Bank Of China Ltd Ord

Dear investors, analysts, and media friends, good afternoon. This is the Bank of China. 2022 Annual Results Release. And my name is Yu Ke, the Securities Affairs Representative and General Manager of the Secretariat Department of BOC Board of Directors. And today, I, myself, and my colleague, Mr. Jia, Spokesman and also Director of the General Office of the BOC, will co-chair. Let me introduce the officials. Today, we have President Liu Jing with us and Vice President Zhang Yi. And also joining us in Boao, we have Vice President Zhang Xiaodong and Risk Management Director Liu Qiandong and Business Management Director Zhao Rong and Chief Information Officer Meng Qian. In accordance with regulatory requirements, we also have specifically invited Mr. Jiang Guohua on behalf of independent directors attending the release as well. Also, Mr. Lin Zhenming, President of BOC Hainan Branches. is also joining us in Boao. Today we set up a venue in Boao because of the participation of President Liu Qing in the Boao Forum for Asia. The forum has attracted great attention at home and abroad, and President Liu only returned to Beijing last night. Next, let's invite President Liu to talk with you about the feelings of attending the forum. Investors, analysts, and media friends, good afternoon. Vice President Zhang Xiaodong and I myself yesterday took part in the plenary session of Boao Forum for Asia, as well as other activities, and I just came back to Beijing for today's event. And Vice President Xiaodong is still in Boao, and he's joining us online. Boa Forum for Asia this year has attracted guests from different parts of the world and also different sectors. People are appealing for cooperation and aspire for greater cooperation. And I heard Premier Li Qiang said at the opening ceremony that the potential for Chinese development is very great and also the momentum is also good. And with that, China can inject more certainties for the world economic recovery. I also can feel that the Chinese-style modernization not only will provide different types of new opportunities for China, but also new concepts, new mindsets, as well as new targets for the whole world. And Boya Forum for Asia this year takes the mission as to synthesize positive energies for Asia as well as for the whole world. And for this year, people appeal for even higher level of opening up, that is the Chinese voice. And also steady progress of Hainan Free Trade Island is a very important landmark for China's opening up. And today, in Beijing, Hong Kong, as well as in Boao, we have three different venues – And the purpose is that, as I mentioned before, as you can see, our Vice President Chang and other colleagues are joining us in Boao. So with that, I hope that you can see and you can feel the momentum of Chinese economic recovery as well as the potential brought by China's reform and opening up as well as the role BOC can play in contributing to China's further opening up. Next step, Bank of China will continue to be a global bank and a specialized bank, a very capable bank in delivering different types of businesses. We try to serve the dual circulation as a national strategy in China and will continuously to serve high-level opening up of China. Thank you. Thank you, President Liu. President Liu not only shared with us the positive energy from Boao Forum, but also conveyed the message in terms of confidence of a further development of BOC. Next, let's move to the official agenda. First of all, we want to invite President Liu to present on the annual results of the company and then followed by a Q&A session. And it should be noted that all the financial figures presented today are prepared in accordance with international financial reporting standards unless otherwise specified. The presentation can now be downloaded from BOC official website or viewed at the bottom of the live page. Now let's give the floor to President Liu who will present the results of Bank of China. investors, analysts, and media friends. Looking back on 2022 for Bank of China, it can be called a fruitful and wonderful year. On February the 4th last year, on that specific day, we started supporting Winter Olympic Games by providing financial services, and then the next day, the 5th of February, we celebrated the 110th anniversary of the bank. During the whole year, we made overall plans to promote services to support real economy and also to fight against financial risks, deepen reform and innovation, prevent pandemic, and also achieve sustained and steady growth in our businesses, and we successfully hit all the annual targets. Next, I want to be more detailed in introducing the business performance of Bank of China in 2022. First of all, steady progress in terms of financial results. The annual operating income was 619.139 billion RMB and after-tax profit and profit attributable to shareholders increased by 4.47 and 5.02 respectively. Among them, net interest income increased by 8.36%. Net interest margin remained stable and cost control achieved good results as well. Secondly, assets and liabilities continue to be optimized. The growth rate of assets and liabilities of the group reached 8.2% and 8.1% respectively. And the increment of domestic RMB loans and deposits both reached record highs in China, and also business structure continued to be optimized. The proportion of net loans to customers increased by 1.86 percentage points. The volume and the price of RMB customers' deposits in China have developed in accordance Denation and a proportion of high-cost deposits has further declined. Personal deposits have also surpassed corporate deposits for the first time. Third, the foundation for further development continues to be improved. The number of active corporate customers increased by 9.1% year-on-year, and total number of personal customers was nearly 510 million, and the highest growth rate in comparable industry, the number of monthly active customers of personal mobile banking increased by 7.2% year-on-year, Number of corporate internet banking and corporate mobile banking customers increased by 9.8%, 24.11% respectively. And also, our asset quality remained stable, and NPR ratio was 1.32%, and provision coverage ratio was 188.73%, up by 1.68 percentage points from the end of 2021. That's the result of a internal development as well as external supplementation and capital adequacy ratio reached 17.52% off by 0.99% compared with the year before. In 2022, Bank of China continued to strengthen the implementation of the group's 14th five-year plan and truly served the stability of the overall economy with our strategic tasks and also moved ahead in terms of high-quality development. First of all, we tried to stabilize the overall economy. We formulated action plans to support the real economy and introduced more than 40 measures in eight different aspects. Domestic RMB loan increased month over month and also year over year as well. Annual increase of more than 1.8 or rather 1.58 20 yuan. We set up a special loan to stabilize and expand jobs and launched a service plan of inclusive employment loan. and we rigorously support catering, retail, tourism, transportation, and other industries, and also support key industrial sectors and work links in the national economy. The balance of medium and long-term loans in the manufacturing industry increased by 6.23% compared with the beginning of the year, and loan for private enterprises increased by over 19%, and also respond to the national policy of ensuring the delivery of apartments and stabilize people's livelihoods. and also actively provide customers with multi-channel financing services and maintain market leadership in bond underwriting, and also custodian services have been developing very fast. As the main bank for cross-border finance, we have been increasing financial support for stabilizing foreign trade and investment so as to serve the overall economic development and trade. And domestic international settlement volume was $3.4 trillion, and the market share increased of international trade settlement ranked first in the industry. Direct investment in import and export trade financing increased by 15% year-on-year. Cross-border guarantee business maintained leading position in the industry. Secondly, we try to support the economic and social development and made great progress in five different areas of financial support. The eight areas as a concept in recent several years, especially in our release activities, has already been introduced and explained by me in a very comprehensive way. And in terms of our finance for science and technology, we have provided more than 1 trillion yuan of credit support to nearly 50,000 companies in the science and technology sector. The total amount of financial support for technology companies was about 455.9 billion RMB, and also the number of branches featuring technology finance increased To 184, we improved our product and service system, developed our own evaluation method for technology-based enterprises, and optimized our credit granting process, and also provided credit to over 18,000 specialized innovative companies with more than 345 pending RMB. And also, the Science and Innovation Mother Fund was successfully prepared. We launched the Yangtze River Delta and the Hengqing Science and Innovation Fund as well. Continue to deepen the cooperation with the government agencies and carry out in-depth cooperation in the fields of science and innovation as well as IP, financial services, national strategic science and technology innovation, etc. And in terms of green finance, we constantly optimize the governance structure and the mechanisms and the policies and deeply participate in global green governance in 2022. The balance of green credit reached 1.98 trading RMB with a 41.08% year-over-year increase and will continue to lead the market in terms of underwriting, insurance, and investment. Actively participate in benchmark. and landmark green projects with international influence relying on advantages of our globalized market as was comprehensive management to create the so-called POC green color. We continue to promote green and low-carbon technology as world's development takes the lead in completing our carbon inventory and also make sure to integrate the concept of green and low-carbon development into all aspects of our daily operation, try to build an environmentally friendly low-carbon bank. In terms of inclusive financing, we follow the concept of financial services for the benefits of people, continue to improve the quality and efficiency of our services. And by the end of 2022, the growth rate of inclusive loan to small and micro enterprises reached... 39.3% and also number of customers increased by 20.87%. We developed 17 online products. And the new online inclusive loan accounts for more than 62% of the total new loan. We released a Hui Ru Yuan app. so as to build an intelligent service ecosystem. We strengthen the services for key customers and carry out micro enterprise assistance program, maintain first place intellectual property rights financial support businesses. We also provided comprehensive service programs, especially for individual entrepreneurs and commercial entities, et cetera. and also continue to deepen cross-border services. And in terms of cross-border finance, the market share of international settlement, cross-border IMB settlement, clearing settlement, and sales of foreign exchange, et cetera, in these different aspects, we have maintained number one. And the volume of cross-border IMB settlement of domestic institutions was 10.4 trillion dollars. RMB and cross-border receipt and payment for new foreign trade customers exceeded 280 billion yuan in the whole year with 85% increase rate and more than 900 corporate credit projects have been followed up in countries that are part of the BRI and also total credit support exceeded 269 billion US dollar. We formulated and issued 20 action plans to adjust and stabilize foreign trade across different cycles, continue to provide high quality services to different expos.

In the Consumer Goods Fair in Hainan, the Canton Fair in Guangzhou, the Survey Trade Fair in Beijing, and other large-scale national exhibitions, VOC is a strategic partner in all those events. Yesterday, when I was attending the Boao Forum for Asia in Boao City, it was a national-level fair, but it seems like... BOC's fair because it is the employees of BOC everywhere and the BOC logo everywhere and BOC customers signing agreements with us or releasing information on different activities. We organized 150-plus events in more than 30 regions across the country, directly serving and matching more than 33,000 foreign trade enterprises, accelerating digital innovation. BOC was the first to convert foreign currency notes into digital R&B through self-service exchange machines. That is about cross-border finance. In the past year's results release, it was always a release by the president and vice presidents. Every time during the release, I will highlight the internationalization and distinctive features of BOC among all the financial institutions in China. If you say BOC is differentiated from our peers, first is our internationalization, our global operations. Therefore, we have been emphasizing in terms of the co-indicators of foreign exchange and the promotion of cross-border finance and cross-border IMB settlement. We are resolute to be the first among the peers, keeping our professionalism in different areas. in the high-level opening up of China in financial markets opening in... globalization and internationalization of financial services were always there for the country, for the customers. In the area of consumer finance, we took a number of measures to help expand domestic demand with the scale of consumer finance loans growing steadily and the customer base further strengthened. We also helped to ensure the stable operation of the real estate market and actively cooperated with local governments to promote the guaranteed house delivery, focusing on the promotional consumption We accelerated product innovation and upgrading, focusing on special customer segments such as agriculture-related and with an increase of 50% in non-housing consumer loans. We promoted the transformation of our product lines into online products with a significant increase in the coverage rate of personal online loans, reading 82.63%. Credit card auto installments amounted to 115.4 billion RMB, an increase of 7.2% year-on-year, leading the market in terms of volume and growth rate of accounts receivable balances. In terms of wealth finance, we continue to enhance the level of inclusiveness, continue to enrich our product shelves, increase the supply of inclusive products, and implemented a preferential rate policy. We have upgraded our professional capabilities and relied on our information service system to provide more comprehensive and intelligent asset allocation structure, diagnosis, and optimization solutions to our clients. We improved the customer companionship app and built an open platform for wealth management with 31 external institutions cooperating with mobile banking's Caifu Hao platform. And by the end of 2022, the total number of personal customers was... 510 million of which the number of mid to high-end customers grew by over 14%. The scale of financial assets of personal customers was nearly 13 trillion RMB of which the market share of investment financial assets of domestic banks increased. There were 159,600 private banking customers and the scale of AOM of private banking customers reached 2.42 trillion RMB. Just now I have mentioned mobile banking of BOC. In recent years, press release of our annual results, I have conducted a lot of publicity for two projects of BOC. One is number one project, that is our mobile banking project. I used to work in several financial institutions. I also have personal housing mortgage loan. I also have other financial service needs. So I have the mobile banking apps of several banks. So I have my personal customer experience. And now I'm president of BOC. So first of all, I would like to talk about the BOC's mobile banking app. It is the most convenient, most easy to use mobile banking app. Together with our customer experience experts, we are soliciting opinions for further improvements. What we want to hear are negative opinions. so we can make improvements. But at the same time, we are receiving myriads of positive evaluations in different mobile banking areas. We have different functions to meet different customers' needs. It's user-friendly interface with very convenient services. So this is the number one project, mobile banking project of the OC. Another project is called number one plus project. That is the enterprise level architecture. We call it Oasis project. which I will talk about in greater details later. In terms of supply chain finance, firstly, BOC helped to preserve and stabilize the supply chain, providing liquidity support to core supply chain enterprises amounting to nearly 2.5 billion RMB in 2022 and providing on- and off-balance sheet trade finance support to upstream and downstream enterprises amounting to over 2.2 trillion RMB, representing a year-on-year increase of 14% and 31% respectively. Secondly, we strengthen our tech capabilities to launch innovative online financing products and put into operation new online supply chain financing services, such as easy credit, providing customers with a digital scenario-based and intelligent supply chain finance experience. Thirdly, we launched a brand-new sub-chain, BOC Smart Chain, to extend quality supply chain financial services to national strategies and key areas, such as logistics, greenness, aviation, and home appliances. In the area of county finance, we focused on consolidating the achievements of poverty eradication and supporting rural industries in the countries to promote the comprehensive revitalization of the countryside with the power of finance. In 2022, county institutions achieved a significant growth in deposits, loans, revenue, and profit before provisioning. The balance of agricultural-related loans and inclusive agricultural-related loans grew by 20%, 38% respectively. 160 key pairing-off counties recorded loan growth rates of over 17%, and financial services such as credit, consumer assistance, mobile banking, and national student loans reached 157 key pairing-off counties. In 2022, 28 new county institutions were opened by BOC, including three in key support counties. More than 550 rural revitalization outlets have been established with a coverage rate of over 63% in the counties. The number of monthly active customers for mobile banking in counties grew rapidly, and the beautiful countryside version of mobile banking project was launched. The bank launched a seed industry loan and agricultural machinery loan and put into operation the Credit Village Farming Express loan online product with regional characteristics. BOC Fullerton has maintained its position of being rooted in the county, supporting agriculture and small businesses, and continue to leverage its advantages as the largest village bank in China. So these are the measures that we have taken in supporting counties through financial services. in ESG and that is the CSR external rating. BOC is receiving a higher and higher rating. You know, MSCI, MSCI ESG rating for BOC has been elevated to A. Domestically, More and more organizations are conducting research on green finance and green development and are also conducting rating in those regards. Corporate social responsibility is fully reflected in county finance and inclusive finance as important components of CSR. Inclusive finance and county finance should be incorporated into ESG and corporate social responsibility ratings. and many of our peers in terms of inclusive finance and county finance. We have a lot of pairing of counties to help for rural revitalization and a lot of achievements have been made. So in terms of corporate social responsibility rating, those achievements should be fully reflected. Thirdly, we deeply integrated into the new development pattern of dual circulation with one mainstay and two engines developing in a synergistic manner In 2022, we fully supported the construction of the country's dual circulation and the opening up to the outside world at a high level, enhanced our integrated global service capacity around the Chinese elements, optimized the global account manager system, focused on core customer groups such as Fortune 500 enterprises in China and large Chinese enterprises going global, and strived to build a system of one point of access, global response, and comprehensive services. The BOC has also been working on the development and security of overseas markets, grasping structural opportunities and revising its one bank, one policy differentiated development strategy. The global service network continued to be optimized and BOC Macau Limited was opened. Significant progress was made in the construction of overseas regional headquarters with the IPO regional headquarters in the EU successfully established and operating internationally. Regional synergy development steadily was promoted and overseas institutions operate safely and smoothly. The group's profit contribution stabilized and rebounded as overseas commercial banks recovered well. The comprehensive operating companies responded appropriately to changes in the external environment, strengthening the competitiveness of key institutions in the market and further enhancing their business expansion capability and group synergy. Fourthly, the group's digital transformation progressed solidly and operational efficiency continued to improve. We continued to invest in technology and focused on building 10 new digital talent teams. The OASIS project was iteratively promoted. The value of digital assets was accelerated and elevated, and digital processes, data, and mechanisms were continuously enriched and improved. We continue to upgrade our new technology platform and achieve the richer results in the FinTech application. We further enhanced our network security operation capability and continue to ensure business continuity. We accelerated the upgrade and iteration of online and mobile services, iterated mobile banking to version 8.0, released a white paper on financial scenario 2.0, and launched digital inclusion, digital CIE, and smart enterprise treasury. apps and platforms. We have explored a wide range of digital financial solutions in different industries and fields, and our tech-enabled financial services have continued to improve in quality and efficiency. Fifthly, we integrated development and safety and security and continue to improve our comprehensive risk management capabilities. We have promoted the construction of a comprehensive risk management system, gradually established a multilevel and comprehensive risk and emergency management mechanism, continued to optimize the closed-loop risk management and accelerated the construction of an intelligent risk control system. The forward-looking and practical nature of industry policies continue to improve. Guiding the continued optimization of the credit structure, we improved our early warning and monitoring and asset quality control system, insisting on early identification, early warning, early detection, and early disposal, and maintain stable asset quality. Market risk and liquidity risk management were actively and effectively managed, while internal control and operational risk management continued to be strengthened, and the group's major risk indicators were in line with regulatory requirements. The year of 2023 is the first year for the full implementation of the spirit of the 20th CPC National Congress and the key year to the group's 14th five-year plan. Our risk management culture is being strengthened, both at the macro and micro level. Capabilities have been further improved in BOC. Recently, in the financial sector, there have been high volatility. First, it started with SVB, Silicon Valley Bank, and then Credit Suisse. its merger with UBS and also the risk incidents encountered by some other financial institutions. For Chinese financial institutions risk management, it offers a warning bell. So the risk management business line, the risk management department and other related departments obviously have quickly responded to offer an active and fast response and timely conducted objective comprehensive and in depth risk analysis and judgment in various domestic and overseas business areas. We conducted stress testing immediately and reported to the regulators. This has fully reflected our professionalism and our capabilities to respond to risks, especially market risks. As I mentioned just now, the year 2023 is the first year for the full implementation of the spirit of the 20th CPC National Congress and a key year for the group's 14th five-year plan. We will continue to promote the implementation of the plan and serve the high-quality development, both in terms of economic development and also societal development.

Support the development of key sectors and key areas as well as the weak links by providing credit support and also follow closely the strategy of expanding domestic consumption and also effective measures will be taken. Secondly, we will actively seize strategic opportunities to consolidate our advantages around the whole world and also improve our market competitiveness as well as the group contribution. And third is to deepen the integration of business technologies and improve the efficiency of our services. And next is better risk management to make it more sensitive and also effective. And pay close attention to cross-contagion, making sure that there will be no systematic risks and Bank of China will continue to strive to build a world-class modern banking group with a sense of mission and a sense of urgency as well as a sense of responsibility. We will continue to follow the road of developing ourselves as the top financial institution in the world so as to create greater values for shareholders, customers, employees, as well as the whole society. Thank you. Thank you, President Liu, for the fantastic presentation. Next, we'll move to the Q&A session. And we want to invite investors and analysts to raise questions. But please identify your name as well as the organization before raising the questions. And if you want to raise a question, please raise your hand. Okay. Mr. Dai. Thank you, management. And my name is Dai Zhifeng. First of all, I want to congratulate the management. Given the complex business environment, such a financial result is very good. Yesterday, we actually looked at the results, and we felt that over the years, the asset of Bank of China has been growing in such a positive way, especially last year. The domestic RMB loan has increased to such a level. So we want to ask... For 2023, what is the target for credit growth? And also, how about the demand for credit? And specifically, what would be the strategies for credit allocation for Bank of China? For example, what is the pace and what is the structure and what would be the industries and regions that you want to prioritize? Thank you. Thank you for your question. Well, credit allocation is a major approach for banks to serve the real economy, and data on this topic really has been something that the market has been paying close attention to. And we want to invite Vice President Zhang Xiaodong in Boao to answer a question. Thank you for your question. Well, yesterday in Boao, together with President Liu and other colleagues, we took part in the plenary session of the Boao Forum, and also we took part in other activities today, and we can feel the momentum and vitality of China's economy, and that strengthens our confidence in serving China's people. Thank you very much. in terms of dual circulation and also accelerate the construction of our strategy of one body, two wings and increase financial support in key eight areas and to implement our structural reform from the supply side so as to better to the development of our national economy. 2023 is the first year in terms of implementing the spirit of the 20th National Congress of the CPC, and several key tasks have been mentioned in the government work report. We will center our work on that, and the overall tone is to keep stability while making progress. We follow the overall asset growth target of the group. We estimate growth rate of 8% to 10% and maintain steady growth of IMB loan increase the vitality of RMB bond investment. We want to expand our advantages in terms of foreign exchange businesses for high-quality development. Since the beginning of the year, China's economy has been accelerating its recovery and also the total scale of financing has increased and the credit demand has been on the rise and also there has been marginal increase for the credit from residents and domestic RMB loan for Bank of China has increased more than last year. and plan for this year. First of all, steady growth of credit on the premise of meeting macroprudential management requirements will continue to support the real economy, and we will moderately expand the scale of new loans and maintain overall growth rate of loan at a reasonable level. And secondly, credit structure should be continuously optimized. If we look at industries, We will focus on the eight areas for support and support the key areas and also weak links of our economic development and increase support for scientific innovation, manufacturing, green and energy, supply, private economy, et cetera. We will also enhance inclusive financial support for MSEs as well as rural revitalization and county economy. And from a regional perspective, we will implement the national plan major regional strategies as well as regional coordinated development strategy improve the credit support in key areas, for example, Yangtze River Delta, Greater Bay Area, Beijing, Tianjin, Hebei, as well as the Xiong'an New Area, and also make sure that credit demand in remote and backward areas, revolutionary bases, and ethnic minority areas will be and promote the balanced and coordinated development of the eastern, central, western and northeastern regions in China. In terms of credit for personal individuals, we focus on the strategic deployment of stabilizing the housing market. On one hand, we follow the city-specific policy, increase investment. in personal housing loans and ensures improved housing demand will be met and make differentiated credit policies. On the other hand, what will support the upgrading of residence consumption, improve people's demands for different types of services, centering on the new consumption, new scenarios, et cetera, to promote the expansion of non-housing consumption loan. Thirdly, to reasonably arrange the pace of credit supply, what will carry out the requirements of a monetary policy, and also adjust the pace of credit supply according to the demand of the real economy so as to make accurate decisions. And we want to make sure that we'll have a reasonable growth of credit, making sure that we will be a stabilizer of the real economy to serve the development of the real economy. Thank you. Thank you, Mr. Xiaodong. Next question, please. Mr. Wang from China Life Insurance Asset Management. Thank you for the opportunity. My name is Wang Napong. This is a great opportunity for me to ask a question about net interest margin. In the past one year, Bank of China has been supporting real economy. However, you performed pretty well in NIM. So I wonder whether you can elaborate the reasons behind. And also, With multiple rounds of LPR declining, how would you expect the trend of NIM in 2023? Thank you for your recognition. Let me invite Vice President Zhang Yi to answer a question. Thank you, Mr. Wang, for your interest in this topic. As you mentioned before, last year, the NIM of the group was 1.76%. That was an increase. instead of a decrease. So the stability of NIM from Bank of China perspective was way better. And if you look at the factors, last year, actually, there were negative factors, but also positive factors. And in terms of negative factors, as you mentioned before, LPR were decreased for many times for one-year LPR and three-year LPR. And actually, the return rate of RMB asset actually dropped quite a lot, 16 base points. And that actually lowered the interest margin of the group by 12.29 base points. And if we look at positive factors, there are two as well. First of all, our own management, and secondly, the market condition. In terms of the management, we have been voluntary in optimizing our asset and liability structure. By doing this, we can improve NIM by 7.52 base points. And in terms of asset structure, the growth of low-yield interbank lending and other assets was controlled and the investment of high-yield assets was increased. So the average balance of loans accounted for actually 63.82% increase of 1.31% of the previous years. And then debt structure, the point is that to focus on the marketing of demand loans by building platforms and expanding channels of businesses by using technologies, the percentage of demand RMB deposits has been increased. And also, high-cost deposits as a proportion has been reduced. So, in another word, For example, we have different types of agreement-based deposits, deposits with more than five-year maturity, et cetera. And over the years, we are talking about one percentage point declining. And because of that, domestic RMB liability cost has been decreased a lot, and domestic RMB deposit cost has been down as well. And as President Liu Jin mentioned Bank of China is quite international. Last year, with the multiple rounds of interest hike in overseas markets, that actually led to improvement of our foreign currency spreads and increased our group interest spreads by 5.14 basis points. Most foreign currency loans of the bank are priced at floating interest rates, while a high proportion of foreign currency customer deposits are priced at listed interest rates. So the asset duration is shorter than the liability duration. These are several reasons. Looking into 2023, this year there is still great pressure in terms of NIM, and from IMB perspective, LPR declining to us in terms of the impact will be greater than that of last year. For Bank of China, as one example, RMB loan, actually, for the fixed rate, it accounts for over 90%. And in terms of the foreign currency interest margin, last year actually was good. But this year, as everybody estimates, that Fed's interest hike will slow down. Another thing is that foreign currency debt, as time goes on, in terms of repricing, It will only accelerate, so the cost for this part will increase. And the level of improvement in this regard will be weaker than last year. Overall speaking, overall NIM for Bank of China will be declining to a certain extent. However, despite the pressure, we will continue. provide quite active management. First of all, we want to focus on both the quality as well as the quantity. I am relatively new to the management, and the first meeting was led by President Liu in terms of improving the strategy for liability and RMB deposit cost of Bank of China is 1.88%. There is still room for improvement. First of all is to manage price, look at the market interest and also to improve our internal pricing mechanism, look at the demand cost and also maturity so as to manage this in a better way. On the other hand, manage the structure. take the eight areas as the starting point to improve our products and also to increase the outreach to key customers and also upstream and downstream customers. So we could do better in this aspect and increase the percentage of low-interest asset. And another part is about the optimization of the asset structure. On top of supporting a real economy, we probably will. increase the investment in retail loans so as to support consumption expansion, and also to activate the existing assets to reduce the proportion of low-return assets, making sure that our name will be within a reasonable range. Thank you. Thank you. Vice President Zhang Yi, next question, please. Mr. Ma? Sorry, Ms. Ma, thank you for the opportunity. My name is Ma Tingting. I have a question. Actually, we have noticed that the Central Economic Work Conference and the latest Government Work Report both pointed out that for this year the priority of our economic work is to expand both domestic and international demand. So domestic consumption and the recovery of the consumption would be considered as a priority. And also for the first time it has proposed the concept of consumption for everybody as was the scenario-based consumption. So I want to ask, What measures have been taken by BOC and also in terms of consumer finance, what would be further measures to be taken? Thank you. Let's invite President Liu Jin to answer this question.

Thank you for your question. At the Central Economic Conference and the two annual sessions, if my memory serves me correctly, About consumption and investment, it says the fundamental role of consumption and the driving role of investment should be given full play. So consumption plays an important role in driving domestic demand, expanding consumption to serve people's livelihood and serving the real economy. So consumption has an important mission. Therefore, consumer finance... has an important mission in expanding domestic demand-boosting consumption, serving people's livelihood, and supporting the real economy. The bank has conscientiously implemented the national decision and taken many measures to help stabilize the housing market and promote consumption with remarkable results. During this process, we have borne in mind the political and people-centered nature of financial services to meet the financial consumption needs of the consumers at different levels. And giving full play to consumer finance also is beneficial to BOC in terms of higher profitability and higher quality of development. Last year, we focused on three areas of work. We promoted the stable and sound development of the real estate sector. Mortgage loan is an important component of the consumer finance. We followed closely the one city, one policy measure of the national strategy to help stabilize the operations of the real estate sector. Personal loans balance realized a steady growth and we have also determined appropriate mortgage loan rate and implemented the requirements of the long-term mechanism for the dynamic adjustment of the interest rate policy for first home loans so as to effectively reduce the financing costs for home buyers. There has been a lot of debates regarding the real estate market in recent days. The problems are concentrated on when will the real estate market be rallied back, how the increments of housing mortgage loans will be brought back to the normal levels. This spring, I had separate meetings I had separate meetings together with my colleagues, meetings with several large private real estate enterprises and some medium-sized private real estate developers. Why do I mention private instead of state-owned real estate enterprises? Because state-owned enterprises are abundant in funding. They do not worry about their liquidity. If you look at the completion rate of real estate projects and the sales restoration level of state-owned real estate enterprises, they are performing much better than their private counterparts or private peers. That is to say, the credibility, the past track records of an enterprise is highly valued by banks. So I had separate meetings with these large scale private real estate enterprises and some medium sized private real estate enterprises. I had in-depth discussions with them and I found that they all expressed confidence in the market in the future and they have also made detailed explanations about their green development and digital transformation strategy in real estate sector, including their internal restructuring efforts and results. Through the in-depth exchanges with them, we now have more confidence in supporting the steady and sound development of the real estate sector in China. I'm sure that for all the major financial institutions of China, They have the same judgment of the situation. In November last year, I went to Hong Kong. The only visit to Hong Kong during COVID. I attended the post-COVID Hong Kong government organized large financial institution summit in Hong Kong. Dozens. Dozens. of famous European and American financial institutions and a large number of Southeast Asian financial institutions, senior management and directors attended the summit. Many of them were discussing the real estate market in China. They said there are so many defaults of the real estate enterprises, so many housing projects stopped construction. What would be the future of real estate? And for the real estate sector's NPL ratio, what is the genuine ratio? These are the questions they were discussing during the summit. During my speech and my interactions with them, I have repeatedly explained to them, I said, please rest assured that the Chinese government, the Bank of China, and the presidents of large financial institutions like BOC are focusing more and more interested in the sound development of the real estate sector and the NPL ratio of the real estate sector. We are reading the financial statements of the sector every day and we are paying high attention to the progress in the construction projects already stopped and then resumed, and we are also taking active measures. Imagine, since the latter half of last year, the related departments and authorities of the central government released a series of measures to support the sound and steady development of the real estate sector. There are sporadic... loan defaults and overseas loan defaults, those problems have been resolved one after another. Some members of senior management of European and American financial institutions asked, how about the default of U.S. dollar debt, I said, don't worry. If some of my large customers had certain default, you know, not so many small enterprises could buy such debt, such bonds. Most of them are large, medium-sized real estate enterprises. If they have such overseas debt default in a certain phase, we prefer that they pay your debt back first and then pay our debt. And we actually did so. Many of the Chinese financial institutions did so. So you don't have to worry. With the implementation of the series of measures to support the real estate sector, you know, it takes time. It takes a process for the real estate sector to get back to normal. I'm sure with these effective measures, they will be back to the normal. In particular, the central government is having multiple measures, multi-pronged measures, including leasing and purchasing. I'm sure these measures will prompt a better mechanism for the sound development of the real estate sector. So we are fully confident of the real estate sector. We are even more confident of the economic recovery of China. So in real estate finance, which is an important component of consumer finance, we are also fully confident. Second, we are making active efforts to promote consumption and boost the domestic demand, especially residence consumption for non-housing consumer loans. New loans increased by 50% and credit cards installments growth are also leading versus our peers. We have also helped boost bulk commodities consumption based on auto installments. We have also helped boost market confidence last year amongst receivables and investments for auto installments growth better than our peers, especially for new energy vehicle installments and our cooperative brands. At the same time, we are making full efforts to support convenient consumption and conversion to online. Through mobile banking, we are continuously improving service efficiency, reducing service cost, optimizing pricing structure. And while meeting the regulatory requirements, we are having appropriate pricing level to concede profits to the general public, to the consumers. and facing the rural customers and young customers we are increasing support for consumer loans to help revitalize the countryside and provide services to new citizens, new customers. This year, after the two annual sessions, the central government's policy for boosting consumption has been released and is now being implemented. I'm sure more impetus will be injected into consumption. I'm sure BOC financial services will play an important role in that process I attended the Boao Forum for Asia over the past two days. I can see that the shuttling buses and vehicles are all new energy vehicles with green car plates. So a free trade island with a high-level opening will be a greener island, and this will become a reality in more large and medium-sized cities. Thirdly, regarding consumer finance, that's the consumption of financial services. Finance is consumption itself. For example, mutual funds or products provided on the shelf in the form of various financial products, they are important components of financial consumption. In addition to working on mobile banking as an important and the most convenient interface to serve our customers, BUC-IM, BUC Securities, BUC Wealth Management have all made innovations in boosting consumer finance and providing better services. together with European asset management companies and the joint venture wealth management subsidiary called Weihua Wealth Management, which is located in Shanghai. We are working on this. We also have a BOCI in Hong Kong and BOCIM, an asset investment. With so many brands under BOC, with the economy recovering, with the recovering of residents' financial services needs, we will have more innovations and create more suitable individuals' personal finance products to meet the needs of different residents. This is also an effort made by us to provide financial services as inclusive finance to realize common prosperity for all. So mortgage loans, consumer finance loans, and other financial product needs These are important three aspects of consumer finance that DOC will work on. Thank you. Thank you, President Liu. Next, we'll switch back to Hong Kong venue. senior manager of board secretariat, Mr. Jiang Zhuo, to continue to invite investors, analysts to raise questions. Okay, thank you. Please raise your hand if you wish to ask a question. So the first opportunity will be given to JPMorgan Chase, Madam Li. Thank you for giving this opportunity for me to raise a question. I'm a banking analyst, Captain Li. My question is related to the handling fee income. I can see last year the growth rate for fee income slowed down. What are the reasons? How about the growth rate of 2023 for fee income? What measures and means will be adopted to realize your growth rate target? Thank you for your question. I would like to invite Business Management Director Zhao Rong to answer this question. Thank you, JP Morgan, analyst of Hong Kong value for your question. In 2022, the group's net fee income amounted to 72.24 million RMB, a decrease of more than 9 million RMB or 11.27% year on year. There are three main reasons for this. Firstly, due to the structure of the bank's fee income, the volatility, of the capital market had a greater impact on the bank. In 2022, the H share indices declined significantly and the bank's capital market-related fee income declined significantly. In contrast, The generally better domestic and international capital markets in 2021 led to a significant increase in the group's fee income, which objectively resulted in a high base. Secondly, the bank has actively responded to the call for fee reductions and concessions. In particular, we were the first among the big four banks to waive the annual fees for personal debit cards and small amount management fees since February last year.

Second is because of the structure of our income. And when we talk about the structure, for example, the percentage related to the capital market is pretty high in 2022. The percentage is 38% and even higher in 2021, probably 43%. And you know that in 2021, the capital market was pretty good, both in China and the overseas market. And with that, we had a lot of growth in terms of fee income. And with that, the base income was pretty high, but then in 2022, A&H market declined. And also with that, our fee income dropped dramatically. For example, our wealth management fund and agency-related fee dropped dramatically. And the third reason is because the weak links that we're still suffering, we're quite clear in understanding that there are still areas which we need to do better if compared with our peers, especially for settlement, clearing, business-related fee income. Now, this part accounts for a low percentage, and in 2022, it was only 39%. At the same time, we should be aware that in 2022, for certain products, the growth rate was pretty good. For example, in 2022, we increased support for the real economy. We increased credit provision and also syndicated loan fee income increased by 27.5%. And also, we had been promoting online consumption with that online payment-related fee increased by 21%. And also, we had been promoting the pension custodian services with the 6.9% fee income in this regard. And also, interest rate fluctuation was an opportunity, and our fee income in this regard increased by 14%. For this year, our expectation as well as the strategies for fee income, overall speaking, we're thinking that while we serve the real economy, we can provide higher quality services to customers, making sure that the whole year fee income will have a positive growth. And so we want to do better. And the specifics, there are four aspects. First of all, we want to further improve the foundation, meaning that we want to better serve and also to expand our basic services, for example, deposit, et cetera, and also improve the fundamental role of clearing and settlement-related businesses. And a third is to further increase the momentum. Right now, the Chinese economy with a great momentum. Consumption and investment indicators are recovering. And for Bank of China, we will continue to do more services in this regard with that there will be more income or free income. Given China has the common prosperity, so we want to improve our wealth finance business. And thirdly, we want to expand into new frontier lines given that we are a comprehensive global bank. We want to expand our network of overseas customers and also to provide both RMB and foreign currency businesses and also to maintain our market position in, for example, settlement as well as cross-border businesses, et cetera. And the fourth aspect is to expand be compliant with regulation, making sure that we fulfill our responsibility and implement different government policies in reducing and exempting fees so as to serve the real economy and also be up to standard in terms of a fee collection. Thank you. Thank you, Ms. Zhao. Next question. Next question, Mr. Zhou. Sorry, Ms. Cho. Thank you for the opportunity. My name is Zhou Yiyun, and my question is, what is the prospect of asset quality and credit cost in 2023? And also, what are the main pressure points for this year? Thank you. And for this question, let's invite Risk Director Liu Qiandong to answer the question. Thank you, Ms. Zhou, for the question. Asset quality has always been a topic of great interest. I just want to briefly introduce our situation in 2022. In 2022, the overall asset quality was quite stable. And in terms of our key risk indicators, we actually performed pretty well. First of all, the group MPL maintained stable, and NPL balance increased by 22.9 billion yuan compared with the beginning of the year, and NPL ratio was 1.32%, down by 0.01 percentage points compared with the beginning, and domestic NPL dropped sharply. and also special mention loan for corporate actually increased, and also the NPR ratio as well as the balance for individuals for retail customers increased. And also we've been resolving this, especially cash collection percentage has increased. Last year – We actually achieved a lot of progress in this regard, and we collected more than 13 bidding RMB in this regard, and also a lot of progress in dealing with major projects, and all these contributed to stable asset quality. And secondly, it's about optimized credit asset structure, and also quality of asset has been improved, especially emerging strategic industries, fintech, green finance, inclusive finance, etc., The loan for these areas actually increased more than the average loan increase rate, and also the asset quality has been pretty good. And thirdly is the group's better capability in fighting against risks, as we mentioned, For example, the provision coverage ratio, et cetera, actually was better. Looking into 2023, overall speaking, Chinese macroeconomy is recovering, and now it's becoming very clear. And also there will be more fiscal as well as monetary policy support, and consumption will be boosted, and there has been – recovery in the real estate market and infrastructure, manufacturing investment pretty strong, etc. So the foundation is good. Chinese economy doing better, meaning more opportunities to banks, and that's why we're confident for the future. And we will continue to provide credit support so as to support high-quality development of the real economy. However, as you probably have noticed, we have to make sure that we keep tabs over the complexity of the real economy. And for uncertainties and potential risks, we should be highly alert. Looking into the Chinese domestic market, I think there are three main pressure points. First of all, real estate. President Liu Qing just elaborated on the situation in the real estate market. Overall speaking, the real estate market in China is still recovering and in this process, because of the unique feature, It takes longer time to solve the problems. That's why it drags on the overall asset quality. So this will be kept for a certain time. And second is, for example, COVID as well as the real estate issues will lead to declining government revenue as well as increased government expenditure. So we have to pay attention to that. localities with a high debt so as to prevent regional systematic risks. And a third pressure is driven by global declining especially with the declining export. And we have to pay closer attention to trade-related risks, because this is our feature business, and we pay close attention to that. That's the domestic situation. And international situation, right now, the global situation is very complicated and a lot of turbulence. And there has been some issues in the banking sector in U.S. and European markets, even though we do not have a direct risk exposure, so it's under control. However, the overall overseas situation, especially the impact of the banking problem on the financial system, should be paid attention to. And geopolitical situations, such as the Ukrainian situation, will also have a huge impact on the global economic and political situation, and the fluctuation of commodity prices declining of the world economy definitely will mean challenges over the quality of our overseas asset. In addition to traditional credit risks, for example, liquidity, market, and also operational and reputational risks should be paid attention to. There is a higher requirement and a greater level of pressure. Considering both domestic and overseas situation, in 2023, we will continue to proactively to solve systematic financial risks. This will be considered as a priority. We want to develop a business with high quality but also prevent and control risks. We want to emphasize on supervision over key areas and key localities. Overall speaking, we're quite confident in maintaining stable quality of the assets. To be more specific, several measures would be taken. First of all, we implement different economic policies. issued by the State Council. We will support tens of thousands of market entities to develop a second to deepen our overall risk management and to identify and manage different types of risks better and also to avoid the contagion of risks. among different sectors. And the third is to identify and also to alert as well as to resolve the problems as soon as possible. And we need to screen risks in different sectors and to keep close eye on key areas so as to resolve potential risks and to better resolve the NPR ratio. And for this year, We compared with before, we'll take different strategies. At the beginning, especially in Q1, we will strengthen our collection work, making sure that collection will be done better. The purpose is to, of course, make sure that there will be sufficient room to deal with the unexpected situations coming in the future. So overall speaking, for the whole year, we want to maintain stable asset quality instead of paying attention so much to the balance among different quarters. And the fourth is to optimize the credit structure so as to have a solid foundation for high-quality development. And the fifth is to analyze different regulations and risks, also evaluate risks, and also to be better capable of hedging against risks. Our provision coverage ratio should be reasonable. We are confident in maintaining stable asset quality as well as stable credit cost. Thank you. Thank you, Mr. Liu. And next, one more question from Hong Kong venue, please. Morgan Steny. Ms. Yang, thank you for the opportunity. I am with Morgan Stanley. I have a question about deposit. In 2022, deposit growth of Bank of China reached a new high, especially demand deposits. which grew pretty well, and also the interest payment ratio was very well managed. Could you elaborate on the deposit growth as well as the bank's strategy in this regard in 2023, and how's your expectation of the interest payment ratio in this year? Thank you for paying attention to BOC's efforts and also achievements in deposit. I want to invite Vice President Zhang Yi to answer this question. Thank you, Ms. Yang. For recognition of our business, especially for deposit, we know that deposit is the fundamental basic business of a commercial bank. And this is the foundation for our business. As you probably know that there has been some issues in the banking sector in overseas markets. Actually, in disregard of the reasons, ultimately it comes down to deposit business. So Bank of China actually pays close attention to deposit. We have taken a lot of measures last year we can say that we achieved such progress in both quality and quantity. And last year... we can summarize the three aspects of achievements. First of all, the percentage of customer deposit and liability has improved. That shows that our liability stability has been improving. And secondly, the growth rate of deposit of the group actually is faster than the growth rate of loan, meaning Now we are better improving the matching between the deposit as well as the loan. And the third is the daily average demand deposit. For this part, we're doing better. And the higher cost of deposit for two years as a percentage has been declining. So in terms of deposit interest payment ratio, we have been managing that pretty well. Thank you.

This year, if you look at the situation within China with the various measures taken by the central government to stabilize economic growth, economic faring will be better in 2023. If you look at the first two months, total RMB deposits, new deposits reached almost 10 trillion. MR's growth rate is a seven-year high. That is to say, funding from the society is adequate. We are here to the overall principle of high quality development of deposits. We formulated very proactive and aggressive expansion markets. The targets will gradually improve deposits market competitive edge. First of all, We will think to lower level of services by serving specialized and innovative enterprises and serving local government bonds. We will get deposits by providing services. Second, we will build the four strategic scenarios to lead through product scenarios and realize technology empowerment. So technology empowerment can give us more deposits. Thirdly, we will work on the sources through improving agency payroll services quality. We can use such service quality improvement to have better cash management. We'll conduct third-party custodian services for deposits so that we can get more deposits through product portfolio expansion. Internationally, the overseas banking crisis incidents have prompted us to conduct analysis. Most of the banks in the crisis due to the monotonous customer type in their operating structure. BOC is a bank with the highest level of internationalization and globalization among all the Chinese banks. We follow closely such market developments. We use more advanced technologies. operating philosophy to attract customers and we also strengthen efforts in low-cost deposits to ensure stability of the debt sources and through the asset business adjustment, we can dynamically adjust the loan term and pricing so that the assets liabilities terms and the pricing levels are well matched so that overseas business can have very stable and sound development. Just now, Madam Ye also mentioned the estimate or projection of interest payment ratio. I have answered the question previously, but I would like to repeat again. With the yearly increased rate of hikes for foreign currency, Funding cost this year may have a larger growth rate compared with the last year. For domestic deposits, I mean new deposits, the growth part will have continuous pressure, and the deposits will be more time deposits. That is the trend. So for domestic and foreign currency deposits, and RMB deposits will put us under great pressure. We are facing these difficulties to improve the interest rate model and optimize the structure to prompt high-level development of deposit business. Thank you for your question. Thank you, Vice President Zhang Yi. These exchanges have also responded to the investors' concerns, concentrated concerns of the investors. That's all for the questions and answers for investors' analysts. Now I would like to give the floor to Spokesperson of BOC General Office Director Jia Tianbing to moderate the Q&A session for media journalists. Thank you, Madam Yu. There is a famous saying in China, If you meet each other physically, you feel more intimate and closer. Last year, during the 2021 results release, we mentioned that we can have face-to-face. We hope we can have face-to-face results release. So we're very happy that this year we have the 2022 annual results release on site physically. I would like to thank you again for your long-term support for BOC. You have our sincere gratitude. The society interest in BOC's business and the customer's interest in BOC's business have always been topics of interest to the media. I'm sure that you are fully prepared with the questions, but due to the time constraint, Each media organization can only ask one question. First of all, media friends from the Beijing site, Beijing venue, please identify yourself and your organization before you raise the questions. Thank you. Now the floor is open. Thank you, the management, for the opportunity to ask a question. I'm from China Securities Daily. My name is Xu Shiyu. My question is about cross-border finance. In the two annual sessions this year, it is said that efforts will be made to continue to give full play the driving role of import and export for economic growth. We know BOC is a banking group with cross-border finance as a future business. So in stabilizing foreign trade and promoting import and export, what remarkable achievements have been made in BOC and what new measures will be taken in the future? Thank you. Thank you, China Securities. Thank you, Shen Yu, for your question. This is a very BOC-specific question. BOC has been operating overseas for close to 100 years. In cross-border finance, we have accumulated a lot of advantages, and our DNA is there. So I would like to invite Vice President Zhang Xiaodong in Bo'an venue to respond to the question. Thank you for your question. Foreign trade development cannot go without financial support. Just now, media journalists have mentioned BOC is a mid-channel for foreign trade financial service. Stabilizing foreign trade is a measure to follow through on building China into a stronger trading country, but also an important effort to consolidate our market competitive edges in cross-border financial services. In 2022, we have a combination of measures and yielded remarkable results. First of all, we strengthened the top-level design. In quarter one 2022, we released a series of measures to have cross-cycle adjustment to stabilize foreign trade. We have also intensified efforts to seize RCEP foreign trade opportunities. At the end of the year, we responded to customers' needs immediately and was among the first to release, was among the first to support foreign trade companies to get orders. from global markets. We have also organized hundreds of events to support foreign trade. Second, we have continuously enhanced financial supply. Centering on customers' needs, in 2022, domestic institutions provide a total of more than 3.4 trillion of international settlement credit and several trillion cross-border RMB settlement support. We directly serve Trade, import, and export finance, which had a big increase, cross-border letter of guarantee, et cetera, have enabled us a strong market position. Third, we have innovative products. In 2022, with further deepened cross-border finance digital transformation, we launched a BOC cross-border in remittance express train to fastly iterate products. BOC cross-border Yishangtong and Yicaitong products, which effectively supported new momentum of foreign trade development with enhanced shipping online connect program to have shipping direct connect so that shipping platform and downstream and upstream customers can have online freight collection and payment. We handled more than around 1 million transactions to have smooth logistics. Firstly, we have consolidated XCBD and cities have become important fairs for China's opening up to the world. They have helped boost the foreign trade. BOC has been the top level strategic partner of all the five fairs. Pre-fair, during fair, and post-fair, we provided whole process support, which is highly recognized from different customers. President Lu Jin has also mentioned that. This year, we have a full toolbox so that we can make new breakthroughs. Guided by the spirit of the 20 CPC Party Congress, we will implement the deployments of the central government on stabilizing foreign trade and having higher quality of foreign trade so that we can make big contributions. First of all, we provide no less than 500 billion for foreign trading companies to get overseas markets. And we are also... trigger new trade formats and new momentum and new potentials by continuing to do a good job at providing financial services for overseas market players to boost the bilateral trade growth. And fourthly, we are making innovations in cross-border finance products so that we can facilitate cross-border investments and increase service quality. Fifthly, following the opening pace of financial markets. We are strengthening market product innovation to promote RMB-denominated currency or financial products to be used in neighboring countries. Sixthly, as Chief Risk Officer Jianzhong has mentioned, we should strike a balance between development and security while effectively controlling risks. We hope to realize high-quality development of our business. Thank you. Thank you. Vice President Xiaodong, now the floor is open for another question. Senior Management, I'm BOC Insurance Daily. My name is Feng Nana. I have a question. In mid-2022, BOC released measures to support SMEs and pro-job inclusive finance loans. A series of special measures have been taken. I would like to know the results and achievements of the measures. And in stabilizing economic growth and promoting employment increase, what measures have been taken? What results are those measures? Thank you for your question. I would like to reiterate your question. You are talking about releasing, not exiting, right? We are releasing, further releasing inclusive finance measures. Inclusive finance is a financial service. It also reflects the value proposition from the perspective of CSR of UCN. I would like to invite Vice President Zhang Yi to answer the question. Thank you for your question. Inclusive finance is a hot topic that has been discussed and debated over the past several years. Regarding the development of inclusive finance, you'll see attached its high importance to inclusive finance. We have improved the systems and mechanisms and taken a series of very proactive and aggressive measures. If you look at the situation last year, we have had very good results in those measures, which can be summarized as follows in four aspects. First of all, We have strong and forceful measures to serve the real economy. Last year, inclusive finance loan balance reached 1.23 trillion RMB, increased by 39.34%, and for customers' growth rate more than 20%. While improving quality and expanding market share, we have increased had very good management of the interest rate of loans dispersed. For the new granted inclusive finance loans, its interest rate is 3.81%. Overall cost of enterprises was reduced by 42 base points. Second, digital transformation has quickened pace. The inclusive finance digital transformations started later in BOC than our peers, but over the past two years with rapid development, last year we launched 17 new type online digital products. Therefore, the online incremental or new loans share in inclusive finance amounted to 62%. We've also launched the Hui Ru Yuan app, to provide financing application, business consulting services, business opportunity matchmaking, and other services as comprehensive financial services. We have also learned iSmart, digital inclusive finance services, plus we have more scenario-based products and more diversified and characteristic financial services. The services are more convenient. Risk control is of higher quality. Thirdly, pro-job loans. Employment is the largest measure for pro-lovelihood. Last year, BOC has worked very hard to stabilize jobs and increase employment. We use financial services to provide more jobs and stabilize people's livelihood. Over the past two years, we launched 1,000 jobs and reaching 10,000 homes to provide staffing support And creating jobs for SMEs, we issued more than 80 billion yuan of such loans, benefiting more than 20,000 enterprises' customers.

Fourthly, more and uh... frequent product innovation we have been exploring innovation in key areas and uh... from now we can see that we already have explored our own pathway for inclusive financial development so we provide life cycle support for technological companies and uh... we are serving eighteen thousand so-called specialized innovative companies by offering three hundred forty five billion RMB as a credit balance and also we published The third phase, IP as a pledge, financing index. And also we are number one in terms of the balance as well as the number of customers in this regard. And also for the pinpoints of small and micro enterprises in the trade sector, we have launched specific solutions for this and this is a systematic solution and we also have launched new urban citizen service solution For five years, Bank of China has been involved in CIE. As President Liu mentioned last year, you know, President Liu mentioned about the activities this year. And for last year, we attracted 1,200 enterprises from 40 companies. The total contractual amount reached $6 billion. So development of inclusive financial, this is not just about political requirement. It is not just about providing benefits to people, but also out of our own development and transition. We will focus on the following aspects. First of all, to continue the optimization of provision of inclusive financial services to improve both quality and quantity. And second, to target at key areas and key customer needs. Follow the national policy and also the trend of technological development to support the industrial recovery for retail, trade, catering, and also to support individuals to start up their own businesses. And third is to accelerate digital transformation. We need to iterate our systems better and also to expand online service scenarios. And fourth is to have overall risk management. We need to be smart in risk control. So when financial sector performs well, the economy will be well. We have to make sure to provide benefits to the people and follow the strategies of the Central Committee of the Party as was the State Council to support the high-quality development of the economy. Thank you. Now let's continue our question. Thank you. My name is Chengkang Liang. Thank you for the opportunity. My question is that recently many banking institutions have released their latest achievements in information technology innovation. How is BOC's situation in this regard, and how will it empower your business operation and development? Thank you. Thank you for your question. Bank of China always keeps track of trends and also follows the overall direction of digital transformation to enable our business development. Let me give the floor to Ms. Meng. Thank you. for your interest. Last year, centering on the overall group's strategy, we put customers at the center and also focus on innovation and technological-driven business development. We have been implementing major projects as well as the technologies to promote digital transformation. Last year, we invested more in terms of technologies. We have more than 13,000 staff in this regard, up by 3.45%, accounting for... 4.35% of the total staff, and in terms of the investment, we're talking about more than $20 billion, up by 15.74%, and the contribution to operating income is also pretty high. We've been focusing on innovation-driven development with data, technology, scenario, and experiences. We try to... improve our capability in this regard so that we can upgrade our FinTech. And we're focusing on several areas. First of all, institutional mechanism as the starting point and also better top-level design and also to reform of our management system. So the party committee Director leads the Digital Transformation Committee. We also have optimized the setting of such committee so as to have a more strategic and operational management. We also have a department in charge of this topic so as to manage products, scenarios, and innovation-related work of the We also have been working on labs and many other mechanisms to encourage the innovation of the group. Also, we've been optimizing the management process as well as resource allocation so as to be more agile in responding. Last year, our R&D investment was up by 39%. And secondly, with the key strategic projects, we try to improve our momentum in this regard. We are pulling resources from the whole group to promote the OASIS project as well as the better capability of the mid-office in terms of marketing, product innovation, and business. Our digital capability has been improved, and our digital platform has been promoted. We also have been working quite a lot, and our – network of digital platform has been improved. We have more than 240,000 customers using our different platforms, and the potential of such vast amount of data is being utilized in sports and many other areas. We are trying to create scenarios and also to expand the ecosystem, reaching over 200,000 many people and improving our ability by using new technologies to improve the processes and also business concentration as well as the smart management. Cash operation has been managed in a smart way. Outlets plus business as an ecosystem has been built and we are providing over 900 types of business services. And thirdly, with application, we can better improve our ability. We have developed Honghu, Hanhai, Xinhan, and many other new generation technological platforms for enterprises so as to improve our distributed architecture, big data, R&D capability. to improve RPA, OCR, technological platform, and reduce redundant manual work. And also IoT, blockchain, and many other technologies have been used to reduce cost and improve efficiency. We also have achieved a lot of progress, for example, by using satellite remote controlling and IoT technologies to support the agricultural sector using artificial intelligence as well as the algorithm to prevent fraud activities, and also technologies have been used in supply chain financing to better support small and micro enterprises so as to shoulder our responsibility. Also, we have been tracking the trend of most advanced technologies, for example, AI and models, et cetera, have been used to improve customer service. Last year, we have increased 5,000 patent applications and over 600 applications have been granted. And in recent five years, we're number one in this regard. And the fourth is to enable businesses. We want to support high-quality development of the group. On one hand, we want to support the smart upgrading of our businesses, release the 8.0 version of mobile banking with more customers using that, and online migration of business for overseas market has picked up the speed. On the other hand, we are enabling eight sectors to transform, for example, green finance, digital platform, and also fintech, et cetera. Now we can acquire customers in a more smart way. We are launching over 20 products so as to dramatically improve the number of customers and also to innovate e-commerce business. And the total amount of business has improved. For example, the supply chain finance, et cetera, now are expanding to more customers and also wealth finance now is with a new platform. We're enriching the provision of products and information. Consumer financing now has a better process in terms of digital businesses, and we are enabling internal management. We have platforms. where the activity from the side of the customers has been on the rise. We have more than 200,000 people using that on a daily basis, and the customer experience has been improved. We're upgrading our remote working platform so as to improve business continuity with technologies. We also are creating internal ecosystem to improve the experience on the side of our staff. Overall speaking, last year, in terms of digital transformation and also fintech innovation, we have achieved a lot of progress. And this year, we will continue to be resolute in implementing the strategies of the Central Committee of the CPC, be firm in our strategies to promote OASIS project, data management, and smart management, as well as scenario construction, etc., or will improve data-based marketing business capabilities so as to support high-quality development of the group with data, but also to help contribute to the integrated development of digital economy as a real economy. Thank you. Thank you. Because time is limited, so Ms. Meng actually didn't expand. Mr. Xiaoduo from China News actually raised a very good question and we welcome your continued interest. Bank of China has a software center and we specifically have a wall where we showcase the patent application, and that's pretty amazing. And also, Ms. Meng mentioned Bank of China's number one position in terms of patents applied and also patents granted, and you're more than welcome to visit that facility. But because time is very limited, so let's just allow one more question from Beijing venue, and then there will be more questions from the Hong Kong venue. Thank you. Thank you for giving me this opportunity. My name is Liu Yao. My question is about international cooperation. We know that this is the 10th anniversary of the BRI and we want to understand in terms of supporting BRI, what specific efforts have been made by Bank of China and also what's the plan for further contributing to BRI? Thank you. Thank you. Thank you for your question. As an international Chinese bank, Bank of China has been working under the framework of a BRI for so many years. Let's invite Vice President Xiao Dong to answer this question. Thank you for your question. As the Chinese bank was the highest level of globalization since 2014, Bank of China has been following the BRI initiative and trying to implement our strategic targets in this regard. And a lot of progress has been made I just want to illustrate several points. First of all, in terms of organizational layout, we've been optimizing our financial service network to support BRI between 2013 to 2022. Now our overseas branches now are covering another 24 countries and regions. And by far, the overseas branches of Bank of China are already covering 62 countries and regions, including 42 BRI partner countries. So Bank of China is number one in this regard. And the second is in terms of credit support. um we consider high standard and also sustainable and benefiting to people as our target to support a batch of key projects which are healthy green digital etc for example we are helping chinese enterprises to be part of a pv solar project in uae by the end of 2022 In BRI partner countries, Bank of China already has supported over 900 projects. The total credit amount exceeded $269 billion, and thirdly, in terms of BRI-themed bond issuance, Bank of China is the first. Financial institution, the first means the highest amount of insurance, the largest scale, and the widest coverage, et cetera. From 2015 to 2019, we issued five different series of BRI-themed bonds. The total value reached 14.5 billion U.S. dollar, and the currency includes RMB, U.S. dollar, euro, et cetera. Altogether, seven currencies have been used. Fourth is to promote people-to-people exchanges and cooperation. Bank of China has successfully organized eight editions of international financial exchange activities, and we shared Chinese solutions and wisdoms and talked about opportunities. And the fifth is to help localities to be part of a BRI. Bank of China is committed to provide very accurate and comprehensive financial services and... I am still in Boao. Take Hainan Free Trade Port as an example. With financial resources, Bank of China has been promoting the alignment between BRI as well as the free trade port and also to promote the implementation of 21st Century Maritime Silk Road.

Which are reflected in the following aspects. First of all, we are leading free trade port financial innovations. We are among the first group of banks to have the pilot program of cross-border trade high-level opening foreign exchange management and the only bank with all the trade facilitation measures in place for all the four current account trade facilitation projects. And we are the first bank to initiate the innovative business of collecting funds of free exemption from registration for reinvestment after receiving the funds domestically. For three years in a row, we have been hosting China International Consumer Goods Expo to support high-level opening up of the country with concrete actions. This year marks the 10th anniversary of the BRI, and the country will have the third BRI International Cooperation Summit will also offer our support for the event. At the same time, we'll also plan related activities for BOC's BRI 10th anniversary activities. We will continue to give foreplay to our globalization advantages. continue to consolidate the BRI cooperation with high-standard sustainability and prove livelihood as the target so that there can be constant achievements made in high-level development, high-quality development of BRI. Thank you, Xiaodong. Now we hand over to Hong Kong venue. I would like to invite my colleague, Jiang Zhuo, to invite media friends from Hong Kong venue to ask questions. Thank you, Director General Jia. My dear friends, if you wish to ask a question, please raise your hand. Ladies first. First of all, the lady in the suit in the middle, please. Management team members, I'm from Phoenix TV. My name is Jin Xiaofei. Just now President Luton has shared with us that for a long period of time, BOC has been actively committed to boosting domestic financing and R&B internationalization. In terms of the debt market, BOC is very active. Can you give us more specific information on the business advantages of BOC in this area and the latest business development and what are the future development plans for BOC? Thank you, Phoenix TV, Xiaofei, for your question. As you have mentioned, in promoting R&B internationalization, BOC has played an important role about the specific practices. I would like to invite Director Zhao Rong to answer your question. Thank you, Jin Xiaofi from Phoenix TV. Thank you for your... recognition of BOC's achievements in debt market, I would like to share with you the related business developments. First of all, domestically, in the debt market in 2022, within China, the domestic debt underwritten is 1.37 trillion yuan, ranking number two in the interbank market. We mainly supported the national strategy and livelihood sectors, including IT, high-end manufacturing, Ports, transport, construction, energy, medicine, etc. We served Beijing, Tianjin, Hebei, Yangtze River Delta, Greater Bay, Xiong'an New District, Chengdu and Chongqing, Double City Economics Circle and Shenzhen. We are ranked number one in terms of the ABS underwriting volume in 2022 and also number one in terms of the real estate sector debt underwriting volume, and private enterprises debt underwriting. So we are ranked number one among the big four banks in terms of the interbank market. In close border finance, in real estate sector, we supported media group projects. Jinghui Groups and Chongqing Longfall Enterprises to have the second arrow, that is the private enterprise debt financing tool. In cross-border finance, we give full play to our globalization advantages. In 2022, our Pender bonds, overseas bond by group standards, in terms of the underwriting volume for seven years in a row, have been ranked second. Number one, in terms of the interbank market and China offshore debt market. And on March the 2nd, we released the first Hainan Free Trade Port sustainability-related bonds. It is in line with both international rules and also China rules for sustainability. Going forward, regarding business development, we can see that the economy is turning for the better and market expectations are increasing. being improved and the financing needs of enterprises are getting stronger. So in this area, we are fully confident. In terms of the business development strategy, it covers four aspects. First of all, we will grasp the strong growth momentum to have adequate scale and speed so that more impetus is injected into the real economy. Second, to have higher level of planning, we will make innovations while keeping stable so that independent bonds and overseas bonds, we can consolidate our market leading position. Third is to conduct research on global debt market-related rules, regulations, management, and standards so that we can contribute BOC's insights and solutions. Fourthly, we'll follow closely the monetary policy of major developed economies and the development of global financial markets so that we can have better risk adjustment and guard against the risk so that we will not have and systematic risks to keep the bottom line and avoid collapse of the financial system. Thank you. Now I would like to invite Jiang Zhuo to invite another media journalist to ask a question from Hong Kong venue. The gentleman with glasses. Thank you, the management. I have a question related to green finance. In terms of green finance, in comparable peers, does BOC have any competitive edges to realize your targets? Because the overall market is moving towards the trend of green finance. Thank you for your question. Green development is... An effort to implement national strategy for green development is also an important CSR for us. I would like to invite Chief Risk Officer Liu Jianzhong to answer the question. Thank you, the journalist from Hong Kong, for your question. Green finance is one of the eight financial priorities or strategies of BOC. Green Financial Services Preferred Bank is our goal. In 2022, centering on this goal, we have achieved very good results. As President Liu mentioned, domestically, green credit balance more than 2 trillion yuan, increase of more than 20% under written domestic and foreign green bonds scale reached 2%. 250 billion yuan and 29 billion US dollars. In terms of the green bonds, in terms of investment issuance and underwriting, we have kept a market-leading position. Diversified green financial products and services have also been upgraded and innovated. including Blue Bonds and ABS and ABN. In recent years, BOC has been constantly improving the quality and efficiency of green financial services in terms of the competitive edges. I think we have such competitive edges in three aspects. First of all, we have established a green finance promotion mechanism striking a balance between incentives and disintensive incentives. Green Finance is deemed by BOC as a long-term systematic project. We have been constantly optimizing governance structure and improving policy system to work on both incentives and disincentives. We have released 20-plus supporting policies and realized policies support toolkit covering performance evaluation enhancement, optimization of economic capital, and differentiating authorization. We have also strengthened the whole process development of credit and investments through FinTech-enabled management. We have built board plus management plus professional teams governance structure, three-layer structure. Last year, we have got very authoritative ESG awards by Global Finance and Euromoney, and MSCI's ESG rating for us is a, in the future, we'll continue to work on both incentives and disincentives to promote high-quality development of green finance. Second, we are improving green finance global brand influence. Last year, we took the lead in Organizing Chinese-funded banks-led ESG sustainability-linked syndicated loan. The first ESG sustainability-linked syndicated loan in China as a Chinese-funded bank with the highest level of internationalization. We support green development across the globe. In 2022, we supported... A lot of such projects, and we are ranked number one in Chinese-funded enterprises in terms of global green loans, sustainability-linked loans, and global offshore green bonds. In addition to making innovations in products and services, we have also discharged our CSR and was involved in the international initiatives and mechanisms like PRPTCFD and ESG. In the future, we'll continue to give full play to our advantages in globalization to explore green plus tech, green plus inclusiveness, green plus cross-border finance, green plus supply chain, and plus consumption in product and service innovations. Thirdly, we have comprehensively enhanced the green finance software power. We have realized... online training system covering eight themes, more than 80 courses. More than 750,000 people have watched and attended the courses. We have also been strengthening green operations and management We have been among the first banks to complete operation carbon screening and stock taking. We have also actively conducted green finance forward-looking research for the frontier areas and international finance forum. We have also cooperated with Hainan Provincial Green Finance Research Academy. We have also published publications on green finance ESG to communicate with peers about latest developments. Going forward, we'll provide long-term strong support for green finance. Thank you. Thank you, Chief Risk Officer Jendon. We started from 2 o'clock. Now it's already almost two hours. I'm sure you have many more questions. So now I would like to... I invite President Liu Jin to further respond and interact with you in terms of the questions of interest to you. Dear investors, friends, analysts, and media friends, this is the third time for me to attend the annual results release in BOC. All the online friends, At least you have met me three times on such occasions. I mean, at least. I mean, I have also attended annual results release of other financial institutions. I'm more than willing to attend such events to interact with investors, analysts, and media friends, all walks of life. for very in-depth exchanges and communication because listening to the voices of the market and following the pulse and feeling the pulse of market is a posture that is expected of a financial institution. We do so not only during annual results release but also in product research events, product launches, and customer events. As was mentioned, in our R&D center we have a wall full of our patent applications and patents issued. I'm looking forward to your visits. And look at that wall so that you can have more dynamic in-depth and better understanding of BUC in your evaluation of BUC. Over the past one or two days, all the major banks are releasing annual results. You have to move from one venue to another, and you have to type a lot of words on your keyboard. You have been working very hard. The market confidence in BOC is half attributed to you. Thank you for your strong support. This is 2022 annual results relief. Actually, over the past two years in H share and A share, BOC's performance among bank shares is quite good, and we outperformed the major market indicators for A shares in terms of the two-year dividend payment, more than 13% for H share, and H share more than 26%, very good return to investors.

Of course, we have been performing pretty well in terms of share prices. However, we realize that the valuation of major Chinese banks, including us, is still relatively low, and we don't think that it correctly reflects our value as an invested company. After being listed, the growth rate of total asset as was profit attributable to shareholders of BOC increased by 11%, and also the annual investor return including dividend from shareholders. a share market and h share market actually is way higher than others and if we consider the to be distributed common stock dividends by bank of china we're talking about over 800 billion by bank of china way higher then IPO as well as a refinancing amount. And over 30% of a dividend payment, that is the percentage that we have kept every year. Bank of China is more than 100 years old. We experienced the hardship for liberation. We also experienced turbulences in overseas markets. Thus, we have accumulated a lot of experiences as well as confidence for us to go through difficulties And currently, by fully integrating ourselves into the national strategy and optimizing our capabilities, we can better serve China's opening up. And of course, in this process, our own features are showing as well. By implementing the new development concepts, we're doing better in terms of ESG, and China has the dual circulation, and Bank of China is not just a participant but also a beneficiary, and we try to become an explorer and a practitioner in the financial business development with the Chinese banks. So my recommendation for all the investors and analysts is that to focus on the long term and also not just pay attention only to, for example, profitability and also management of the businesses and stability of an asset, but also realize that all of this is supported by by the Communist Party of China, as well as the creditworthiness of the Chinese government, as well as the advantages of socialist policy. In previous two rounds of results release, I shared with you three points where I mentioned you have to look at this, but also look at that. And today I want to add another two messages, but I don't want to too many because that's difficult for you to remember and also that will further delay the release I want to say that we need to look at the share price but also dividend we also need to look at the current situation as was a long term we need to look at the financial performance as was the overall performance we need to look at the growth of emerging but also we need to look at the stability of traditional blue-chip companies like us. We need to look at the general rule and pattern when it comes to the operation of commercial banks, but also we need to understand the unique advantages given by the socialism with the Chinese characteristics. So in this way, The Western risk management concepts and approaches and financial management approaches and methodologies can truly be combined with the actual situation in the Chinese market. And we can, by doing this... Jointly explore as well as make contributions to our ultimate target. I've been taking part in Global Wealth Management Forum and CDF as well as the Boao Forum for Asia, etc. And I've been talking with stakeholders from China and overseas markets. During CDF in Beijing, there were some overseas financial institutions executives coming and visiting us. People are quite optimistic about Chinese economic growth, as was the development of banks in China. And in my conversation with them, as was in my conversation with my colleagues, I always say that our peers in the U.S. and the European markets, our competitors, are now quite confident and optimistic about China's development and also about us. Then what's the reason for us to hesitate and not be confident? So let's join our hands. Let's be more confident. And let's make contribution to the capital market with the Chinese features as well as the modern financial system with the Chinese characteristics as well as to make contribution to early recovery of the Chinese economy as well as a healthy development of Chinese economy. Of course, make contribution to the implementation of modernization with Chinese features. Thank you. Thank you, President Liu. One year ago, in last year's annual results release, President Liu mentioned three points in terms of you have to look at this but also that. And this year, President Liu encouraged everybody to look at long-term, and also he has added another two points. And I think the message from President Liu is that Bank of China are taking concrete actions to showcase our vision and our confidence about future, as well as the fact that Bank of China will continue to improve our business strategy. to make contributions to the society, to our customers, and to generate better return to our shareholders. And with that, today's annual results release has come to an end. After today's event, through our official website as well as the WeChat public account, you can have more access to different types of information. Of course, as Mr. Liu mentioned, we welcome further exchanges. Exchange should be long-term and also dynamic, and we hope that we can always have access to your information. comments and feedbacks so as to have a better understanding of the market sentiment. Thank you one more time, investors, analysts, and also media friends, for your interest as well as support for Bank of China. And let's keep in touch. Bye for now.