Industrial and Commercial Bank of China Limited

I'm Wang Liancheng, GM of Corporate Strategy and IR Department. Today, Board Secretary Guan Xuejing and other management personnel from the departments and subsidiaries are here to communicate with you. Our directors are also online. They are Feng Lidong, Cao Liquan, Yang Dingbang, and Yang Shaoxing. Our Q3 results have been released online. We can see that the Q3 results continue the robust performance. Core indicators are stable and robust. The net income totaled $269.9 billion, up by 0.8%. ROA was 0.86%. ROE was 10.56%, leading the peers. Net interest margin was 1.67%. The decrease was the same as the Q2 in the trajectory, the same with the main peers. NPR ratio was 1.36%, slightly lower compared with the beginning. And the CSRS difference continued to be negative for 14 consecutive quarters as the quality improved further. capital adequacy ratio was 18% more and provision coverage ratio was over 200%. The deposit and loan increased robustly. The loans increased more than 2.5 trillion. Investments improved by more than 850 billion. And the deposit increased over $4 trillion. Savings, corporate, and institutional loans increase all the peers. In the government, business, and customer GBC Plus customer ecology and DICBC, the digital ecology continues to optimize. Personal customers increased to 736 million. Corporate customers over 1.18 million. All kinds of customer base continue to solidify, and the active customers of mobile banking exceeded 200 million with ever-growing innovation. This is a brief introduction of our three Q3 results. Now we enter the Q&A session. Please identify yourself before raising questions. Thank you. The first question, please.

Richard Xu from Morgan Stanley. Thank you for the opportunity to raise questions.

In the future, for my question is the outlook for the credit growth in the future. This year we have seen the rapid growth of credit growth. What's your plan for the credit growth in the future? And also we heard the PBOC had some meeting. How do you take on that about the futures trajectory? And also we see some progress in diffusing debt for LGFVs from the platforms or the non-standard business. I think we have more momentum. Is there any new demand in this regard? in Q4 or next year? What's the contribution of it to the credit growth? How do you evaluate this issue? Thank you. I'll invite Mr. Zhou from the asset and liability department to answer your question. Thank you very much. For the credit growth, I would like to respond as follows. Since this year, we adhere to the strategy of the central government and we continue our commercial sustainable principle. We grasp the market need in the resumption of the real economy and the aggregate volume increased stably. For the first Q3 quarters, the increment was 2.49 trillion RMB. The increment and the year-on-year growth recorded historical high. Contribution comes from the major projects and also the grain innovation, rural area service, private sectors, and also the consumption promotion areas are the major momentum and in the regional lending especially in the major strategic regions the proportion of the in the growth and the outstanding are both leading other regions in the mix of the loan book the mid and long term loans proportion was 63.6% of the total and increased by over 20% year on year. The loans growth also account for more proportion, increasing by four percentage point. The inclusive finance loans and other loans are the major momentum. The bank notes and the discount increase, decrease For the whole process, the landing would be focused on Q1. Its proportion is 34% of the total increment. And then the Q2 and Q3 will see a slower pace. But that's the increase still totaled 200 billion RMB. For the end of this year, we will continue to maintain a year-on-year growth. Next year, and also after the landing for the consumption of capital, just now Mr. Wang introduced the Q3 results and also the capital adequacy ratio. The adequacy ratio was over 18%. In the MIPS allocation, the upgrading of MIPS, we are taking active measures. The capital adequacy level lead the peers domestically and also internationally. We are in the first class among international peers. Despite the high growth of assets, our capital adequacy is still robust and balanced. Next year, for the credit extension, every year in Q4, ICBC starts to make plans for the market connection and the credit extension. For the next year, we have seen the arrangements from relevant departments and for the reserve of the loans, we are making plans. For next year, we will hold meetings about the specific targets. ICBC will adhere to the requirements of the macroeconomic requirements and also make due allocation. for the market opportunities and resource preparation, we will make our ample support for the credit extension. On the one hand, in the future, we will have an important meeting in the future in the economic operation, according to the we will respond to the requirement. Second, I've issued a five-year development plan. Under such framework, we will properly manage the growth and effects of the loan extension. We have seen some positive growth quarter on quarter, so we are confident about the extension of the credit and the upgrading of the mix. ICBC has been emphasizing the prioritized position of retailing loans and its proportion in a whole loan book. In the future, I think we can foresee some positive effect. Thank you. I'll give the floor to Mr. Jones from Credit and Investment Management Department. I'll make some supplement. After the credit plan, the debt plans, In this region, we see the external liquidation is improved. For our risk prevention, it plays a positive role. Second, for the demand of credit in this area, we will follow the law-based principle in cash flow. We will make our assessment so as to ensure that they are sustainable. The second question. Thank you for the opportunity to raise the question. I wanted to ask about name. The name for the first three quarters or 1.67. the single Q3 NIM was lower than Q2 and was contracted to a large extent. If we exclude the impact of LPR and suppose LPR will remain unchanged in the future, when can we see NIM start to be stable Another question is about asset quality. What's the NPR ratio of developers' loans in Q3? And what's the balance of the impairment for developer loans and the provision level? The first question will be answered by Mr. Zhou, General Manager of Access and Liability Department. When can we expect to see NIM can be stable. As to your question about NIM, for Q3, we have seen ICBC's NIM was 1.67%. Maybe later you can see for the entire banking sector, all of us face pressure of continuous contraction of NIM. It's mainly because of the lowering of LPR and also the adjustment of the existing mortgage loan interest rate. So that's the major pressure for NIM against this backdrop. The banks can also take multiple measures to deal with this pressure. For example, we have... optimized and strengthened more refinery internal management so as to optimize our performance in NIM. So for the result of adjustment for mortgage, retail mortgage, interest rate and LPR lowering, we have done our best. And you can see some marginal changes of some positive signs, for example, for the deposit cost. For the newly deposit cost, it was lowered by one BIP. And for the newly savings, the deposit cost was also lowered by around 13 BIP from our asset, particularly from the loans. have continued to face pressure and it was 30 bps lower than that of the same period last year for the Q3 of last year. However, along with adjustment of the mortgage interest rate level, we have seen some changes of the prepayment of mortgages. For example, recently we have noticed some positive changes after the adjustment of mortgage rate. And even after adjustment of mortgage rate, the current rate is still above 4%. So it's also a good contribution for us to stabilize our name. In the first three quarters, the medium and long-term loans all account for over 60 to 70% of the total loans. The pricing of the medium and the long-term loans is also conducive for us in the future. From our micro perspective, Q3, the deposit rate, deposit cost and loan yield through our internal management improvement, have some positive signs and good momentum to go better. This is not only our way and the direction for us to go first to achieve. After twice of deposit rate lowering from the bank, we have seen the loss of our new deposit cost. And this momentum will continue to be played out in next year. And now the banking sector has formulated a kind of activism of self-disciplinary and to lower our deposit cost. We will also continue to discuss with our main peers and this is a good opportunity to continue to guide down the deposit cost.