inclusive loan increment has increased and the value contribution of financial market business has improved. At the same time, headquarters, domestic branches overseas institutions and comprehensive subsidiaries and other institutions have been more coordinated so as to enhance the synergy.

In terms of the ecological foundation, we persist in integrating our own business ecology into the overall society and economy. We continued the GBC+ program focusing on the changes in customer demand.

We follow the capital chain and strengthen the customer chain, service chain and the value chain. By 2024, we have expanded G-end and B-end customers by over 3.7 million, reached 170 million C-end customers.

The total number of individual customers is nearly 770 million. The total number of corporate customers is 13.35 million and the scale of mobile banking customers is nearly 590 million.

At the same time, we're organically integrating ESG and sustainability into the business development, further consolidating the ESG governance and continuously improving the ESG information disclosure. Looking ahead to 2025, the advantage and conditions for China's high-quality economic development continue to expand and the prospects of Chinese modernization became even more promising.

ICBC will unswervingly follow the path of financial development with Chinese characteristics, actively play the leading role of banks, seek progress while making stability and promote the five transformation more deeply. By focusing on creating a clean and healthy balance sheet, a balanced and sustainable P&L statement, we will promote the coordination of asset, capital and funds, deposit and loan income, strength, quality and scale.

We will better balance value creation, market position, risk control and capital constraints so as to ensure that the key operating indicators remain robust. With higher quality development, we will create stable and sustainable value returns for shareholders, both at home and abroad.

Thank you, Mr. Duan.

Next, we will enter into Q&A session. [Operator Instructions] First give the floor to Hong Kong.

Please this lady from the first row.

Thank you very much for giving me this opportunity. I'm from the UB Securities.

I would like to congratulate ICBC as the largest bank to achieve such a good result against such a complicated internal and external situations in 2024. Can you please introduce us about the business highlights last year?

And what is the outlook for the operating income and profit in '25? Can we still sustain a positive growth?

Thank you.

I will take this question. Thank you for your question.

This is my first time to attend earnings call as the President. Last time, when I was at the earnings call, I was representing a different bank, but I'm very happy today that I can represent the largest bank in this world.

Mr. Duan just summarized the highlights before.

So it makes it much easier for me to give you an introduction on the business highlights, but it is difficult to give an outlook into '25. So first, I will give you the business highlights to see if our highlights is consistent with that of analysts to see that '24 is the new year of the new journey for ICBC after its 40th anniversary.

And the situation is that we have to go through a low NIM situation, and it give us very heavy pressure. It's a short pass for us to be a leading bank in China.

We have to blaze a new trail of our own. So for the last year, we have been committed to the five transformations and some of them have already had fruits and manifest in our earnings, which was introduced by Mr.

Duan. Some of them are just taking its form and will have results later on.

And we will continue to have the manifestation in the future. So I will summarize in three aspects.

First, from the value creation, ICBC have already had a high ambition. We always aim high.

Last year, our net profit has achieved 0.5%. Our operating income is down by 0.5% and this decrease is also the smallest among peers.

So the NIM is only down by 1 bp. Considering the internal and external environment, our value creation is still robust.

We also share our dividends to our shareholders and investors. The A share and H share price has been up by 44% and 36% respectively.

The yield on dividend is 5.32% and 7.49% for A and for H share. And that is very remarkable for a listed company.

We have sustained a very positive returns to the investors. And our dividend distribution is also leading.

And second from the business development, our total asset has sustained at RMB48.8 trillion. And our total net capital was RMB4.99 trillion.

We also have made remarkable progress in IT and innovation. And facing a lacking credit, we are also playing a role to help ease that situation.

We are also clearing out our high-cost loans. This is an issue that a large bank have to deal with.

If you cannot manage your liability cost, then you will have to undertake many risks. You don't want that kind of business on your balance sheet and will also lower your quality and efficiency of the business.

The RMB deposit interest rate was 1.3%. And another aspect is that we have continued to consolidate our balance sheet.

Our NPL is down going by 1 bp. And as I just mentioned before, our net profit is growing.

So actually we didn't change any accounting subjects. We have sustained a real positive growth to give returns to the investors.

It showcases that we have a very resilient indicators. And I want to talk about changes now.

Talking about ICBC, we got this impression of being resilient. In this macro environment, resilience is a word that's been brought up very frequently.

That is a very important characteristics for a competitive bank. I think this comes from our scale and our business because we have a very large and strong balance sheet and we have a very strong customer base.

And our balance sheet is matchable to our country's balance sheet. We have good resources to those important industries.

We also are faced with cyclical pressure and we will continue to improve our whole product line and we will bring more momentum to the old and new business. And I talk a lot about whole product line.

And I understand that there may be doubts about whether we can do it, but ICBC as the largest bank in China, in the world, we are so committed to do what we have promised to. And we have covered 49 countries and regions.

We are the number one shareholder of the South Africa Standard Bank. So we have reached deep into the Africa zone.

We also have 11 overseas RMB clearing banks, which can help business in insurance, custodian business and et cetera. According to our estimations, those two business takes about 11% of the business that can help us to take more growth points.

If we can have two more points in our international business, if we can have two more points, our subsidiaries business then we can have 5% to 7% of income. In this regard, we can have a more diverse balance sheet to create income and values.

It can also support our growth. Last year, we also have balance sheet for each overseas banks to help improve the synergy between the branches, subsidiaries and the mother bank.

And now the pretax profitability is already a double-digit figure, about 11%. Another thing is that we will continue to start the real economy.

If our balance sheet is only a balance sheet of liabilities and assets, it's a heavy balance sheet. It's less flexible.

That's why ICBC has made efforts to build its financial services to build our second growth curve. We have a one-stop service for infrastructure, and we will recreate values.

Taking an example of serving the infrastructure, ICBC is the largest agency for the capital markets. We have help to link the invest, banking, securities and many other financial services.

We will try to make our balance sheet more flexible and try to expand to more overseas businesses. Another thing is to use world of AI and Fintech.

Fintech is one of our strongest advantage. I'm not a brag at the earnings call, but we have a very powerful model and a very powerful ICBC AI model that can empower our bank.

ICBC embraced the new rounds of revolution of IT revolution. I will give you several figures.

Last year, we had this multibillion level AI model, which covers dozens of scenarios, which can have this digital estimations of loans extension. We will try to cut our menu work by using machines, but I'm not going to disclose you the numbers.

We will continue to improve our quotation to the clients. With the help of AI and Fintech, we will create more values on our applications.

And so back to the beginning, can we sustain a positive growth in 2025? I cannot make a very forward-looking estimation because the market will create a lot of uncertainties.

But I want to make a promise here that we will be at least above the average. We will go with the market and achieve values as much as possible.

So for this year, we'll continue to sustain adhere to the five transformations, continue to manage risks and to give a better results to return to our investors. Thank you.

Thank you, Mr. Liu.

Now let's give the floor still to Hong Kong please.

Thank you, Senior Executive. Winnie Wu from Bank of America Securities.

My question is about asset quality. Last year, ICBC showed overall robust asset quality.

What industries and regions you have focused on, especially for the areas like personal business loans, consumption loans and credit cards? We see rising NPL.

What measures has ICBC have done? And what is your outlook in 2025's asset quality?

I will give the floor to Mr. Wang Jingwu in Beijing.

Thank you for your question. ICBC has always safeguarded asset quality as its lifeline.

In the past year, ICBC thoroughly implemented all decisions and arrangements made by CPC Central Committee for financial work, focusing on preventing risks, strengthening compliance and promoting development. The bank centered on the five transformation, empowered the high-quality development of investment and financing, took a firm approach to group-wide credit risk management throughout the process and maintain a good momentum of asset quality.

As at the end of 2024, the NPL ratio of the group was 1.34%, down two basis points from the end of last year. This demonstrated that high-quality risk control provides a strong security for ICBC.

In respect of asset qualities in industries, thanks to the strong measures taken, we handled the asset quality in key industries. In 2024, at the end of 2024, the average NPL ratio for corporate loans at domestic branches was 1.5%, down 27 basis points from the end of last year.

On the basis of providing strong support for basic industries, ICBC further increased its support for fostering and developing new quality productive forces. By offering differentiated policy guidance, we constantly improved the quality and efficiency of risk management.

Also, at the same time, we optimized the NPA disposal system and established a direct operation management mechanism by the head office for cross-region or large volume difficult NPL projects. We realized more accurate risk treatment and consistently improve the efficiency and effectiveness of NPL restructuring and innovative disposal.

With these efforts, NPL ratios in such industries such as manufacturing, production, supply of electricity, we have made serious results. In terms of real estate industry, ICBC adopted various measures in the four aspects of optimizing the increment, preventing the risks, reducing risk and conducting governance while resolutely implementing the urban real estate financing coordination.

ICBC guarded a strict path for the selection of newly assets and focused on building a decentralized, diversified and balanced real estate investment and financing structure and step up efforts in the exit from real estate enterprise with risks and the disposal of relevant projects. Loans to real estate industry showed an overall trend of better quality and optimized structure.

As at the end of 2024, the NPL ratio in industry stood at 4.99%, down 38 basis points from the end of last year. So we can see overall stability of the credit asset.

In respect of regional asset quality, asset quality in each region was basically stable. We strongly implemented coordinated regional development strategies and we focus on coordinated regional development strategy.

And also we have provided a differentiated personalized overseas institution credit risk management. Also we did a good job and served the high-quality Chinese enterprises going global and foreign companies investing in China so as to reach stability of the asset qualities and a coordinated development across different regions.

NPL ratios in the Yangtze River Delta, the Bohai Rim, Central China and Western China were better than the national average. In respect of the retail sales line, although the NPL ratio rose, it remained at a controllable level.

Affected by the changes in the external environment, ICBC NPL ratio in retail sales lines such as personal business loans, consumption loans and credit card growth, we have made, refined the all life cycle risk control and enhanced our credit management capacity. From the all year, the personal business loans, consumption loans and credit card loans, we saw some rises in NPLs, but this is in line with the general trend of the industry and the asset quality were under well control.

In terms of the personal business loans, judging from comparable peers, NPL ratio of ICBC was at a superior level. In terms of personal consumption loans, we continue to intensify forefront access and review and approval management of retail customers and kept stable asset qualities in newly issued loans.

In terms of credit cards, ICBC consistently refined the risk management system for credit business. We deepened the building of differentiated risk control models and independent risk control capacity.

Looking ahead to 2025, we will further implement a series of incremental policies focusing on five major areas of national commercial banks so as to support ICBC to walk in the right direction and have a right structure of business and make a coordination between different factors in credit development so as to lay a solid foundation for the 15th five-year plan. Also, according to the arrangements made for the five transformation, we will put the credit risk management into the high-quality development mechanism so as to enhance the efficiency and effectiveness of ERM mechanism, continue to mitigate precisely the risks in key areas, to build intelligent risk control firewalls so as to ensure all kinds of risk well under control.

KPIs of the credit asset maintained stable and risk in key areas were under control so as to not happen the systematical risks. In the current background, we see the release of the momentum and bonuses from the policies like external internal consumption, domestic demand.

We believe that the new quality productive force will continue to provide new momentum to Chinese high-quality economic development and Chinese economy will follow the right path, maintain stable while making progress. Against this macro backdrop, ICBC will continue to enhance our efficiency and effectiveness of serving real economy.

It's a real time for us to start again, make better balance and always fight the hard battle. We will coordinate development and safety, respond to the cyclical fluctuations and market changes more actively and more effectively.

We expect that the asset quality will maintain stable and well under control.

Next, I will ask for another question, please.

Thank you. I'm commercial paper from Hong Kong.

My question is for serving higher quality opening up. In 2024, what were the new advancements of ICBC's efforts to promote internationalized operation high-level opening up?

In recent years, new forms of foreign trade such as cross-border e-commerce have been rapidly developing. What financial service measures does ICBC have?

I will give the floor to Mr. Zhang Weiwu from Beijing.

Thank you for your attention paid to ICBC. In 2024, ICBC served China's high-level opening up, maintaining an overall trend of high-quality developments in internationalized operation.

I will talk about four points. First, global operations saw progress amid stability.

Currently, ICBC's service network covers 49 countries and regions globally. By shareholding in Standard Bank Group from South Africa, we covered indirectly 20 African countries, serving as RMB clearing banks in 11 countries and established 254 institutions in 31 countries that participate in the Belt and Road initiatives.

At the end of 2024, overseas institution maintained stable. Pretax profit exceeded US$3.9 billion, up 21.6% and the total asset of overseas institution exceeded US$430 billion, up by 4% year-on-year.

Second, ongoing efforts were made to serve foreign trade and foreign investment. To fulfill our Chunrong Action service commitments, we issued RMB4.8 trillion of financing.

We continue to enhance service capacity for going global Chinese founded enterprises and supported key overseas projects. Last year, we were named as the Best Domestic Bank for Belt and Road by Global Finance for its fourth consecutive times and were named the Small Yet Smart Best Practices in International Energy Corporation for the first time.

We established a list of major multinational corporate customers and key foreign foundry projects and create a full caliber product system through deepening domestic and overseas integration to accurately match customer needs. We accelerated to build the ICBC Global Pay system, released the Global Pay Africa service solution and covered 28 countries and regions of 56 currencies.

We continue to promote the single window financial services for customers' clearance and boosted trade facilitation, handling over US$6.4 billion for cross-border remittance in 2024. Third, we advanced the internationalization of RMB in a steady, prudent and solid way.

We continue the Qiushi Action providing cross-border RMB financing of more than RMB1.45 trillion to global market entities. The annual cross-border RMB business volume of group reached RMB9.8 trillion.

The business volume of RMB clearing banks exceeded RMB155 trillion, up 48% year-on-year. We acted in accordance with the guidance of State Council in facilitating foreign trade and domestic trade.

We took the lead in establishing the free trade account. Separate accounting unit headquarters in Shanghai, actually supports innovative development of cross-border RMB business in key areas such as Shanghai International Financial Center, Guangdong, Hong Kong, Macao, Bay Area and Hainan Free Trade Zone with a total of nearly 12,000 customers served.

We served over 700 overseas institutional investors from more than 60 countries and regions globally, participating in the China interbank bond market with a market coverage of over 60%. In 2024, we underwrote 39 panda bonds with a total issuance size of RMB101.5 billion, an increase of 66% and taking the market share of 55%.

Fourth, international cooperation was enhanced continuously. We fulfilled the responsibility of Chinese Chair of BRICS Business Council Chinese Chapter, and actively promoted the mechanisms that we initiated established such as BRBR, Belt and Road Bankers Roundtable and China Europe Business Council, CEBC.

BRBR mechanism now covers 183 members and observers in 75 countries and regions, and CEBC has covered 17 European countries and total members are around 100, including 44 Fortune 500 enterprises. As strategic or comprehensive partner of CIE service trade, we actively serve important international exhibitions and build a financial bridge to promote cooperation.

The second aspect is about ICBC financial service for new forms of foreign trade. This year, we launched Chunrong Action 2025, introducing a service system for new forms of foreign trade and aim to support new forms of foreign trade through financial innovation.

I will talk about three points. First, a cross-border financial service system with a wider customer base.

We have built a comprehensive online service system for cross-border e-commerce tailored to payment institutions, cross-border e-commerce platform, independent websites and other service providers. We provide foreign exchange settlement for 45 currencies and currency risk management for over 100 currencies.

Help the customer to meet their demand to be directly exchanged to RMB and helping them to reduce exchange loss and transaction costs. Since its inception, the cross-border e-commerce payment settlement has reached nearly RMB1 trillion and we have served over 100,000 small and micro-sized e-commerce enterprises.

Second, we have developed a comprehensive innovative product system, adapting to the new forms of characterized by the small amount, high frequency and massive volume, we rely on ICBC's advantage of a comprehensive global network, advanced technology system and group-wide integration to build ICBC e-commerce foreign trade service system that integrates account management, payment, settlement, financing, guarantee, cash management, exchange rate hedging and consulting. Third is to consolidate the security foundation for global settlement.

We adhere to the standard of independent, controllable, secure and efficient. We built an e-commerce payment settlement system and pioneered a service model of internal and external intelligent direct connection in the industry.

Based on big data and artificial intelligence, we have built an intelligent risk control system for cross-border e-commerce, providing enterprises with full process compliance solutions before, during and after the event so as to ensure transaction compliance. This is my answer.

Thank you.

Row number four, gentlemen, please.

Thank you. I'm with Guosen Securities.

Thank you for the opportunity. I have a question for capital and dividend distribution.

So one year after the rolling out of the new capital regulations, I want to know about if there are any change to the distribution dividend policies?

So I will invite Mr. Duan to answer your question.

Thank you. Thank you for the question from Beijing.

Capital is a lifeline for commercial bank's continuous operation and the foundation for serving the real economy and preventing various risks. ICBC have attached great importance to capital management.

We also value the improving of the efficiency of capital to make capital in the reasonable range and at a better range compared to international peers. Last year, at the end of last year, the Tier 1 capital adequacy ratio and the capital adequacy ratio has reached 15.36% and 19.39% respectively up by 19 bp and 29 bp from the beginning of the year.

Meanwhile, considering factors such as enhancing support for real economy and the rise in the group of globally domestically important banks, we also try to balance the indulgence replacement and exogenous replacement to create returns for our investors, shareholders and also to accumulate more indulgence capital for ourselves to develop. We will make a balance between demand and supply.

So in terms of indulgence replenishment, we treat profit accumulation as a primary source of capital ingestion. We maintain a reasonable profitability and enhance the long-term sustainability of capital sources.

In 2024, the bank replenished capital by more than RMB190 billion through profit retention. For exogenous replenishment, we continue to enrich and improve capital replenishment channels, coordinate the assurance of various capital instruments, optimize the capital structure and choose favorable opportunities to control capital cost.

In 2024, ICBC's net redemption of capital instruments amounted to RMB30 billion. The average interest payment rate of capital instruments decreased by 40 bp through rational replacement of existing instruments.

In terms of balance, we honestly implement the new capital regulations and achieve real-time calibration of risk parameters through upgrading measurement models, statistics system and data identification, thereby releasing capital space. We constantly optimize asset allocation and use tools like EVA.

At the same time, we continue to enhance capital utilization efficiency, strengthen capital constraints and increase value creation in the future to create a clean and healthy balance sheet and balanced, coordinated and sustainable income statement. In terms of the policy of dividend distribution, I want to say that ICBC is forever committed to service shareholders.

Since we went public in 2006, we continue to create cash dividends over RMB1.5 trillion. In the recent years, the distribution ratio maintained more than 30%.

We are the number one listed company of Asia that gives the most dividends to its shareholders. In 2024, we also rolled out for the first time the midterm dividend distribution, so we will have twice dividend distributions in a year.

That is the very first in the listed companies. For three consecutive years, the dividends per share exists RMB0.3.

Last year, calculated by average share price, the each share, and each share's returns on dividends achieved RMB5.32 and RMB7.32 respectively. So we have relatively high returns.

In the future, we'll continue to create more values and be more competitive in our markets and balancing the market position, risk control and capital constraint and strive to create long-term sustainable value returns for shareholders and a consistent policy for dividend distribution. Thank you.

Thank you, Mr. Duan.

And back to Beijing. Row number four, please.

I'm with the Xinhua Agency. I noticed that President Liu Jun published an article talking about no evolution and no price battles.

It also caused a lot of attention online and there was heated discussion around it. People were encouraged because now we are under great pressure of the low NIM, so how does ICBC foresee the performance of the NIM in this year?

And when is the turning point expected? The listed rate of deposit on liability side is already very low.

Is it expected that the LPR will continue to decrease?

I will ask SEVP, Mr. Yao to answer your question because I will embarrass myself to answer your question by myself.

Thank you. Thank you for your support and for your care.

About the LPR and NIM, I will give you an estimation. I believe the NIM will be going down and it will remain common in the industry, but the decline is expected to narrow compared to last year.

And first, from the perspective of macro policies, there is still considerable downward pressure on asset side yield levels. There were three LPR cuts in last year and the existing housing loans is also adjusted and the impact of that will manifest this year.

In this year, we will have more proactive monetary policies and physical policies, so they will raise higher requirements for the NIM. And second, from the perspective of banking operations, the effects of continuous cost control on liability side gradually become apparent.

In recent years, we are trying to implement a self-discipline initiative of cash flow clause for rate adjustment and continue to improve the sustainability of the banking industry services to the real economy. So in the second half of last year, the narrowing of NIM has already improved.

Last year, we proactively strengthened the adjustment of asset liability layout and low interest rate, optimize the allocation of major assets, though that's something that we want to talk about the no more press battles. And as you have very keenly noticed, the year-end NIM was 1.42%, down by 19 bp from the end of the previous year and 1 bp from the midyear.

So this is quite remarkable results in the peers among the peers. So we believe the decline is narrowing and the situation is turning up.

For this year, ICBC has already started on serving national strategies and meeting people's needs, balancing the operation and profitability, actively playing the lead role of a large bank in serving the real economy. And for this year, we will continue to align the macro policies, improve the supporting systems, highlight industrial and commercial main responsibilities and main business so as to keep NIM at a reasonable level.

First, we'll continue to optimize the allocation of major assets, continue to support the ultra-long-term special treasury bonds, local government special bonds. And second and also promoting the adjustments of durations to structure of assets.

And second make reasonable arrangements for credit placement to meet the real economy's demand and to delve into development of five priorities, supports the personal mortgage, consumer loans and credit card overdrafts will be enhanced. Third, continue to enhance cost management of asset liabilities.

Improve the pricing levels of loan risks and implement comprehensive liability cost management, avoid involution and proactively optimize maturity variety structure to adhere to achieve a win-win situation. Regarding the LPR trend, our basic judgment is that LPR will continue to decline in 2025.

The LPR is strongly determined by market supply and demand, quotations of commercial banks and monetary policies of Central Bank. The changes in LPR are necessary to balance three objects of financing cost of the real economy, profitabilities of banks, macro risk prevention control.

In recent year, the transmission mechanism of deposit and loan interest rate has become smoother. The policy rate cut drives LPR adjustments, reducing social financing costs, commercial banks will also timely adjust deposit listing risk, lower liability cost, stabilize interest margin, enhance the stability of serving real economy, to balance relationship between stability, growth and risk prevention.

I wonder if my answer -- if I answered your questions.

One more question from Beijing.

Good afternoon. Shanghai Securities News.

In 2024, ICBC total investment and financing volume continued to lead the market. Could you specify which fields does it go?

How has support for the good start of the real economy been this year? Also recently, domestic new technology achievements represented by DeepSeek have received high public attention.

What measures does ICBC have in supporting private enterprises developing technology, finance and fostering new quality higher productive forces? Last from ICBC's DICBC construction, what are the new breakthroughs in AI large model application and achievements and transformation?

Shanghai Securities News has put forward four questions in one. So I will invite Mr.

Zhang Shouchuan, who is in charge of these four areas.

Thank you for your question. In 2024, ICBC implemented the decisions and deployments of the CPC Central Committee and State Council coordinated the implementation of existing policies to stabilize the economy and the package of the incremental policies, served the real economy and promoted steady volume growth and a balanced pace of investment and financing.

At the end of 2024, ICBC's domestic full caliber investment and financing increased by RMB4.2 trillion with loans of domestic branches increased by RMB2.3 trillion. In terms of the five priorities, in terms of the technology finance, we continue to lead peers.

The balance of loans to strategic emerging industry and technology-based enterprise ranked first, green loans exceeded RMB6 trillion. Also we have issued the domestic and overseas ESG and green bonds.

In terms of the inclusive finance, we continue to promote coordination mechanism supporting the finance of SMEs and the growth of inclusive loans is significantly higher than the group average. Also we together with several stakeholders and the agriculture loans increased by nearly RMB800 billion.

Also we have maintained a high-speed growth in several key areas like digital finance. Second, we highlight the main responsibilities and main business, strengthened price size investment.

We enhanced financial services in fields such as major national strategies and construction of security capacity in key areas and equipment renewal and trading for all customer goods and other major projects. The medium and long-term corporate loans increased by RMB1.2 trillion.

And the balance of loans to manufacturing sector exceeded RMB4.4 trillion. And the medium and the growth are both leading the market.

We also supported the high-end intelligent and green development of manufacturing, both the number of amount of white lease projects of real estate financing lead peers. Third, we enhanced the momentum to promote the transformation of the credit structure.

We vigorously promoted the transformation of personal loan structure. As a result, personal loans increased by RMB300 billion from the beginning of the year and the growth rate of personal consumption loan exceeded 28%.

Since the beginning of this year, ICBC deeply implemented the instruction of the two third plenary session of 20 Central CPC Committee and the Central Economic Work Conference. In the first two months, we continuously intensified support and we issued over RMB840 billion new loans, a year-on-year increase.

In the next stage, we will continue to implement the Central Spirit and take the status quo of ICBC into consideration, maintain a progressive and stable pace of loan granting and bond investment so as to enhance our adaptability, competitiveness and inclusiveness of our financial services. To your point of support private enterprises, we implemented the CPC General Secretary, Xi Jinping's instruction.

We unsparingly support the private enterprises, mainly reflected in three areas. First, financing support more powerful.

At the end of 2024, the total financing amount of ICBC for the nonpublic economy exceeded RMB7.5 trillion, annual growth of over RMB1 trillion and the interest rate was lower 0.14%. And the growth rate of unsecured loans for private enterprises was nearly 27%, significantly higher than the average growth of all kinds of loans.

98% of companies with loan accounts were private companies. We plan to provide not less than RMB6 trillion loan in financing and investment for private enterprises in the next three years.

Second, innovative service are more diversified. In 2024, we underwrote bonds of over RMB60 billion for private enterprises and invested over RMB20 billion in private enterprises through direct equity investment and debt-to-equity swaps.

80% of them are private enterprises. We have done a matchmaking platform, inviting private enterprises to join this mechanism and get the intent of cooperation of more than 200,000.

Third, service security is more comprehensive. On March 12, ICBC and All-China Federation of Industry & Commerce jointly held the promotion conference of assist enterprises with finance, improve the quality towards innovation to empower the high-quality development of private enterprises, proposing a goal of providing RMB6 trillion loans financing over three years.

Next is about support for the technology finance and new quality productive force. We follow the guidance of CPC General Secretary, focusing more financial resources into new quality productive force.

There are also three aspects. First, resource supply was further increased.

We focus on areas such as the loans, debt and other kinds of projects. The balance of loans to strategic emerging industries at the end of 2024 exceeded RMB3.1 trillion.

And also we vigorously promoted the AIC equity investment pilot and balance of equity investment in the primary market for technology enterprises exceeded RMB70 billion. Second, the service mechanism was further upgraded.

The head office established a technology finance committee to strengthen the overall planning and coordination of technology finance. In 2024, 22 regional technology finance centers were set up nationwide.

To help the technology SMEs and SRDI enterprises, we deeply carried out the Chunmiao and Qiushi special actions to enhance full life cycle services for customers. Third, service innovation was accelerated.

We coordinated the full life cycle and financial service system consisting of equity loans, bonds and issuance, focusing on early-stage investment, small investment, long-term investment and investment in hard technology. We have innovated three types of special financing scenarios like fund credit loan, fund investment loan and technology stock loan.

Over 200 projects were launched in half a year covering key industries such as integrated circuits. We also vigorously enhanced digitalization intelligence by continuously iterating the inclusive rating credit model for technology-based enterprises to give a full life cycle monitoring system and promoting automatic access for technology-based enterprises.

Next step, we will step up our effort to cultivate new quality productive force. The last question is about progress in DICBC.

ICBC is assisting taking technology innovation as an important support to promote the high-quality development of itself. We initiated the Artificial Intelligence Plus initiative.

Mr. Liu also mentioned this point.

Our auto robot has replaced more than 42,000 employees. And also among our peers, ICBC is the first to complete the local deployment of the largest open source large model DeepSeek and integrate into our own ICBC ChatGPT system called Gong Xiao Hui.

Also in this point, I would like to make three points. First, we have built an enterprise-level financial large model technology.

Algorithm, computation power and data are the core technology elements and we are the first to take the leading large models in this regard. In terms of the algorithm, we have established a financial large model algorithm metrics with multilayered architecture and deployed a collaborative application of metrics over 10 large models and more than 2,000 traditional models.

In terms of the computational power, we have built the first autonomous controllable and high-capacity AI computation power cloud among peers. Also in terms of data, we have established a general industry enterprise field task five years knowledge architecture and levered the advantage of rich financial data accumulation to innovatively create intelligent full life cycle pipeline for collection, cleansing and management.

And also we have already deployed an AI solution in the financial industry level. From the perspective of the financial industry, we draw lessons from our business experience.

We took the initial intelligent hub as a foundation to flexibly assemble the core capacibilities such as knowledge retrieval, data analysis, document drafting and intelligent search. We support many use cases to be put into use.

And also we share this platform with domestic peers. Next, ICBC will further enhance the core technological capacities of Gong Xiao Hui to promote the quality development, coverage expansion and volume increase of AI applications empowering the bank's overall business quality and efficiency improvement.

Thank you, Mr. Zhang.

Ladies and gentlemen, friends from the press, analysts, due to the time limit now our Q&A session will come to an end. Thanks for the professional answers from our senior executives and thank you all for your participation.

In the next step, we will organize other IR activities and exchanges. We welcome you to continue to participate and pay your attention to.

Should you have any further inquiry, please feel free to contact our IR and PR team, which maintain close relation with you as always. We hope that you continue to support ICBC and we will do our job better so as to serve the high-quality development of the society and provide long-term and sustainable return for our shareholders.

Now the 2024 Annual Results announcement of ICBC has concluded. Happy weekend.