China Construction Bank Corporation

Ladies and gentlemen, good afternoon. The meeting is going to kick off. We would like to invite moderator. Distinguished investors, analysts, media friends, good afternoon. Welcome everyone to attend CCB 2022 interim results renouncement. I'd also like to thank you for your all-along support to CCB. In terms of the prevention and control of COVID-19, this meeting takes the form of phone connection as well as webinar. The attendees of today's meeting are President of CCB Mr. Zhang Jiliang, Vice President Cui Yong, Mr. Ji Zhihong, Ms. Zhang Ming, Mr. Li Yun, CRO Mr. Chen Yuanguo. According to the requirements of the regulators, we also invited our independent director Kenneth Chang to attend online. They are also the representatives of the board as well as the supervisors to attend this meeting. Good afternoon, I'm the board secretary Hu Changmiao. The interim results was officially publicly announced last night. And we also showcase the performance results on our official website for your reference. When we come to the official interactions, we'd like to invite President Zhang Jiliang to brief you about our H1 performance. Over to you, Mr. Zhang Jiliang. Distinguished investors, analysts, media friends, good afternoon. Welcome everyone to attend 2022 interim results announcement. Thank you for your long-term interest and your support to CCB. I'm very glad to share with you our performance in the first half of this year. And I'd also like to update about our future outlook. In the first half of the year, CCB actively implemented the decisions and the deployments of the central government and the state council. We have been working on the stability as well as future development. We have been fulfilling the responsibility in the economic and political sense. And we also coordinate the COVID-19 prevention and control as well as economic and social development. We have been implementing the new finance activities to consolidate our client base to improve our operational performance as to cope with the risks and the challenges. So core indicators has been quite stable. NIEM was 2.09 percent, ROE 1.01 percent, ROE 12.59 percent. Taking the lead among peers, business size, benefits, return and asset quality developed in a coordinated way. So total asset exceeds 33 trillion RMB up by 11.4 percent. Total liability exceeds 31 trillion up by 12.2 percent. And net profit, 161.7 billion. Year on year increase of 4.95 percent. NPR ratio, 1.4 percent. Down by two percentage points. Provision coverage, 244 percent. Capital adequacy ratio, 17.95 percent. We are capable to fight against all kinds of risks. First, we are quite determined to serve the real economy. We want to prevent COVID-19 to stabilize the economy and to pursue secure development. We have promoted a series of quite strong as well as heartfelt and speedy and pragmatic measures so as to consolidate economic recovery and stabilize the macro economy. On my hand, we continue to increase our capital support. RMB loans increased by 1.54 trillion. Year on year increase of 364.2 billion. RMB debt investment increased by 800 billion. We greatly participated in the government debt subscription. Also support monetary as well as fiscal policy. On the other hand, we continue to optimize our resources allocation to focus on the key priorities in our national economy. For example, infrastructure, manufacturing industry, strategic emerging industry. The loans increased by 8 percent, 14.4 percent, and 26.7 percent respectively. And tech related loans exceeds 1 trillion. Jingjingji, Yanshui River Delta region and GBA area also get more loans in the total loan extension. We also cut our fees and surrender profit to the real economy. Inclusive loans increased by 267.1 billion. The balance total 2.14 trillion. And second, we have been very effectively in promoting our strategies. Centering on the pinpoints of the economic and social development, we have been promoting series of new finance explorations and practices. Rely on the FinTech stress, we have been built different kinds of operational scenarios. We use the smart governance system to enable the national governance system as well as the modernization of the governance. We also coordinated our leading strengths. For example, our fast loans as well as a wait only platform reach out to more SMEs. Platform as well as digitalization based development promoted high quality and sustainable development of inclusive finance. Inclusive finance balance takes about 10 percent of the total. We also deepened rural revitalization practices. Yuenong Tong continued to converge online and offline practices. Agriculture related loans increased by 12.4 percent. We also constantly improved the green and low carbon development footprint. The green loans total 2.4 trillion BN and green product development products further diversified. We also actively increased our lending to foreign investment and foreign trade. Also promoted whole currency payment products. The global matchmaker platform facilitated the interconnectivity of the market. We also continue to construct the housing reform focusing on equal emphasis on rental as well as house purchase. The house rental platform comes more than 90 percent of the prefectural level geography and above. The house rental loans totaled 180.6 billion RMB. Third, our operation and development further improved its quality and efficiency. We have been trying to strike a balance between the size as well as the return of the business. We further continue to the corporate business base and business structure. We also strengthened corporate as well as private businesses. With higher efficiency and high quality services to precisely reach out to the clients and also expand a client base and deliver comprehensive financial services. So corporate accounts totaled 12.58 million taking the lead in the industry. And personal accounts totaled 730 million. AUM exceeds 16 trillion. Credit card exceeds 115 million. We also promote online and offline convergence, optimize the outlist deployment and also accelerate the digital transformation as well as binary star campaigns. The mobile phone as well as the internet banking services have a total of 500 million clients. CCB life has registered users of about 66 million and DAU 4 million. We also consolidated on balance sheet and off balance sheet coordination to shift from the bank balance sheet to the operation of the client's balance sheet. So as to promote the grant asset and grant wealth management ecosystem. And CCB Dragon wealth branding became more influential. Our agency business, wealth management business, continued to develop with the total custodian size more than 19 trillion. And investment banking business also taking the lead in the industry and of course our risk control continued to be strengthened. We further improve our comprehensive risk management framework to mitigate major risks to actually exclude the major risks and strengthen our preventive scenarios. And to better control property as well as the local government implicit debt risks. We continue to strengthen credit asset quality to have the tiered based management for the key accounts and promote unified credit risk monitoring system. Asset quality continue to be stable and the risk categorization has been quite consolidated. The delinquency ratio is 43 basis points lower than NPL ratio and the gap between overdue as well as NPL is 87.9 billion. We also intensified the disposal of NPL, strengthen the cash recovery as well as the other aspects. We also strengthen internal control as well as compliance management AML work is very effective and consolidated. We also share our benefits and return with the shareholders. Last month we completed 2021 dividend payout with a total number of 91 billion. Since IPO, CCB created significant amount of cash return for our shareholders. We have paid out one trillion yuan in total and we are also listed as the China IPO Association, the most rewarded company. We also have to consolidate poverty alleviation as well as revitalization. The workers and labor's harbor platform offer comprehensive services to the society. We also improve our senior and elderly support facilities and change women project to take a deep route. So as to offer to provide knowledge to the different people and aggressive level. Our strategic initiative also got high recognition in 2022. The bankers also ranked us as number two in the world top 1000 banks. And in 2022 in Fortune 500 we ranked 24 up by one position. And we also were awarded by the Asian bankers as the best retail bank in Asia Pacific, China's best inclusive finance bank and China's best custodian bank and China's best comprehensive risk control bank. And MSCI ESG rated CCB as A level and CSI ESG rated CCB as triple A. We are the highest level among the peers. Since this year we can see that in the assessment of the service to the rural revitalization, you can see that CCB is also ranked as the excellent level. Since this year facing very complicated external dynamics and risk and challenges, the central government coordinated the COVID control as well as economic development and also made very effective achievements in terms of COVID control as well as economic recovery, creating very favorable conditions for the stable and sound development of the banking sector. So far we see that unprecedented dynamics over the past century, the global economy slowed down with more inflation as well as market dynamics. However, the long term good trend of the economy hasn't been changed and the economic resilience continue to be strengthened. There are a lot of favorable conditions for us to promote high quality development. The economic transformation and upgrading has generated new momentum for the growth, digital transformation, green development as well as tech innovation expect more financial support and at the same time we can also expect historical opportunities for the commercial banks. In the future, CCB will continue to insist on Xi Jinping's new outlook for China's development with the Chinese characteristics. We will grasp the opportunities and to pursue a good path for financial development in China to consolidate our capabilities to serve the national economy, to participate in international competition and we will also utilize the digitalization as well as platform based operation to promote our new finance initiative and to solve the deep rooted problems, optimize the mechanism and promote mainstream business to develop in a stable and sound manner so as to realize the sustained, balanced as well as coordinated development of size, benefits and risks. Firstly, we will continue to play our role as the major bank to serve the economy and society. This is our responsibility to serve the real economy and also the fundamental guarantee to realize sound and sustainable development. We will continue to implement 23 measures to prevent COVID as well as to promote economic and social development and to continue to lay equal emphasis on the key priority area, key industries, key clients as well as key geographies will continue to surrender benefits to the real economy to help those SMEs so as to realize the six debilities and six guarantees. And the second, we will continue to balance size and quality so as to improve the quality and efficiency of our operation. We will continue to pursue high quality development. We will pursue the reasonable growth of quantity as well as stable growth of the quality. Asset and liability business will strike a balance as to satisfy the needs of the market major players. We will continue to optimize the liability structure as well as liability structures. And we're going to make breakthroughs and to deliver more coordination and to better allocate the benefits. Cost control will also insist on the principles as to improve the input-output ratio. And certainly, we will continue to deepen the new finance initiatives. Based on CZB 14th Five-Year Plan Blueprint, we are going to integrate the platform-based mindset into our new finance initiative. House rental will continue to deliver support to the social housing development. We're also going to improve the influence of the comprehensive house rental platforms.

We'll continue to improve the structure of inclusive finance and to provide better services to the customers and to improve the Huitong ecosystem. For FinTech, we have to let FinTech play a leading and driving role so as to take stock of the needs of the customers to integrate and share and better use the data. And for green finance, we'll continue to improve the share of asset and to expand the services and products of green finance and to prevent climate risk and to transition risks. For rural revitalization, we have to take an integrated approach regarding the product and services and to improve the comprehensive services regarding all types of rural-related products. And also, we will have to promote deposits and existing funds and to focus on the key areas and become a model in these areas. And number four, we'll continue to strengthen our fundamentals and to improve the quality of our businesses. For commercial banks, customer operation is the basis and the business development is the fruits. We'll continue to enhance the roots and to have a customer service system that is multi-tiered and multi-category based. And number five, we will leverage the digital tools and to make use of the three mid-office and to also leverage the corporate level and other platforms to promote the integrated development of business data and platforms. Number five, we'll have to balance business development and security and enhance risk control and compliance to follow the rules of financial development and observe the bottom line to be prudent, comprehensive, and proactive in our risk management and build such a culture. We'll have to have full coverage in our risk management and enhance business operation, the first, second, and the third line of defense. And to accelerate risk treatment and control and to ensure that all the key indicators are within a reasonable range. And we also have to strengthen AML and to protect consumer rights and data security. So this is our ambition. And we will continue to implement the arrangements of the central government and to seek progress among steady development, to make consistent efforts to pursue high quality development, and to produce tangible results to repay your trust and support. Thank you. Thank you, President Zhang. Now let's turn to the Q&A session. To enable more questions, more investors, and the media to have more opportunities, we suggest that each one just raise one question. And please identify yourself before raising your questions. Okay, now let's start the Q&A session. Ladies and gentlemen, if you want to raise a question, please press the star button and wait until you are called. First question comes from Morgan Stanley. Please. Thank you for giving me the first opportunity. I'm financial analyst Xu Ran from Morgan Stanley. First of all, I would like to congratulate the CCB for achieving good performance results in this complex situation in the first half of the year. We have seen that in July, some key economic indicators have all recovered, including the industrial added value and export growth. However, social financing growth has slowed down and we continue to expect complicated situation in overall economic development. So I would like to consult the management on your opinion on the current macroeconomic situation and the environment for banks' operation. For the lending of CCB, you have more lending in the first half of the year on a -on-year basis. Do you expect this to be the same for the whole year? And what are the key areas for lending? And personal mortgage loans has been impacted to some extent, so would you accelerate the supply of consumer lending? So Mr. Zhang, President Zhang, thank you. So this year, because of the impact of both internal and external factors, China is facing a lot of pressure in its economic development. So the central government and the CPC Central Committee has introduced a series of measures to stabilize the economy. Actually, from the mid to long-term perspective, China has the world's most potential, has the largest market in the world with the greatest potential. We have the world's most complete industrial system and our economy is resilient, dynamic, and has a great potential. So our fundamentals remain good and we are confident that we can overcome the volatilities and difficulties for the time. And China's economy will achieve long-term and high-quality development. So in the first half of this year, CCB has fully implemented the financial policy in advance, in full, and with accurate targets. The total lending of the group has exceeded 20 trillion RMB Yuan, with an addition of 1.58 trillion Yuan. And the balance of bond investment exceeded 8 trillion RMB Yuan, with an increase of 800 million Yuan. Both are historic highs. And we have also increased support to the key areas and weak links. And for inclusive loans, the balance of inclusive loans have reached 2.14 trillion RMB Yuan. We continue to be number one among the peers. Second, we have continued to provide funding for manufacturing sector and the green sector. And the balance of green loans exceeded 2 trillion RMB Yuan. And the balance of mid- to long-term loans for the manufacturing sector exceeded 800 million Yuan. So the growth rate of both has exceeded 20%. And third, we have actively supported the rural sector. In the first half of the year, rural-related loan growth and the growth rate has exceeded the previous historic average. And also, we have leveraged our traditional advantage in infrastructure support. Our balance of loans in the infrastructure sector has exceeded 5.5 trillion RMB Yuan and has maintained steady growth. And number five, we have continued to consolidate our advantage as the largest retail bank. And the growth of personal business loans has exceeded 35%. So in the second half of the year, CCB will actively seize the critical period for economic recovery and implement the monetary policy of PBOC and continue to provide steady loans. You have mentioned consumer loans. Actually, in the first half of this year, the market conditions was quite harsh. But we managed to provide the personal mortgage loans in a steady and orderly manner. And also, we continue to expand the consumption scenes and to innovate the service model. We actively promoted the consumer finance and have registered a positive growth. Actually, personal consumption loans has increased by 22.8 billion Yuan. And credit loans has increased by 14.1 billion Yuan. So as the government's policies to boost consumption and stabilize the economy continues to take effect, I believe that the consumer confidence will continue to recover and the consumption demand and the market room will continue to be released. So from the long term, I think there will be a good opportunity. And we believe that in the second half of this year, the growth of consumption loans will be better than the first half of this year. That's my brief answer to your question. Thank you. Thank you, President Zhang. Next question, please. Next question comes from Sun Lulu from the Security Times. Thank you. We have seen that given the COVID and just economic slowdown, despite this, CCP has maintained its asset quality on the whole. We know that the asset quality of banks is closely related to the macro environment, especially economic growth rate. So given the pressure in overall economic growth, how do you see the asset quality for the second half of this year? And as the central government has raised the policy requirement to lower the provision rate, what's the impact on the lending cost for CCP? Thank you. So in the first half of this year, because of COVID and the triple pressure of the macro economy, CCP has fully leveraged its professional capabilities in lending management and has strike a balance between stabilizing growth and preventing risks. So by the end of June, NPL ratio of the group was 1.4 percent, which is 0.02 percentage points compared with the beginning of the year. And the overdue rate is 0.97 percent, which is relatively low. And we have very solid asset quality and very prudent categories. By the end of June, the scissors gap of the overdue non-performing loans was minus 78.858 billion yuan, which is better than most peers. And the proportion of non-performing loans overdue for 19 days and more was 44.89 percent, which is relatively low. So CCP always pursued prudent management and has taken a prudent and forward-looking approach in foreseeing the risks in key areas and has taken proactive measures for adjustment and management. Take the real estate sector as an example. While meeting the reasonable financing need for the real estate sector, we have strictly controlled risks. The corporate real estate loan non-performing ratio was 2.98 percent and the NPL ratio for personal mortgage loans was 0.25 percent. Both were relatively good among the peers. And the risks were generally under control. And in some other sectors, for example, in infrastructure and manufacturing sectors, the NPL ratio has the NPL ratio and the NPL assets amount have both been reduced. It's fair to say that we have enough room for managing the asset quality, credit assets quality, and we have the capabilities and the confidence to respond to all types of risks. And in terms of provisions, by the end of June, the provision coverage rate was 244.12 percent, which was 4.16 percentage points compared with the beginning of the year. However, it was 2.24 percentage points compared with the Q1. So we have ample financial capabilities to fend off the future risks. So in the future, we will closely follow the developments of the macroeconomy and the changes in the asset quality to strictly follow the requirements of the MOF and the CBI RC to objectively and reasonably evaluate the ECL. And to set aside the provisions in full and in time. Thank you. Next question, please. Next question comes from Tama. Please. Thank you for this opportunity. I'm sorry from Tama. I have a question regarding the real estate sector. There are two aspects of my question. Since last year, we have seen many risks in China's real estate sector. So my question is, what's the asset quality of CCB in the real estate sector? And how do you see the future trend of the real estate sector? And what are your response measures? The second question is that recently we have seen that the Ministry of Urban and Rural Development and Housing and MOF and the PBOC have introduced a series of measures to enable specialized loans from policy banks and bank loans to support the delivery of overdue houses. What's your interpretation? Okay. CRO Chen will answer this question. CCB has always actively implemented the decisions and arrangements of the central government. And we believe that housing is for living, not for speculation. And around the goal of stabilizing the land price, the housing price and expectation, we have provided ample and reasonable financing support for the real estate sector on a city by city basis. So in the first half of the year, the real estate sector has faced a lot of pressure and the NPR ratio has risen. We have seen reduction of the housing sales. And the lending assets for the real estate sector have been affected at CCB. And our NPR ratio was 2.98%, which is higher than last year. And personal loans was 6.48 trillion RMB Yuan, which was also higher than last year. However, it was generally under control and we continue to be the best among the peers.

In recent years, you can see that our asset quality in the property sector remains quite stable. This is because we always bear in mind that fighting against financial risks, in particular, prevent systematic risk from happening is our fundamental role and our time-honored theme. You know, because CCB insists on serving the real economy and insists on our three major strategy, keep optimizing our credit structure to use our credit resources to support the priority area in the economy. As a result, property extension has been reduced. And second, we have been very forward looking to make deployment in the house rental and we deliver more credit resources to house rental sector. At the end of June, we can see that our total house rental loans were 180.6 billion, an increase of 35%. House rental loans has nothing to do with exposure. And since we continue to optimize our client structure, geography structure, as well as client base, we are quite capable in terms of fighting against the risks. In terms of the property developers loans, we can see that most of the projects are concentrated in tier one and tier two cities. The balance in tier one and tier two cities occupies more than 85% and more than 87% of the loans are delivered to the residential house projects. We think that property sector will continue to our key priority in the future. And we think that the central government has been releasing favorable policies in June. The property sector has witnessed the marginal improvement. The construction area and the land purchase area all witness month by month increase. And recently, PBOC continued to reduce five-year LPR by 15 percentage points. Multiple government authorities issued policies through policy bank loan. We are supporting the delivery of the difficulty property projects and the local government also issued a series of bailout measures. I believe that all of these measures will help us to stabilize the market conditions and to recover the market confidence. In short term, there will still be volatility on the market, but in the longer term, I believe that major theme is to stability. CCB will continue to follow the market-oriented, legal-based and professional principles, actively shoulder social responsibilities, and to give more financial support in order to guarantee the delivery of the house projects. First of all, stabilize the loan extension. We will continue to implement the property financial policies so as to stabilize the delivery of the projects and to satisfy the financial needs of the property sector to support the rigid as well as the improvement housing demand and to deliver more support to the social housing as well as the house rental services so as to maintain the sound as well as long-term development of the property sector. And second, to promote M&A. According to compliance, risk control, as well as commercially viable principles, we will actually conduct property M&A financial services and, third, controlled risks. CCB will continue to incorporate property business into our key priorities in the future to take full advantage of intelligent risk control instruments to continue to have a good monitoring of the risk in the property sector. We will also standardize the pre-sale funding management so as to better control the risk. We will also facilitate the property developers to have a very sound development in the future. Thank you, Mr. Chen Yuan-guo. Next question. Next question comes from Xinhua News Agency, Wu Yu. Hi, management. I'm Wu Yu from Xinhua News Agency. There's a follow-up question. We can see that what is the change for the mortgage demand? In particular, we see that there is some delay of the delivery of the house projects, and there's also suspension of the mortgage. Is CCB under such impact, and what is the asset quality of CCB's mortgage? How can we forecast the future mortgage asset development? We would like to give the floor to our Vice President, Li Ren. Thank you for raising this question. I think that there are three major aspects in your question. I'd like to take the question one by one. First of all, I'd like to briefly talk about the overall development as well as asset quality of mortgage loans in CCB. CCB insists on implementing the rules of the central government and state council. We insist on that houses are for living rather than for speculation. We also stabilize the loan price so as to stabilize the expectation by the end of June. Our individual mortgage balance is worth $6.48 trillion, increased by 92.69 billion yuan. NPR ratio opened to 5% keeping the lead amount appears. As always, CCB strictly implemented the national policies. We keep optimizing the mortgage quality and structure. In terms of the mortgage structure, there are three characteristics. First of all, optimize the regional structure. We would choose the best performing geographies. 50% of the mortgage loans are extended to Bohai region, Yangtze River Delta region, and Pearl River Delta region. More than 65% of the loans are extended to tier one and tier two cities with good economic operation, continuous population growth, and second, optimize the client base. We will select the high quality developers to support the individual clients, rigid as well as improvement based housing demand. 80% of the loans are extended to the clients who purchase a house with an area below 144 square meters. And sadly, we keep optimizing the product mix. We insist on the balance development of the new house as well as secondhand houses. By the end of June, secondhand house loans was $1.76 trillion, takes 27% of the total. In many years of development, we'll also continue to improve the professionalism and refine the risk control for mortgage lending. There are three things we did. First of all, for the pre-loans access risk control, we have collected different kinds of data, and all together we cooperated with the risk department as well as the corporate lending department to score the developers as well as their projects. So as to optimize the access of the projects. And second, during the lending, we will precisely identify the risks. We will give priority to the default conditions as well as the abnormal conditions for the advance payment of the key clients. The system will block the risky loans before the loan is extended. And third, you know, there's also intelligent risk monitoring system. After lending, we actually have 128 risk alert and risk monitoring models to actually give pre-alert for the post lending risks. So through all of the three professional capabilities, you can see that since 2020, for the newly issued mortgage, the NPR ratio was just 0.07%. So this is about the risk control for the individual mortgage. And the second part, you can see in terms of the demand of the mortgage loans, in the first half of this year, you can see that in different months, there's volatility for the demand of the individual mortgage. In April and May, due to the volatility pressure of the house developers as well as the outbreak and resurgence of COVID-19 from the demand side, there's a big pressure. And in June, you know, thanks to the policy optimization as well as the recovery of the pandemic, the acceptance as well as extension of the mortgage loans recovered reached 88.9 billion as well as 89.9 billion respectively. Month by month increase of .5% and 49.4%. And daily acceptance is about 3 billion. And recently, central and local government also issued a series of policies. You can see there's also the policy from the policy banks to ensure the delivery of the products. And the local government also issued a series of policies to stabilize the property segment. And you can see that on August 24, the five-year LPR downgraded by 15 percentage points. This was also in favor of the development of the demand side of the mortgage loans. And certainly, you're also interested in a so-called mortgage suspension. A while ago, you can see that in the public channels, you see the media also released the mandatory suspension of the mortgage, which actually got high attention from different walks of life. After such a bill, it's of great importance. And in the first hand, respond to mortgage suspension. You can see that according to the data collected by July, we see that the personal mortgage related to suspension is about 1.14 billion, which accounts for .018% of the total. And NPL was 500 million, which is .0077% of the total in the balance. Generally speaking, the personal mortgage risk is well under control. In the future, CCP will cooperate with the local government to stabilize the delivery, to stabilize people's livelihood, as well as stability. It has to mitigate risks, promote the sound and smooth development of the property segment. Thank you, Mr. Li Ren. Next question, please. Next question from Jiang Shuai from CICC. Thank you. Thank you, management, for giving me this opportunity. I'm Jiang Shuai from CICC. I'd like to ask a question about infrastructure. When it's at this year, infrastructure investment will be very important, Peter, to stabilize the growth. There's also the acceleration of the issues of the specialized data as well as the policy finance. And for CCB, you know, we do enjoy great strengths in infrastructure. So my question is that whether we're going to benefit more from this trend, what kind of deployment and arrangement do you have in this aspect? Thank you for raising this question. We'd like to give the floor to Vice President Cui Yong. Thank you for raising this question. I can tell you that in this round of infrastructure investment, we benefited a lot during this process. As we know, I think all of you here today, both offline and online, you see that China's infrastructure development is pretty fast. People's daily traveling, transportation, and logistic experience are greatly enhanced. This is attributable to the fast increase in the infrastructure investment. You can see that infrastructure development is already very famous, name card for our capability. You see that in CCB, in terms of infrastructure, we do have traditional strengths. To grow infrastructure-related finance is also actually taken by CCB to implement the President Xi Jinping's general instructions. But at the same time, we should also play the role of infrastructure as a cornerstone. Since this year, central government and city council issued a series of policies and measures to promote the further development of infrastructure to expand effective investment. In CCB, we also actively implemented the decisions of CC of central government and city council and further intensified credit support. The loan to infrastructure increased steadily, and CCB continued to benefit from that. The role played by infrastructure as a cornerstone continues to showcase. There is some data I would like to share with you by the end of June. Our infrastructure loan balance, like Mr. Johnson said, was 5.5 trillion yuan, and it takes almost 52% in our total corporate loans. An MPL ratio is much lower than a corporate loan, and the asset quality is pretty high. And in terms of the extension, there is an increase of 406.6 billion, an increase of 8%. And new infrastructure loan balance, 115.1 billion, an increase of 14.3 billion. And according to our arrangement, we would like to make the following ideas. First of all, we would like to strengthen the credit extension to key areas. We will continue to support transportation, water conservation, et cetera. In particular, recently there are also special arrangements from the state council to water conservation project. We are going to extend loans to 5G base stations, AI, big data center, as well as the other new infrastructure development.