Industrial and Business Financial institution of China Restricted (ICBC), the world’s largest financial institution by property, reported steady principal efficiency indicators and regular development in its working outcomes for the primary half of 2024. The financial institution’s whole property surpassed RMB47 trillion, with a big buyer mortgage enhance and a internet revenue that solidifies its main place amongst home banks. ICBC’s dedication to strategic transformations and threat administration has laid the groundwork for continued steady growth and shareholder returns.

Key Takeaways

• ICBC’s whole property exceeded RMB47 trillion, with a buyer mortgage enhance of RMB1.8 trillion.
• Working earnings for the primary half of the 12 months reached RMB402 billion, and internet revenue stood at RMB171.3 billion.
• The financial institution introduced plans to pay RMB51.1 billion in interim dividends in January 2025.
• ICBC reported a 12% enhance in earnings over the identical interval final 12 months, amounting to RMB20.6 billion.
• Asset high quality improved, with a lower within the non-performing mortgage (NPL) ratio and a rise within the provision protection ratio.
• The financial institution is actively managing its internet curiosity margin (NIM) via asset and liabilities allocation changes amid NIM compression stress.
• ICBC’s bond funding yielded outstanding earnings, notably from authorities bonds and key monetary areas, with a 35% enhance in bond buying and selling quantity with abroad institutional buyers.

Firm Outlook

• ICBC plans to optimize its asset and legal responsibility construction and improve drivers of high-quality growth.
• The main focus will likely be on deepening operational transformation and innovation, with a dedication to offering steady and sustainable returns to shareholders.
• Continued emphasis will likely be positioned on asset high quality and threat administration to take care of steady efficiency.

Bearish Highlights

• The financial institution faces stress from NIM compression, necessitating lively administration and changes in asset and legal responsibility allocation.

Bullish Highlights

• ICBC has a excessive capital adequacy ratio and is utilizing retained earnings as the first channel for capital replenishment.
• The financial institution is innovating in TLAC (Complete Loss-Absorbing Capability) instruments and has carried out new guidelines necessities.
• There was a marginal enchancment in internet curiosity margin resulting from lively administration methods.

Misses

• No particular misses have been reported within the earnings name abstract offered.

Q&A Highlights

• ICBC addressed plans for steady growth and the strengthening of its safety growth line to take care of monetary stability.
• The financial institution goals to reinforce administration empowerment and strengthen the bank-wide threat management system.
• ICBC is concentrated on bettering asset allocation capabilities and actively implementing interim dividends.
• There may be an ongoing effort to coordinate the expansion of amount, administration of pricing, enchancment of high quality, and management of dangers.

ICBC’s interim outcomes show the financial institution’s resilience and strategic foresight, with a robust emphasis on supporting the actual economic system and managing market liquidity. The financial institution’s strategic investments in superior manufacturing and inexperienced environmental safety, together with its position within the bond market, underscore its dedication to balancing performance with profitability and contributing to the broader monetary ecosystem. As ICBC seems to the second half of the 12 months, its deal with structural transformation, threat management, and working earnings development is anticipated to additional solidify its market place.

InvestingPro Insights

Industrial and Business Financial institution of China Restricted (ICBC) not solely maintains its stature because the world’s largest financial institution by property but additionally presents a compelling profile based mostly on InvestingPro information and insights. With a market capitalization of $277.41 billion, ICBC stands as a big participant within the banking trade. That is additional evidenced by the financial institution’s low price-to-earnings (P/E) ratio of 4.21, suggesting that the financial institution’s shares could possibly be undervalued in comparison with its earnings potential. Moreover, the adjusted P/E ratio for the final twelve months as of Q2 2024 is 5.67, which nonetheless signifies a probably engaging valuation for buyers.

InvestingPro Suggestions spotlight that ICBC just isn’t solely a distinguished participant within the banking trade however has additionally maintained dividend funds for 18 consecutive years, showcasing its dedication to shareholder returns. The financial institution’s dividend yield as of 2024 stands at a big 6.21%, which is noteworthy for income-seeking buyers. Regardless of a slight decline in income development over the past twelve months with a -1.31% change, the financial institution has remained worthwhile throughout this era, and analysts predict profitability will proceed this 12 months.

Traders searching for extra in-depth analysis and extra InvestingPro Suggestions can discover them on the devoted InvestingPro web page for ICBC (https://www.investing.com/professional/IDCBY). There, they are going to uncover a complete of 8 InvestingPro Suggestions that present additional insights into ICBC’s monetary well being and market place. The following pointers embody cautionary notes in regards to the financial institution’s money burn and gross revenue margins but additionally acknowledge its standing as a big dividend payer and profitability over the past twelve months.

ICBC’s resilience and strategic administration have set a stable basis for its future, and the InvestingPro Insights serve to offer buyers with a nuanced understanding of the financial institution’s monetary outlook.

Full transcript – Industrial Business Financial institution of China (IDCBY (OTC:)) Q2 2024:

Wang Liancheng: Pricey buyers and analysts, good afternoon. I am Wang Liancheng from Company Technique and IR Division of ICBC. Welcome to ICBC’s 2024 Interim Outcomes Announcement. This convention is broadcast on-line. We’re additionally joyful to have a few of the buyers and analysts with us in particular person. I would prefer to introduce to you the senior administration members becoming a member of in the present day. President, Mr. Liao Lin, Senior Government Vice President, Mr. Jingwu Wang; SEVP, Mr. Weiwu Zhang; SEVP, Mr. Duan Hongtao; SEVP, Mr. Zhang Shouchuan; our administrators, Herbert Walter and Murray Horn participated on this assembly in particular person. Our administrators, Lu Yongzhen, Feng Weidong, Chen Yifang, Dong Yang, and Shen Si take part on-line. We even have basic managers from departments and subsidiaries right here with us. Subsequent, I am going to give the ground to SEVP and Board Secretary, Mr. Duan Hongtao to transient you on ICBC’s interim outcomes and the principle options.

Duan Hongtao: Pricey buyers and analysts, good night. Within the first-half of 2024, with advanced exterior setting, we pursued progress whereas making certain stability superior the 5 transformations of clever threat management, trendy structure, digital driver, diversified construction and ecological basis and promoted its personal high-quality growth with serving financial restoration. Our principal efficiency indicators maintained steady and working outcomes grew steadily with improved high quality. It is demonstrated in following three elements, first sustaining steady operation and demonstrating working and growth resilience, core efficiency indicators have been steady. The market-leading place by the tip of half 12 months, whole property have been greater than RMB47 trillion persevering with to guide the world. Loans to prospects recorded almost RMB28 trillion, up by RMB1.8 trillion over the tip of final 12 months resulting from prospects was greater than RMB34 trillion, up by over RMB580 billion. Sound efficiency. Working earnings was RMB402 billion, and internet revenue, RMB171.3 billion, sustaining the main stage amongst home banks. ROA and ROE have been 0.75% and 9.53%, respectively, remaining at an affordable stage. NIM was 1.43%. Price-to-income ratio was 24.79% sustaining steady basis for operation. Capital adequacy ratio was 19.16%, sustaining the forefront amongst main banks around the globe. NPL ratio was 1.35%. Allowance to NPLs was 218.43%. In 2023, the dividend totaled RMB109.2 billion, persevering with to have the best money dividend amongst A share listed corporations. Based mostly on the common share price of half one 12 months, dividend yields for every share are 5.79% and seven.97%, respectively. This 12 months, we actively promote interim dividend, planning to pay RMB51.1 billion within the subsequent January. In order to offer steady and sustainable returns for shareholders. Second, property and liabilities rising steadily and the standard and effectivity of providers for the actual economic system improved. In half one 12 months, property grew steadily. The steadiness of loans to prospects elevated by 6.7% over the tip of final 12 months, and the steadiness of bond investments elevated by 9.8%. Deposits noticed stable development, of which private deposits elevated by 5.8%. The deposit deviation was improved, was the bottom within the corresponding interval within the final 5 years, constantly optimizing the credit score construction and taking stable steps to spice up 5 priorities. Company loans elevated by RMB1.37 trillion, which have been extra focused. The financial institution exercise accelerated the transformation of the actual retail enterprise by elevating the proportion of retail inclusive loans, private enterprise loans and private consumption loans, maintained excessive development. We truly served the 5 priorities. Loans to strategic rising industries steadiness was RMB3.1 trillion, up by 15%. Loans to website and enterprises RMB2.1 trillion, up by 19%. Inexperienced credit score was over RMB6 trillion, up by 14%. Inclusive loans, over RMB2.7 trillion, up by 22%. Pensions beneath administration RMB4.5 trillion, up by 8%. Loans to core industries of the digital economic system totaled RMB911.1 billion, up by 16%. Third, deepening operation transformation and innovation and enhancing drivers of high-quality growth. For half one 12 months, we accelerated reform and improved the transformation framework deepened the transformation contents and upgraded the transformation measures and work to understand the efficient enchancment in high quality, Hebei enterprise has continued to strengthen. Company banking. Company loans totaled RMB17.5 trillion. Company prospects numbered 12.85 million. Mortgage to manufacturing exceeded RMB4 trillion, all main friends. Private banking. Private AUM totaled RMB21.8 trillion. The variety of personal banking prospects, the whole quantity and increment of AUM, the variety of private pension accounts opened and the whole quantity of contributions to all led the trade. Institutional banking, institutional deposits was RMB8.4 trillion main the trade. We obtained a double excellence score the analysis of centralized fee brokers organized by the Ministry of Finance for the sixth consecutive 12 months. Market enterprise, AUM exceeded RMB30 trillion. Home property beneath pricey recorded CNY 24.5 trillion. We led the trade in bond investments, underwriting, overseas change buying and selling on behalf of shoppers market making, making new progress within the growth of the ICBC. ICBC continued to enhance three exterior and three inner platforms, strengthen the 2 supporting methods of enterprise and information, speed up the digitalization and intellectualization by serving prospects and empowering our personal staff. For the exterior platforms, MAUs of cellular banking exceeded RMB230 million. MAUs of ICBCE life have been over RMB17.4 million buying and selling quantity of open banking over RMB200 trillion, bettering buyer expertise. Persevering with to optimize the client ecosystem and implementing GBC previous initiatives in depth, we accelerated the combination of 4 chains: Fund, customer support and worth chains, strengthening the client base. Private prospects totaled nearly 750 million, up by 9 million over the tip of final 12 months. Cell banking prospects totaled over 460 million, up by 12 million, main the trade. Asset high quality, sustaining steady and the standard and effectivity of enterprise threat administration enhanced, ICBC continued to reinforce enterprise-wide threat administration system and mega threat coordination and improved threat provides and mechanism, speed up threat management intellectualization, all dangers are controllable, asset high quality steady. By the tip of June, group-wide NPL ratio was 1.35%, down by 1B over the start of this 12 months. Credit score value was 0.7%, sustaining a sound stage. Dangers in key areas have been successfully addressed. Actual property NPL ratio continued to say no supporting native governments in stopping and resolving debt dangers based mostly on regulation and market guidelines. For small and medium-sized banks, we offer technical {and professional} help. Dynamically integrating the ESG idea into operation growth. We additional strengthened the ESG governance construction, continued to construct a three-in-one ESG data disclosure system. ICBC’s MSCI score was AA, main home friends. Looking forward to the second-half of 2024, ICBC will stay dedicated to the trail of monetary growth with Chinese language traits, deal with advancing 5 transformations and attempt to realize a dynamic steadiness of worth creation, market place, threat management and capital constraints. The financial institution will embark on the brand new journey for ICBC after its fortieth anniversary with achievements in high-quality growth and ship steady and sustained returns to shareholders from residence and overseas.

Wang Liancheng: Thanks to Mr. Duan. Now could be the Q&A session. Please state your title and group earlier than asking the query. The primary query from this aspect.

Q – Unidentified Analyst: Thanks for the chance to boost the primary query. I am from UBS. I want to ask you a query in regards to the earnings and internet revenue. Within the first half of the 12 months, we have now seen your complete banking sector nonetheless faces stress of earnings and internet earnings of ICBC has additionally decreased by 2%. So what measures have you ever taken — will you are taking to stabilize working earnings and earnings within the second-half of the 12 months?

Liao Lin: Thanks to your query. Within the first-half of 2024, ICBC achieved a internet revenue of RMB171.3 billion, a year-on-year lower of two%, as you talked about in your query. That is consistent with the supply pattern of the home banking trade, as a result of we have now massive sum. However we expect this deviation continues to be inside our expectation. And likewise the interim dividend payout can also be a superb demonstration of accountable listed firm for ICBC and which can also be our aim to pay sustainable return to our buyers. The primary-half of the 12 months, the decline of our internet revenue is extremely related with the macro rate of interest setting and likewise on the present stage. And that is additionally a state of affairs at present going through your complete sector. So for the entire 12 months, though we nonetheless have stress when it comes to working earnings and internet curiosity margin, we have now seen some optimistic adjustments, and you’ll present sturdy help for stabilizing annual internet revenue. First, deposit rate of interest declined in contrast with the start of this 12 months, and the soundness in deposit development vital improved, benefiting from audible reductions in deposit benchmark rate of interest. The deposit value now within the first half is 1.84%, down by 5 bps in comparison with final 12 months. And by the tip of July, we lowered our deposit benchmark to five to twenty bps, so which can additional drive our decline when it comes to our deposit prices within the first half of — within the second-half of this 12 months. So within the first-half, we have now seen very high-quality deposit development. The deviation of our deposit is 2.2%, the bottom in almost 5 years. On the identical time, we have now additionally optimized the deposit construction and the legal responsibility with decrease value has elevated proportion. Secondly, our asset construction continues to optimize. Within the low rate of interest setting, we have now constantly strengthened adjustment of the asset construction and targeted on prime quality growth of the — to serve the uncommon economic system. Efforts we made to stabilize the 12 months margin. Within the first-half of the 12 months, the loans and bond investments, which have larger yields elevated by 0.7 proportion factors and 1.1 proportion factors, respectively. Within the first half of the 12 months, yield on interest-bearing property decreased by 5 bps, a smaller decline than within the first quarter. Furtherly, extra diversified earnings supply is regular enchancment in working earnings contribution. Based mostly on the principle contraction, we have now realized a internet payment earnings of RMB67.4 billion, with the whole quantity remaining the best within the trade domestically. So with the common above talked about, the compression of our internet curiosity margin has been slowed. This will show the resilience of ICBC. And amongst our payment earnings, our earnings from the funding banking syndicate. Sports activities ForEx commerce and the RMB company settlement has witnessed an excellent development and we have now additionally seized the tendencies to understand different noninterest earnings, which totaled RMB20.6 billion, elevated by 12%. So we have now made achievement on this regard within the first-half of the 12 months, and we’ll proceed to take action within the second-half. Fourthly, the steady asset high quality steady enhancement of threat resistance functionality. By the tip of June, the NPL ratio of ICBC was 1.35%, 0.01 proportion factors decrease than Q1 finish final 12 months. And the availability protection ratio is 218.4%, up by 4.5 proportion factors. Complete provision steadiness was RMB954.2 billion, elevated by RMB70 billion. And the mortgage impairment provision is RMB819.9 billion, elevated by RMB63.5 billion. In order you may see, the mortgage provision ratio is up and all these index can present ICBC has performed our due half when it comes to the main position to offer help to the actual economic system. Within the second-half of the 12 months, we’ll proceed to deepen construction transformation, successfully stop the management threat, strengthen asset liabilities, promote working earnings and push ahead reforms by actively adapting to the rate of interest in kind with — strived to serve the high-quality growth of the actual economic system and likewise create long-term steady worth returns for shareholders. Firstly, implement a number of measures to stabilize the curiosity margin and attempt to slim the decline within the internet curiosity earnings. On the asset aspect, we proceed to take proactive steps to excel within the 5 key monetary areas supporting the event of recent high quality productiveness, strengthen the credit score provide capability to the important thing methods, key areas and weak hyperlinks, whereas sustaining our main benefits in manufacturing, rising trade, inexperienced finance and personal enterprises accelerated the rise within the proportion of return, inclusive loans on the legal responsibility aspect and to shut the funding loop continues to advertise the GBC Plus foundational initiatives targeted on the supply and the movement of funds, attempt to extend the retention of low-cost settlement funds, targeted on key situations of strengthen the competitors for present funds and that embed period administration into your complete deposit administration course of, promote a wholesome interplay between financial savings and AUM, finally diminished the proportion of high-cost liabilities and guarantee a steady, but gradual lower within the deposit price. Secondly, accelerated transformation monetary providers, improved new infrastructure providers akin to clearing, settlement, fee and value, deeply delving into the expansion potential of the 4 new enterprise areas, funding banking, asset administration, wealth administration and monetary buying and selling. Utilizing the worth ecosystem chain of funding banking, asset administration, wealth administration, monetary buying and selling to invigorate the standard steadiness sheet and supply more practical help for income development. In company enterprise, the mixture of business and funding banking merchandise to create a complete service ecosystem, promote income development in funding banking, syndication custody and bond underwriting via buyer sharing and enterprise synergy. In primary providers continues to enhance the development fee settlement and consumption situations and promote income development in bank cards, third-party funds and RMB settlement merchandise. In Wealth Administration, enrich the product portfolio based mostly on market rotations to satisfy prospects’ drivers’ wants for monetary asset, participation and appreciation, additional stimulating the expansion potential enterprise like fund distribution, wealth administration distribution and treasured metals. Thirdly, asset high quality. We are going to proceed to reinforce our threat management and likewise seized the chance of some optimistic alerts we have now seen to higher management the fee. On one hand, we’ll proceed to reinforce our threat management and to make sure the general asset high quality, steady momentum. And on the second, we additionally proceed to reinforce our deserve therapy and disposal of non-performing loans, in order to create a extra coordinated new steadiness between earnings and expenditure. Thanks.

Wang Liancheng: The following query.

Junliang Chen: Thanks for the chance. I am Junliang from Guosen Securities. My query considerations the expansion. Not too long ago, we have now noticed that banks appear to face mortgage development decline, lower from scale, combine and pricing transient us with the half one 12 months state of affairs? And likewise, regulators have modified their wording about scale. So do you propose to cut back your mortgage development plan for full-year?

Wang Liancheng: I am going to invite Mr. Zhang Shouchuan to reply the query.

Zhang Shouchuan: For half one 12 months state of affairs, we comply with the macro insurance policies, coordinate tempo power, focus of funding and financing, accelerated rejuvenation of excellent fund and promote the transformation and upgrading of mortgage combine. In serving the actual economic system in its restoration, we have now performed the position of main power in Encore. First, scale an impressive, each the friends, the home RMB loans steadiness was over RMB26 trillion, up by RMB1.74 trillion reaching a steady development on the excessive base. Second, mortgage development was extra focused. The home branches company loans was up by RMB1.4 trillion, of which the medium- and long-term proportion was 72%, up by 3 proportion factors year-on-year. We elevated our help for five priorities, to majors, to new manufacturing, meals, power, assets safety. The rising — strategic rising industries loans steadiness was over RMB3 trillion, manufacturing over RMB4 trillion, inexperienced loans over RMB6 trillion. Specialised in new loans, inclusive finance, agricultural loans have been each grew over — by over 10%. We comply with the insurance policies of our actual property market, high-quality developments and help financing coordination mechanism for city actual property markets, assist the steady and wholesome developments of the property market. Third, the momentum continued to choose up. We actively sensify the folks’s consumption want. The home non-mortgage loans was over by RMB300 billion year-on-year development. The — we adapt to the financial transformation upgrading, the relending of the loans to rejuvenate the excellent loans was over RMB2 trillion, growing the effectiveness of fund allocation. Fourth, the tempo of development was balanced. The each day common of increments of RMB loans was over RMB2.1 trillion, up by 9%. We crossed the 12 months and quarter and achieved steady development. For the second half of the 12 months, the Chinese language economic system operates stably and making progress, proceed the restoration. So the sturdy financial coverage is concentrated on steering industrial banks to maintain an affordable development and balanced development of loans. So for the way forward for the Chinese language economic system and for our personal high-quality growth, we’re absolutely assured. Within the second-half of the 12 months, we’ll proceed to implement macro insurance policies and promote the steady and cheap development of loans and based on market adjustments, we’ll steer the targets of mortgage development, preserve our aggressive internet edge, enhance {our capability} of serving the actual economic system and proceed the main place. First, we’ll proceed to deal with serving the most important methods and high-quality prospects. We are going to use the group’s complete monetary benefit to help the most important methods, fields and weak hyperlinks when enhancing the inspiration, we’ll create new development factors. We are going to do good in making certain timing supply and the assured housing to assist the brand new mode of actual property markets. We are going to moderately improve our help for medium- and long-term loans to the most important initiatives. Second, we’ll proceed to offer larger high quality and extra diversified retail finance providers. We are going to proceed our help for private consumption, private enterprise loans and bank card and different retail and inclusive loans, and enhance their proportion within the mortgage combine. We are going to modify the mortgage combine about mortgage loans within the second-hand homes. Third, we’ll proceed to optimize the combination of the credit score assets. For the high-quality property, we’ll proceed to strengthen our NPL disposal and coordinate the event amongst areas and enhance the coordination between mortgage development and financial growth of the areas. Thanks.

Wang Liancheng: Thanks. As we speak, we are also joined by many analysts and buyers on-line. So subsequent query from on-line.

Richard Xu: Thanks for the chance to boost the query. I am Richard from Morgan Stanley. My query consists in regards to the asset high quality. Seen to view of the macroeconomic, the supply property high quality of ICBC maintained a steady stage. Wanting ahead, we nonetheless face stress of additional slowdown of the macroeconomic. So what’s your view in your present asset high quality stage? And what key areas do you assume it wants additional focus and a focus? And all of us pay numerous consideration to the chance in the actual property sector. So what’s your view on this regard?

Wang Liancheng: Thanks. I am going to invite Mr. Wang Jingwu to reply this query.

Jingwu Wang: Thanks to your query in regards to the asset high quality. Within the first-half of 2024, ICBC strike a steadiness between prime quality growth and high-level safety. We deal with the principle themes of threat prevention, compliance enhancement and growth promotion. Now we have tightly managed the credit score threat throughout your complete scope and cycle. Dangers in key areas have been resolved in an orderly method and the standard of credit score property has remained steady and controllable. As of the tip of June 2024, as enterprise NPL ratio stood at 1.35%, a lower of 1 foundation level from the tip of the earlier 12 months. From a enterprise phase perspective, the asset high quality within the company sector has continued to enhance. The general NPL ratio for home department company loans was 1.63%, down by 14 bps in comparison with the tip of final 12 months. The NPL ratio for all main industries have additionally seen very lower of decline for the reason that starting of the 12 months with notable reductions of 40 bps within the manufacturing and wholesale and retail trade. Whereas the NPL ratio within the retail phase has elevated as a result of slowdown of financial development and earnings family, however the general asset high quality stays at a comparatively good stage. In accordance with early prevention precept, we’re taking a number of measures to reinforce sensible threat management, restoration mechanism and disposal of NPLs. By way of the chance in the actual property sector, we have now lengthy adhered to a prudent and cautious enterprise philosophy following the 3-in-1 asset choice standards that take into account area, buyer and challenge. We deal with constructing a diversified and balanced actual property funding and financing construction, moderately controlling the proportion of actual property within the whole mortgage portfolio and strictly managing the proportion of loans to particular person actual property firm. In response to the brand new traits and conditions which have emerged in the actual property sector lately. ICBC has adopted a complete method specializing in growing, stopping, mitigating and managing dangers by optimizing new funding and serving to to determine new growth fashions for the industrial actual property sector successfully managing current property growing efforts to order and clear dangers related to high-risk enterprises and initiatives. As of the tip of June, the steadiness of company loans, growth loans — home growth loans, the steadiness is RMB852.1 billion solely accounting to three% of the whole loans and NPL ratio of the developer loans down — was down by 2 bps over — as stability of our developer loans was fairly steady. Moreover, adequate provisions have been made for threat loans to totally cowl potential losses and dangers. Wanting forward, within the second half of this 12 months, we’ll proceed to stick to the aim of steady growth, strengthen the safety growth line and act as a stabilizing power in sustaining monetary stability and leveraging larger stage threat administration to help high-quality growth. We are going to improve administration empowerment, continues to strengthen the bank-wide threat management system, optimize coverage help, precisely handle key space mortgage placements and improved asset allocation capabilities. Moreover over deepened digital and clever empowerment constantly superior development of an enterprise-level clever threat management platform makes use of early warning capabilities for sensible software reaching forward-looking and exact threat administration.

Wang Liancheng: The following query is from on-line.

Jia Wei Lam: Thanks for the chance to boost questions. I am Jia Wei Lam from HSBC. I’ve a query relating to capital and dividend. Now we have observed that ICBC has comparatively excessive capital adequacy ratio. Do you will have any capital plans sooner or later? Now the sector is going through the NIM compression stress, how do you steadiness the connection with — between capital adequacy, asset development and dividend stability and the way do you create sustainable returns for shareholders?

Wang Liancheng: I am going to invite as SEVP, Mr. Duan Hongtao, to reply the query.

Duan Hongtao: At current, ICBC’s capital is nicely managed. The capital plan is already carried out. Within the first-half of the 12 months, our precept is inner, exterior and balanced we actively promote industrial banks, capital administration pointers, implementation. We use retained earnings as the principle channel to replenish capital. We optimize capital administration and elevated capital effectivity. On the finish of second quarter, ICBC’s energy was 19.16%, CET1 and Tier 1 capital adequacy ratio have been 13.84% and 15.25%, respectively, sustaining an affordable and sturdy vary. In serving the actual economic system, strengthening threat resilience, we lay a stable basis. First, we improve inner capital accumulation. Our revenue for the primary half of the 12 months was RMB171.3 billion. Deducted dividend and fairness instruments curiosity, we have now retained earnings of RMB56.6 billion. Now we have been sustaining a sturdy profitability. We offer good returns for shareholders and buyers and likewise obtain self-replenishment of capital. Second, we already implement exterior capital replenishment. In first half of the 12 months, ICBC’s CNY 370 billion capital instruments issuance plan was authorized by the regulator. We glance into the asset growth and market rate of interest growth pattern. We already accomplished RMB50 billion perpetual bond and RMB50 billion Tier 2 capital bond issuance by the tip of August. We implement maturity substitute of the excellent instruments. So the entire curiosity fee value was diminished by 26 bp. Third, we actively carried out new guidelines necessities. This 12 months, we have now seen the happening of capital pointers in capital allocation, capital measurement and threat restraint. There are new guidelines, so we prioritize the capital extension to key areas, the RWA development was decrease than that of whole property, saving capital occupation reaching steady transition between outdated and new guidelines. Fourth, we actively participated in TLAC instruments innovation. In first half of the 12 months, guided by regulators and shareholders, we carried out the issuance of RMB40 billion TLAC noncapital instruments, the primary in home markets receiving excessive recognition from the market. As G-SIB, we have now been a mannequin for the friends and offered a brand new and high-quality funding targets for the market. You additionally raised questions on internet curiosity margin stress. The NIM change was modified, was influenced by macro economies and industries setting adjustments of NIM for ICBC is just like different friends. In contrast with the final phrases information, we have now seen some marginal enhancements. We pay excessive consideration to NIM administration in low rate of interest setting. We adjusted asset and liabilities allocation, optimize massive property allocation and stabilized internet curiosity margin. First, we optimize mortgage combine and make focused pricing. Within the first-half of the 12 months, the brand new RMB loans rate of interest was elevated by 4 bps in contrast with fourth quarter final 12 months. The rate of interest change was just like the sector. Second, the deposit curiosity fee ratio was diminished. There are a number of optimistic curiosity elements on this regard. In first-half of the 12 months, the brand new deposits rate of interest was diminished by 29 bp than final 12 months, an impressive stage among the many friends. Sooner or later, we’ll coordinate property and liabilities, promote 4 transformations and promote internet curiosity margin to take care of in a comparatively cheap vary. Not too long ago, we’re actively implementing interim dividend, contemplating that our capital was enough, interim dividend wouldn’t convey outstanding stress to our capital adequacy ratio. With the dividend payout ratio unchanged, we moderately elevated the frequency of dividend is nice for smoothening the capital adequacy ratios change. Sooner or later, we’ll proceed to coordinate the cheap development of amount, refined administration of pricing, efficient enchancment of high quality and focused management of dangers and to assemble a triangular of effectivity among the many capital property and fund in order to create a clear and wholesome steadiness sheet and a balanced and coordinated and sustainable earnings sheet and enhance our sustainable growth functionality. Thanks.

Wang Liancheng: Now we have printed a listing of the questions from buyers. And all these questions could also be targeted on dividend payout and Mr. Duan answered this query. So final query, please.

Unidentified Analyst: I am from Citi. I want to ask a query in regards to the monetary advertising and marketing funding. Within the presentation, initially of this 12 months, we have now seen ICBC’s bond funding has realized a outstanding earnings. So might you present extra particulars of ICBC’s bond funding efficiency? And what are your future plans for increasing the bond enterprise?

Wang Liancheng: I want to invite Mr. Zhang, Weiwu, to reply this query.

Weiwu Zhang: Thanks to your query. On the finish of June 2024, as bond funding steadiness had elevated by 9.8% in comparison with the tip of final 12 months, with the steadiness of RMB bond funding rising by 10.4%, whereas sustaining a robust deal with authorities bond investments and making certain a market-leading scale in key classes akin to native authorities bonds, ICBC has optimized the construction of credit score bond funding across the 5 key monetary areas. From January to June, the expansion price of recent RMB company bond funding in key areas akin to superior manufacturing, technological innovation and inexperienced environmental safety exceeded 60% year-on-year. Moreover, ICBC has actively offered citation and market-making providers to each home and overseas buyers, striving to reinforce the exercise and the liquidity of the home interbank bond market. On the finish of June, the bond buying and selling quantity between us and abroad institutional buyers elevated by 35% year-on-year, in line with the expansion price of our financial institution’s bond market-making quantity. Not too long ago, the Central Financial institution has made some new motion. And likewise, we have now seen some new adjustments within the demand and the provision of bonds. So wanting forward, ICBC our bond enterprise based mostly on the rules of adequate power, regular tempo, optimized construction and a sustainable pricing, striving to realize a steadiness between performance and profitability to make larger contribution to serve the actual economic system and prime quality growth of the financial institution. So firstly, to offer complete help for the actual economic system, we’ll proceed to optimize account and portfolio constructions, strategically allocating funding sorts, maturities and currencies to steadiness liquidity, safety and profitability. Efforts will likely be made to reinforce the income contribution of bond funding and buying and selling, aiming for high-quality deployment. By way of help for key areas, we’ll deepen our deal with the important thing — 5 key monetary areas by growing investments within the main methods, key sectors, necessary areas and weak hyperlinks. Secondly, we’ll present our market-making tasks. We are going to proceed to be dedicated to our position as a market maker, serving to to make sure the environment friendly operation of the home bond market. We are going to comprehensively enhance market-making service ranges, strengthen market research analysis and judgment capables’ and intention to extend buying and selling enterprise earnings, whereas sustaining market liquidity. Efforts will likely be made to develop the vary of counterparties and lengthen the service attain. Constructing on present abroad buying and selling counterparties, we’ll proceed to develop relationships with overseas sovereign and nonbank institutional purchasers. At identical time, the financial institution will work carefully with monetary infrastructure regulation, regulatory our bodies to optimize bond market regulation and preserve good buying and selling order. Firstly, we may even attempt to — we’ll intention to totally leverage synergies between bond underwriting and funding facilitating interconnected development in these areas. We are going to proceed to combine our buyer enterprise expertise, know-how and model benefits to constantly optimize the ecosystem of bond issuance and the distributors. On one hand, we’ll appropriately decrease the credit score focus of home issuers, whereas supporting extra high-quality issuers akin to overseas middle banks, worldwide growth establishments and multinational companies to concern bonds domestically, thus serving to to reinforce the position of RMB as financing foreign money. Alternatively, we’ll proceed to refine our bond distribution community, enhanced distribution efforts and capability and obtain differentiated administration of threat urge for food for bond funding and distribution. This may help the interconnected growth of the first and the secondary bond market and enhance the market layered bond market system that integers funding financing.

Wang Liancheng: Because of restrict of time, the Q&A session will shut now. Thanks for the questions from our buyers and analysts. When you have additional questions, be happy to contact our IR group. Please present help to ICBC, as at all times, and we may even proceed to realize steady operation of ICBC in order to ship steady returns to ICBC. So that is the tip of the interim outcomes announcement. Thanks, once more.

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