Agricultural Bank Of Chin

Ladies and gentlemen, good afternoon. Welcome. I would like to say welcome to all the investors, analysts and media friends to attend the 2023 annual results announcement of the ABC. Well, actually, for ABC, We have left Hong Kong for eight years in terms of the convening of our announcements. So we are very happy to come back to Hong Kong to have this face-to-face meeting with all of you. And also we have a lot of friends, analysts attending this conference online or in Beijing's venue. And today we also have... management representatives as well as independent directors attending this conference. So we can start from our operating results of 2023 for the ABC. And last year, China's economy rebounded, paving a solid foundation for the development of finance industry. And our performance was also pretty good last year. So to sum it up, I think there are two points worth mentioning. One, the first one is that our operating revenue is experiencing steady growth. Our net profits was 269.8 billion yuan, a growth rate 4.2%, and ROE is 10.91%. Our operating income was 694.8 billion yuan, maintaining positive growth. And in the last year, we've been faced with very complex external environment. our operating income still remain positive growth. That is not an easy task for us to do. Second, Our strength of the core group continues to increase. Our total assets reached 39.9 trillion yuan, an increase of 5.9 trillion yuan. And the loans increased by 2.85 trillion yuan to 22.6 trillion yuan. And the NPL ratio was 1.33% down by 0.44 percentage points to compare with the end of previous year. And our provision coverage has reached of 303.87%. And the balance of the customer deposits was 28.5 trillion yuan. And domestically speaking, the deposits of our customers domestically increased by 3.91 trillion yuan to compare with the end of last year. And another statistic we want to disclose is that our daily increments, the average daily increments of the deposits of our domestic customer would reach 3.9 trillion yuan, so pretty similar to our deposits, the total amount of our deposits. we replenished our capital by 230 billion yuan, and our capital adequacy rate was 17.14%. So here we have already illustrated you about our revenues, as well as some important contents or highlights in our income statement. So looking back at our operation last year, we believe that we need to adhere to a systematic concept of management. We need to achieve three endeavors related to coordination. That is why we could achieve such results last year. And the very first reason for our rebound last year is because of the rebound of the macro economy. And for us, I think we need to do three coordinating endeavours. And the first one is that we need to coordinate the two markets in the urban area and the rural area. And now we have 23,000 outlets of ABC and half of them are located in counties and another half are located in the urban areas. And the layout of our customer base in rural areas and urban areas are kind of balanced. This is our biggest differentiator, which also represents our competitive advantages. And based on the different features of different regions, we have made a lot of innovations or tailor-made innovations for those county outlets or customers in the county areas to improve our capacity to serve the residents in the county areas. And now we have 281 products related to rural revival. And we have 255 products with unique county characteristics. And at the county level, we have a total of 546 million customers in rural or county areas, accounting for 63% of the total customers we have in ABC. And in ABC, the revenues at the county level accounts for 47.7%. And the growth rate is 4% higher than the industrial average. And the balance of the loan is... 8.78 trillion yuan and an increase of 1.45 trillion yuan. And our county level loan has increased at the rate of 19.8% higher than the average of the whole industry. So in the past three years, the scale of deposits and loans have both increased. and the county level deposits and loans are increasing in its share in our overall bank. But if we zoom out, not only looking at a three years scale, we could see that the county level loans have risen more rapidly. So that means for ABC, We are injecting lots of capital to revive the rural areas and to promote integrated development of the urban and rural areas as a whole. That's the first coordinating we need to do. We need to coordinate the urban area and the rural area. And the second thing we need to do is to coordinate the high-level security and high-level, high-quality development And last year, our NPL ratio, it was 1.33%. 0.04 percentage points last year and for three consecutive years and in our annual report we have also disclosed a lot of forward-looking indicators for our asset quality. For example our NPL ratio was 1.33% and our special mention loans ratio is is 1.42% down by 0.04 percentage points. And our overdue loan rate was 1.08%. And our provision coverage was 303.87%, increasing at a relatively high level at the beginning of last year. In terms of deposits, we not only organize the funds in a really good manner, we also provide good services for our clients. And the increments of our deposits was 3.91 trillion yuan, ranking the top in the industry. And we are optimizing our services provided to the clients. And the number of complaints per thousand outlets and per 10 million customers is pretty low, lower than the industry average. And a third coordinating endeavor we need to do is to coordinate our current operation and future development. So here I want to stress a technology. Technology will reshape our future operation and is to promote digitalization and to better leverage technologies so as to lay a solid foundation for future development. So here to sum up how we're going to leverage technology to facilitate our future development, I would like to use three sentences to sum up that. Firstly, our core business system have already basically completed the transformation of distributed architecture. And last year, we have already finished the system migration for individual customers totaling 800 million. And our daily transaction volume, our transaction volume has exceeded 1.9 billion. And the second one is that we need to increase our capacity and scale as well as our computing power. And we all know that AI is based on computing power. So we are accelerating our speed to, accelerating to develop our AI capacity. And we have also developed our centers, data centers in Inner Mongolia. We have already finished the first phase of the construction of our computer, our data center and computer room in Inner Mongolia for the first phase. And last year we started to Last year we started to build the second phase of our data center. Last year we started to build the second high into operation into 195, increasing our computing power. And the third thing I want to mention is that we need to continually establish our business model driven by data. We have already built 42,000 high-frequency internet scenarios, and the scenario-based financial ecology continues to expand. improving our efficiency to provide services to the customers in a primary level. And the user experience of our bank application has also been optimized. Our MAU, the MAU of our mobile app has exceeded 230 million. And we have also optimized our products in terms of digital digital debt products. So the balance of the e-loan of ABC has increased by 39% last year. And we have a lot of experience in last year's operation. So we also want to, just now I've already summed up our endeavors in the past year. So now I'm going to talk about this year's operation. And in terms of the overall market, the economic growth potential in China is still very large, and the resilience is sufficient. And this year, our economic growth target is set to be 5%, still very high in the global arena, providing a very favorable environment for the development of our bank. And if we look at the first two months in this year, you will see that the main indicators of production demand in the first two years is increasing. For example, like the retail sales, the total retail sales of consumer goods is increasing and industrial value added and export growth were also better than the market expectation. So our economy has started steadily this year and our credit demand is also increasing in a good way. So we believe that China's economy will move toward a positive direction, providing a favorable environment for our operation. And in 2024, we will do a better job in our businesses related to rural area, agriculture, and farmers, and to provide better services for real economy, and to better serve the stability of the finance as a whole. And we will also deliver more value for our shareholders. And finally, I hope that we can gain the support from you as always. And now I will open the floor for questions. And the Chief Risk Officer, Mr. Gong, will preside over this Q&A session. Thank you, Mr. Gu. So during this Q&A session, you can only – for one person, you can only raise one question. And before you raise a question, please introduce yourself as well as your department you're from. So the first question will be raised in the Hong Kong venue. the lady in the second row. Thank you, Mr Wu, for giving me this opportunity. to raise this question. I'm from UBS. I'm Yan Weizhi. It's really happy to see you again here. And just now you've said that we have a really good year of 2023, so I would like to congratulate you on that. In this complex environment, your stock price is very positive, especially compared with our counterparts. And my question is related to credit growth. And just now you've mentioned that last year we have an increase of 10% to 14% to 15% of credit growth. So my question is whether this credit growth is sustainable and where can we see this growth? If we look at this growth in terms of individual loan or retail sale loan, what is the proportion in that? And in terms of retail, for retail, have we seen any increase of the credit demand or credit, the loan issuance demand there? And is this credit growth sustainable? Well, actually last year our issuance of loan is increasing. And our pace of loan issuance is consistent with our national policies, as well as our management level at ABC. So just now you've also mentioned that the overall landscape is positive. We have increased loan issuance scale last year. And the second thing I want to mention is that, the county-level loan issuance was increasing really fast, accounting for about half of the total loans issued to our clients. And also, last year, we've issued a lot of loans to those emerging, newly emerging industries, as well as green industries. And our loans issued to those industries is higher than our counterparts in the industry. And also for individual loans, last year we've had a, the individual loan has increased by more than 500 billion last year, maintaining the first place in industry for four consecutive years. And for consumption loans, individual consumption loans last year, the figure has exceeded 100 billion. So for this year, what is about the demand of loans is can this growth trend sustained? That's a very important question that we need to answer. And just now I said the economy is moving toward a positive direction. So I think the reserve and the demand of the loans or the credit will also increase toward a positive direction. And in opening remarks, I've briefly talked about the loan issuance. definitely stick to our main principal business area, that is our countywide loans or countywide finance. And secondly, we need to focus more on rural areas, agriculture and farmers. And this year, there are several focuses for us this year. First of all, we need to continue to provide better services in terms of low insurance for county level related to rural areas, agriculture and farmers. And this year, we plan to have a loan growth in the county level reaching 1.3 trillion yuan, accounting for 50% of the overall loans being issued from ABC. And for county level loans, we need to talk about the industries involved in this area are related to grain or food security and so on. So in related areas, our loan issuance is expected to increase by 200 billion and the balance will exceed one trillion. And for the loans, in terms of the loans, providing for those farmers, we expect to see a growth of 300 billion yuan. And the balance would reach 1.5 trillion yuan. And if we can really give out 300 billion loans to the rural households, it will be definitely sustainable. And for individual loans, we have personal business loans, which is related to inclusive financing. And we also have individual consumption loans and the housing loans. And these individuals are aiming to stabilize the real estate market and to prevent systematic risks in the macro economy. So we will definitely stick to the monetary policies as well as regulatory policies of the country. And just now you've also mentioned personal or individual loans. From the perspective of ABC, the 300 billion loans to farmers is a key for us. If we can manage these loan, these amount of loans very well, we can stabilize the whole individual loan market. So we need to better correlate ourselves to rural areas, agriculture, and farmers. And also we need to focus on universal and inclusive financing. And the ABC is actually the bank that provides the most loans to the inclusive finance fields and serve the most customers in this area. In 2024, we aim to increase our inclusive financing by 800 billion yuan. And the third thing is that we need to be greener. And as you can see, our logo is green. So we need to be greener. We need to provide more green loans. and we expect to increase our green loans by one trillion yuan. So I've already told you all of these statistics or the scale. And fourth, we need to improve our supply, our supply of financing to facilitate the improvement of the real economy, especially those industries related to new productive forces. The financing supply should be consistent with, should be aligned with the demands of the industrial transformation in China. it should serve the Chinese modernization. So the loans related to rural areas, agriculture and farmers, and the loans related to inclusive financing, and the green loans, as well as the loans aiming to facilitate new productive forces, are all aligned with our positioning and our cultural DNA. And just now I gave you so many numbers. If you add them up, it will be astronomical. And so here, I want to clarify a bit. Just now, I've mentioned so many numbers, and some of them are overlapping. For example, some of the loans related to rural areas, agriculture, and farmers, they are also included in green loans. Some of them are also related to inclusive financing. So you can never add them up very simply. So all in all, we need to strike a balance of our loads. And now the next question will come from the Beijing venue. The left area lady in the third row.

Thank you.

I'm with Xinhua News Agency. I'm . And my question is about the quality of the credit assets. So my question is, Where are the risks of the credit lying in ABC in 2023? We know that ABC has spent a lot in terms of, has spent more in facilitating real economy. So the debt, the loan is increasing really fast. Will that pose any pressure for the future asset quality of ABC? So Mr. Zhang Xuguang will answer this question. actually ensuring preventing risk or minimizing risk is our bottom line. At least we need to do that. And recently, our asset quality has continued to optimize. And MPL ratio was 1.33% down by 0.04 percentage point. And the incidence rate of MPL rate was 0.85% down by 0.07 percentage point. And the special mention loan ratio was 1.42% down by 0.0 percentage points to compare with last year. And our overdue loan ratio was 1.08%, equivalent to the beginning of the year. And the negative difference between expected and the Caesar difference of the expected loan and the MPL was 56.2 billion yuan. which has been negative for 14 consecutive years. And the provision coverage was 303.87% by 1.27 percentage points. So we increased our capability to fight against risks. In our MPL, mainly concentrated in real estate market, and it is the overall market, the overall risk is preventable, is controllable. And we have implemented our 16 measures to minimize the risk in this area and so which has already generated good effect. So the MPL ratio of real estate is going down recently. So you can see that our risk management has been well performed and In the future, we are very confident about our risk control. And also, you've mentioned we have really fast credit or loan issuance growth. We will always strike a balance between the risk prevention and the business development. We will definitely ensure no systematic risk will happen. And this year, the quality of our assets will remain stable based on several reasons. First of all, the macro economy is very positive providing a favorable environment for the quality of our assets. And we'll also optimize our structure of our credit, our loans. And 80% of our loans in 2003 were issued to manufacturing or advanced manufacturing. And we also continue our counter-cyclical adjustment capabilities. And we have also continued to strengthen our research adjustments capability to manage the credit risks. So we are very confident that we can continue the stable asset quality of ABC. So now the next question comes from the Hong Kong venue. The left area. The first, the guest in a first row. Hi, Mr. Gu. I'm with Phoenix Satellite TV. And we know that the profitability of ABC has maintained a really positive growth. So in the future, in the following years, how can we strike a balance between the profitability and our risks? So how can you do that? How can you strike a balance between serving the real economy and the management of the risks? And how do you perceive the net interest spreads as well as the net interest margin and profitability of ABC this year? I know that a lot of people are concerning about our profitability. I want to answer this question from the following perspectives. First of all, for a bank, no matter we're talking about the long term or short term vision, if we're going to have a good operation, the most important thing is to stabilize our asset quality, especially for the long term. If we do not have a good quality asset, even if we can make profit in the short term, we will lose money in the long term. So the priority for us is to stabilize our asset quality. And second, the current economy is recovering really fast, and we have seen the emerging of new productive forces. And just now we've mentioned that China's economy is very resilient, and the recovery of the economy is undeniable. And the overall financial risks of the whole industry is controllable. And just now, we've repeatedly said the same thing, that we were repeatedly discussing about the quality of asset. And your question is also related to quality asset. So for us in ABC, the non-performing loan, the MPL ratio was 1.33%. We have disclosed that in our report, and we have also included many forward-looking indicators of risks in our annual report. Just as Mr. Xu mentioned, the incurrence rate of the MPL in 2023 was 0.85% down by 0.07 percentage points, and overdue loan was 1.08%. That is another forward-looking indicator. And the scissor difference between overdue and non-performing loans, as well as a provision coverage ratio, these are all the forward-looking indicators to identify the risks, assuring all the clients that ABC will strike a balance, will definitely strike a balance of profitability both in the long run and in the short term. That's the first thing, that's the first point I want to mention. And secondly, what we need to do is to stabilize the net interest margin, the NIM. And we also need to look at NIM in the long run. We need to look at the assets and liability at the same time from the perspective of assets. And last year, the interest rate of our loan last year was 3.79%, down by 30 BPs to compare with last year, which is also similar to our counterparts in the industry. It is because that we really wanted to support the real economy. We want to provide them with more profits, benefits. So next step, we will better coordinate this whole mechanism. And we will also optimize the asset margin pricing. While supporting the real economy, we will also maintain sustainable development on our own. for ourselves. So from the perspective of liability, just now I've mentioned that the deposits of customers of ABC has increased at the fastest speed among the counterparts. The increment of the daily increment as well as annual increments are synchronous. Another highlight in our annual report I want to mention is that our interest payment rate of our customer deposits is 1.71%, which is the best to compare with all the counterparts in our industry. And in 2004, for deposits, we will make more initiatives to promote digitalization, to leverage our advantages of a massive scale of outlets and a customer base, and to provide more low-cost deposits. And for NIM or NIM, here I want to add something. When you are analyzing our annual report, if we're going to look at the NIM risk, we should not only look at the interest rates of deposits and loans. We also need to look at the investment portfolios. Because for other state-owned banks, the amount of their investments could reach over 10 trillion. So if you're going to analyze NIM, you should not only look at the deposit and loan, you should also look at investments. And last year we've invested a lot in the bond, the government bonds. The interest, the benefits, interest rates is relatively low, of course, but it is safe. And also it has, it can exempt tax for us. So, If you are analyzing the NIM, you should also look at our income tax. It has changed drastically last year. So we strongly advise you to look at our tax, the investment and the tax, when you are analyzing NIM, the net interest margin. And thirdly, we need to stabilize the value delivered for those intermediate business services. On the one hand, we will continue to work for the real economy. And second, we need to improve our ability of comprehensive financial services. We will focus on key areas and promote value to the intermediate business by providing customers with high quality financial services for example for consumption industry we will seize opportunity of resuming consumption growth and we will also improve our capability of third-party payment credit cards and in terms of the price we will provide more benefits to our customers and third-party partners by lowering down the prices a little bit we will also improve our comprehensive service capability and for intermediary business We also need to improve our international settlement, the RMB settlement, bond underwriting, and consulting business, and integrated services, and so on. So we need to look at different aspects. So all in all, we need to stabilize the asset quality. If we can stabilize that, we can provide basis for long-term and mid-term profitability. And if we can stabilize NIM, we can ensure that our profitability in 2024 is well assured. We reiterated that we need to make more benefits for the real economy, no matter for the regulatory body or other departments. No one was saying that we need to cut the price disorderly. We need to be, we need to stable this whole process. We need to do it, we need to cut the price in a steady way. And in CDF, China Development Forum, Premier Li Qiang has delivered a speech. He was saying that we need to slow down our economic growth in a steady way. That's also what we need to do in the banking industry. We need to guarantee the financial needs, ensure to meet the financial needs of our customers while maintaining the profitability of ourselves. So the next question should come from the Beijing venue. In the mid area, the gentleman in the second row. Thank you for giving me this opportunity to raise this question. I'm Lin Xi from CICC. And my question is related to individual or personal loans. And in 2003, in supporting personal consumption law or individual business law, what achievements have you got? And in 24, what are your expectations on that? So President Lin will answer this question. Thank you for the question. China is really resilient and potential in terms of economic development. and the fundamentals or the basic trends for long-term improvement hasn't changed. And ABC will resolutely stick to the decisions made by the party central committee and will actively serve for the steady growth, expand domestic demands, and to serve the people's livelihood. And we will also better strike a balance of the services between the rural areas and urban areas. And we'll also do integration of offline and online And we will do a better job in terms of providing better services for those SMEs as well as individual businessmen in rural areas. We have achieved pretty good results. And as of the end of last year, our retail credit balance exceeded 8 trillion yuan. And the personal loan, consumption loan, as well as the business loan and the credit loan, the balance in total reached 2.891 trillion yuan. an annual increase of 690.4 billion yuan, a year-on-year increase of 366.7 billion, up by 31.4%. And the growth has been maintained for four consecutive years. And in terms of management, we have done really concrete jobs in five perspectives. First, we always we always prioritize the expansion of the consumer financial services. Last year, the retail sales of consumer goods is rebounding. So based on the expansion of traditional consumption, we will accurately meet the demands of the new consumption. We have been actively integrated ourselves into green consumption, healthcare, NEV, home appliances, as well as the cultural tourism. So based on that, we will expand, cultivate and expand new customer groups and to increase the provision of loans for them. And in 2003, the resident customer loan increased by 147.1 billion, and the credit loan increased by 52.4 billion yuan, and all year round, The total spending of the credit card has exceeded 2.2 trillion. Second, we will deeply cultivate inclusive financing. We are providing services for individual businesses as well as SMEs. We have innovated our e-loan for farmers. We have also increased our loans, providing for husbandry and retail and many other industries related to rural areas. And last year, we have issued 1.97 trillion yuan of personal domestic loans, up by 38.3 percent, a year-on-year increase of 254.4 billion yuan. And annual increase as well as the increase rate has ranked top among all the counterparts. And our individual industry and commercial households has, in our customer base, reached 6.35 million, with the average balance of 29 trillion. And thirdly, we have leveraged our advantages of spanning both urban and rural areas. We provide active services for rural revitalization. And in our operation, we always grasp the service, we always grasp the gist to provide services for rural revitalization, and we pay close attention to the upgrading rural consumption. And we have also had, we also issued those net , net fast loan, the entrepreneurship loan as well as those other loans facilitating farmers to develop and now We have organized 18,000 service team related to revitalization and these teams will go to the fields or the ordinary households to provide point-to-point financial services. And last year, the personal business loan could reach 1.62 trillion yuan. up by 390.5 billion yuan, accounting for 76% of the total increase of loans in the whole bank, up by 29 percentage points to compare with last year. And fourthly, we are also accelerating our digitalization process. And we will always be customer-centric and innovation-led. We will build a production system for online and offline collaboration. We will strengthen data-driven endeavors, and we will leverage more data capability to facilitate the business, to facilitate the services for our customers, to save the customers time and energy. And we are also using smart technologies such as OCR, as well as digital figure. as well as many other new centralized authorization processes, making the whole process of providing services less time consuming. And the digital application has already reach the share of 40% of all the services we provide. So our services has become smarter. And the fifth thing we need to do is to coordinate the development in a secure way. And we will strengthen our ability to be forward looking and be more intelligent and also we will be compliant with the risk control regulations and we will also do a good job in protecting the rights and interests of our financial consumers. In 2003, our NPL ratio of personal loan and personal business loan is 1.04% and 0.88% relatively. So the overall risk is controllable and NPL rate for credit cards is was 1.4%, so the quality of our assets is pretty good, satisfying. So here I want to tell you that the retail credit business keeps the good momentum. And as of now, the increment of the retail loans has reached 492.4 billion yuan, up by 192 billion yuan year on year, ranking the first. in the whole industry. So if we look at the asset, all of this is conducive for us to stabilize our name. And in the next stage, we will further implement the guidelines of the central the National People's Congress, as well as the Financial Work Conference and Economic Work Conference, as well as guidelines of the two sessions. We will provide better and high quality financial services to our customers in the following years. And the next question comes from the Hong Kong venue. And the lady in the third row. Thank you for giving me this opportunity to raise the question. I'm Claire Ouyang from Goldman Sachs. And just now you have mentioned about the agro-related businesses, which is also your advantages. So what are the specific differentiator for you in terms of the countywide business? And in the future, how are we going to leverage these countywide businesses to better serve the rural revitalization while providing greater contribution to the profitability of the bank as a whole? So, Mr. Liu Jiawang, responsible for agro-related business, will answer this question. Well, as a state-owned bank, providing services for rural areas, agriculture, and farmers. We have implemented the government's strategic plan to comprehensively promote rural revitalization, and we continue to increase our financial supply to agriculture, rural areas, and farmers. And we have kept this good momentum. So the chairman of the board have already illustrated some of the advantages. I will build on his remarks from five perspectives. First, in terms of integration, between all the interaction between urban and rural areas and ABC is the only institution or commercial banks cover covering all Counties in a country in the country and we spent the two major markets of the urban and rural areas Half of our outlets are located in the county areas in counties so as with the faster integration of urban rural areas more and more customers are laying out their business both in the urban area and the rural area, making it easier for us to play out our advantages. And secondly, we have agro-related products. In addition to some products that are common for other people, we have some specific agro-related products. For example, our branches, has launched more than 280 products with rural characteristics. For example, we also have many subsidiaries located in the rural areas. focusing on the business in rural area, and they have a strong comprehensive management capability, so they can provide diversified, comprehensive financial services for our clients in rural areas. And fourthly, in terms of technological empowerment, ABC has continued to improve our investments in technology. We have the Huinong eLoan and SME eLoan, and these are online agro-related loan product system, part of the online agricultural-related loan product systems. And we also have the mobile banking application, as well as the agro-related applications, specifically for agriculture. And fifthly, we aim to develop our brand image as an agro-friendly banks. And since our establishment 70 years ago, we have worked really hard to serve the agriculture rural areas as well as the farmers. And we have made positive contributions to poverty alleviation and rural virtualization as well as the development of inclusive finance and green laws. And we have been widely recognized by all kinds of customers in rural areas. And ABC is also the only one recognized or rated at the highest level in terms of the services provided for the rural areas for three conservative years. So in the future, we'll continue to deepen our services for agriculture and we will consolidate and improve our capability to provide financial services for rural areas and to better serve the implementation of the National Rural Ruralization Strategy. and we want to make greater contribution in the following years. We will do it in three perspectives. Firstly, we will improve the financial supply for the counties so as to help them to meet the needs of grain and other agricultural products. And second, we will we will channel more funds to the counties. And on the basis of implementing the national policy of fee reduction and profits concession, we will actively channel the fund to go to the counties. and to vigorously attract funds from the rural areas and to expand our local source of funds for our bank. And we will also cater to the rural needs in terms of settlement and deposits or financial or wealth management. And thirdly, we will consolidate and improve the effectiveness of business operation in the counties we will follow the trend of AI, big model, the generative AI algorithm, as well as IoT to address the bottlenecks of agricultural development currently, which include high cost or high risk. So another goal for us is to reduce the NPL ratio and to improve the efficiency of operation. And the next question comes from the Beijing venue. So in the middle, in the rear, the lady. Thank you. Thank you. I'm a journalist with 21st Century Business Herald. And just now Chairman Gu has mentioned technology will reshape the future of banks. So my question is related to fintech. FinTech is actually a very important force for financial institutions. And my question is about the digitalization of ABC. And in the next step, what kind of strategies will you adopt? So Mr. Xu, responsible for technologies adoption, will answer this question. Thank you for the question. I want to answer your question from three perspectives. First, ABC is promoting digital transformation by using the technology, learn by doing. And we have grasped the essence of digital transformation. The essence is to leverage data. So we haven't done a large transformation of our old system. Instead, we built a data layer and enterprise architecture on the system. In 2003, we accelerated the promotion of cloud native data lake, data pool, as well as a real-time data warehouse platform. And we have initially established a data layer enterprise-grade architecture. We spent a lot of time, energy, and resources to grasp the construction and the optimization of the model to identify, to better identify key products and to improve the precision marketing and the precision management so as to develop a data-driven operation model. And secondly, we need to have a layer solid foundation for digital transformation. We have a customer base of 880 million customers, and the daily trading volume would peak. The peak of daily trading volume could be close to 2 billion. And for per second, the peak transactional volume could reach 50,000. So last year, we have basically completed the transformation of the distributed architecture. At the same time, we have safeguarded our stable operation. It is not an easy task to do because we have such large volume of transactions. Well, at the same time, we need to stabilize the trade. It's not easy. Let me give you a metaphor. If you only have 100 million customers, it's like that you are driving a truck carrying 10 tons of cargoes. But if you have 800 million people, it's like that you are driving in a truck carrying 80 tons. So you cannot change your tires in the way and you should also ensure a smooth ride to avoid any accidents. So it's not easy task to do for us. So in the past years we have optimized our distributed commuting center as well as our disaster relief center, disaster preparedness center and so on. We have also built our production operation system and we have also built a network security defense system. So all in all, we've done a lot to guarantee the stability of our trade. And certainly, we take the customer experience very seriously. but it's very hard to satisfy every and each customer. To facilitate our customers to use every and each services, we want to use only one application. to provide all the services. That means we integrate all the functions needed by individual retail customers in one application. That is something our peers want to do, but they haven't done it yet. So in this way, we have increased the satisfaction of our customers. So at the end of 2023, the MOU of our mobile application could reach 213 million. leading the industry for 34 months in a row. Because we have already identified the most important thing is data, and we have also paid great attention to customer satisfaction. That is why we can achieve such large or such great results in terms of digital transformation. But what is our future expectation on digitalization? Also, you want to answer this part of question from three perspectives. First of all, we will continue to reinforce our technology security. We will prioritize the security of our customer and we will be responsible for them. That is why we will upgrade our network security and the defense system for our data to make sure our financial services are safe, stable, and precise. Second, we will make efforts to build a smart bank. AI is a buzzword. And in terms of like earlier application like semantic analysis, facial recognition, we have already adopted AI. But in the future we will implement AI in a deeper and more profound way. We'll improve the new data-driven operation and to accelerate the construction of the smart banking. And third, we will deepen our online and offline collaborative operation. We will leverage the channel advantages of 22,000 outlets as well as the online advantage of more than 200 million MAU so as to better collaborate both online and offline. So the next question comes from the Hong Kong venue. The left area are the guests, the lady from the fourth row. Thank you for giving me this opportunity. I'm with the Hong Kong Commercial Daily. I'm . My question is about pension finance. According to the data released by the Ministry of Civil Affairs at the end of 2024, the 60-year-old population is 210 million and accounted for 14.9%. And the State Council has also released some documents related to gray hair economy. So I want to know more about your strategy related to senior care finance, as well as how you're going to adapt yourself to the aging society. So President Lin Li will answer this question because he's responsible for individual finance services. Thank you for your question. Last year, after the convening of the Central Finance World Conference, the ABC has deployed and implemented five INDIVAs. And we have specialized our research to promote the high quality development of pension finance or senior care finance. And in this, we have made a plan featuring the three plus two high quality senior care financing system. So the three here, the three plus two in the three, covers pension finance, senior care finance, as well as senior care industry finance, so as to cater to the aging population in China. And the two in the three plus two layout, covers the consolidation of pension system as well as the financial technology support. And we will also strengthen our protection for customer rights. We will cater to the whole life cycle of customers and to have an overall planning and a forward-looking systematic layout. And in this plan, we have specifically identified 188 items of services to provide services and specific financial – differentiated financial products for the gray hair population. And in terms of financial, I think our country, China, has achieved remarkable results in safeguarding the senior people. And first of all, in terms of security, social security, the ABC has absolutely responded to the interprovincial social security interaction system. And now our social security card has already covered 272 million people in China. And our electronic social security card users has reached 125 million. The medical insurance card has covered 68.57 million people. And in terms of annuity, we are making efforts in trusteeship as well as custodianship. And the number of customers in enterprise annuity ranks the top in the industry, and the scale of business also continues to grow. And in terms of individual pension, we have been the first in all the counterparts to provide a full portfolio of products, including deposits, wealth management funds, insurance, family trusts. And the scale of personal pension accounts for the largest portion in China. And also in terms of the senior care services, finance service, we have also done a lot to improve our services for the senior people. We strengthen our service channels, and we also have the self-service devices specifically designed for the senior people. And we also optimized the mobile app for the senior people. For example, the mobile app will provide larger size of characters for the senior people. And we also In the outlets, we have also optimized the business processes to help those senior people to get their business done really smoothly. And we also provide special services for those disabled or the senior people suffering from dementia. And we have also improved our service system. We have a fast response mechanism, and we also provide 100,000 door-to-door services for the elderly customers. who has reduced mobility. And we also have the remote services provided for the senior care, for the senior people. And in terms of the pension products, we have commercial senior care, the senior care insurance, as well as exclusive commercial pension insurance. And now we have 131 pension related funds and 14 insurance products. And we also have the senior care related wealth management products. So in terms of both scale as well as diversity, we ranked top among the industry. And we will make more efforts on that. And in terms of Senior care industry, we believe this part needs our great support. We have released, relaxed, extended the scope of access to pension institutions so as to improve the availability of financing for pension institutions to support those senior care industry. And another thing we have done is to increase provision of loans to inclusive pension institutions. And last year, the balance of the loan for the senior care institutions could reach 7 billion yuan, up by 11%. So in next step, ABC will continuously implement the decisions and arrangements of a CBC-centric committee. And we will be people-centric and play the advantages of ABC. as well as our layout in both urban areas and rural areas, we will keep building demonstration outlets to cover more people. And we will also pay attention to science and technology and to develop new productive forces. And we are also absolutely exploring and promoting the digital service for the elderly people to make our services for elderly people more convenient. and more professional. So the next question comes from the Beijing venue. On the right, the third row, the gentleman, please. Thank you for giving me this opportunity. I'm from City Securities. And my question is related to the organization and staffing. And we know that serving the rural area and serving the rural virtualization is one of your priorities. And last year in the Economic Work Conference, the government has also emphasized that we need to coordinate rural virtualization and urban development. So in this regard, how can the ABC coordinate the services in revitalization as well as the agro-related businesses in terms of staffing and organization structure? And Mr. Liu Hong will answer this question. Thank you for the question. The ABC has carried out the policy of the CPC Central Committee to promote the rural revitalization and build financial system with Chinese characteristics. We have continued to optimize our layout in rural areas and to put more resources in counties. with high quality financial services. In terms of organization or institutional establishment, based on our framework and organizational framework in the agricultural areas, we have optimized our channels providing services for the agriculture areas. And we have continued to strengthen our professional departments or service team for rural revitalization to make sure that we have a dedicated team to better serve the agro-related customers. Second, we have continued to optimize our business outlets and layout in rural areas. We'll have more agencies or outlets in rural areas. In 2003, among the newly established outlets, 70% were located in the county areas. And as of the end of 2003, the county level outlets reached 12.7 thousand, accounting for 55.9% of the total number of the outlets, covering all counties in the country. And certainly we have to strengthen our establishment, our service channel establishment, combining both online and offline services to improve the accessibility of financial services for all the people. And as of the end of 2003, our Jingshui Huilong Cloud has welcomed 126,000 customers covering 2,542 counties and districts. And the Hui Nong Tong's coverage has reached 97.8%. And the registered customers on mobile application, on our mobile application, could reach 229 million. And in terms of staffing, ABC has strengthened the construction of our workforce to better support the vital, the rural revitalization. And we have invested more human resources in the rural areas, and 50% of our recruitment, personnel recruitment, are sent out to rural areas. And recently we have recruited 41,000 new employees in the county level outlets. And as of the end of last year, The total number of the county-level employees could reach 188,000, accounting for 42% of the total number of employees of the bank. And second, we have strengths in our cultivation of the talents in rural areas. And in total, we have cultivated and selected county-level young talents totaling 18,000. And we also provide special support for those customers, for those talents working in the county level. And thirdly, we have strengths in the construction of the county level account manager team. And every year we will have a special recruitment of the account managers. And we will help train them, train their business skills so as to improve the efficiency of serving the agriculture areas. And the next step, we will further strengthen our construction and professional departments and service team for agriculture, and we'll also optimize the layout of our service structure, featuring both online and offline, so as to improve the coverage of our financial services. And the next question comes from Hong Kong venue. So how about the rear of this room? Maybe on the right, the lady in the five role. Thank you for giving me this opportunity. I'm Katherine Lilly from JP Morgan. JP Morgan Chase. My question is related to green finance. I know green finance is a part of your strategy. So in terms of green finance, what are the characteristics? And how can we strike a balance between the volume and price, as well as the price and the risk? So Mr. Zhang Shiguang will answer this question. Thank you for the question. Well, the Central Financial Work Conference has put forward the five endeavors for us, and green finance is an important part of it. So the ABC has always attached great importance to green finance. In 2021, green finance has been included in the three top strategies of our 14th Five-Year Plan. It's our top priority. And as of the end of 2003, the balance of the green credit is 4.05 trillion yuan, which is released by the State Administration of Financial Regulation. increased by 1.35 trillion yuan to compare with the beginning of the year striking a record high. So our characteristic is that we will always serve the agricultural areas and integrate agricultural development and the green development and we have promoted many unique or feature products, for example, Hui Nong Yi Fund, PV Fund, Ocean Husbandry Fund, and the Beautiful Village Fund, Beautiful Village Loan, and so on. We have different kinds of loans provided specifically related to green finance. And as of 2003, our county-level green loan balance exceeded 1.6 trillion yuan, accounting for more than 40% of the total green credit. And we have also made innovations in terms of the wealth management related to green finance. And we also have diversified green investment and financing channels. And next, we will better leverage our positioning as a green bank and to improve our investment of green funds. And we will also help to support the green development of agriculture and rural areas to empower rural revitalization. And we'll also integrate the concept of the green development into all areas of ABC business philosophy. We will implement green offices, green outlets, implement green procurement, and advocate green business travel. And we will also improve the quality of the information disclosure related to green finance so as to build ourselves into a green brand. So, since the beginning of this conference, we also have many questions flooding in on the internet. So, how about we open the floor for questions for the online audience. Maybe we can have one more question from the online venue. So I will read out the question. And recently I watched a news saying that the balance of the inclusive finance of ABC had exceeded 3.5 trillion yuan by 30, the average annual growth rate in the past five years has reached 30%. So now you have a really pretty, you have a pretty large credit or loan issuance recently. So how can you ensure that the risk can be fully controlled? and whether inclusive financing is profitable, and how can you strike a balance between the pricing and the risks? So Mr. Liu Jiawang will answer the question. I will answer this question. Well, the World Economic Conference has included the inclusive financing into the five endeavors. So it indicates importance of inclusive financing for the livelihood. and for the national economy. So in the past several years, ABC has implemented the development strategy, the inclusive financing, and strength and enhance our efforts in that. We have expanded the coverage of inclusive financing, improved the quality for that, and increased the volume of inclusive financing. And by the end of last year, according to PBOC, the loans related to inclusive financing exceeded 3.5 trillion yuan, an increase of about 1 trillion yuan. In terms of coverage, our clients of inclusive financing, the number of the SME clients with our inclusive financing reached 3.54 million households. So in terms of quality, of our assets. I think it's still within the scope of regulatory requirements. And we are also improving our improving our endeavors in inclusive financing in accordance with requirements of the regulatory bodies. And based on the requirements of the SMEs and the private enterprises, as well as the characteristics of their development and operation, we are constantly promoting our mechanism making it easier for the customers to apply for loans. And they will dare to borrow, and they are also willing to borrow money from us. And we will also increase our support services for the loans, the credit loans, medium and long-term loans, and so on, to satisfy the needs of SMEs and the private enterprises. And we're also absolutely involved in construction, the new generation of the system. We will employ digital means to continuously improve the efficiency of the approval of the inclusive loans. And just now, in your question, you are wondering whether we can sustain this growth. So to answer this question, I want to tell you that the ABC Inclusive Financial Business is maintaining a good growth trend. And according to BBOC, the total loans of inclusive financial loans have exceeded 4 trillion yuan, an increase of 400 billion. And the number of inclusive small SME enterprises loans has already exceeded 4 million households. And we have a very large coverage of inclusive finance. Our inclusive financing have a really large coverage of customers, and we have strike a balance between the volume, price, and the risks in terms of the volume or the amount. China's economic development is of great potential, vitality, and resilience. We maintain a stable and positive development trend, and the country has attached importance to inclusive financing, and we've created a very favorable environment for inclusive financing. And our market entities has exceeded, has reached 180 million, and every year we will have more than tens of millions of new entities being registered in the market. So we have new market players, new business scenarios, and new financial demands flooding in, paving a solid foundation for the ABC to improve our inclusive financing. And in terms of the pricing, the interest rate of inclusive loan is consistent of the average interest rates of all the other loans in our bank. In 2003, our Our analyzed inclusive loan interest rates is 3.67%, decreased by 20 BPs from the previous year. And relying on the strong support of the national policy, as well as the transformation of the digital technologies, the cost for inclusive finance, the cost of capital, the operational cost, and the risk costs for inclusive finance can be better controlled. And we are solving the problem of the SMEs. We can reduce the price of the money they get. And from the perspective of the risks, And since this year on, we have been very actively deploying technologies, making innovation in terms of risk control methods as well as a model of risk control. We are providing precision services and precision risk control so as to effectively solve the asymmetrical information distribution between us and our customers. And the quality of assets of our inclusive finance is also satisfying. Thank you. So in this conference, we have exchanged a lot due to time limits. We are open for one more question. And this question comes from the Beijing venue. In the middle, the lady in the first row. Thank you for giving me this opportunity to ask the last question. I'm Mami with Shanghai Securities News. So I want to know about the current demands of the private economy loans and how can you increase your credit support for the private economy this year? Thank you for your question. And your question could be divided into two parts. And the first part is related to the loan demands or credit demands for the private economy. And if we look at 2003, I can give you some numbers. If we deduct the investment in the real estate development, the speed rate of the private investment is 9.2%. And the private investment growth rate in manufacturing infrastructure was 9.4% and 14.2%, respectively. And higher than other industries. So the government work report this year has also put forward that we need to provide a level playing field for all the industries. So the private economy is The private economy will be more confident and the expectation will also be optimistic. And the ABC will relatively – will resolutely implement the strategies laid out by the central committee – central government. And in 2003, the balance of loans to the private enterprises was 5.5 trillion yuan. an increase of 1.1 trillion yuan by 25.6%, higher than the average level of various other loans, according to the state administration financial supervision. And the interest rate of the newly issued loans to the private enterprises, in terms of this, the interest rate is 3.06%, down by 31 BPs from the beginning of the year. If we exclude all the note financing, the figure would be 3.54%, down by one BP. And the second part of your question is, how can we increase our efforts to the private economy? In the first two months of this year, the newly issued loans to the private enterprises was close to 300 billion yuan, and the growth rate is higher than the average, the industry average. And there's one line from the work report this year, saying that we need to increase the proportion of loans to private enterprises, which is definitely what we are doing now. And the growth rate of private enterprises, the loans of the private enterprises got from our bank is higher than the average of the industry. So how can we support them? First of all, we will intensify our allocation of resources for private enterprises. And this year we will separately list our loan operation plan for private enterprises in our annual business plan so as to guarantee the fund provided for the private enterprises and to make sure that the loans, the share of the loans for the private enterprises will continue to increase. Second, we need to highlight the focus of our services. We support, we will support our private enterprises to deepen their, to identify, to launch more local products, products with local features and to promote, to encourage them to improve their new productive forces and to go green and go low carbon And we will also provide financial support for those private enterprises to participate in the implementation of major products and technological transformation. And we also need to make innovation in terms of our product and services, especially providing greater services for industrial clusters and feature industrial parks and niche market. we will provide better, greater support for SMEs and optimize our loan portfolio, loan products matrix, both online and offline. We will also facilitate the convenience of loan issuance for private enterprises. And we'll also continue to improve our long-term mechanism to encourage those private enterprises to be willing to apply for loans from us. And we will also have the due diligence exemption and the fault tolerance mechanism, and to boost the enthusiasm of private enterprises to get loans from the ABC. Thank you again for this question, and also thank you again for coming and Here, I would like to avail myself of this opportunity to express my gratitude to all of you. And today, I know Hong Kong will have a holiday, so I will not take up too much time of you. So that's the end for this announcement. If you have further questions, please feel free to contact our investment team or our news team. Thank you.