China Constr Bank H

investors and analysts and friends from the media community. Ladies and gentlemen, good afternoon. A big welcome to the 2021 annual results announcement of CCB and also a big thank you to all of you for your care and support for CCB. Because of the COVID control and prevention needs, this announcement will take the form of conference call and live streaming. So present at this venue are Mr. Tian Guoli, chairman of CCB and also Ji Zhihong, vice president of CCB and Mr. Wang Hao, Ms. Zhang Min, Mr. Li Yun and also Mr. Chen Yuan-guo, CRO of CCB and also Mr. Liang Jingsong. Anthony is also joining us online and we also have some representatives of the directors and supervisors at the venue and also heads of other departments. My name is Hu Chang-miao, secretary of the board. So the announcement of CCB in 2021 was made last night and also the papers were already released on the official website of CCB for your information. So the interest of time, we will not present the details on this occasion. So now we would like to invite chairman Tian Guoli for the speech. Dear investors, analysts, media friends, good afternoon. On behalf of all the staff of CCB, I'd like to welcome all of you to this announcement. I'd also like to take this opportunity to express our appreciation for your long-term support for CCB. In 2021, in face of the complicated situation, home and abroad and also the different challenges and risks, CCB has been earnestly implementing the deployments of the CPC, Central Comedian State Council in promoting the new concept development and also the new finance action. And we guided the financial resources to flow into the key areas and weak links in the economy. And of course, we contributed to the construction of the new development model and of course, the new high quality development. So actually we have the balanced growth in asset liability. So the net profit for 2021 increased by 11.09%. We had an average growth rate of .25% for two years and the MPL ratio is down by .14% and we plan for 91 billion of dividend payments. So we had a very good beginning for the 14th five-year plan. So we actually handed out a pretty excellent report to the shareholders in the society. So I think all of the indicators are already in these papers. So I will not go into details on this occasion. The new finance explorations by CCB is not only reflected in those data and indicators, we actually share in the creation of solutions to the national problems and also the social issues. Of course, we also have won a lot of trust and support along the way. The CCB community actually enables the citizens to enjoy the services that we can provide everywhere in this inclusive lending that is digitalized and targeted actually has grown from the thin profit business to a major driver business and that over 270 billion yuan of Yu Nong Tong has contributed to the rural revitalization drive. More importantly, new finance explorations can help us jump out of the box to seek answers. Now the path has really become wider and wider. And so we have more momentum for sustainable development. And the second development curve is becoming more robust. We have won a lot of recognition from the international community. So we got more confidence as a result. Now the COVID pandemic and the changes and also the geopolitics, of course, we have more uncertainty surrounding the market. However, we can still expect a pretty long-term rosy prospect for Chinese economy. In recent days, the State Council, Financial Stability and Development Committee held a special meeting and called on financial institutions to look at the big picture and support the development of real economy. And of course, we will continue to be people-centric and we will continue to integrate resources along the path of new finance. And of course, we will reward you with better results and better performance so that we can jointly safeguard the stable development of the capital market. Of course, we are also looking forward to all of you landing us your support and increasing your holding of shares. Thank you. So now let's head on to the Q&A session. In order to have more chances for you, we actually propose you each ask one question. Please identify yourself and your organization before you ask your questions. So now the floor is open for questions. Ladies and gentlemen, now let's move on to the Q&A session. If you have a question, please press asterisk plus number one and then wait for your turn. The first question comes from Lu Yuheng from Financial Times, sir. First of all, big congratulations on CCB on your good results. We could see the net profit actually hit a record high. I also heard, Chairman, you actually talk about the new finance action and we heard about it on multiple occasions. Also to ask you, can you give us more details? What are the differences between the new finance action and the traditional finance and what roles does it have for the performance of CCB? Thank you. Thank you for your attention to new finance. Actually, new finance action is a new thinking about finance under new development philosophy. The traditional finance has been developing for civil centuries and it has actually played very important roles in promoting human society. And of course, we actually have seen great changes as a result. And there is one basic issue. Now in this digital and information era, people's demand for physical stuff and also for spiritual stuff is increasing. So we need a new language, new logic to talk about new finance. In particular, after the financial crisis, we actually should think more about how we can serve the society better rather than become a social issue. Let me give you an example. In the past, in order to gain efficiency, to serve about one, if you invest in 20% of the companies, you can expect 80% of benefits or profit. This is very, very sharp calculus. However, in this new development era, with the people-centric philosophy, if we are over pursuing the value, then you might forget that 80% of the customers and they will be left unattended. They will be marginalized. So this new finance action all boils down to the attention to people. But of course, we also should be supported by tools. If you want to serve that 80%, the majority of the people, it can not only be done by your wishes. You just were not able to do that. But now with the fintech going on, we are better empowered to do that. On the one hand, we have very lofty aspirations and we are more able to serve the society. I can give you one more example. Just recently, we were developing the Yu Nong Tong, which actually serves the villages. So that is the connection of the villages. In every village, CCB built about 520,000 outlets that cover basically all villages, or I should say 80% of the villages in this country, because some natural villages are extremely small in terms of the population. But we can cover 80% of the villages in China through that Yu Nong Tong project. In the urban areas, you might not need to go to a CCB outlet to handle your business. But actually, there's no boundary in the cities. And the countryside should also have access to modern financial services. A marginalized, marb farmer can enjoy the same level of service that can be enjoyed in the city. And this itself plays a very important role in financial equality. It's very simple. We can take advantage of the communities level, health clinics, and also the CPC grassroots outlets. We can put some machines there, and then people can get their service. We cannot do it all by mobile phone, because people might not be that internet capable or mobile phone capable. So basically, if we can use this as a tool, then we can pretty much deliver all the services that are delivered in the busiest urban areas. So for example, withdrawals and deposits, and also some wire transfer, and also fast loan, et cetera. All of these can be enabled. In addition, we can also help the village level government in terms of the e-governance and also employment service, et cetera. So it's just a one stop service platform. Another example is inclusive finance. In the past, in the old days, people were trying to compete for the big accounts. And we used to have this too big or too big strategy. But now, with the transition from the high speed development to high quality development of this country, now when it comes to high quality, we should not only look at the big ones, we should also pay attention and spare our attention equally to the small ones or the mid-sized ones to improve the whole quality across the society. So inclusive finance is very important. And several years ago, we made this strategy. So when you lend to the mid and small or micro, medium businesses, without the help of FinTech, you just cannot do that. It's impossible. However, the return is different. If you can just add one zero to lend to a big account, but of course you need to make a lot of investments to lend to the micro and small businesses. But with the big data and FinTech, we can be better able to lend to the macro and small businesses. In the past, we can lend to about 20 to 30 billion in the oldest to the small businesses with an MPL ratio of seven to 8%. But now with the internet technology, with the latest IT, and also with the AI technology or big data or blockchain, you name it, basically with all of these tools, we are better able to do such things. In 2018, in the very first year, we lent 230 billion with an MPL ratio of 1% and 350 billion in 2019. And the MPL ratio is still at around 1% in 2020. And then we had 450 billion of loans and the MPL ratio still was kept within 1%. So basically, it took us less than five years for CCB to develop the inclusive finance lending to grow it to over two trillion. Let me give you some data points for your comparison. We all know that CCB is closely linked to the real estate industry and our lending to real estate. And we actually granted a lot of mortgage loans. And it took us about 30 years to have a lending about five trillion in real estate. But it took us just three to four years to grow inclusive finance lending to five trillion. So maybe it's very hard to think that CCB handles inclusive finance because inclusive finance has been tried by a lot of people. It's not that people do not want to serve micro and small businesses, but that means very high MPL ratio. The banks do not have that capacity to withstand it.

But we have new strategies for new finance and with the support, CCB has only used three to four years to grow our scale to two trillion. And also for our MPL is over our expectations. Our CBIRC had a tolerance of 3%, but for us, it was only around 1%. So I can say it is pretty effective and which really provided us with a lot of confidence. In the future, we will try better and try harder to realize our ambition of providing services to the overall country and to the majority of the people so that we can have a more expensive scope of services and we can better help the small, micro and mid-sized businesses so that we can leverage more capability of new finance and FinTech to do better, to do more, and more people can enjoy those financial services and resources in an equal and fair manner. Moreover, for CCB, we are also pushing forward our house leasing strategy. In the past, this is not something by traditional banks, traditional banks only offer loans. But when we are trying to contribute to a mature or a developed market of house leasing, it is very difficult to do. And we also call that new finance. So we have a whole set of ideology of serving the society. And under that umbrella, we have reconstructed some of our logic for new finance and reconstructed some new product. So we have a lot of innovative product for that and with great result and great benefits to both economy and the society. Thank you. Thank you, Chairman. Next question. Next question, Shiran from Morgan Stanley, please. Thank you for the opportunity. I'm Shiran from Morgan Stanley. I have a question regarding the structure as well as loan issuing. So in 2021, the overall growth for loans is very good, specifically for corporate loans is growing very rapidly. So we were wondering, what are the reasons behind that? Moreover, we can see that it is proposed by the regulatory department that the social financing growth speed should be in line with the nominal economic growth. And actually this year, our overall economic growth goal is adjusted downward compared to last year. So would our goals adjust accordingly? And what are some changes that we might see in the issuance of loans in key areas? Mr. Ji, thank you so much for your question. And thank you for following us. As a major bank, CCB has been promoting the roles for services of finances, and we try to achieve six guarantees, six set abilities, and the more of the financial resources will be contributed to the key areas and the weak links. And we try to achieve a sustainable and continuous growth at the same time. So in 2021, we have a very good growth compared to the end of the last year, we have an increase of two trillion with an increase of 12%, and for domestic corporate loans with an increase of 1.2 trillion up by 14.8%. And we've contributed more and stepped up for infrastructures. And on that basis, we've supported more for green, inclusive manufacturing, as well as rural rejuvenation. So we issued more loans in those regard to better fulfill the need of the real economy financing. One is that we've provided services to the major program of the country and to leverage our traditional advantages with an increase of 733.1 billion RMB up by 16.9%. And the second is that we are trying to be more green and trying to increase the quality of that greenness so that we can establish a long-term developed mechanism, explore new product, new services, and new measures for green finance. And we issued more loans in terms of clean energy, energy conservation, as well as carbon reduction. We have an increase of green loans, 515.5 billion RMB up by starting 5.6%. And the third is that our inclusive finance continue to lead the market, and we continue to diversify our system for inclusive finance. And for CBIRC, the inclusive finance balance is around 1.9 trillion RMB up by 449.9 billion. So we are leading the industry in that regard. And number four is that we continue to support the high quality department for the manufacturing industry. We have a increase of 152 billion up by 29.2%. And we are trying to build a assessment system for the innovation capabilities of the tech industries. And our strategic increase for emerging industries has an increase of 306 billion up by 49.8%. And number five, we are trying to consolidate our result of poverty alleviation and build our service brand for rural rejuvenation. And we're continuing to innovate our models of product and services. We have a new increase of 377 billion RMB for rural loans up by 18.1%. At the same time, we are also promoting this mega retail ideology. We have 7.9 trillion RMB for individual loans balance up by 658.1 billion up by 9.1%. And we're still continuing, remaining our first and top one status. As of now, our economy is still facing many challenges and pressure, including the downward of expectations and impact to supplies, as well as the drop of demand. And we need to be more proactive, need to take initiative and keep everything stable. So in the next step, we will push everything forward while remaining that stability, continue to consolidate the micro policy, support the real economy, and to continue with an appropriate increase of new issued loans. And at the same time, we are following the macro policy orientation, as well as the demand of the customers to appropriately control the pace of the increase of loan increases. And with regard to our key areas, the first is that we focus on the key areas and the weak links of the real economy. We continue to provide financial support to inclusive finance, technology, innovation, manufacturing, green development, and rural revalidation. And we try to have this increase while remaining stability. And the second is that we continue to provide good services for the major projects of our country and to increase or to focus on our issuance of loans for key areas, as well as for infrastructures. And number three is that we keep a stable issuance of real estate loans so that more of the appropriate needs of the property purchases will be fulfilled. And number four is that we continue to increase our internal demand to build up our ecology scenarios and to develop consumer finances. And at the same time, we have this good cycling of original economy, including Beijing, Tianjin, Hebei region, Yangtze River Delta as the Greater Bay Area, as well as Chengdu and Chongqing areas. And we, at the same time, focus on the support of Midwest as the Northeast. So CCB as a major bank are also trying to leverage our good capabilities of both the parent banks and the subsidiaries to have this overall increase as well as for different debts and to increase our scale of asset management. So this direct financing channel in the recent years is very good. And in the next step, we can continue to guide the social financing and social funding into supporting the real economy and they can bring a greater role in the future. That's it, thank you so much. Next question. Next question from Mr. Zhang Shuai, CICC. Thank you so much for giving me this opportunity. I'm from CICC. So previously, we can see that the chairman was attending the press release conference of the Information Office of the State Council. CCB is doing a lot of tryouts and trials for intelligent governance. And in the early of 2021, we attended the open day of intelligence governance hosted in Kunming of Yunnan province. And we know that there are a lot of services provided by CCB and also online, we can see there's a lot of good implementations of new finance. And there are a lot of good cases. So thank you goes out to the management and thank you to the information release so that we can understand better than competitiveness of CCB in this area. So I was wondering whether the management can introduce more regarding the intelligence governance and what are our ideas behind that from the perspective of the group and what are some impact it could have for our performances? Thank you. Thank you so much. So actually for this intelligent or smart governance, this is also part of new finance. For new finance, we have a new development ideology and the core is innovation. To be green, to be more inclusive, to be more open. So those are our principles. So if you follow that logic, a lot of the answers will become very obvious. So including our financial products, in our designing of scenarios, allocation of resources. So you can have the answers for all of that. For example, CCB has a great team of technology. But in the past, traditionally, we leverage that to compete with our peers. We try to innovate to issue more new products, but it is not necessarily will boost our competitiveness because you are not having a wider or more comprehensive perspective. If you don't focus too much or be obsessed with that, if you focus on serving the society, when you win the trust of the society, when you have a very good reputation, after that, you will have greater potential. You have more room and space in the market. So that is our underlying logic. And for our digitalization and our technology, we have such great ideology so that we can empower the society very early on when we were in the Yunnan province and we were working with the executives or the management of that province, they were thinking, oh, you are so innovative. Oh, you can do this. And we proved that yes, this is something we're capable of. Because to be honest, for intelligent or smart governance in terms of technology, it's not that difficult or tough. Because for our banks, we deal with the numbers for a long term and we have a very good capability to deal with those numbers. So we can design different platforms or different products for smart governance. So for our perspective, for the benefit for the public, it could be a lot better. So based on that, we were working with the Yunnan province and we've established a strategic cooperation agreement. And everyone was having this attitude of to try this out, but yes, indeed within a very short period, we have this one phone connection for dealing with different affairs. And in Shanxi province, it is the same. So a lot of the local government believes that, oh, this is a pathway that we can pursue. And when we try to build those areas up, we weren't focusing on profit. We weren't focusing on the revenue. With our partners, including with the tech companies, we had a very good relationship of collaboration. So this is to modernize the governance capability of the local government. And this is our responsibility as a major bank. This is our obligation. In the past, last year, we have a more than 300 billion profit. So with that profitability, you should be paying back to the society. So we weren't focusing on the profit when we tried to help with the intelligent or the smart governance. And we had a very good result, exceeding our expectations.

Now we have already signed the agreement with 29 provinces and cities. We were part of the Jingjingji and also the Internet Plus Governance Plus Supervision Scenario Development. So now, we provided governance service, an inquiry, and also a reservation for over 200 million users. And we actually are connected to over 25,000 governments. We actually assisted in the processing over three million government affairs and over seven, implementation of over seven million lists. So basically, we increased their efficiency by 30%, reduced their handling time by 38%, and we can cut the errands by over 60%. I'm citing these data just to show you that with better data, we can reduce the trouble that people should take to do them, but this requires concrete action. It's not only the part of the government and financial institutions like us has the capability, so we should just give back. So this is part of sharing and being open. And on ATM machines, we actually delivered cross-provincial service. So you might hear a lot of news coverage in Shanghai. In Shanghai, we can actually ensure that if you are in Shanghai, then you can do things at home. For example, if you're a migrant worker living in Shanghai, work in Shanghai, if you lost your ID card, then actually you don't have to go back home to do these things. You can actually go to a CCB outlet to handle such things. So 14,000 outlets of CCB can deliver over 6,000 governance issues. So actually it's all enabled in Shanghai. You can handle the issues, all the issues across the country in Shanghai. And then here in Beijing Tianjin, Hebei province, it's all connected. And you can, we've already delivered over 6,000 increase in other services over 40,000 such transactions. We serve over two million, two million people. So I'm talking about these outlets because in the past, you have to really join a very long queue to process, to get these service. But now the traditional function is disappearing. 100% can be handled online. But CCB has such a wide outlet, network of outlets, and they are very strategically located. So just think about it from the internet perspective, you can use them to handle governance issues, to serve the public. And also we can change them into workers' harbor. So that those truckers, those cleaners, and those express delivery people can come there to use outlets for bathroom, to get some water, et cetera. And of course we also work with the disabled association to make it accessible to all the disabled people and to deliver better service to the marginalized group. So if we can follow that logic, then we can actually make a difference to the everyday life of the ordinary people and provide more convenience. I just touched on Yuenong Tong moments ago. So this is also part of the governance. How can we better ensure a fairer and more equal distribution of financial resources when it comes to rural vitalization? A very important point is that, since we've just completed the most important battle against poverty in order to consolidate this achievement, without financial resources, you can hardly make it sustainable. How can we take advantage, build on the very successful battle against poverty and develop the rural areas? Financial resources are really the most important resources that you should put in place in the first place. So the Yuenong Tong project, I just mentioned the number across the villages. We just want to put our tentacles there in those villages so that people living in those remote areas can enjoy the services, those people that grow crops, those people that actually raise animals or animal husbandry can get such services. So it's part of the governance. On the other hand, it also gives us a lot of opportunity to grow new business. And of course, we're also trying to work in the field banking plus governance. And I'll... So... Let me give you one more example. We established those specialized platforms to enable payment products. And this alone, in medical diagnosis, we actually did over 10, 100 billion in business. So finance can actually also make a profit out of business for the majority of people. It's better than those name-based profit because we can make a difference to the society and really tangibly improve people's life. And for us, people working in the banking industry, we also feel a very strong and lofty sense of mission. As a financial practitioner, we can actually serve the people and give back to society. And that is really quite an inspiration for us and for our staff. So under new development strategy, we really can do a lot of things and there can be a lot of opportunities so that we have the opportunity to really better serve the society. Thank you, next question. Next question is from Pinko Zhonghua Nan. Pinko Zhonghua Nan. I'm Zhonghua Nan with Pinko. My question concerns asset quality. Because in 2021, the overall asset quality, the whole banking industry, including CCB, was looking up. However, there have also been some risk exposures in certain fields. So now we're the triple whammy from the real economy this year. So my question to the management is that, what's your view on the trend in this year's asset quality and credit cost? And I also like to ask your view and judgment and also some countermeasures relating to the real estate industry. So CRO Zhonghua, thank you. Thank you for this question. Now the economic operation is overall stable. And of course, we have made important preliminary progress in guarding against the risk. So in 2021, we actually maintained the stability of the risk. The MPL ratio is .42% down by 0.41%. So we know the risk exposure is closely linked with the overall economy and also the endowment of our sources and also the internal management capability. This year, we will continue to deliver very strong management to deal with the triple whammies like the geopolitics and real estate, et cetera. And of course, we will also try to make our countermeasures even better targeted. So we expect stability in the credit costs. On the one hand, Chinese economy is still improving in spite of the difficulties. This long-term rosy prospects for Chinese economy remain unchanged. In the first two months, we can see that the major economic indicators are showing improvement that further bears it out. And then we will actually pay attention to the three missions and three measures to further improve our credit mix. We will continue to boost the inclusive finance, consumption finance and rental house support. So assets in these fields are overall good. And then we will continue to increase our efforts in the disposal of non-performing assets. And then fourthly, we will also try to improve our governance. We have always been adhering to the balanced, coordinated and sustainable strategy to improve the comprehensive and smart risk management and improve our capability. And of course, we have also optimized the pre-landing process and strengthened the mid-landing procedure and post-landing management. Of course, we also focused on the... That gave us some post-some challenges for us, but now real estate is going on the right path. But this will not affect the overall stability of CCB in 2021. Our asset quality in real estate remains stable. MPL ratio was lower than the average MPL ratio in corporate loans. And the proportion of the real estate landing was still pretty small and the impact was manageable. And real estate had an impact on financial and economic stability. And the central government economic meeting continued to decide to squeeze out the bubble in the real estate industry. And of course, we strengthened risk mitigation. As the next step, CCB will continue to implement the deployments of the central government. And we will continue to improve the risk mitigation and promote restructuring and promote the basic rental house development. Of course, we will also pay more attention to the risk profile of the industry to maintain the stability in the industry. Next question. Next question comes from Chou Zhao Yan with the insurance newspaper of PBOC. Thank you. My name is Chou Zhao Yan. So I still like to follow up on that previous question. You just mentioned that we need to support the new financing needs. And of course, we also need to increase our support in key areas. So in real estate, the rental house support has been the call of the government. And the government report also mentioned that there should be more development of the long-term rental house and basic housing. And CCB has also tweaked its policy in response. In the past, people went to CCB to buy a house and then people went to BBC to go to BBC to rent house. So I'd like to ask your measures in this regard. And of course, the lending in the rental house, which has already been included into the concentration, lending concentration management for CCB, how much impact does it have on CCB? And the personal housing loan is a traditional advantage for CCB. And what's your strategy for this year? And I'd also like to ask about the proportion of real estate lending. And so it's slightly down in 2021. Will there be more change since 2022? Thank you. Thank you for the questions. So if you want to rent a home, then come to CCB. And this has been recognized by more and more people. And this itself is the best approval of our achievements over the past four years of work. So people have been paying close attention to rent a house, basic house, rental housing, et cetera. And local governments have been coming up with a lot of the specifications for implementation. And the environment is improving. And CCB, of course, will make the most out of our experience and of course, take advantage of our Lego to do a better job in the field. And now we're focusing on three things. First, on the financing, and we are improving our financing service. Now we actually have the evaluation and screening mechanism. On that basis, we can increase our support for a house rental. By the end of last year, the balance in this regard, it topped over 130 billion. And then this year, we also witnessed very strong growth. In the meantime, we are also providing the green service. This can help clean the exit channel and attract more funds into the field so that we can have a virtuous cycle.

And we try to supply more housings and we rely on our CCB housing to use a different method to ensure the sources of those housing, and including the renovated rental housings for those existing housings. And also we try to build up new houses for security housing. And we use an innovative model of existing housing to use a existing or those housings that are not in use. So we have more than 129,000 houses. And under CCB management, we also have 179 for rental communities of CCB. And next is for establishing the transaction platform of CCB leasing, that is for CCB Jianrong family. The registered user has exceeded 38 million with more than 150,000 registered corporate users and to help with the transparency of the market environment and to make the transaction more convenient. We also established the security housing application over 59 different cities. So we are having this ecological systems established. And when it comes to the loan concentration, we believe this can better support the commercial banks with the establishment or construction of market of leasing and for different local government. There are different regulations and guidelines being established for different local government. So with the next step, we are trying to develop that system of specific guidelines and regulations and though we are seeing an increasing of influences. So in individual mortgages or individual housings, this is our advantage and we will continue to support the healthy development of the real estate market. We are seeing a increase of need and demand for individual mortgages and we will be prepared. And just now our VP, Mr. Ji had introduced the details so that's it for me. Thank you so much. Next question. From Shanghai Security Journal. Thank you for giving me this opportunity. I'm Zhang Qiong Si from Shanghai Securities Journal. We know that inclusive finance is very important strategy for CCB and our loans are increasing very rapidly but we remained a very good asset quality. So what are the keys and importance behind that? Also under the overall backdrop of giving interest concessions, our loan interest of inclusive finance is going down. This will be very good for the real economy but will our profitability be affected? So can the management help us analyze in this regard? Thank you. Thank you for your question. That is a very important question. Regarding inclusive finance as well as the sustainable development of our inclusive finance. Just now our chairman had introduced before in 2021. This is a year for, or rather for the fourth year of CCB trying to continuously develop inclusive finance. So we have actually mentioned the balance. That is the overall triple R targeted cuts and we also had another number of CBRC that's 1.9 trillion. And so our chairman mentioned that previously as well. So for the last year we had a increase of 31.6 and for corporate customers, our customers has exceeded 1.93 million and increase of 220,000 customers, that is corporate customers, very rapid in last year. Also for the inclusive small and micro businesses just like you said, our interest is on average .16% down by 20 bips compared to the end of last year. So that you can see we are trying to increase the quantity but are trying to reduce the cost and our scope is more expensive. We are increasing our quality of services at the same time. Our CRO just introduced. So our overall NPL is .42% and for inclusive finance, the NPL is lower than the average NPL. So in this regard, we are stabilizing the economy and we are stabilizing the growth. For small and micro enterprises, the country is providing them more support to give them interest concessions, the delayed repayment. So all of this can contribute to their growth and development. So this is the external reasons that we can maintain a very good asset quality. So only other hand, we had a lot of implementation of digital innovation. So our inclusive finance is digital inclusive finance. We are trying to increase the number of customers and trying to make the regulation more standardized. So we have a lot of external numbers, leveraged data, as well as the internal accumulation of data. So different departments are working together in coordination to achieve this overall mechanism. And this is the internal reason. And that's why we can remain the risks very low. Our country trying to encourage the commercial banks better serve the small and micro enterprises. We also have a targeted cuts of RRR as well as exemption of taxes, et cetera. All of those are supporting policy, which helped us to reduce the cost of funding as well as taxes. We talked about the digital inclusiveness. And naturally, that is very low cost of operation. And we leveraged the digital inclusiveness. So our asset quality compared to the past, and just like the chairman mentioned previously, the MPOs are very high, but right now it is lowered. So for our cost is very low, our tax is dropping. So that has given us a very good advantage to give interest concessions to the small and micro businesses. And you mentioned profitability. Undoubtedly, our inclusive finance and inclusive loans at the current level with the support of the country really made a lot of contribution, which helped with the adjustment of the customers as well as our overall structure. And we are very confident. And we will continue to provide a good inclusive finance services. Well, let me just add a few words. Actually, for all of the efforts of CCB in terms of new finance is something that we try to build up our capability of serving the society with light assets. So we must be prepared for the 0% interest rate environment. So we need to leverage our endogenous or internal capability to win over the trust of the clients. So I believe for the smart governance, the remote technology of finances, we talked about without technology, there will be no finance. All of the products will be combined with technology. So with regard to risk control reduction of cost, we will see great improvements. So this is another concept with regard to new finance. Thank you so much, Mr. Wang. And Chairman, next question. Next question, UBS Securities. Thank you. I'm Li Keqing. My question is with regard to technology. FinTech is the focus of many banks. It is also one of the three major strategies of CCB. We can see that CCB is trying to step up its effort in FinTech area. There's a lot of platforms and products rolled out. So we were wondering, do we have any quantifiable indexes for the development of FinTech, as well as how FinTech contributes to our performances? And in the future, what is our plan with regard to the input and investment of FinTech? And last year, we rolled out to the CCB live application and what are our considerations behind that and what is our situation? Thank you so much for following FinTech. Of CCB, yes, in the recent years, we can feel that with the development of information, of technology, our user is moving online and is more scenario-based. So the traditional model of financial services cannot fulfill the demand of the clients anymore. That's why we are using more concepts of new finance and we're trying to have more actions to build up this online channel of CCB live so that in non-finance scenarios, different customers can still have this habit and need of using finance. We need to be connected with our customers in this ecosystem so that we can have this transition. So for our customers, CCB live provide very convenient services for both finance and non-finance and we also have incentives to encourage them to have consumptions. So actually for merchants, we have zero commissions strategy and we leverage our traffic of the platform and operation capabilities to empower the merchants. For local government, CCB live supports different discounts of the local government. We also have different platform scenarios for low carbon travel, beautiful countryside to empower the real economy. By the end of 2021, CCB live has actually covering 326 cities with more than 34 million registered clients in the application and with more than 150 merchants. So by now we have more than registered users of 50 million. So for CCB live, it's just one area of our FinTech application, just like Chairman Tian mentioned. Without technology, there will be no finance. So FinTech has been incorporated into the overall development of strategy of CCB as well as for different areas of our business, just like the inclusive finance that you mentioned. We leveraged big data to analyze the credit as well as the business operation of small and micro businesses to promote the building of credit systems to restructure their service models. And we can have a rapid development. For intelligence government, we can have this collaborative relationship with more than 29 provinces and we can cover all different services from our outlets. So our outlets has become a governance lobby for our local people. We have more than 2.5 transactions or trade with regard to intelligence governance so that the daily affairs of our people will be reduced. And leveraging AI, leveraging big data, we've established this proactive and intelligent risk management system. We have a safe operation platform in 2021. We had fend off more than 18 million of attacks for cyber attacks. So those rely on the swift reactions and support of FinTech. And for the impose our investment of FinTech in 2021, the overall amount is 23.58 billion, an increase of 6.6%. In the future, we will continue to increase our investment in FinTech. And we will also continue to build up a team of talent for FinTech to have more input for R&D for infrastructure. And we will build up this business platform for CCB life as well as mobile banking and to have this integration of both online and offline scenarios for house leasing, inclusive finance, rural nation, green finance, smart governance, wealth management. All of those in business will see an increase of investment in FinTech so that our increase, our development of technology can contribute to our overall capacity of serving the society, thank you.

Next question. Securities newspaper. Thank you. I'm with Securities newspaper. So I'd like to ask a question concerning retail. So CCB has been the market leader when it comes to retail and you're also the biggest retail credit bank. And now all banks are actually competing in this business and trying to grow their business. So given this landscape, what's CCB's advantage in retail banking in terms of personal customer exploration and channel development, what's your plan and target? Thank you. Thank you for the question. CCB has always been setting a premium on the development of retail business. In 2021, personal business increased by over 22 million and the daily average deposit increased by 2.6 trillion and the AAM personal business increased by 1.35 trillion. And the balance of personal loan stood at 7.89 trillion. We are expected to maintain our position as the biggest retail bank. And the profit from this business stood at 214 billion, accounting for 56.7%. So we believe that the retail business of CCB has the, these three advantages. First, digital operation plus big asset management plus the connection between corporate and personal business. Digitalization has been a very striking feature. We have always been attaching great importance to digital operation and digitalization for retail is also very important. For example, the identification of customers is digital. Basically we need to very precise and scientific modules to locate our customers so that we can reach out to our customers, find those customers and in the process of processing transactions, we actually work to build the ecosystem and we want to serve the customers in that ecosystem. And we develop that agency salary ecosystem and the big retail ecosystem and the agriculture ecosystem. So now we have these loopholes for different groups of the customers where we got a lot of value and then the great asset management is also becoming increasingly important. Actually, we started from a very small area to actually promote a change for the whole asset management business. For example, we developed the main menu for the wealth management and also the so-called wealth community. And we also established this work platform for the account customers to enable our teams and with regard to the management system, we are trying to connect the wealth management to asset management and investment banking as a whole. And we also covered all the way from the investment research to post investment management. The AUM and also personal AUM, business AUM of CCB led the way and the 37 level one branches all witnessed their positive growth in the AUM and deposit balance. So basically the asset management reputation of the Long Caifu is also increasing. And then the personal and corporate business connection is also improving. The agency salary business and the agency social security service is improving, which actually promoted the personal business. These are the three features and advantages that CCB has. And when it comes to the personal business service and the channel development, we would also like to promote their further development also in these three fields. Thank you, next question. Economic Journal, Lu Yu. Thank you. I have a question relating to green finance. We know that China is promoting carbon peaking and carbon neutrality and a lot of financial institutions are also contributing and got their support from that policy. We also know that CCB has come out with a lot of action plan and also develop your green finance development strategy. I'd like to ask about the progress of these jobs. So what about the pricing and the asset quality when it comes to green finance? Thank you. Thank you for this question. As you've mentioned in your statement in 2021, the Green Finance Committee, which we established internally, and under that we also set up the carbon peaking and carbon neutrality working group. We actually developed the 20 measure action plan and prepared our green finance development strategy and came out with our roadmap and the international cooperation in green finance is also deepening. For example, we held the Green Finance International Forum and also we signed the declaration for a green finance and of course we became the official member of the green disclosure in 2021. And of course we are strictly managing the environmental and climate risk, which is part of our comprehensive risk management and credit extension management system. In the meantime, with the support of the departments, we actually are promoting, we're doing the stress test for climate risk. And of course we are also smoothly promoting the work in carbon neutrality to make sure that we are okay with national energy security. And you also asked about the specific measures we're taking in this regard. It's actually developing very rapidly. First, green loans are increasing at the end of 2021 by the CBRC standards. We actually had about two trillion balance of the green loans and we pretty much delivered the regulatory requirement that the green loans should not be lower than the personal loans. So we hit that tap, we outperformed that targets because we are way, way above the growth rate in other categories of lending by 20 to 30 basis point, percent I should say. So actually we effectively supported the climate work in this country and then non-credit green business is also improving in 2021. We undertook 41.4 billion of green bonds by a big margin. And of course we held over 23 billion in green bonds by a big margin as well. And of course we also issued the first ever sustainable green bond in China and Europe. And of course we also issued the EST bond index, green bond index. So all of these showed the CCB's efforts in the last year green finance. So as next step we will continue to deepen the green contents in under new finance system. We will provide even more collection of green financial products and services so that we can make green finance a new pillar for CCB's growth and new competitive edge of CCB. Thank you, next question. So with Bank of America, Mayor Lynch. So thank you for this opportunity. My question concerns the interest margin. We're happy to see that the interest margin stabilized since Q2 last year, but we also saw that the central bank further downgraded the LPR. So this year there might be some more pressure for pricing. So I'd like to ask in 2021, what's your expectation of the NIM in 2022? Thank you for the question. Yes, in 2021. The NIM at .13% down by six basis points and NIM management is a big challenge and point of pressure for us on the asset and we actually increased our efforts in reducing the fees so that we also managed to reduce the cost and the lending cost and the interest rate cost is also down in terms of the liabilities, though the pricing has been changed, which actually helped smooth over the premium in deposit. However, the overall trend was not changed and in the process, the market competition for deposit is also increasing. So this situation is hard to be broken or to change. So on the one hand, we increase our support for the real economy on the liabilities end through digital operation and asset management and also we increase the management of the asset management so that we can improve our capability to manage the interest bearing business. As you mentioned, the NIM stabilized in 2021. The net interest margin among peers is also a leader. We, as you are, we are also aware that LPR was downed it twice in December and the one year down by 15 basis points and the five year LPR down by five basis points. So considering the downside landing interest rate and the pretty stable deposit interest rate and the two cuts, the triple R last year and also we expect pretty more downside pressure for the NIM this year and this is a common challenge to all banks in China. So at CCB, we'll continue to closely monitor the changes, external changes, external changes and of course we will also strengthen our risk study and of course we will focus on value creation and focus on new finance and digital transition. We will take the opportunity of the national strategic implementation consumer consumption grading so that we can optimize our asset liability structure to maintain our NIM at a stable and robust level. Thank you. Next question. Next question is with Ms. Lee from Hong Kong Business Journal, thank you. Thank you, good afternoon. So this is the third year we're having a conference call and last year we said that maybe next year we can have a physical meeting so we just hope that the pandemic can be over as quickly as possible. So the performance of CCB grew very robustly. We also noted that CCB grows steadily but in terms of the trend, it slowed down. So I'd like to ask the reasons for the slowdown. So I'd also like to ask about your expectation of the impact of the fee income and what's your expectation of the fee income growth this year and what will be your priorities in the future? So last year the fee income is 121.5 billion at 6%. So it's actually a pretty high level in the past five years in 2021. In different quarters the growth rate were 8.8, 4.7 and .4% respectively. So we can see that the growth rate had been pretty stable and since Q2 we could see an incremental increase. So as a state on bank on the one hand we were implementing the deployments of the CPC Central Committee and the state government and we're trying to discharge a social corporate, a social responsibility. We're trying to reduce the cuts and actually yield profits to the whole society and to lend stronger support for the real economy. On the basis of the big reduction in 2021 we further expanded our reduction. Of course we yielded profits to MSUs. So the fee reduction was no less than in 2020.

For interest concessions and their impact on the commissions and fees of course there are such impacts and influences but we are trying to have more transitions and reforms and to cultivate our comprehensive servicing capabilities and for overall our asset management, wealth management transactions. So those fees have rapid increases. So that is a great support for the increase of our fees and commissions. You mentioned 2022. In 2022 we will try to step up our transition for intermediary businesses to connect closely with the need of the customers to consolidate our traditional advantages including the consulting, letter of guarantees, settlements of organizations, individuals. So those are mature and developed businesses will continue to push that forward. At the same time we'll also focus on our key and important areas. So we can leverage our advantage of multi licenses and we will increase our capability in terms of asset allocation and investment consulting for investment banking or trust et cetera. And we will engage more and increase our capability to serve the asset management market. We are trying to boost our capability for comprehensive financial services to have more innovative product, better serve our customer in terms of financing investment. Of course we have a lot of innovative services including house leasing et cetera to push toward the stable and sustainable development of intermediary businesses. And overall it is expected that in 2022 our commissions and fees will see a steady increase. Thank you. Thank you VP Mr. Ji. Well due to the constraint of time we will have the last question. Next question is from China Securities Journal, Madam Shi Shiyu. Okay, thank you for giving me this opportunity to ask this question. I'm Shi Shiyu from China Securities Journal. My question is regarding for the transition of WMPs. So actually by the end of this year the deadline of.

Under the current circumstances what are the plans for the development of financial business of the construction bank? What is the current design and business development of the product? Thank you.

Let's welcome VP Ji. Thank you for your question. The new WMP has been implemented. We are actively promoting financial business to head back to the CPC, the financial sector of Chinese banking industry. to maintain strategic engagement and continue to improve wood management. The comprehensive professional ability provides more rich and competitive comprehensive investment services to customers. We are working hard to build a large-scale capital management industry and transform it into a new development and new business support. You just mentioned the problem of planning and layout. The three aspects of planning and layout are to strengthen the integration and coordination of capital management functions. The three aspects of planning and layout are to strengthen the integration and coordination of capital management functions. The new financial rules are new to the fund, the financial rules, and the new debt. Our company has a multi-price company. We will further develop and implement the comprehensive management advantages of the financial fund, credit, pension, insurance, and other capital management companies. We will lead the company to develop and create features for the wrong place and create value for service customers. We will accelerate the construction of capital management products within the company as the main body. We will develop and implement the new financial rules for the new financial management. We will further develop and implement the new financial rules for the new financial management.

Thank you. Thank you.

Thank you.

Thank you.