Bank Of China Unsp/Adr

Dear investors, analysts, and friends from the media, good afternoon. Welcome to the 2035 annual results release of the Bank of China. I'm Liu Chungang, Vice President and Secretary of the Board of BOC. Today's press conference is co-hosted by Mr. Yi Ke, spokesperson of BOC, and myself. This event has been live-streamed online, and we also extend a warm welcome to all participants who are joining us online. First of all, let me introduce to you the leaders. Attending to this conference, Mr. Zhang Hui, Vice Chairman, President, and also Chief Compliance Officer, Mr. Cai Zhao, Vice President, Mr. Wu Jian, Vice President, and Mr. Yang Jun, Vice President, Ms. Huang Xueling, Member of the Party Committee and Vice President. In addition, some directors are participating online. 2025 annual results have been announced to the public today. The performance presentation slides are now available for download on the bank's official website or can be viewed at the bottom of the livestream page. All financial figures presented today are prepared in accordance with IFRS unless otherwise specified. Today's conference consists of two sessions, a performance overview and a Q&A session. First of all, let's give the floor to Mr. Zhang Hui to deliver the speech. Dear investors and guests, good afternoon. And first of all, a big welcome to all of you to our annual results release. I want to thank all of you for your long-term trust, attention, and support for our bank. I will first provide a brief overview of our 2025 operating performance and outlook for the next stage. After that, I will join the senior management present here to have an in-depth exchange on issues that you care about. was the final year of the 14-5 year plan period. Facing a complex environment, our bank resolutely implemented the decisions of the Party Central Committee and the State Council. We accelerated transformation under a low interest rate environment, achieved steady and improving operational results, improved quality as we progressed and met our expectations. and deliver the stable and satisfactory returns to our shareholders. First, operating efficiency steadily improved. Operating income reached about 659.9 billion RMB, an increase of 4.28% year-on-year. In the past three years, the cumulative year-on-year growth over 11 quarters ranked among the top in May 2020. peer groups and financial efficiency input marginally with three provincial profit growth increase in 2.62 ppt compared with 2024 net profit and the net profit attributable to shareholders grew by 2.06 percent and 2.18 percent respectively with growth improving quarter by quarter lean stood at 1.26 percent remaining stable quarter by quarter since mid-2025 The cost-to-income ratio fails, 0.93 CPT year-on-year, and operating efficiency further improved. Second, resilience of development significantly enhanced. We have consistently promoted high-quality transformation under a low interest rate environment and achieved noticeable results. Net interest income in the quarter-by-quarter and the single-quarter year-on-year growth in the second half of this year turned positive. Non-interest income increased 19.21% year-on-year and maintained a high proportion of 63.21% of operating income, up by 4.16% ppt year-on-year. Income sources were further broadened with rapid growth in wealth management, settlement, and clearing customers. Financial market trading of ODEX and integrated operation, which strongly supported overall performance. Three, balanced asset and liability growth. Group total assets reached 38.36%. A trillion RMB up by 9.4% from last year. The proportion of high-yield assets such as loans and investment increased 0.93 ppt. Total liability reached about 35.15 trillion RMB up by 9.47%, while RMB deposits increased by 1.37 trillion. Yuan and foreign currency deposits grew by 15%, further consolidating our leading advantage. Fourth, assets quality remained stable and the accident NPL ratio stood at 1.23%, down by 0.002 ppt from last year end. Maintaining the best level among peers, the watch list ratio remained 1.47%, which is very stable. Provincial coverage ratio was about 200.8%. 37% maintain reasonable adequate level. NPL balances and ratio for overseas institutions both declined. We completed the first batch of capital replenishment of 165 billion RMB and the car reached 18.85%, the highest year-end level historically with continuous improvement in risk buffer capabilities. Fifth, our market recognition and shareholder returns remained high. Our unique operational advantage and business development have been widely recognized by the market. S&P, Moody's and Fitch all rated BOC at the highest level among Chinese peers. In 2025, we formulated and implemented market value measurement measures and the value enhancement and quality return plan. Striving to convert steady performance into substantial returns for investors, we efficiently completed both the 2024 year-end and 2025 mid-term dividend distributions with a per share dividend of RMB 0.2310 and a payout ratio maintained at 30%. For four consecutive years, we have delivered double-digit stock investment returns to shareholders. Over the past one year, we have been persistent in our positioning, and we have also been fully integrated into national strategy in serving the real economy, preventing financial risks, and our innovation has further enhanced our high-quality development. Firmly supporting high-quality development of the real economy, domestic RMB loans increased by 1.81 trillion RMB, up by 9.9%, intensified support for major national strategies, key sectors, and weak links, including technology, innovation, technical upgrades. inclusive finance, elderly care, et cetera. And we have also made great efforts in developing the five key areas of finance. We also increased about 18.78% in our technology loan balances, leading the peers. Green loan balance grew by 27.83%, and green bond underwriting led Chinese peers. Inclusive finance expanded in scale and quality. Inclusive small and micro enterprise loan balances and account numbers increased by 21.52% and 22.86% year-on-year, respectively. We built the VOC Silver Age pension financial brand enterprise annuity. Individual accounts ranked high in the market, and the pension industry loans achieved double-digit growth. We promoted breakthrough in digital industrialization and the deep transformation of industrial digitalization. With digital economy, industry loan balance is exceeding 880 billion RMB. We supported consumption recovery through the $10,000 billion Benefit in the People initiative. Effectively implementing physical interest subsidy policies, domestic or personal consumption loan balances increased by 28.35%. We contributed to stabilizing the real estate market with personal housing loans exceeding 500 billion RMB. Secondly, firmly expanding global advantage and supporting high-level opening up. Our global operations advantage continue to consolidate with global deployment and international competitiveness further strengthened. Overseas pre-tax profit contribution increased to 27.99% where actively supported stable foreign trade and investment. Domestic institutions handled international settlement of US$4.45 trillion, up by 9.56%. Cross-border e-commerce settlement reached US$1.18 trillion, up by 45.07%. We established the first Chinese global custody bank. The custody network covered over 100 countries and regions, maintaining the top scale among Chinese peers. We actively served going out and bringing in initiatives. We tracked over 1,400 Belt and Road corporate credit projects with cumulative credit support exceeding $4.39 billion with closely followed key foreign-invested projects providing loans, funder bonds, cash management, and supply chain financing services. We became one of the first bond-collect northbound repo market makers, bound trading volumes with foreign investors consistently exceeding trillions over the past three years. We launched cross-border payment channels for mainland Hong Kong transfers, becoming the preferred channel for routine small value remittances. We supported offshore tax refund services covering the widest regions, with the number of cases for foreign visitors increasing more than 150%. We vigorously supported RMB internationalization. Our London and Colombo branches were successfully qualified as RMB clearing banks, bringing the total number of clearing banks to 18. Cross-border RMB corporate loans continue to grow, with cross-border RMB settlement, panel bonds, and offshore RMB bonds maintaining market leadership. We conducted various multinational central bank digital currency bridge transactions exceeding 350 billion RMB. And over three consecutive years, we acted as a main participating bank enabling efficient cross-border capital flows. Third, formally consolidate the client base and enhance competitiveness in key sectors. Businesses, we classified corporate clients and implemented targeted strategies, increasing corporate clients by 13.88%. We built a comprehensive financial service ecosystem for government, military, education, healthcare, insurance, securities, and infrastructure clients, forming well-integrated cooperation in government, military, school, hospital, insurance, securities, and infrastructure sectors. We developed a digital service system for individual clients, total personal and client approach. 554 million, and mobile banking monthly active users exceeded 100 million. We continuously improved the quality and efficiency of wealth management services. Agency sales of personal wealth management products and public mutual funds increased by 11.8% and 12.73%, respectively. We provided full lifecycle and full process comprehensive products and service for clients. Link financing projects increased 24.25% year-on-year. Comprehensive operating profit contribution has increased for three consecutive years, maintaining leading position among main domestic peers. Fourthly, firmly coordinated development of safety, safeguards, risk, and compliance will continue to deepen the comprehensive risk management system and proactively prepare for various risk prevention. We adhered to the new approach of strict control of the new NPLs and strict management of write-offs, ensuring the entry gate and exit gate of asset quality was strictly managed, maintaining stability in asset quality and adequate risk buffer capability with stress and overseas risk management. assisted clients in coping with external environment changes to ensure the safety of their overseas funds and assets. We responded prudently to market volatilities with liquidity risk and market risk maintained at a controllable level. Internal control and compliance management were stressed and compliance operation input defectively. firmly promote digital transformation and deepen intelligent empowerment. We accelerated the transformation and upgrading of technology architecture. The total number of cloud service exceeded 51,000. We implemented the AI Plus initiative and formulated AI Plus construction plan, deploying over 400 intelligent assistants across credit, operations, risk and client services for deep empowerment, enterprise level RPA, covered over 3,600 scenarios, expanding the effectiveness of digital tools to reduce workload and empower frontline teams. Six, firmly practicing sustainable development and fulfill social responsibility. We officially released our first disability report, reviewing the significant achievement of BSC in serving social development, improving people's livelihoods and contributing to eco... Logical and environmental protection with road carbon emission measures for high carbon clients within credit portfolios, oddly reducing portfolio carbon intensity. For 26 consecutive years, we have provided national student loans benefiting more than 2 million students. We actively supported employment stability and livelihood loans to maintain and expand the jobs increased over 63%. 2026 is the first year of the 15th five-year plan period. We will implement the deployment of the state council and also to focus on our main businesses and also hold fast to our risk bottom line and continue to build ourselves into a very strong financial institution In accelerating China's effort to build a strong power of the finance, we are going to make our contribution to high-quality development. We will mainly focus in the following five areas. First, high-quality support for the real economy, deepen the five key areas of finance, intensify support for technology, innovation, strategic emerging industries, manufacturing, SMEs, and other key sectors, and follow the national strategy to expand the domestic demand, promote consumption potential, and optimize investment structure. Second, high-quality support for opening up, deepen the one access point global response service model, build a financial platform for Chinese enterprises to go global, and increase support for Chinese enterprises going global and foreign-invested companies bringing in enhanced R&B internationalization services and accelerate integrated company operations. Thirdly, promote high-quality value creation, stress and proactive lean measurement and pricing capabilities, consolidate income structure advantages, continuously improve non-interest income contribution, optimize application of EVA and RWA in resource allocation, promote cost reduction and efficiency enhancement, and enhance sustainable development capability.

Fourth, high-quality digital and intelligent empowerment will be improved. We'll apply smart contracts, blockchain, and AI in cross-border payments, wealth management, client operations, and internal management. We will also enhance online and offline, domestic and overseas integrated services, and improve total factor productivity. Fifthly, high-quality foundation... We will strengthen monitoring and management of key industries and clients, control credit and compliance costs, and effectively enhance risk prevention and resolution capacity and ensure stable and safe financial services. Dear friends, In 2026, BOC will also celebrate the 20th anniversary of A plus H share listing. Since listing, our total assets have increased 6.2 times, and cumulative dividends have exceeded 970 billion RMB, providing substantial returns to the country and shareholders. Standing at a new starting point and position, all BOC employees will unite, act pragmatically, and continue to work hard to deliver steadily improving operating performance, repaying the trust and support of clients, investors, and our works of life of society. Thank you. Thank you, President Zhang. Now we move on to the Q&A session. In order for more friends to have a chance to raise questions, each person only can ask one question. Before that, please identify yourself and your organization. First investor is analyst. First analyst on site, please raise your hand. First row on the right-hand side in the middle. Gentlemen, please. Thank you for the opportunity to ask the first question. I'm Dongbo from CTA Securities. Congratulations on the excellent performance. I have a question regarding strategic planning and business strategy. It is a top-down question. So 2026 marks the first year of the 15th five-year plan. We would like to ask the management to share BOC's overall layout for the new development stage of the 15th five-year plan period as well as its business philosophy and goals for 2026. Thank you. It is a very comprehensive question. I'd like to invite President Dunn to answer the question. Thank you for your question. As I introduced at the results released just now in 2025, facing the complex and volatile external situation, BOC forged ahead under pressure and pursued progress while maintaining stability and successfully concluded the 14th five-year plan with good results. laying a solid foundation for the development of the 15th five-year plan period. Looking ahead to the 15th five-year plan period, in terms of the overall strategic goals, BOC will align with the strategic deployment for building a country strong in finance, aim to develop into a powerful financial institution, and continue to act as a doer in implementing the decisions and arrangements of the party central committee, a major force in serving the real economy. a forerunner in supporting high-level opening up, a practitioner in enhancing the strength of the large-scale, large state-owned financial institutions, and the balance for maintaining financial stability, thus promoting its own high-quality development while serving the high-quality development of the economy and society. This strategic position and goal is a solemn commitment made by the party committee of BOC to the party and to the country, to all customers and investors, and to all cadres and employees of the bank in 2024, which has effectively guided and promoted the achievement of all the bank's business goals during the 15th five-year plan period. That is about the overall strategic goals. And in terms of the business practices, during the 15th five-year plan period, we'll adhere to the consistent implementation of the overall plan and continue to effectively carry out its strategic goal and positioning from the perspective of operational management. During this new period, BOC will focus on its core responsibilities and main business, mainly six areas. capability improvements and two transformation promotions. About the six capabilities, first we built a strong capability to serve the real economy, but here to taking financial services for the real economy as the fundamental purpose, closely focused on major strategic tasks and projects such as the construction of China's modern industrial system and coordinated regional development. During the 15th FYP period, optimize financial supply and improve service quality and efficiency. We will solidly carry out the five key tasks of the financial sector. Place high-tech finance in a prominent position in the group's overall development and build a service model that empowers the innovative development of industries. Second, build a strong global layout capability and international competitiveness. We will resolutely take globalization as a core development strategy and top priority, continuously consolidate the advantages in key regions such as Hong Kong and Macau, accelerate the strategic layout in key emerging markets, and create new growth drivers for profit contribution. We will play the main role of BOC in facilitating international use of the RMB and supporting the construction of the two international rich financial centers of Shanghai and Hong Kong. Third, we will build a strong comprehensive customer service capability. We will adhere to customer centricity, give full play to the characteristics of comprehensive operation, improve the echo efficiency, ecological construction of circles, chains, and groups, optimize the comprehensive financial services of equity, loan, bond, insurance, and lease, continuously enhance ecological and integrated service capabilities, drive the improvement and strengthening of medium-sized credit customers, and take multiple measures to improve the quality and efficiency of customer service. Fourth, build a strong risk resistance capability. Optimize the comprehensive risk management system. Strengthen asset quality control. Improve the quality and efficiency of recovery and resolution. Ensure the basic stability of the group's assets. Quality keeps the NPL ratio at a low level among peers and firmly holds the bottom line of preventing systematic financial risks. Fifth, build a strong integrated operation capability. will strengthen the organic integration of business data and technology and enhance the agile and collaborative channel operation capability intensive and shared operational support capability, and data-empowered management and scheduling capability. Six, we'll build a strong team of financial talents. We'll adhere to high political standing, excellent work style, and strong provisional capability, clearly establish a correct orientation for talent selection and employment, improve the talent system and mechanism, encourage cadres and employees to take on responsibilities, and strive to cultivate a team of cadres and talents with global competitiveness. Regarding the two transformations, first, accelerate digital and intelligent transformation. We'll increase tech investment in digital and intelligent business, build an AI plus finance ecosystem, strengthen tech empowerment in key areas such as key business, channel construction, risk management, build differentiated market competitiveness, and create a power engine for high-quality development. Second, accelerate the transformation of sustainable business development. Last year's name was 1.26, greatly shortening the gap with our peers. We are confident that. that in terms of the net interest income fundamentals, we'll be able to make more contributions. We'll optimize the asset liability structure and firmly hold the basic foundation of net interest income. We'll promote the high-quality development of net interest of business and increase effort streaks by net interest income, which account for a large proportion of our income. We will also strengthen refined management and promote cost reduction and efficiency improvement. At here, we'll also continue to adhere to light asset intensive development, strive to alleviate the pressure of the tight balance of capital and funds and effectively respond to the low interest rate environment. So that is our overall strategy and for the 15th five-year plan period. 2026 is the first year of the 15th five-year plan period. The bank will firmly establish and practice a corrective view of performance, serve national strategies, and the development of the real economy, adhere to focusing on main business, improving governance, and achieving differentiated development, maintain a good development momentum, and go all out to ensure a good start for the 15th five-year plan period. Our business philosophy and goals for 2026 can be summarized as the six goals. The first orientation is appear to innovation-oriented development, serve the overall national interest and increase support for the development of new quality productive forces. We will continuously improve the product and service system, highly adapted to new quality productive forces, boost and empower the construction of the modern industrial system and help smooth the innovation chain, supply chain, industrial chain and capital chain. We will also increase support for the construction of a strong domestic market, serve the expansion of domestic demand and boost consumption, implement the policies of two major categories of projects and two new types of infrastructure, and help improve the transmission efficiency of fiscal and financial policies. We will also increase support for areas such as upgrading traditional industries, cultivating and expanding emerging industries and future industries, expanding capacity, improving the quality of the service industry, and creating a new form of intelligent economies, so as to improve the quality and efficiency of comprehensive financial services. Second orientation. Adhere to the advantage-oriented development. Consolidate advantageous features and provide all-round services for high-level opening up. We will continuously improve the global layout and financial service system and maintain a high level of overseas profit contribution. We will vigorously expand the international use of the RMB and maintain rapid growth of RMB assets and liabilities of overseas institutions. We'll also serve the ongoing global of Chinese-funded enterprises and the layout of the global industrial chain and build a benchmark plan for supporting the overseas development of Chinese-funded enterprises. We'll also improve and expand global custody products and services and the proprietary custody network and provide higher-quality global custody services for various cross-border investment and financing customers. We will adhere to the value-oriented development, focus on value creation, and effectively respond to the challenges of the low interest rate environment. We will strengthen refined management and drive the steady improvement of net profit to a level comparable with peers. We will enhance the capability of overall allocation of domestic and overseas funds, strengthen the forward-looking management of net interest margin, and drive the stabilization and recovery of net interest income. We will increase efforts to expand intermediary business, steadily raise the scale of settlement and clearing, deepen wealth management business, and optimize comprehensive financial services. We'll expand the scale of customer-driven transactions and promote the development of other net interest rate, net interest businesses. We'll also strengthen cost reduction and efficiency improvement. but here to the foundation-oriented development. We'll strive to consolidate the fundamentals and improve the quality and efficiency of key business products and services. We will closely focus on customer needs, give focus to the advantages and characteristics of globalization and comprehensive operation, and continuously improve the full lifecycle and full process. Comprehensive service system will enhance the market competitiveness of key business products segments continue to focus on key products such as salary payment agency, express payments, party custody and cash management and actively expand the sources of low cost liabilities. Also, and the fifth orientation is adhere to the stability oriented management development. We'll build a solid risk defense line and better balance development and security. We will effectively respond to internal and external risks and challenges and adhere to prudent and compliant operation. We'll also strengthen asset quality control, focus on the two main lines of strictly controlling newly generated non-performing assets and increasing substantive recovery, continuously save credit costs, and keep the group's non-performing loan ratio stable. And six, we'll adhere to the intelligence-oriented development, strengthen digital intelligent empowerment, accelerate the improvement of tech operation efficiency. We'll accelerate the implementation of the AI Plus plan, optimize the high-efficiency technology supply system, promote the value transformation of data assets, and create AI application paradigms, focusing on the scenario needs of key areas such as credit marketing and operation. That's all for my answer, and thank you for the question. Thank you, President Zhang. Now we move on to the next question. Second row, lady in the middle, please. Thank you, senior management, for the chance to ask a question. I'm from Bata Securities. First of all, congratulations on the excellent performance of BOC. I have a question related to deposits. Since the beginning of the year, the market is highly concerned about the large-scale maturity and repricing of time deposits in the banking industry. How does the management of BOC view the growth trend, structural changes, and room for cost improvement of deposits in 2026? At the same time, we can see that the market has noticed the fierce competition among peers or the flow of deposits to other areas. So what measures has the bank taken in active liability management in the face of fierce deposit competition? Thank you. I would like to ask Vice President Yang to answer the question. Thank you for your question. I would like to answer from two perspectives. One is... our view on the growth trend of deposits, and second is how to promote the high-quality development of liability business. First of all, our view on the growth trend of deposits. In terms of total volume, in recent years, M2 has maintained steady growth Over the past three years, average growth rate was 8.5%. It is estimated that this year this trend will be sustained. About the customer's deposits, They have shown a steady and sound momentum. In 2025, domestic RMB deposits achieved a year-on-year increase in increment. Regarding the issue of the maturity of bank time deposits concerned by the market, the scale of the bank's maturing time deposits has indeed increased since the second half of 2025. For these maturing time deposits, we have earnestly done a good job in deposit retention services, and if you look at the actual results, most of the deposits are still retained in the form of deposits with a high rollover ratio of time deposits. It is expected that the maturity of time deposits will have a limited impact on the bank's deposit growth this year, and the momentum will continue. On the other hand, the current deposit

interest rate is lower than the time deposit interest rate three years ago. The pricing of the above deposits will drive down the deposit interest rate bringing a positive impact on stabilizing the bank's interest margin level. In terms of structure, it is estimated that social funds will continue to gather towards individuals and non-bank institutions. However, with the implementation and effectiveness of the package of policies for physical and financial coordination to boost domestic demand, which supports the sustained sound development of economy and improves corporate liquidity, the growth of corporate deposits will improve. And this will create a good foundation for the bank to consolidate the liability base and support the development of the real economy. Secondly, how to promote the high-quality development of a liability business. Customer deposits are the core business for improving liability quality and an important guarantee for banks to maintain a steady growth of assets. The bank has always adhered to the customer centrality driven driven by the dual wheels of world management and asset management allocating products and services around customer needs and improves efficiency of deposit precipitation by providing customers with full process services first consolidate the customer base and improve liability quality for corporate customers establish hierarchy and classified service system actively to the traditional advantage of cross-border business and to further expand the customer base by providing customers with international trade and cross-border R&B settlement services. Relying on digital platforms such as corporate online banking, mobile banking, and which has worked to improve the coverage and the convenience of customer services, carry out targeted marketing for various customer groups such as site-type enterprises, multinational corporations, listed companies, micro and small enterprises, industry leaders, and continue to improve customer service capabilities for individual customers, continue to optimize the hierarchical operation strategies, steadily promote the three-level customer management model and provide precise services for customers at different levels, strive to improve customer Secondly, improve the product and service system and enhance the quality and efficiency of customer service. We adhere to win-win value creation concepts for both banks, and we have also provided diversified professional products. services so as to drive the steady growth of deposits. For instance, in 2025, the bank optimized the global cash management system and realized 724 real-time receipt of matching currency funds on the basis of security leading the industry give play to the capability advantages of BOC Wealth Management and Bank of China Hong Kong to provide customers with rich and high-quality selection of products adapted to the wealth management needs of multi-asset, multi-strategy, and multi-region, build the group's exclusive pension product system, build the Silver Age Loan Masking Care, provide exclusive wealth management services for pension preparation and elderly care, Thirdly, promote ecological operation and facilitate the closed-loop retention of funds. Focus on the policy orientation of investment in physical assets and human capital. Follow up the capital flow of finance, social security, housing, major projects, construction, technological transformation, and industrial and supply chains. build a finance plus non-finance service network for customers and integrate financial services into customers' ecological operations scenario. Through the in-depth integration with customers' capital flow, information and logistics flow, promote closed-loop management of customers' funds, drive deposit precipitation and improve stability. of deposits. Fourthly, optimize active liability management and enhance resilience of operation and management with a continuous decline of interest rate center. Banks can obtain stable funds with relatively controllable costs. We are going to seize favorable market opportunities, issue bonds and interbank certificates of deposit at the right time, enrich the source channels of liabilities, and also achieve cross-cycle high-quality development by supplementing capital and improving the total loss-absorbing capacity. Thank you so much. Thank you so much. Now we can invite more questions. Okay, the lady who are sitting on the second row on the left-hand side. Thank you so much for this opportunity. I'm from Guotai Haito Securities. I have a question about lean faced with the challenge of low interest rate environment. Can you introduce us on the specifics looking ahead of 2026? What is the trend of lean and what are the main pressures and the supporting factors respectively? Thank you so much. I'm going to answer your question. Actually, according to Mr. Zhang, you already mentioned that it's a very important task for us to maintain our good development and performance in the low interest rate environment. As for Bank of China, we have our own advantages, so we will make good use of both domestic and overseas markets, coordinate both RMB and foreign currencies. And we already achieved good results in 2025. And our net interest margin was 1.26%, a decrease of 14 basic points over the previous year. Since the second half of this year, the group's foreign currency net interest margin has stabilized and rebounded. The group's net interest margin was the same as that in the first half of the year, and the net interest income achieved positive year-on-year and month-on-month growth. Specifically speaking, first, we increased asset investment and improved efficiency of asset allocation and strengthened our self-disciplinary measurement of loan interest rate. In 2025, the bank's domestic RMB loans increased by about 1.8 trillion RMB. Credit supply maintained steady and balanced growth adhered to the principle of risk pricing. and reasonably determined the interest rate level of newly issued loans according to operating costs. We also actively seized domestic and overseas market opportunities. The proportion of the bond investment in interest earnings asset increased by 21 percentage points year-on-year, of which the growth rate of foreign currency bond investment exceeded 20%, flexibly arranged the term bond investment. Secondly, continuously optimize liability structure and effectively reduce liability costs. maintain the rapid growth of domestic RMB deposits, appropriately absorb interbank non-bank demand deposits, solidly promote the self-disciplinary measurement of deposits, drive the group's liability interest payout rate down by 37 basic points, with the improvement amplitude hitting a new high in recent years. Third, give play to the advantage of global business and improve efficiency for in-currency fund utilization. The asset scale of overseas institutions has grown steadily and the proportion of core assets in total assets has increased by 0.9 percentage points. And looking ahead to 2026, it is expected that the year-on-year decline of banks' net interest margin will narrow significantly, and the net interest income will achieve positive growth. Currency were faced with a lot of uncertainties, as you may know, that now the geopolitics landscape has actually shrink, has already give pressure to the interest rate decline of many currencies. We have confidence that We will see the market opportunities brought by implementation of the package of incremental policies give full play to the advantage of globalization and the characteristics of a comprehensive operation solidly achieves a comprehensive balance of volume, price, risk, and efficiency for the 2026 we will do great efforts in the following aspects first optimize the basic foundation of asset and ability business and effectively control the decline of interest margin of r b business in terms of asset in the first year of 15 five year plan period the bank will grasp the more proactive micro policies act ahead of schedule and reasonably arrange the pace of credit supply and bound investment And also in liability, we will stress on technological empowerment, focus on key scenario and products, remote digital operation of corporate non-loan customers, settlement accounts, and individual long-tail customers, and facilitate precipitation of demand deposit funds. Meanwhile, we will also actively seize the favorable opportunities of the gradual maturity of time deposits to effectively hedge against the downward pressure of asset income. And besides, secondly, we will stress on the global service system and maintain the overall stability. of the interest margin of foreign currency business. The bank will continue to steadily expand the customer base of going global, promote sustainable growth. Meanwhile, the rapid growth of low-cost domestic deposits has provided competitive capital support. Currently, the expectation of U.S. dollar interest rate cut has weakened significantly. If the U.S. dollar interest rate is cut, it will have basically no adverse impact on the bank. If the Hong Kong dollar's interest rate declines, it will bring certain pressure on our income. We will stress an interest rate sensitivity measurement and take multiple measures to alleviate the adverse impact. Thirdly, refine the requirements for interest rate pricing management and consolidate foundation for steady development. We will follow closely policy development adhered to the bottom line of compliant interest rate operation and improve efficiency and effectiveness of pricing management through institutionalized and standardized management methods. And we will also assess the reasonable deposit and loan interest rate. Thank you so much. And today we have a lot of friends who are with us today, especially some H share investors who are also joining us online. So now we will invite the friends who are online to raise questions. And also please identify yourself and then ask your questions. Thank you. Thank you. Thank you so much and I'm very grateful for this opportunity. I'm from Morgan Stanley. I have a question regarding the growth of the commission rate while the ratio of the non-interest income is also quite high. So I want to ask a question about reasons and also whether in 2026 will it continue to grow and what are the driving factors? Thank you. and we will invite Vice President Huang Xueling to take this question. Thank you so much for your question. Bank for China has played its advantage of globalization and comprehensive business and actively promote the source of non-interested income and effectively tackle the market. Also, we have the total non-interest income of 219.2 billion RMB, a year-on-year increase of 19.2%, while the net fee and the commission income was 82.2 billion a year-on-year increase of 7.4%. And also, this is the historical high in terms of the contribution ratio of non-interest income. mainly in three areas. First, grasp the development trend of transformation and upgrading of resident assets location and enhance wealth management capabilities. We continuously build a full market plus full group product shelf, improved product selection and management capabilities with more than 7,500 on sale and agencies sold public funds and wealth management products. Benefiting from the recovery of the capital market in 2025, the investment assets of domestic individual customers increased by 15%, the customer-driven stock trading volume of the Bank of China Hong Kong increased by 85%, and the marginal scale of BOC funds increased by 12.8%, driving the group's agency fees up by 26.67%. At the same time, accelerate the construction of global custody capabilities, the group's Asset scale increased by 21%, driving the growth of relevant fees by 7.74%. Secondly, optimized comprehensive finance and continues to provide high-quality payment and settlement services. Bank of China has solidly expanded customer and account base. The total number of corporate customers and corporate settlement accounts have both achieved double-digit growth, and the international settlement volume has increased by 2%. 9.56% driving the group settlement and clearing fees up by 2.03%, achieving positive growth for five years in a row. The corporate domestic settlement fees achieved remarkable performance with a year-on-year increase of 7.2%. The development foundation was further consolidated, and the leading advantage in international settlement was further expanded. Thirdly, due play to the advantage of a global market business and a steadily expanded trading and investment business. As you may know that in 2025, the global financial market experienced large fluctuations. Relying on the global 24-hour uninterrupted service network, we served the global customers' need for found risk efficient and value preservation, and the customer-driven trading business achieved steady growth, grasped the trend of R&B and foreign currency-bound markets, dynamically optimized the investment portfolio, and realized effective growth in financial investment income. Looking ahead in 2026, the domestic economy has a good start, The transformation of old and new growth drivers are accelerating and the demand for transaction banking, wealth management, investment banking, business will further grow. We will take customers first as a call taking service customers through the entire chain as its mission and strive to maintain the steady and healthy development of non-interest business. In terms of wealth management, we will continue to coordinate the management and to build a full-spectrum product system and achieve a win-win situation for both customers and banks in terms of values.