Agricultural Bank of China Limited

Ladies and gentlemen, good afternoon. Welcome to the annual results announcement of ABC. It's a great honor to meet our online, on-site, international, domestic investors, analysts, and media friends. With that, I'd like to express my appreciation to your active participation, and my thanks go to your long-term support and interest in the development of ABC. Thank you. Today we are with us Mr. Wang Zhi, Mr. Lin Li, Vice President of ABC, Vice President of ABC Liu Hong, and Vice President of ABC, Mr. Wang Wenjing, and Vice President of ABC, Meng Fanjun, and Mr. Liu Jin, Board Secretary of ABC, and some other directors are joining us online. I'd like to present some of the basic facts, three aspects. The first one is operation results. In 2024, ABC implemented the strategies from the government and provide support to the agricultural development as well as every economy, optimize our management strategies, major operating indicators are performing good. First, the growth rate in the first half of 2024, turning from negative to positive, and in the second half of 2024, we'll continue to optimize the total net profit, $220 2.7 or 4.8 percent and operating income, 711.4 billion or 2.3 percent, interest income, 580.7 billion, 1.6 percent. And the second, newly growth loan, 2.29 trillion or 10.13%. The growth of corporate and individual loans or personal loans are leading our peers and also the Individual loan, or the discrepancy, is 0.42%, and also leading among the peers. As the quality was sound, NPL ratio, 1.3%, down by three bits from the year end of last year. Special mention loan ratio, 1.4%, down by two basis points. And overdue loan ratio, 1.18%. And the ratio of overdue loan to NPL, 98.98%. And provision coverage ratio 299% and remain well capitalized and risk resilience. Capital adequacy is increased. We issued around 320 billion TLAC and a capital bond. And CAR increased by 1.05%. A CT1 car was issued 11.42%, and also the return to investors has been increased. The dividend ratio and the potential and the performance has been recognized by the investors. In 2004, the stock price of A-shear and H-shear has been increased by 55% and 58% respectively, and also ranking first among the comparable peers. Recommended by the Board of Directors, based on the interim dividend payout, and there will be 1.255 RMB per 10 shares, plus the interim, so we'll have 2.419 RMB per 10 shares, and we have around 90% 80 billion of dividends payouts. Measures we have taken, the operating results for performance are attributable to the strong leadership of the CP Central Committee and the government. It is also possible because of the interest in the customers, paid by the customers and the private sectors, we achieve to the high-quality development. More specifically, our job were done in the following five aspects. First, We focus on our main business and continue to strengthen our financial service to the agriculture, farm, and rural areas. And the strategy's development has brought room for the development of ABC. We focus on the agricultural area and county level and enhance our service capacity in the county level areas. In terms of the business growth scale, the county level growth exceeds $1 trillion balanced 9.85 trillion, accounting for more than 40% of the domestic loan balance. And the annual growth rate of the daily balance, 1.1 trillion, and balance, 12.53 trillion, accounting for 44% of the total loan balance. So the county level has provided a more and more important role in the development of ABC. We focus on food security and also consolidate the poverty alleviation and enhance our financial support, green and the loan balance to the important agricultural products, more than $1 trillion, and also we have more than 15% growth rate of the agricultural area. And then in farmers, we also increased our coverage of the loan to farmers to help the farmers. Huilong Yi alone reached 1.49 trillion, 37.7 percent of growth. And the second focus on the real economy, to the five key chapters of finance, we focus on the real economy, continue to in-house our financial supply. With the reasonable growth rate of the volume, we focus on the five key areas of finance and enhance the investment in the key areas of the weak links of the economy to enhance the quality of financial service. And in fintech, we actively innovate our financial products as well as the service mechanisms that focus the fintech where the technology companies will establish the specific credit service system. And for the technology companies at different development stage, We built a whole lifecycle matrix of the products, and we rolled out the empowerment loan as well as the loan as well as external direct investment loan. And also we established the equity investment pilot fund, and we signed a strategic agreement with the cities and relevant businesses were put into operation by the end of 2024. ABC's loan balance to strategic areas more than 2.5 trillion, growth rate more than 22%. And in green finance, we implemented the green finance strategy focused on the clean energy and upgrading of infrastructures as well as energy conservation, enhancing our asset supply, our credit supply. And based on the features of ABC, we wrote out the three agricultural integrated development enhancers, green agricultural development, as well as the improved of the environment in rural areas enhance our credit supply as well as the service to the green investment and we originate the green bond and also enhance the appropriate green bond investment and innovate the ESG-themed WMP. The green bond balance, 4.97 trillion, an increase of 22.9% from the year end of last year. In green finance, inclusive finance, we established ABC featured online, offline, integrated as development model, create multi-scenario credit products to meet the inclusive finance borrowers demand. And we implemented the support to small and micro borrowers and visited the credit and the boroughs we visited, those indicators were ranking number one among the comparable peers. By the end of 2024, Inclusive finance, loan balance increase rate more than 30 percent for six consecutive years, and balance 4.66 trillion, number one among the peers. The largest coverage and the sustainable development is the best among the peers. In pension finance, We support the multipolar pension fund development, the real social interest card and the QR code. That number has been leading the peers. And the management scale and the number of the pension fund is increasing rapidly. And we actively... the supply, product supply, newly added 140 pension fund products and also pension funding finance has been developed. The loan has been grown at 68%. In digital finance, We use a digital plus algorithm. We rolled out and as well as other innovative products. We use the enterprise level architecture as well as the digital tools to provide the bottom line just to support to the customers. So we have an online-offline and agricultural the balance reached 5.73 trillion and 34.8% growth rate. ABC actually responded to the financing mechanism in the real estate sector. We approved more than 1,000 white list projects and provided $400 billion loan balance and promptly reached the major projects equipment upgrading as well as we signed around $130 billion and also loan balance is $28.5 billion and support And they cross-border as R&B settlement, and the growth rate is 13.7 percent. And the third, we focus on the people's livelihood. Finance for people's livelihood is the basic feature of finance. While maintaining its own sustainable development, CCB is true to its mission to serve people's well-being, to serve the environment. immediate problems and interests of people's livelihood. To provide people's livelihood, we enhance financial support in education, medical care, and housing, and the loan balance has been, individual loan has been increased by around 1.9.4 percent. Number one in the majors, personal consumption loan and growth at 28.3 percent or so, number one, among the comparable peers. For the key customers, we optimize the aging population as well as the international friends living in China. We provide the China optimization as well as other areas to provide a more inclusive and a more convenient environment for payment and provide the wealth of the people put out of poverty and we provide the people, we provide the benefits to around 580 million. And for the consumer rights protection, the mechanism for the whole life cycle of the products as well as the service provide the rights to know as well as other legitimate rights of consumers. In 2024, for 1,000 outlets and for 10 million complaints are the least, and also the regulators' comments or feedback has been improved. For the consumer finance, and also we responded to the jobs. We enhanced our headcounting in higher meant and to supplement the vacancy since 2001 for each year. The newly added employees are among the peers and they are first. And in 2024, we hire 32,000 employees. In the future, we'll continue to hire more employees. In 2025, we will increase our headcount. Recently, we noticed that the spring hirement, the hirement or headcount plan is an annual plan. please look at the figure at the whole year so that they'll be more comprehensive and to get a paramount picture about the employment by ABC. We focus on the risk control, focus on the development as well as risk control. Risk control is the top priority of ABC. Risk management focuses on three areas. The first one is the key area, risk control, market risk, and technology risk control. For the key areas, risk control, ABC focuses on the preemptive deployment. It has more active and intelligent risk management mechanism focused on emerging areas, industries, and retail and the inclusive finance to We have the borrower or the customer specific to do the risk mitigation and also province specific mitigation measures. And also enhance the platform market risk control and enhance the oxygen see-through monitoring and also optimize the risk exposure and enhance the market risk monitoring. It's more targeted and really effective. And for the technology risk control, we put forward the three areas, risk discovery or recovery, and also we completed the distributive architecture, final accounting, and enhanced the cybersecurity mechanism, protection mechanism, and also the daily transaction has been $1.5 billion, and also the service availability rate and the important time has been 99.9%. And the focus on the reform and innovation. The new driving force of businesses in 2024, ABSC implemented the spirit of the third plenary of the 20th Synthesis Committee at Explore. In technology innovation, we built the intelligent banking system and we put in the digital and AI application. While at the same time, Explore, the application of large language models using it to empower our internal management, improve efficiency internal management control. For business management, we deepen our reform of the agricultural development to ensure the support, and we coordinate the pricing and volume, and make the pricing more targeted, and also enhance the credit review, improve the credit granting efficiency. And for the first service efficiency, enhance the CRM team. CRM has been increased to 113,000 and the queuing time at the outlets has been reduced by 20%.

Now I'd like to report to you on the third part that is in 2025 our outlook for 2025. So in 2025, with the economy turning for the better and the momentum remain good, so we believe that with the continually releasing of the consumption boosting policies, we think that the consumption will remain stable and investment will continue to maintain fast growth. For infrastructure investment, it will be supported. The housing market will continue to be improved. In terms of export, although there are some uncertainties, we estimate that it will remain resilient. And in the meantime, we will also have more proactive policies, monetary policy and fiscal policy that will be strengthened or enhanced. management and control. So all this will actually provide a very good external environment for us. And also for 2025, it is also the end year of the 14th five-year plan, so the ABC will continue to strengthen risk management, promote growth to continuously improve our development and to serve the real economy and maintain the stability of the financial sector and also to provide sustainable and tangible return to our shareholders. Specifically, firstly, we will stick to our main business and to strengthen the county-level agro-related development. And secondly, to support the macroeconomy policy and to further strengthen enhance the five priorities in the financial sector, and certainly to strengthen risk management control and keep the bottom line of risk management control, and also to improve customer satisfaction and improve reform and innovation. So much for my presentation, and now we're going to enter into the Q&A session. Ms. Liu will be hosting the session. Thank you. Thank you, President Wang. Now we're going into the interaction session. So for this session, one delegates are limited to only one question. Before raising question, please identify yourself. So now the first question, the gentleman, please. Thank you. Thank you for this opportunity. I'm from CIC. I'm Lin Qi. in 2024 operating income and the profit growth is the first among the peers. So I'm wondering what's the reason behind this and what is your expectation for this sustainability of such a good momentum this year? Thank you. I'll take this question. Actually, in my presentation, I've already talked about the five focuses of our work. which to some extent have explained the reasons why we have such a good momentum in business growth. And also I would like to share with you some specific experiences. So in the past year, We have done a lot of work in the following aspects. The first one is to improve the credit structure. For example, we try to further strengthen the support to the real economy. And in 2024, the real economy loans have increased by 10.1%, which accounts for 93.8% of the total domestic loans. So you can see that this improved credit structure have actually improved the returns for those loans. So this is part of the reason. And secondly, It's about the pricing and quantity balance. So while improving our quality of service, we try to optimize the pricing of our assets and also to implement relevant requirement and also in order to maintain the name decline within a reasonable range. Last year is 1.4, 2 percent. So we can see there has like three bips decline compared with that of last year, previous year. And also for non-interest income, well, against the background of fee concession, we're trying to seize the opportunity of consumption upgrading and focus on the consumption and needs of customers. We can see that. Currently, the non-fee income is around $75.6 billion. And for our investment business, revenue increased by 8.5%. Credit card businesses, 3.8% growth. And wealth management business have also maintained very prudent growth. And also, we see the opportunity in the bound market. The other non-interest income have also maintained growth. And fourthly is we've controlled the risk cost. In 2024, the asset quality has been improved. The MPL is 1.3%, which is a little bit down, like 0.03% compared to the year beginning. Credit loans have also increased a lot, decreased a bit. And for loan provision, it exceeded $100 billion. The risk compensation capability has also remained high. So that is why or what drives our operating income and also profit growth. Looking to 2025, as I've just mentioned, What's our expectation for the market? As I just mentioned, we still have confidence in the future that we will maintain the profitability growth. And we will also try to do our work in the following aspects. The first one is we'll continue to seize the opportunity in the economic development and promote high quality. growth of ABC and also there are a lot of package of policies issued. This will actually bring us a lot of new growth points. So the key is whether we can actually seize this opportunity to seize these development points. This is quite important. And also we need to build a modern industrial system, the green finance and all these are opportunities for us in the future. So while serving the national strategy, we're trying to realize our own high-quality development. So for the first two months of 2025, we can see that the loans and the deposits have maintained very good growth with improved operating efficiency. So basically, we can see that the growth in the key areas have been higher than the average. And here I'd like to share with you some data. The first one is recently for PBOC financial inclusive loan, we have exceeded $5 trillion threshold. And for personal loans, we're the first among our peers to realize the $9 trillion. And also for private-owned enterprise loans, we've also exceeded $7 trillion threshold. For county-level loans, we can see that the growth rate has become 47 percent. So from this we can see that in the first two months of this year, in 2025, we have really done a lot while serving the national economy. That is to say we've realized our own growth. Apart from the opportunities, we also try to strengthen management. So as I mentioned balance the pricing and the quantity and also to ensure the interest bearing assets grow and to improve the interest gaining assets structure and to also seize the opportunity of the market and to strengthen the deposit base. So also we need to balance the price and quantity and try to ensure the stable growth of NIM. And thirdly, we need to strengthen our judgment and analysis and to promote the growth of non-interest income. So we need to ensure the fee-based income to grow and to improve its contribution to our total income. And we can see that there has been huge room for the non-interest income. And also we need to strengthen the management to ensure the asset quality stability. So we need to balance our business and try to strengthen the risk management control, specifically in specific key areas, so as to provide a sound foundation for the long-term and sustainable growth of our profitability. Thank you. Thank you, President Wang. Now, the next question. The friends on the right. Thank you. I'm from Xinhua News Agency. My question is about deposit. Last year, the deposit growth in the banking sector is actually under pressure. So what's your judgment and estimates for the deposit this year And are there any further room of decline in terms of the interest of bearing assets? And also, under such circumstances, in terms of what are the measures you will take in terms of optimize your liability side assets, liability? Thank you. Thank you for your question. To balance asset and liability business, this is quite critical for us. So I think the key is to ensure match and also through constant internal pricing ability to promote the high-quality operation and development. In 2024, we have been supporting marigold control, and we actively conform to the rules on changes of the market to promote the deposit growth. So this high-quality development of deposit shows three matching features. The first one is loan reserve increase, which is in line with the such needs. So we can see that the deposit growth is around 2.2 trillion. We can see that we're still ranking among the top among our peers. And for personal loans, daily average volume have been increased by 1.74 trillion. So this data actually shows that we provided a strong support to the real economy. Secondly, deposit growth is in line with the requirements. Last year, we've been continuously consolidating the development to promote deposit growth. At the year end of 2024, loan deviation rate is zero point down by 0.1 percentage point. So this is quite uneasy for us because we've done a lot of work. This deviation and the improvement in deviation ratio is also the best among our peers. Deposit growth can actually ensure our credit extension in a balanced way. And the third one is the asset utilization and return. So we can see last year the interest paying ratio 1.56%, that is 0.15 percentage points compared with the previous year. And for interest, there has been a reasonable difference between the interest bearing and interest paying. And for the future trend of deposit growth, for us, we think that last year, at the end of last year, the central government raised that we need to implement the moderately easy monetary policy. So we can see there's been moderately monetary growth. And the deposit growth have also created very good monetary and physical policy. So we estimate that this year the deposit will still maintain the balanced growth and we will continue to build customer base to promote deposit growth so as to better serve the rural rich nation and the real economy. In terms of the interest cost, last year, we can see there have been twice the lending rate downward adjustment. So we can see that has been improved mechanism in this aspect. So we estimate that the cost will be reduced to some extent, mainly based on the following three reasons. The first one is that since last year, the deposit rate downward policies will be further unleashed. And secondly, the After these policies have been managed, we think that this will actually further reduce the pressure in this aspect. And secondly, there has been interest cut cycle. So we can see that the foreign currency interest cost has been decreasing. So to some extent, we think that the interest paying or cost will be still going down. And last year we can see the time deposit accounts for an increasing percentage. This increase has been not as much as previously. But how do we look at this figure? This means that there has been more resilience in deposit. But if we look at the maturity, it actually relates to the train of interest rate. When there is low interest rate, the long duration of a deposit will be better for us to manage the full cycle of the deposit. And also, we can see it reflects the changes in people's wealth management behaviors and also in the financial market. So with economy turning for the better, consumers' confidence in the market.

It would be better for the adjustment of the liability structures in the future, ABC, to meet the customer's requirement. And demand will continue to optimize the liability structure to support the credit supply to the real economy, major four aspects. The first one is to focus on the customer-based development needs. This is a priority of the priority. And to be more specific, I want to expand the customer scale while at the same time I want to optimize the customer structure. And third, to promote the deep-rooted customer and to enhance the customer experience, use high-quality products as well as a convenient financial service to enhance the goodness or loyalty of the customers. And also to strengthen the core competitiveness, to be more specific, and include this finance, pension finance, to continue to consolidate ABC's, the county business as well as retail business that is a comparative advantage. And third, we need to enhance the IT management to have a stratified management of the customer so as to enhance the deposits, products into the service, to enhance the revenue of the sources of low cost. and it also will lead to the digitalization transformation in the digital development of ABC to participate and promote the digitalization application in the rural areas so as to provide a comprehensive and a diversified financial service so as to enhance the high-quality development of the deposit business. Thank you. Thank you, Ms. Rutling, for the answer. Next question, please.