Bank of China Limited

Dear investors, analysts, friends from the media, good evening. Welcome to the Bank of China 2024 Annual Results Release Conference. I'm Zhuo Chengwen, Secretary of the Board of Directors of the Bank of China. Today's conference will be co-hosted by me and Liz Yuke, Spokesperson of our bank. This conference will be broadcast live simultaneously, and so I want to extend welcome to all the friends who are also joining us online. First of all, I'd like to introduce the leaders. We have with us Vice Chairman and President of Bank of China, Mr. Zhang Hui. Mr. Zhang Xiaodong, Vice President of our bank. Mr. Cai Zhao, Vice President of BOC. And Vice President Wu Jian. Besides, the independent director representative of our bank, Ms. Liu Xiaolei, is also joining us online. Our annual results for 2024 were already announced today. The presentation can be downloaded from our official website or reviewed at the bottom of this live broadcast page. All financial figures presented today have been prepared using IFRS unless otherwise noted. Today, we have two parts, including the result release introduction and the Q&A session. First of all, let's give the floor to President Zhang Hui to introduce the annual results. Dear investors, analysts, and friends from media, good evening. A big welcome to all of you to our 2024 Annual Results Release Conference, and thank you so much for your long-term trust, care, and support to the Bank of China. Now, please allow me to briefly introduce you the operation of our bank in 2024 and the outlook in 2025. Afterwards, I would like to have a Q&A session together with our management with Sophie. In 2024, the Bank of China resolutely implemented the decision-making plan of CPC Central Committee, so we implemented a political and people-oriented nature of financial work and gave full play to our advantages globalization integration and seized opportunities domestically and overseas and promoted overall operation of various work and achieved good results. We fully support high quality economic and social development and steady growth of assets and ability. Total assets exceeded about 35 trillion RMB and the total ability reached 32 trillion RMB up 8.11% and 8.20% respectively from the end of last year. Domestic RMB loans have achieved total growth, optimized structure, balanced and reasonable asset portfolio, and abundant liquidity. We actively promoted improvement quality and efficiency with steady increase in our financial benefits. Our operating income reached about 632.8 billion RMB representing the year-on-year growth of 1.38% after tax profit amounted to about 252.7 billion RMB and year-on-year increase of 2.58%. NIM was about 1.4% while the ROA was 0.75% and ROE was 9.5% while cost-to-income ratio was 28.77%. All the key indicators were within the reasonable range. We continuously laid a very solid foundation for risk prevention and control and effectively improved comprehensive risk management asset quality remained stable while NPL rate was about 1.25% down by 0.002% and the risk offsetting capability continued to improve with the provincial coverage ratio rising to 200.6% and the capital adequacy ratio reached 18.76%. We actively responded to the shareholders' demand for returns, and the shareholders' earnings were considerable. In 2024, the bank implemented the entering dividend for the first time in the share prices of Asia and Asia. rose by 55.24% and 42.97% respectively after regaining the right. Specifically, over the past year, our bank has focused on our main business and made solid progress in high-quality development in serving the construction of a strong financial country and made steady progress in all aspects. Firstly, the ability of financial services continues to grow and the quality of efficiency of services to the real economy input. We support the development of new productive forces in Aiwei's local conditions and do a good job in five priorities. We provided about 1.91 trillion RMB in credit support to about 102,900 technology-based enterprises. During the 14th five-year plan period, comprehensive services totaled over 710 billion RMB, serving over 70% of China's UICOM companies, and the balance of domestic green credit grew 31.03% investment on the rating scale of Green Bond remained the market leader and a number of innovative green financial products were launched. The balance of inclusive loans and the number of households for small and micro enterprise increased by 29.63% and 39.62% serving more than 40,000 credit customers. and for national and provincial specialized innovative small and medium-sized enterprises providing a total loan of more than $600 billion. And the bank has provided individual pension fund account service to over 10 million customers. second and third in the market in terms of the number of individual accounts of corporate annuities and pension trust funds respectively with a 23.44% increase and secondly the comprehensive competitiveness of the market continues to increase and the quality of high quality development is even better our balance of domestic R&B companies exceed 12 trillion RMB with loans for strategic emerging industries manufacturing and private enterprise increasing by 26.31%, 16.6% and 18.72%. We supported our customers in direct financing. Our bond sales volume was among the highest in interbank bond market. Cooperation among financial institutions have been further deepened with a number of cross-border RMB interbank transactions leading among our peers. International settlement volume of domestic institutions and across over R&B settlement volume increased by 20.51%, 26.27%. Cross-border e-commerce settlement volume increased by 39.82%. Market share personal housing loans and non-housing consumer loans have steadily increased and total number of individual customers was nearly 540 million with a number of high-end customers and financial assets growing steadily. The financial market has consolidated its business advantage and has initially participated in market innovations such as RMB to MOP exchange in the China Foreign Exchange Trading Center and the RMB foreign exchange trading in the free trade zone. The size of asset under custody exceeded 20 trillion RMB and the growth in the size of key products such as bank wealth management custody and insurance fund custody ranked first among May appears the integrated operation segment further optimized cooperation mechanism between the banking and corporate departments within over 400 linkage projects providing integrated financing for customers of nearly 150 billion RMB. We have also consolidated the distinctive advantages and achieved remarkable results in opening up to the world with a high level of services. We have continuously improved global layout and covered 64 countries and regions. Mechanism for the regionalization and intensification of overseas institutions has been continuously improved. BOCHK's leading role in Southeast Asian institutions and its jurisdiction continuously strengthened, BOC Europe's regional management capability has been continuously strengthened, and the coordination linkage mechanism among Latin American, South Asian, and South Pacific region institutions has seen steady progress. Value-creating roles of globalization has been a great highlight, and the pre-tax profit of foreign commercial banks increased by 40.75% year-on-year in 2024, and the contribution to the group's has also increased. The key business continued to develop with more than 1,200 corporate credit projects followed up in the countries that have jointly built the BRR. an initiative and credit support of more than US$372 billion. Fourth, comprehensive risk management was continuously improved, and the Foundation for Safe and Sound Development was continuously laid. We further promote construction of comprehensive risk management system, further improve the closed-loop management mechanism for risk assessment, investigation, and emergency response to sound and risky events. The Effectiveness Evaluation System for Comprehensive Risk Management has steadily pushed forward implementation of the new capital regulation one-line-one policy formulated. The risk strategies of various overseas institutions continues to improve the comprehensive risk management capabilities. We have also effectively identified the risk characteristics of off-balance sheet business and stress and unbalance sheet and off balance sheet integrated risk and also we have further increased the digital finance and top level design under stress and the indicators of the digital finance and we have also improved the full location and the three centers and landscape and also increased the landscapes that covering the world and also to enhance our service capability to serve the customers and we have witnessed about 12.57 percent of domestic active users and also for the newly integrated remote verification and cash operation and also the mobile Office, as well as the enterprise-level robot modules covered about 3,000 modules, and we have also been able to enable the businesses with technology. In 2025, the Bank will take Xi Jinping's thoughts on socialism with transgressions for New Iran as a guide and serve the real economy as its fundamental purposes and take risk prevention and control. as our everlasting thing and take consolidating expanding advantage globalization and enhancing our global distribution as the main task adhering to this principle of seeking progress while maintaining stability and promoting stability with progress and uphold integrating innovation and establish first and the integrated system and cooperate with the system and firmly stick to the road of financial development with China, Chinese characteristics and create a new situation of high quality development in the construction of building a powerful financial service country. First, focus on customer demand, optimize financial supply, and build a diversified and professional financial service system. Corporate finance accelerated the increase in quality, helped foster and expand new quality productivity, and continuously improve the quality efficiency of financial services to the real economy. focusing on MAU and AUM, personal finance, continued to push forward the six key projects of payroll, agency, third-party payment, wealth management, mobile banking, cross-border business, and social security card, and devoted all efforts to build the six basic systems of management, users' rights and interests, marketing, operation, and risk. The financial market business accelerated the enrichment and improvement of the product system, stressed the marketing of customers such as financial factor, market number, bank and insurance businesses. The second, is that we are going to focus on the national strategy to the traditional advantage of global distribution and international competitiveness, focus on key areas of the AI to improve the quality and effectiveness of Chinese-funded going out and also the foreign-funded ring-in services and we will consolidate and expand our traditional business leadership and the banking leadership in the FTZ and create cross-border RMB integration services to support overseas institutional investors participating in China's factor market. The bank will enhance distribution, regional management, and market perspectives of overseas institutions, consolidate the advantage of Hong Kong and Macau branch, and enhance our capabilities of regional headquarters such as BOC Europe and promote overseas institutions to strengthen their advantage and create their own features. Thirdly, focus on financial security and strengthen extreme thinking and firmly hold the bottom line that no system risk will occur. Adhere to the principle of early identification, early warning, early exposure and disposal. and improve the comprehensive risk management capability with full coverage, process, and lifecycle. Firmly establish bottom-line thinking and extreme thinking, carefully deal with external risks, prevent and resolve risks in key areas, strengthen internal control and compliance management. Fourthly, focus on strengthening the foundation, leading a solid foundation for development, improving the quality and efficiency. of our science and technology operation. We will speed up the construction of an integrated operation and maintenance system and disaster recovery and prepare the system to enhance our ability to support science and technology, establish digital transformation in our system, and increase digital support for key needs such as long-term customer operation and public chain marketing, strengthen the centralized management of the group's data, and increase the use of data mining.

The year 2025 will be the final year of the 14th five-year plan. The bank will continue to focus on its main business, steady operation, risk prevention and control, continuously improve its operation efficiency and value creation ability, and repay the trust and support of consumers, investors in all sectors of the society with better performance. Thank you. Well, thank you President Zhang for your presentation. Now we will start our Q&A to ensure everyone has the opportunity to ask. So please make sure you ask only one question at a time and please identify yourself. So now, for investor analysis, now we have four questions. The gentleman in the front row, please. Thank you. I am Ma Kunpeng, the chief analyst. list of CITIC investment banking. My question is, BOC still achieved good results under various external pressure challenges last year. So now facing the current low interest environment, would you like the management to introduce BOC's operation and management thinking and major countermeasures in 2025? Thank you, Mr. Ma, for your question. And now, please, President Zhang Hui will answer your question. Thank you very much for your recognition and affirmation. Indeed, in the year 2024 we're now facing a low interest environment with the relevant pressures and BOC did a very good job in the five articles in finance fully supporting the high quality development of economy and society giving full play to our advantages and characteristics and effectively grasp market opportunities and promote cost reduction efficiency enhancement and we have a very very satisfactory results in the year 2024. So now I would like to elaborate on the following four aspects in terms of our experience. First, we actively responded to the interest rate cut environment, and we adhered to the coordinated development of volume and price, and we strive to stabilize the basic net interest income and actually in 2024 our name was 1.4% which is expected to be the same as that of the major peers from a long-term perspective during the recent round of interest rate downturns the gap between the bank's name and its major peers has narrowed significantly and the gap narrowed from about 40 bps in 2018 to almost the same as that of the major peers at present. The second is to focus on customers' financial needs, enhance their comprehensive service capabilities and expand net interest income sources on the one hand, we actively implement the policy requirements and actively reducing or waiving some of the service industries and on the other hand we will give full play to the advantages of overseas brokerage businesses and enhance the contribution of overseas handling And actually, the group's net handling fee income narrowing on a quarterly basis in the second half of 2024. And certainly, we adhere to the principle of keeping expenditure within the limits of revenues, continuously strengthen refunded management, and steadily push forward cost reduction efficiency improvement. And the cost income break show for the whole year was 28.77%, which was kept at a very low level. and actually we have our MPAL rate 1.25% and down by 0.02 percentage points and the credit cost 0.58% almost the same with last year and we have the provision coverage ratio 200.60% up by 8.94 percentage points Now looking ahead into 2025, there will be both pressures and opportunities for our further business development. On the pressure side, under the background that the growth of the monetary and the credit has changed from supply constraint to demand constraint, the market competition will intensify and the continuous downward adjustment of LPR will have repricing impact on the asset return. In terms of opportunities, the supporting conditions and the basic trends for the long-term sound operation and domestic economy have not changed, and there is a broad space for demand upgrading, structural optimization, and energy conversion. In the next stage, the Bank will continue to give top priority to strengthening the management of the net interest margin in all work under the low-interest environment, adhere to and carry forward the effective practices in the previous stage, and reasonably control the change range of net interest margin and actually in terms of assets the bank maintains a steady growth in asset size and continues to optimize the asset structure and we will continue to give top priority to This will continue what we did before. We will reasonably control the change of name and to adapt into the market changes. We will change our policy structures and our operation models and we will do a better job in this regard so that we can improve our operation quality. So we will do our best. in the following aspects. First, in terms of assets, we will maintain a steady growth in our size and continuously optimize the asset structure. We will take various measures to further increase the proportion of high-yield assets such as loans and bonds, and we will Seize the market opportunities and maintain a steady and healthy development of credit business. We will implement the more proactive fiscal policy, increase investment in government bonds and local bonds, and moderately increase investment in credit bonds. We will seize the market opportunity of relatively high foreign interest rates, a reasonable increase the investment in foreign currency bonds and moderately lengthen the bond duration effectively control the low-income assets such as bills and interbank assets In terms of liabilities secondly efforts would be made to enhance the competitiveness of the deposit market and reduce the cost of comprehensive liabilities and we will optimize the deposit expansion model we will improve the deposit pooling and cold management mechanism focus on the key products such as payroll and fast payment and grab low-cost settlement funds and source funds we will increase the allocation of resources and promote the continuous improvement of deposit base thirdly on the customer side we will continue to promote the transformation of the customer structure and consolidate the customer base we will adhered to the principle of two households and two bases, and we will focus on improving the customer base, raising the pricing level, and promoting the transformation and development of its medium-sized credit customer base, and increase the expansion of small and micro enterprises and individual customer bases. The fourth is in revenue. We will focus on key products and services in optimizing the revenue structure. We will focus on expanding key products, focus on customers' demands for multiple level financial services. We will consolidate the advantages of a traditional business such as Also, we will do a good job in pressure reduction and control of key handling fee expense items and strive to improve the leverage efficiency of relevant expenses to the businesses. We will also try to minimize our cost and also waste. In terms of regional Restrategizing, we will continue to consolidate our strengths and we will increase our global competence and we'll continue our global strategies and deploy new business models and different presence throughout the globe and we'll step up our investment in developing regional businesses and we will start to expand to different types of businesses in the overseas markets. so with these measures we will optimize our overall global business layout at the same time We will improve the global business layout, and according to regional features and resource endowments, we will expand the field of personal finance, financial markets, other financial institutions, asset custody, and enrich the business types. In terms of risks, we will strengthen comprehensive risk management to ensure the asset quality is stable within a reasonable range. We will adhere to the principle of early identification, early warning, early exposure, and early disposal to improve the comprehensive risk management capability with full coverage, full process, and full lifecycle and ensure the NPR ratio remains at a low level among major peers. It will increase incentives, constraints, and resource allocation, maximize cash receipt, and pay equal attention to quality and quantity to improve the effectiveness of non-performing loans. We will adhere to four major principles. We will enhance our full coverage, full process and whole life cycle risk management capacity, making sure our NPL remains at a relatively lower level among peers. We will mobilize more resources and leverage those resources to increase our efficiency and effectiveness of daily operations. In terms of personnel development, we will try to maximize the potentials of our talents making sure we have the best people the right people to do the right things and we will fully discharge our responsibilities and perform our duties and we will invest more in our human resource development and particularly in those specialized areas and we need to try to provide more developed training programs for our talents. So the year 2025 is the final year for the 45-year plan and we are looking forward to doing a good job in all the above-mentioned areas and aspects and we will continue to enhance and implement our ability to implement the policies and directions from central government so that we can provide better financial services and products to our customers and create more values to the society and making further contribution to our social development. Thank you. Thank you, President Zhang, for your response. Now, next question. Well, thank you, President Zhang, and other senior management. I am Ni Jun, chief analyst of Guangfa Securities Banking. Could you please elaborate on the management about BOC's credit extension strategy in 2025, especially what are the main growth opportunities for public credit extension? Thank you, Mr. Wang. and Vice President Zhang Xiaodong will answer the question. In 2025, BOC will continue to provide strong financial support to serve the global economy and improve the quality and effectiveness of credit business. On the whole, it is expected that the domestic R&B loan growth will remain steady and increase throughout the year. and among the new loans, corporate loans are still expected to dominate and efforts will be made to improve the contribution of consumer loans. We will step up credit support in key areas such as five major articles, two innovations, two innovations in private sectors to achieve a higher than average loan growth rate. We will support real estate companies in their reasonable financing needs. increased the expansion of second-hand housing loans and achieved a positive growth in personal housing loans. We will seize the opportunity of this special action to boost consumption and realize the increase in non-housing consumption loans year-on-year. You're also concerned about the bank's public credit facilities. In this year's two sessions, the government will report the card of GDP growth about 5% was clearly proposed, and a more active fiscal policy and a moderately reduced monetary policy will be implemented, and BOC will actively coordinate and line up with the above-mentioned policies and proposals, and we will stick to the principles for front-loading and pre-session loading, and we will further increase credit extension around key areas and weak links in corporate loans, and strive to achieve a year-on-year increase in domestic RMB corporate loans. especially in the following areas. First, in terms of key areas on the basis of consolidating the last industries such as infrastructure and transportation, credit resources are inclined to new quality productivity and other related key areas. 2025 will be the end of the 14th Five-Year Plan, the completion of 102 major construction projects. The two innovations and the two ones will be accelerated. and we will expect that demand potential for infrastructure-related investment will be released at an accelerated pace. The bank will strengthen our interface with local governments, seize business opportunities in infrastructure. We will follow up on new government investment projects launched after the relief of local debt pressure, and we focus on the project reserves of 16 key branches with large scale and volume. At the same time, we will focus on technology and finance, strategic emerging industries and green developments and actively serve the transformation and upgrading of traditional industries and development of expansion of emerging industries and prospective layout of further industries to help build a modern industrial system. Second, we will focus on key customers and manage customers in different levels and categories and increase the expansion of medium-sized customers. By the end of 2024, the number of medium-sized credit customers of the bank will had nearly doubled in the past two years, with loan growth rate higher than the average growth rate of the corporate loans, and the contribution was outstanding. In 2025, BOC will give top priority to the transformation and development of medium-sized credit customers by focusing on measures such as expansion and marketing of customers in cures, such as technology and finance, key private enterprises in manufacturing, and we will increase number of medium-sized credit customers.

said in terms of key areas will continue to enhance the comprehensive service capability and market competitiveness. By focusing on the national strategic orientation and regional functional positioning in Beijing, Tianjin, Hebei, Yangtze River Delta, Guangdong, Hong Kong, and Macau Greater Bay Area and other power source regions, we will focus on scientific and technological innovation advance manufacturing and green industries to increase our support for regions with potential cultivation such as the central region. We will tap into structural opportunities such as infrastructure upgrading, county transformation and development for regions such as the West and the North. We will grasp the industries with local characteristics according to local conditions. Thank you. Thank you so much, Vice President Zhang Xiaodong. Today, many friends are joining from the H-Share investors also attending the meeting online. The next question will be given to the online participants. Please ask the conference assistant for access. Please identify yourself before you start asking questions. Thank you so much. I'm Xu Ran from Morgan Stanley. My question is related to the global layout. As we have noticed that in 2025, the global political and economic situation is more complicated and changing. Facing these challenges and opportunities, what are the new development directions and measures of BOC? Okay, thank you so much and let's give the floor to Vice President Tsai. Thank you so much for your question and thank you so much for your attention to the globalization of our bank. I'd like to respond in the following three aspects. First, globalization has always been an important part of our operation and also it's our differentiated advantage compared with our peers. Over the past one year, in 2024, the financial efficiency of our overseas institutions grew steadily the contribution to the group further enhanced the distinctive advantage of globalization was fully reflected in our financial business dimension from the size of assets the total overseas asset reached about 1.15 trillion US dollars accounting for about 22.48% an increase of 0.17% compared with the end of last year. In terms of financial returns, revenues, the overseas institutions has about 11.106 billion in dollars of pre-tax profit, contributing over 26.78% to the group. up by 4.08% year-on-year. Faced with complicated external environment, BOC has always adhered to forward-looking analysis, anticipation adjusted our business strategy in a timely manner and achieved continuous and stable operation and institutional and personnel safety. Secondly, we are faced with both opportunities and challenges in globalization. On the one hand, external challenges have deepened as global protectionism intensifies and a lot of uncertainties remain in geopolitics. The stability of the supply chain and the industrial chain have been greatly influenced. On the other hand, we have also some favorable factors in operating environment. We are full confident in our future development because firstly, the trend of going global by Chinese companies has intensified and the demand for relevant financial services has increased. and so definitely we have a great prospect in growing our overseas business. Second, China's series of high-level opening up policy have continued to take effect, bringing in and going global policies have been implemented in-depth. BRI has been developed in-depth. Internationalization of RMB has been successfully promoted. All these policies have provided rare opportunity for our business development. Thirdly, we will always firmly serve as the vanguard of the new development pattern of double circulation and continuously expand our advantage in globalization for the next step. we will strengthen our overall planning, optimize resource allocation and further enrich the products and services of overseas institutions to enhance their competitiveness. In terms of key businesses, first, we will consolidate, expand the advantage of traditional cross-border business and continue to expand in the field of settlement and sales of foreign exchange, international settlement and trade financing. Secondly, We will build up advantages in emerging business areas, strengthen proactive services to new foreign trade formats such as cross-border e-commerce, overseas warehouse, and intermediate goods trade and increase market share of all types of financial services. Thirdly, speed up the structural adjustment, optimize products deposit. and loan debt and term structure, strengthen active distribution of personal finance, financial institutions, financial market asset custody, and other business, and reduce business and risk concentration. Fourthly, enhance RMB internationalization services and enrich the products and services of RMB clearing business. In terms of key regions, we will continue to optimize our regional layout and accelerate development of key regions. First, we will continue to consolidate advantages of Hong Kong and Macau and promote transformation upgrading of BOCH Hong Kong from the city bank to regional bank. Second, we will further promote business development with national financial centers in rich product lines such as interest rate and exchange rates, and expand business of syndicate, cross-border mergers and acquisitions, bonds, cash management, etc. Thirdly, we will accelerate the cultivation of new growth paths for globalization in Central Asia, Latin America, and the Middle East and expand the scope of financial services in an orderly manner. In terms of risk prevention and control, we will continue to improve our ability to cope with changes in external environment and do a solid job in risk prevention and control. Looking forward to 2025, The bank will continue to maintain favorable environment for overseas interest rates to remain relatively high, maintain significant contribution of overseas business tour groups. Thank you so much. Thank you so much Vice President Cai Zhang. Now let's invite the analyst on-site to raise a question. Thank you so much for this great opportunity. I'm Lin Qi from CICC. In 2024, the overall asset quality remained stable in 2025. So I'd like to ask the management to provide some specific information on the overdue and the new NPL, what are the major pressure on asset quality in 2025 and what proactive management measures are in place, how to forecast the trend of provincial coverage and credit cost. Thank you so much. Thank you for your question. In 2024, China's economy was generally stable and has successfully hit our expected target of economic growth, creating favorable external conditions for asset quality control. Meanwhile, the bank stressed proactive management of credit risk, further improved refined control measures, and improved quality of collection and disposal. Good results were achieved in asset quality control throughout the year. Previously, President Zhang Hui already introduced some indicators of asset quality. Specifically speaking, our new NPL remained generally stable. The number of MPL overseas decreased. Some key domestic areas were still under pressure in asset quality. On the corporate side, real estate industry is still the largest source of new MPLs. but the risk has been gradually decreased and the trend has been on a downward cycle. In terms of personal businesses, the new NPL for personal operation and mortgage loans increased year on year, putting great pressure on asset quality, affected by the increase in business risk. our bank focused loans and also our overdue loans increased. Therefore, we have taken various measures and stressed the control of asset quality. Since the second half of this year, our overdue increase has been restrained. Looking forward, the basic trend of our long-term economic growth will not change. However, external environment is increasingly complicated. Effective demand is still insufficient. We believe that the pressure of risk control mainly comes from the following areas. The first one is the real estate market because it's still in the deep adjustment with the implementation of our national package of incremental policies. The real estate market is expected to gradually stop decreasing and return to stability. It is expected that the pressure on the quality of the developmental loan asset will continue. the marginal improvement trend in 2024. Secondly, real estate market continue to adjust and superimpose structural contradiction in employment and the quality of our assets such as personal mortgage and operational loans expected to remain under pressure. Third, the early US dollar interest rate hike the sluggish commercial real estate market in North America, Europe and other markets and spill over of internal housing risks have brought certain challenges to our overseas asset quality control. For the next step, we will continue to coordinate development and security and be balanced for maintaining financial stability. Firstly, we will persist in solving problems in development, take initiative to integrate into the national development structure, focus on the five priorities in finance, and optimize the financial supply structure. Secondly, strengthen full-scope and full-cycle active management of credit risk. Enhance the coordinated prevention control capabilities of the three lines of defense. Accelerate transformation of intelligent risk management and strive to keep risk management ahead of the market curve. said we will continue to adhere to the four early principles. On the one hand, we will strengthen forward-looking risk management and post-loan management. On the other hand, we will proactively address the challenges of NPL being diversified A small insight, we will strive to maximize cash collection, revitalize resources and free up space. Fourthly, continuously implement the new classification requirement, actually reflect asset quality and fully assess the risks in key areas and make a full and prudent provision. All in all, we are confident to maintain the stability of our group's asset quality through 2025 and keep the credit cost within a reasonable range. Thank you. Thank you so much, Vice President Wu Jian. In the interest of time, that will be the end of Thank you.