Agricultural Bank Of Chin

Thanks for your participation. The meeting is ready to start. Ladies and gentlemen, good afternoon. Hi, my name is Liu Qing, Secretary of the Board of Directors ABC. Welcome all shareholders, investors, analysts, and friends to attend 2024 Q3 results announcement. Thank you for your long-term care and support. Today's announcement is mainly held through telephone access. also have invited some of the friends to the scene. First, I would like to introduce the team attending this announcement. They are Mr. Deng Lijuan, Director of the Office of the Board of Directors, Yeo Shih-tung, General Manager of Financial Accounting Department, Xiao Ning, Senior Expert of Financial Market Department, Deng Xiaolei, General Manager of Corporate Business Department, Wang Xiaohan, General Manager of Credit Management Department, Wang Yang, Deputy General Manager, Accent Now Ability Management Department, Zhou Bin, Deputy General Manager, Personal Credit Department, and Sun Yat-sen, Deputy General Manager, Rural Revitalization Finance Department. Today's announcement will be divided in two parts. In the first part, I will introduce the business performance in Q3. The second part is Q&A. We'll respond to the questions we care about. Now we will proceed to the part one, which I've released the Q3 results and will continue to financial operation will stay the same and the net profit operation even continued to grow a positive net profit 215.3 billion of the 3.6% operating income 540.7 billion up 1.3 yy a net interest income 437.8 yuan up 1% yy the net interest margin 1.45% remaining the same in the QH1 the all-caliber, full-caliber balance and the domestic daily balance up 2.21 trillion, up 8.2% YY. The margin and the speed ranked first among peers. And among them, for the personal loan balance, 8.75 trillion. The corporate finance, 14.3 trillion, up 1.54 trillion. And county level, 9.73 trillion, accounting for more than 40% of domestic loans. County loans increased by 956.3 billion, up 10.9%, 1.73 percentage points higher than the whole bank. And MPL, 1.32 percent drop by 0.01 percentage points. The mentioned loan, 1.45 percent. The forecast risk indicators are stable, and the provisioning coverage ratio is about 3 percent. Now let's come to the Q&A session. And in this session, we will adopt three ways, answer question, telephone question, respond publicly, solicitate questions. If you want to ask question, please press the asterisk key on the phone and then press number one. Please ask one question only and please identify your name and organization before asking. Now we may come to the first question. Okay, thank you. Thank you. My name is Zhang Shao from Citic Securities. First, congratulations. You have mentioned that the operating profit is down. I would like to ask the trend of the profit. How about Q4 and the whole year? From the previous year, we have seen that ABC has shown quite strong competitiveness. Could you please elaborate on this? Thank you for your question. Mr. Liu from the financial accounting department will answer the question. Thank you for your question. For the first three quarters, ABC continued to improve its ability to serve the real economy and the overall performance was sound. And we have maintained the general stability of the As a quality, the main financial indicators have improved generally and net profit has increased by 3.6% and the growth speed still leads the peers at interest spread 1.45% and provision coverage ratio was still above over 300%. So we have a strong cushion to diffuse risks. This has made a solid foundation for this year's performance and Q4 and the next year as looking forward into Q4 and 2025 with the macro control increment policy has shown its effect. The economic recovery will be consolidated. The market demand will continue to increase. This will create a sound environment for the operation of the banks. Given the LPR's continued decline and the existing mortgage rate adjustment and also ABC actively yield profits to the real economy, these policies may increase the market volatility, the operating profits continue to increase but still face a certain degree of pressure we still take focus on the key businesses and continue to increase the revenue and increase the quality of the assets and maintain the stability of the assets we have strived to work hard to realize that in the whole year we will achieve the stability of the operating performance we'll constantly optimize the structure of the asset and maintain stability of the asset increase in the first three quarters and the share of the real economy financing still increased and in the next step we'll continue to focus on the main businesses and responsibilities improve the key areas such as sandal area and the tech financing and we'll constantly serve the real economy at the same time we'll strengthen the foundation set up by the customers and control the costs and have a better pricing and so has reduced the net interest rate volatility to promote the interest income. Second, we have increased the non-interest rate interest income and we have narrow decline margin of the fees and Q&Q compared with H1, the drop margin is narrowing with the effects of the policy. We will seize the opportunity of market recovery. We will continue to grasp the potential of the market and also keep the other non-interest income stable. We will also follow the domestic and international macroenvironment changes and sees the sound opportunities and optimize the portfolios also increase other non-interest income that will make keep the asset quality stable reduce the credit cost in a three three quarters to provision coverage ratio is still high and we still have the strong ability to to diffuse risks and we will continue to strengthen the risk control and keeping the asset quality stable. This represents my answer. Thank you. Thank you, Mr. Liu. Please welcome the friends from the telephone to ask questions. And also the question will be ordered by the time of your application. Let's connect to the first questioner. Greetings. Please ask question. Okay. Thank you. I'd like to ask you when it comes to the interest rate trend, we have seen recently there are lots of interest rate adjustments in September, the mortgage rate repricing. Of course, the previous press conference has mentioned that the liability of the banks can maintain the corresponding adjustment. I'd like to ask you when it comes to the interest rate spread, In the new policies, what is the expectation of the interest rate? What's your prediction in the net interest rate has narrowed when reaching the bottom? And please ask Mr. Wang from the Assets and Liability Department to answer the question. I would like to thank you. And you have raised a quite good question, just as the Secretary of the Board mentioned. In the first three quarters, the net interest rate formed 0.45%, the same with the last H1. We have implemented the deployment of the CPC Central Committee, especially recently the Central Police Bureau has issued relevant documents to launch the anticyclical interest rate adjustment, and we have reduced the existing mortgage ratio rates. and compounded by APR decline, our net interest rate will be maintained steadily. The asset side will strengthen the support to the real economy and reduce the general financing costs of the society. Consider the October's existing mortgage rate adjustment. The interest income will still face pressure. It is expected the asset ratio interest rate will be under pressure in terms of liability with the July and October R&P deposit rate has been reduced and the efficacy of the policy has been released and the effect has reduced by 90% so the liability cost pressure will be released and from the October's package of policies Depositing loan interest rate effects will offset each other, so it will have a limited impact on the net interest rate. Next year, when the financial sector will yield profit to the real economy, our income will, under pressure, we may consider the following factors. One, on the liability side, this year, three times of the LPR reduction will promote the existing mortgage repricing. So the interest rates will be manifesting next year. The interest spread will also go down. The deposit cost pressure will be eased and deposit interest rates will continue to go down. If we consider the deposit interest rates, it may offset the Deposit decline, interest decline. Thank you, Ms. Wang. Now, next, please welcome the speaker and the questioner from the scene. From . My name is . I'd like to ask you a question related to the asset quality. Could you please look forward to the asset quality in the future? Also, from the corporate and retail, so what are the areas And the most prompt for the MPAs, thank you for your question. The credit management department, Mr. Wang, will answer this question. Thank you for your question. So I'd like to release the information on ABC's asset quality because ABC has always prioritized the prevention of the risk. and keep to the bottom line of the credit risk and the asset quality has been steadily recovered. So the MPL is 1.32% and down 0.01 percentage point compared with H1 as the forward-looking default ratio has been maintained low among peers and our expected CSER margin has reflected the foundation of the assets. So among the major state-owned banks, this ratio is the only bank that has maintained the positive ratio. From these indicators, ABC's asset quality is kept steadily. So looking forward, we expect that the asset quality will be stable from external factors, China's policy stabilizing expectation growth. And this has been showing its effects. And our economy has been recovered with introduction of the package of policies. It will provide a more favorable environment for us, especially the real estate market has stopped the decline and recover. And also for the government debt, a package of fiscal policy support has also eased the debt pressure of the government. So externally, we have a sound policy environment. Internally, we always serve the real economy and constantly optimize the credit structure, accelerate the economic transformation, and we have consolidated the asset quality. In terms of credit risk management, we have strengthened the real estate and local government risk diffusion. In terms of the credit management, we have improved digital management capacity. Our digital centers have established lots of models and we have also collected lots of clues and we can have the caution early warning of the risks. Therefore, the credit risk management has been forward-looking. So from the forward-looking indicators, such as the Caesar margin, we have maintained a sound level among peers. Our asset quality reflected in NPL has been maintained a sound level. Thank you, Mr. Wang. Please connect to the next questioner from the telephone side. Okay. Thank you, management, for giving me such an opportunity. My name is from . I'd like to ask you the risks currently for the general policies. There are some support on the real estate asset quality. I'd like to ask you the corporate real estate asset and what is the trend for the loan disbursement for real estate and the central public bureau has mentioned that we should promote recovery of the recovery of the real estate market and what are there any policies for the collection and storage so I'd like to ask Mr. Duan to answer this question thank you for the question for long term ABC conscientiously implement the deployment and decision making of the CPC Central Committee and State Council, follow the requirements of the regulators. And also, we have secured the policy compliance. We have adjusted our real estate and mortgage policies, follow the rule of law and regulations very, meets various diversified demands of the different financing entities. In terms of asset quality facing the downward pressure of the market, ABC has taken active steps and multiple steps, adopt one policy for one player. As of September, the NPR ratio compared with the beginning of the year has been stable. Asset quality has been kept steadily. So we have the sufficient provisioning to ensure that real estate risks are controllable generally. In the next step, we will earnestly implement central political roles, work essence, and highlight the people-orientedness and the political-orientedness of the real estate policy, secure the delivery of the houses, and purchase the existing commercial houses for the purchasing and leasing Actually, we actively support the real estate sound development to facilitate the stop of the declining of the real estate market. And according to the commercial sustainability, for optimizing the additional real estate, we will play a more active role. Thank you. Thank you, Mr. Duan, for your answer. Next, the question from the scene. Thank you, the management. My name is Li Jun with Guangfa Securities. I'd like to ask a question related to county area because in recent years, the county area contribution has been high. What is the priorities and deployment for the county areas? And we have the county area loan have been increasing fast, and how do you control the risks? Thank you. At the Re-Revitalization Finance Department, Mr. Sun will answer this question. Thank you. For San Long and county area businesses, the main businesses of ABC, and this is where our traditional advantages lie. Just now, our speaker have introduced the county area loan situation. We have seen the contribution has been increasing. Next, we will conscientiously implement the sub-plenary session assets and match a package of incremental policy. We use the experience of thousands of engineers and will mainly do the following work. First, we would grasp major opportunities of integrated urban rural development and increase the supply of in sandal area focusing on the key area and weak links and implement the industrial financing and the farmers and new citizen financing constantly increase the disbursement second overall built on the sandal use diversify needs and deepen the service model innovation and cater to the new demands of the business types and categories and expand the bond and fund and leasing and other financing needs explore the diversified and diversified financial service systems. Third, we focus on the sustainability digital technology development. According to the smart bank development, we have strengthened AI, IoT, and big data and other technologies application in the farmer-related businesses. Constantly serve the digital scenarios and introduce more online farmer-related products, optimize the products, use the quality products to promote The rural areas economic development force will optimize the San Long professional service system, rely on the San Long business units architecture and strengthen the resource giving, optimize the business authorization channel establishment. so as to provide stronger guarantee and support for the San Long financial services. As for the San Long area loan, which are our next focus, will continue to do well. The loan disbursement at the same time will control the risk, will constantly optimize the credit policy supply, identify the priority of the disbursement, optimize the county area business strengthen the risk control second will strengthen the farmer related business will strengthen the dairy products manufacturing and research identify the big customers risk control third will deepen digital risk control methods diversify the digital risk control methods and iterate the risk monitoring models, constantly improve the accuracy of the risk identification. Fourth, we will improve the long-term work mechanism using the recovery and write-off. This is my answer. Thank you. Thank you, Mr. Sun, for your answer. Please connect to the next questioner from the telephone. Thank you for the opportunity. I'm from JP Morgan. When it comes to my question related with the disbursement, the growth rate has reached 9.2%. It is stronger than the industry. So with the economic growth under pressure, how do you view the current credit disbursement situation. So what are the major priority areas for the credit disbursement? Thank you for your question. Mr. Wang from the credit management department will answer this question. When it comes to the credit disbursement for ABC, it is mainly focused on the three areas. First, San Long, Business and County area business and maintain the growth. By September, the balance reached 9.72 trillion, accounting for 40% of the domestic loans for the increment of 956.3%, up 10.3% YY. In the rural revitalization development, it has maintained fast growth in the accuracy and the coverage of the county, Financial services have been increased and will serve the five priorities. Support for the key areas has been increased. In tech and strategic emerging industries alone, growth rate has exceeded 20%. The growth rate has reached 12.6%. Green credit has exceeded 4.9 trillion yuan up. of 895.7% of 22.2% in the inclusive finance. The balance reached 4.95 trillion. A third area is the personal loan area. It is leading the peer. It has newly added 691.8 billion. The increased speed was higher YYY. and the emerging as well as the growth speed who are among the first in peers. So the macro policy's effect has been showing our economy has continued to be recovered. Economic transformation and transition has given us impetus and the credit need has been recovered steadily. So we will seize the opportunity to store the projects to increase the uh disbursement efforts so as to uh all mainly serve the provider of the finance to the real economy and as for the we'll continue to focus on the whole supply chain of the financing and have the potential and needs of the county area maintain the fast growth of the loans in county area will serve the five priorities serve the upgradation and transition accelerate the green and low carbon transition and match two areas credit needs so as to increase the financing for the key projects and engineering second or increase our efforts of the coordinated white list for the financing will use the refinancing and securing the delivery of houses tools. Fourth, will facilitate the well-being improvement and matching using the old instruments and to replace the new objects to keep the leading advantage of the retail business. Fifth, will implement the policies to support the real economy and continue to support the SMEs and constantly strengthening and these are our efforts. The credit demand will continue to be recovered steadily. Thank you. Thank you for your answer. Next speaker from the scene. Next question, please. Thank you. I care about the investment issue because so my question, can you please Introduce other strategies for the investment and can you please have look forward to the investment return? So the financial market Mr. Xiao will answer this question. Thank you for your question since the start of this year the bond market investment has been in decline and 10-year bond market has dropped by 40 bp compared with the start of the year as for the bond investment we conscientiously implement the central financial work conference and central economic work conference and the third plenary session sessions and we maintain that's pursuing steady growth so we constantly give full play of these SLEs in the bond investment has three features we have mastered the market according to the asset allocation strategies we have also considered needs of the investment and we have also seized the opportunity of the high interest rate of bond second we coordinated the categories and duration and account structure of the bond and coordinated the comprehensive yield requirements we have increased our investment in the in the tax-free bond to serve the real and local economic growth. A third feature goes like this. We still actively serve the economic development strategies and serve five priorities. We actively support modernized system, strategic emerging industry financing, support the rural revitalization, inclusive finance development. ABC has comprehensively considered As a liability structure and the need to serve the real economy, we have also adjusted our duration generally, which is higher than the market average. In the downward pressure, investment in return has been sound. From the whole year, the return has been sound, which is higher than the market average. Thank you. Thank you, Ms. Xiao, for your answer. Please connect to the question on the telephone. Greetings. With Credit Agro. I'd like to ask you the consumption loans. Our country has introduced a lot of policies. I'd like to ask you for the financial loan and consumption loan. What are the trends of these loans? Are there any increase of the MPL ratio? And how do you control and manage the relevant risks? Thank you. The personal credit, Mr. Zhou will answer this question. Thank you for your questioning. ABC attached great importance to the development of the personal fund credit business. Especially this year, we have implemented policy deployment of our country to boost the consumption. But as of September, personal credit a personal loan balance of $800.75 trillion, up 8.5%. For the five years in a row, the growth margin and speed have been leading among peers in the consumption loan. We actively respond to our country's strategies and support the cost utilities to Using the old objects to replace the new objects, by the end of September, the personal consumption loan registered 1.62 trillion yuan, up 66.8 billion, maintaining first in terms of the margin. We have disbursed 4.48 trillion yuan. We have nearly dispersed the interest rate that is 18BP lower than the H1. We face lots of commercial and industrial users. We constantly optimize Shanhui Yilou and Huino Yilou, increase our financing to the catering and wholesale and retail industry. As of September, personal operation loan balance up 68.6 billion. Accumulately, we have disbursed 258 million yuan, newly disbursed weighted ratio of 2.55%. Just now, Mr. Wang has mentioned the asset quality situation. I'd like to add some of the personal loan situation. As of September, the NPR ratio, personal ratio, 0.88%. Asset quality is leading the peers. The personal consumption debt was 1.32%. So from the perspective of the future development trend, our business department's judgment was the same with the credit department. The asset quality is generally controllable and we will do the prevention control of the personal loan and thus we uphold the business development and the business risk control integration so that the risk prevention control has been incorporated into the adjustment strengthen the risk control at the source we will also pay great attention to the risk control of before low before landing and also will prevent the illegal agents, we have established the personal credit model monitoring committee. We have also iterated the models so as to identify and dispose of the risks at an early time. And also, if the risk cannot be diffused, we'll stop such business. And also, we have improved the tool before lending tools to ensure the real mortgage and the field investigation. We also refuse to cooperate with the illegal agents. Third, we uphold the service driving and the tech fund driving. We have created an innovative management model before lending, in the lending and after lending. And in the personal management loan, we have introduced the external data also. In the consumption, we have introduced the insurance data. So currently, the effects have been sound. We established the normalized risk management. We have utilized asset securitization methods and so on. And we have adopted multiple channels to defuse the existing risks. This is my answer. Thank you. Thank you, Mr. Zhou. The next question from the C. Thank you, management. I'm with from Huatai Securities. I'd like to ask a question related to the deposit we have seen in the past one year or two years. Deposits have met serious conditions, but in the Q3, the market has undergone great changes. I'd like to ask you, for the loan trend, what is your judgment and analysis in the future? Also, for the citizens' deposits, I'd like to ask you, because in the past two years, and there has been adjustment of the listed interest rate. So what is the effect on the repricing of the liability side? What is the rhythm of the repricing and what is the effect on the liability side on ABC? So asset and liability management department, Ms. Wang will answer the question now. Thank you for the question. I would like to answer this question. In recent years, the financial environment has been complex both on the broad and the residents and the companies who favor the stable on deposits, especially the time deposit. The time deposit has been uprising in recent years. This has increased the pressure of the net interest rate but at the same time, with the share of the time deposit increasing, has increased the liability, make the liability stable. So ABC's trend is in line with the whole industry. The time deposit has currently, as our economy continues to be consolidated and recover, facilitating consumption, domestic demand policies have been strengthened especially recent years a package of incremental policy have been introduced the market expectation has been changed gradually which will facilitate the willingness of consumption the deposit will continue to consolidate the base of the savers and will enhance our capacity of their customer segmentation facilitate the demand deposit to turn to the time deposit. Constantly optimize the deposit structure when it comes to the interest rate reduction. According to the deposit adjustment mechanism, you can refer to 10-year bond yield and considering your loan conditions, adjust the deposit interest situation. Our banks have for two two times reduced the deposit rates. Next, given the market condition, as well as the strategies of our peers, optimize the deposit pricing strategies, consolidate the service of the real economy. Thank you. Thank you, Ms. Wang, for your answer. Because time is limited, we will answer the last question. In October 23rd, we announced the notice soliciting the questions from the investors. They focus on the capital and dividend payout. The country plan to increase the tier one core capital for the six banks. And what is the latest trend of ABC? And also, it will dilute the dividend per share. Will it increase the dividend payout ratio in the future? Mr. Tang will answer this question. Thank you for your caring and support of the ABC. Also, thank you for your question. When it comes to the capital remuneration, according to the arrangement of the shareholders, we facilitate the capital supplements and we actively communicate on this issue and discuss the core capital supplementation ABC has considered the requirements of the shareholders who have maintained a relatively high dividend payout ratio, which has been maintained at 30 or over 30%. We have cumulatively paid dividend of $815.2 billion from the share interest rate According to 2023, each share and each share dividend payout ratio is about 4.8% and 6.9%. And the same management in H1 announcement is that we attach great importance to the dividend payout. And before the spring festival, we'll complete the distribution of the dividend so that the shareholders may give to get the dividend when it comes to the refinance influence on the dividend payout. Indeed, in the short term, it will dilute the dividend per share. We'll adopt a package of measures to meet the gap of the dilution with the policies' effects being released. we will provide more long-term and also abundant dividend payout. We wish you can continue to care and support ABC. Ladies and gentlemen, Agricultural Bank of China 2004 Q3 results announcement comes to an end. I'd like to thank the investors, shareholders, and analysts for your long-term and continued support and care. Also, I'd like to Thank the colleagues of our team for your interpretation and sharing. If you have any questions in the future, welcome you to contact with our team. This announced the end of this results announcement. Thank you. See you.