Bank of Communications Co Ltd
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Bank of Communications Co Ltd
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[Audio Gap] 2019. I am Guo Mang, EVP of Bank of Communications. It gives me great pleasure to communicate with you.
First, on behalf of Bank of Communications, please let me give our sincere gratitude to your support we [ hold on ] for a long time. We have attached great importance to the market communications. And our concern -- your concern is to help us to improve our management and the business operations.
Today, what -- also have the following participants. so Mr. Gu Sheng, Chair -- Corporate Secretary; Mr. Xu Han, Chief Director of the [indiscernible]; Mr. Tu Hong, the Chief Investment Officer; and also the representatives from ALCO finance department, the corporate department, institution department, risk management department, credit department, the IT department, credit card center, global marketing centers, and BOCOM Wealth Management [indiscernible].
This morning, BoCom's Board has approved the third quarter report of 2019. On the whole, the -- in the third straight quarter, BoCom has maintained prudent and stable development. The key financial indicators of the bank has improved. The net operating income, net interest income has both grow by double-digit growth. And as so, the cost-to-income ratio has been reduced. NPL provision coverage ratio has improved.
Although we still have some shortcomings, but just cost speaking, we think that our share is undervalued on the market, and it still has great value for investment. And as the senior manager of finance department, Mr. [indiscernible] will introduce to you the financial performance with BoCom in the third quarter, then we will take your questions. This announcement will take around 1 hour. [indiscernible]
Good afternoon. I'm [indiscernible] from the finance department with Bank of Communications. First, let me introduce to you our development in the third quarter. And my section will include 4 parts: First is the section of business operations. We can have the review of business development set, right, the risk management and last, the outlook.
In terms of our operations. In the first 3 quarters, we have implemented the "186" Strategic footprint. And we -- under the new strategy, our initial indicators has achieved prudent and stable growth. So we have focused on the value creation. So our net profit reached CNY 60 billion, up by 4.69%. As our site -- as we -- the net operating income is CNY 176 billion, up 11.6% or CNY 10.65 billion. Net interest income is CNY 106 billion, up by 11.72% or CNY 8.8 billion. The main reason for this is the improved NIM. Our NIM is 1.57%, up by 10 bps. And while we follow the fee and commission income, it's up by 9.76%. And we have controlled the cost effectively. The cost income ratio is 13.15% (sic) [ 30.15% ], which is down by 1.34 percentage points.
With the optimized business structure and the quarter [indiscernible]. And we have restructured our business by the end of September. Our pre position then is up by 7.26%. On a yearly basis, our key growth rate is 1.36 percentage points higher than the same period last year.
And of the -- and in terms of our long allocation, we have increased the support to private sector and increased their finance. We have achieved target of [ 2 ] increase and [ 2 ] control by end of September. The small and micro enterprise system is up by 41.26% on a yearly basis. The number of this, as one of our group enterprise, has also achieved growth. The loan to product sector is up by 9.39%, higher than the average loan growth. And in terms of the regional allocation, we have increased the support to the Yangtze River Delta and to the Guangdong Bay Area. And we have optimized the credit procedure, sped up the financial ramp and also give more support to the Yangtze River Delta and the Guangdong Area. The percentage of the loans to these 2 areas is [ 30.76% ] and [ 13.63% ], respectively.
We also use technology to empower our transformation. And we continue to carry out the group's strategy. The overseas branches and the subsidiaries' net profit is about 25.9%, while the total asset is up by 9.65%, which -- and it now stands at RMB 1.2 trillion. The 12th branch has been opened, and we are also in preparation of opening Toronto branch and Johannesburg branch. The subsidiaries' net profit attributable to the parent company is up by 15.3%. The total asset is up by 15.8%. Local investment debt equity swap program posted number, which is 37. And we have used CNY 22.6 billion which is relatively high compared with the other commercial banks.
BOCOM Wealth Management has also issued its [indiscernible] WMP and is the first product issued under the new regulation from the [ PMC ] under our banking group. And we have also issued [indiscernible] products afterwards, and we help our clients to increase the value. We have sold -- or the fee and commission come from the associative insurance, treasury bonds and [indiscernible] is up 17.78%, while the management fees for trust funds management and WMP are 18.19%. [indiscernible] which is RMB 3.37 trillion, up by 10.35%.
And our -- and in terms of the technology empowerment, the New 531 project has continued being carried out. And we will issue the 4.0 version of our mobile app in the mid-October. And we have 3 projects, fintech [ MT ], the 10,000 people for fintech program and also the empowerment for its existing talent. And we also use technology to deduct the big data risk control model.
We continue our risk appetite so that while we might -- and asset quality indicators remain stable, our NPL overdue loan and -- has been reduced. The NPL ratio and overdue loan ratio has been up by 0 percent -- has been down by 0.2 percentage points and 0.18 percentage points comparing with the end of 2018. The provision coverage ratio is up by 1.797 percentage points. And the -- our CET1 -- our Tier 1 capital ratio and total capital adequacy ratio has both grown, and we have used a number of measures to improve our asset quality. We have addressed 43 billion NPL and also [indiscernible] RMB 14 billion.
In terms of our market risk and liquidity risk, it was all controllable, and we have viewed a matrix of risk in prevention and integrate the comprehensive risk management and provision. And we have this [ 5 plus 30 prevention ] program.
So just the financial statement, the balance sheet, the income statement. So you can see somewhat high gross of net interest income here. And so for the fee and commission income, up by 9.76%. And in terms of the structure, our agent structure, agency and the management fee has increased. And then our business cost is up by 6.41%. Most of our cost -- increased cost is in technology empowerment and employee program.
In terms of -- and we have increased the provision 6.5% or 22.78%. We have increased our provision to some high-risk portfolio. So here are the main financial indicators. So this is the instruction of our firm in the third quarter.
And now for the business development. In terms of our corporate finance, we have restructure of the business. We have increased the support to certain business lines and so as to support this economy. The corporate -- the profit is CNY 4.02 billion end of September, up by 2.13%; the corporate loan, 3.5%, up by 8.81%. So we have increased the loan.
In terms of the highlight, the industrial chain finance has been important to highlight. We have built an online/off-line business structure, and we have 30 -- 3,800 qualified industrial chain clients, while the key project financing volume is more than RMB 200 billion.
In terms of investment banking, we have underlied the balance, excluding ABS and municipal bond. And the fiscal number is 309, while the volume has been up by 5.3%. For the asset custody business, the total assets -- or the total -- the size of that reached CNY 9.3 billion, up by 5.22%.
In terms of offering electronics channels, we have -- the number of corporate client is up by 2 -- 340,000. As for the personal finance, we continue to focus on the clients and build quality brands, improve the client experience. The outstanding personal deposit is RMB 1.9 trillion, up by 9.12%. The personal loan is CNY 1.7 billion, up by [ 4.21% ]. The mortgage is up by 9.3%.
In terms of wealth management, we have combined technology with our product capacity. The qualified [indiscernible] client and [indiscernible] client is up by 11.9% and 15.2%.
The client choice will actively participate in the launch and promoting of the [ ETC ] product. The new version of the mobile banking won't be released very soon.
In terms of the bank card -- the debit card, we have proactively promoting the application and its usage areas, the credit card issued by more than CNY 71 million. The total consumption of the first 3 quarters was RMB 2.1 trillion. The Pacific debit card issued by a total number of 1.4 trillion, up by 7.3 million and the total consumption of the 3 quarters was RMB 1.6 trillion.
And in terms of the interbank and the global markets businesses, we have integrated our asset management, wealth management and global market clearing and settlement product to further promote the development of the capital markets and the financial institutions. In terms of the market businesses, the financial investment was RMB 3 trillion, up by 6.35%. The asset investment yield was rosy, and we have increased our net worth high wealth management product. And the off-balance sheet wealth management grew by 27.6%.
The off-balance sheet net worth products, the balance grew by RMB 122 billion. And in terms of the financial institutions, the bank-to-bank -- our cooperating platform, the total clients in this platform was 1,087, up by 203 financial institutions. And in terms of the precious metals, the agency transaction volume for precious metal was RMB 120 billion. The physical precious metal sold by RMB 918 million. And in the Shanghai Gold Exchange, we ranked the first 3 places in the exchange.
So this is the outline and briefing of the sector-to-sector business performances. And next, I will talk about the risk management. For the first 3 quarters, we have maintained a stabilized asset quality, and we have been more capable in resisting to those adverse risks. The nonperforming loan balance was RMB 76.6 billion and down by 5.676%. Among these, the NPL in the corporate sector was RMB 58.2 billion, and the retail NPL was RMB 18.4 billion. And the nonperforming ratio now is standing at 1.47%. The special-mention loan decreased by RMB 5.2 billion or down by 0.26 basis -- percentage points.
And finally, we will talk about the outlook. Complex -- with the complex situations, we will follow closely about the developments in the market and also the trending of the market -- the regulatory policies, and we will strive to lay a solid foundation for fulfilling the whole year target.
And next, we'll have several priorities. One is, we will better serve the -- increase our capacity to serve the real economy, and we will focus the national initiatives and strategies and better upgrade our loan portfolio, and we will also further promote our "186" Strategic outline to accelerate our transformation and development. And we will further promote our innovation of the financial technologies and integrate our onshore and offshore platforms for us to ensure a quality development of the whole group. We will also encourage the application of [ defense ] impact for us to be more tech empowered and to better serve our integration of the online/off-line platforms.
The fourth point is that we still need to stick to the principle of prudential operations and prevent major financial risks. We will have more refined and targeted management of certain areas of high risk, and we will further reform our risk management framework to prevent the risks exposure in certain areas.
So this is the briefing of -- and a review of the first 3 quarters. So that is all my introduction. Thank you.
Thank you for the introduction. Now we're happy to take your questions. The floor is open.
So the first one is from Huatai Securities, Mr. [ Jan Jao Kwang ].
So my question is twofold. One is about the NIM performance. We have noticed that in the first 3 quarters, the NIM has decreased by 1 bp. So in the downward trending of the pricing, what do you think will be the impact on the NIM in the future? The second is a new notice issued by your bank is the Social Security council did not decrease its shareholding of Bank of Communications. And it hasn't issued the further plan of reducing its shareholdings. So according to your knowledge, what is their plans in terms of the shareholding in your bank?
So thank you for your question. We will have the -- [ Mr. Chen ], general manager from the financial investment department to answer your questions.
Thank you for your attention to the NIM. Actually, NIM has been a major factor in influencing the performance and the indicators of the commercial bank. It is a major metric. In terms of our NIM performance of the first 3 quarters, we see a stabilized trend. At the end of the first 3 quarters, we grew year-on-year by 10 basis points and -- or 6 basis points compared to the end of last year. Looking ahead, LPR repricing, the new policy, we think, will weigh down on the yield on the incremental loans. But from our perspective, judging from our current -- this year's performance, we are now optimizing the liability mix. For example, we further expand our customer base and upgrade our financial technology system. We have been increasing our cost for their liabilities. And at the same time, we are now grasping the good timing to replace those previously high cost liabilities. Through these measures -- or our anticipation is that the whole year NIM will be maintained at 1.57%. So this is a general outlook.
We believe that the NIM will be stabilized, but this will face some pressure. It's also true in some other big state-owned banks. They share this belief and expectation with the introduction of the new policy on the pricing. But with our adjustment on the pricing our assets and also reducing the liability costs, we are confident to maintain a stabilized NIM level in the next year.
And the second question about the reduction of the shareholding of the Social Security council. In the past 6 years, the Social Security council did not reduce its shareholding in our bank. And it hasn't. We haven't received any notice and plan from the council to reduce their shareholding. They are a large shareholder, and they are also our institutional client.
You have to also notice that the Ministry of Finance has allocated or transferred part of its shares into this council. So we will maintain a close cooperation and ties to this institution.
Now we will have the analyst from UBS.
I have 2 questions to ask: One, about deepening the reform. What is the progress in this area? And also, when we were at the press result, the result of the beginning of this year, there was a owners share -- staff ownership holding scheme. So well, this can be expanded to more staff.
And the second question is on asset quality. We have seen is an optimistic trend of the asset quality. Can you share with us your -- the major points of risk in the corporate and the retail sector and also the asset quality at the end of the third quarter of the credit card. Also, do you think -- the trade dispute between China and the United States has been lasting for more than 1 year. Do you think this will weigh down on the asset quality of your good bank?
I and my other colleagues will answer your questions one by one. The first question about deepening the reform. As you have noticed, we have further launched our deepening -- our reform work. We have the "186" Strategic outlook to further implement our BoCom strategy. And also at the same time, we have to deepen our reform. By deepening reform, we had 3 or 4 priorities set in the beginning of this year. So these 4 areas is the remuneration reform, technological empowerment and the credit risk. And the third is the restructuring of the channels and its upgrading. So these are the 4 areas for our deepening reform.
At present, we have seen this progress as follows: In terms of the remuneration, where there's several things. One is that we had an investigation or examination or a survey on those excellent staff who were born after 1980 to let them be the managers at the branch level. And also, we have some adjustment to the salary of the staff. We further increased our resources to those front-desk employees who are performing well.
And the third work is that the professional manager reform in the 37 provincial branches, those leaders with front desk or professional managers. So this will be a very market reform -- market-based reform. And the last measure is that we continued our incentive mechanism for the middle-level leaders.
And second area so far where deepening reform is, is technological empowerment. One point is we initiated the 10,000 talent for the financial technology upgrading. Within first year, we hope that we can cultivate a total number of 10,000 fintech talent. And in this year, we have already recruited 200 FinTech staff. And also, we will recruit the FinTech management trainee to further enhance our capacity in terms of the FinTech. In particular, to ensure our smart transformation and upgrading of our IT system.
We are implementing this upgrading, and we have seen some preliminary successes. For example, the advances in the biological screening and identification, big data, block chain, all this technology have been applied in promoting sales, risk management, et cetera.
In promoting the security of the infrastructure, we expedited the IT systems transformation from the centralized system to a distributed system. And we have made great breakthrough in this area.
They have to reverse different services which integrate different scenarios for our users. In the past, the management separated. The new mobile app can deliver [indiscernible] financial and life coverage. By the end of September, the DAU [ of the DAA ] is around -- the monthly active user is about 33%. While our credit card mobile active users is around 24 billion. This is the second project. And the third project is the risk management and the credit management. For our provisional branches, they have established the risk monitoring system and the client unified map has been ready for search for all of our employees. And we have also put our risk management procedure over the corporate procedure. We now have mobile in the [ pre-close coverage ] approval procedure. In some of our branches, they have begun the green channels for credit approvals, which has shortened the time and improved -- enhanced the customer experience.
The fourth project is channel transformation. The transformation, we have these comprehensive market intelligence outlets, the corporate and private client service capacity also has increased.
Our branches -- our process gets deployed in the corporate finance business. And also, we have transformed the tenets for the client managers. And we have also tried to make our branches more smart. And our product make the client -- make it more convenient for clients to do the business by themselves. And our -- and we have handheld equipment to help our client managers with marketing, and these projects are still underway.
And we also have a question for shareholding of our management. The question will be taken by [indiscernible].
So the risk management will be taken by Mr. [ Chung ] from the risk management area and also Mr. [ Wang ] from credit card center.
For the risk factor deal for our corporate business, there are a lot of factors. First, the external economic environment will have a big impact on the risk. We finished the [ subscription ] and also the slowing GDP growth, and this will all have impact on the corporate risk.
The second, the policies registry will have impact structurally, especially the government liability, even the corporate real estate, and all of this will have an impact on existing corporate portfolio.
The third factor would be industry. [indiscernible] for the commercial plans, for the manufacturing industry, the forestry, agriculture, fishery, [indiscernible].
The fourth factor will be the cost themselves. We have similar measures to help to address the risks such as the monitoring prevention of risk, and we use Big Data to see that smart choice control system can help us to address the risk on the way for the corporate business. And so we have optimized our risk address mechanism and accelerate the -- address significant risk so that we can control the corporates business risk at a stable level.
The second question is about the trade friction and its impact on our asset quality. So the trade friction, it's related to the China-U.S. relation, and also, the world economy as a whole. And as we are in the cyclical industry, and of course, we are on this impact. And we have done a number of [ inflections ] on our portfolio. The risks are controllable for most of our clients. The direct impact is for tax clients. That's the manufacturing industry with export to U.S. And also -- second, C-corporate reliance on the imports from U.S. That's the corporate with pressure on ForEx liability. And the fourth culprit is corporate-related to the trade between the 2 countries. We have taken some measures to address the potential risks.
In the future, we've taken number of measures. We will optimize our client structure, support the clients. And for the clients with temporary difficulties, we'll continue to give them support so that we can cope with the impact together for the clients with major risk. And we will try to reduce our exposure.
And for the credit card risk as well, the question will be taken by Mr. [ Wang ], the head of the credit card center.
Thank you for your support to our credit card business. In 2018 in terms of the card issuance, monitoring and the traction, we have taken a number of risk management measures. We have enhanced our tenders for the high-risk clients in regions. So we use third-party database and increased our client entry standard.
Up to now, the key risk indicator has all improved. By the end of September, the newly-added clients -- or the newly-added monthly NPL ratio has been dropped by 3 continuous months. And also, the [indiscernible] clients is the lowest in the recent 2 years. The NPL ratio and overdue ratio has been up by -- has been down comparing with the beginning of this year. With effective control of the risks [indiscernible] financial credit card business started to recover its growth rate.
We will continue to use stable -- we will continue to follow the stable growth. We will improve our risk management to stabilize asset quality, and we'll also [indiscernible] acquire new clients and increase efficiency for our existing portfolio and field branch execution.
And for the incentive program. Mr. Guo will add some points.
Since 2017, we have [indiscernible] programs for the A+ page shareholding of the senior management. More than 400 effective management have used their own funding to buy in 1 -- 15 million A share and the 10 million H share. So this has helped us, first, to improve our incentive programs and make it more connected to BOCOM's transformation.
In September 2018 to September 2019, the -- our senior managers in the operating institute have been granted with 20,000 shares. Among those, 20% is bought by the [indiscernible] own funding, and the lockup period is 4 years. In the future, BOCOM will follow a national strategy. And if part of these are issued, then we will have pilot programs for the employee shareholding.
The next question will be asked by [indiscernible] security.
[indiscernible] security. Thank you, first, in the management to give me this opportunity. I have 2 questions. The first question, CBRC has issued its guidance on the structures deposit. From your perspective, this new regulation -- will this new regulation have impact on the bank? And can you introduce the size of your structure deposit? Has the increased volume as well as your [indiscernible] issue at BOCOM, so will this have some pressure, this new regulation have pressure on BOCOM?
The second question is about your credits. And also, the yield of the products; its trends in 2019 and the outlook in 2020. And I want to understand the demand of your -- of loan from clients. I believe in the beginning years, that your plan is around RMB 380 billion. So how much has been completed and what's the plan in the fourth quarter? And also, what about the potential loan projects in the third quarter of 2019? So those are my two questions.
Your question will be taken by Mr. [indiscernible], the head of [indiscernible].
And for the new regulation, as a notice on the restricted deposits, I think the target is to regulate -- to standardize the [ environment ] of structured deposits. It has -- it includes sales and the valuation and transaction and information disclosure. I think this sector is good news for BOCOM because our product has been standardized, and we have qualification for derivative trading. So this new vision could help us to develop structured deposits. And based on the clients' demand and also the cost management of the bank, we will continue to effectively manage structured deposit. The [indiscernible] by the third quarter concerning with the first quarter is relatively the same. So I think the new regulation's impact on our deposit -- structure deposit, is actually positive. So in terms of the question regarding the loan -- the yield on the loan in terms of the trend of the change, it is in line with the market trend. So we see the pricing -- the newly expanded loan if pricing is going down. It is also true of our bank compared to the same period of last year.
But overall speaking, it is in line with the market trend, and it is also in line with our BOCOM's industry positioning.
Looking ahead, after the introduction of [ LTR ] after the introduction of this new pricing mechanism, the transmission mechanism, this will be more conducive for our commercial banks to serve the real economy. The loan rate will be further go down, and this is also in line with the market environment. As to the last quarter's loan allocation, the whole year's allocation will increase by 7% to 8%. Compared with the beginning target, we'll further arrange our loan expansion in terms of our -- according to our previous target. There will be no major fluctuations in this loan allocation.
So we think we can fulfill the target we set in the beginning of this year. That is my answer.
Now let's have the analyst from Citibank.
I have 2 questions. One is regarding the establishment of the wealth management subsidiary. We see that the noninterest income has grown -- has increased remarkably as a contribution by the subsidiary. So how will the subsidiary will take over those responsibilities that was supposed to be taken by the bank? So what is your anticipation for this subsidiary?
The second question is about the capital replenishment plans. For example, the issuance of the convertible bond. What is the progress of the issuance planning? And do you have any other plans to replenish their capital.
The first question will be answered by Mr. [indiscernible], head of the Interbank sector.
The subsidiary was established in June the 13th in witness of the Mayor of Shanghai. At present now, the factory has issued one product. The balance is [ 3.5 balance -- RMB 1 billion ]. The subsidiary in all those big state-owned banks, they face the same situation. And the existing products compliant with the regulator can be transferred to the subsidiary. This is also the situation facing other commercial bank subsidiary.
Previously, signed contract was between the bank and the customer. But as long as those products are compliant with the regulator, these contracts will be transferred to the subsidiary. In this area, we have altogether RMB 300 billion worth of contract to be transferred to this new subsidiary. Therefore, at the beginning -- at the end of this year, there will be an increment of RMB 300 billion. The off-balance is more than RMB 900 billion. And the bank will also issue some less management products that are already existing. So in next year, such the cost of this liability funding and also the yield of those assets, the contribution by the subsidiary, in next year, we'll have a total contribution. That is the same with the current years of contribution that will have the same share of contribution to the whole group.
And the second question will be asked by the head of the financial department about the capital replenishment.
Capital is a foundation of the operation and development of a commercial bank compliant with the regulator by the -- our bank has adjusted their plan in terms of the mid- and long-term capital replenishment. There are several factors to take into account. One is the current and existing -- the redemption of the current core. Now we have the Tier 2 bond and also the convertible bond to be mature and to be redeemed. And also by product promoting our businesses and the -- resisting the potential risks, we will have a year-to-year plan for the capital replenishment. The regulator, in terms of the capital replenishment, they are very supportive in this area. You have noticed that we have issued RMB 40 billion worth of Tier 2 capital bonds and also the perpetual bonds. In September, we had a very good timing, time window, especially the issuance of the perpetuality. The coupon rate was 4.2%. So this is the lowest pricing among all the issuance of the perpetual bond issued by the commercial banks. So we will choose the best timing suitable for our bank to issue the appropriate debt instruments. And in terms of the convertible bonds, since previously, the CSRC has an approval, but the approval has already been mature, it has already been overdue. So the -- in terms of the issuance of the convertible bonds, we still need further discussion with the CSRC. So we'll keep you noted. And this is not a good timing for us in terms of the price of our shares at the current stage.
Next, we will have an analyst from CICC.
So we have some change of the indicators. One is the growth rate of the loan book. The growth rate of the corporate loan is faster than the retail loan book. What do you think of the -- so what do you think of the transformation of all those Chinese commercial banks in terms of the corporate and retail banking mix? And also the deposit. We see the retail deposit has grown by more faster than the corporate liability and deposits. And also, the off the balance sheet, we have seen a rapid growth. And previously, there was a document which was lever stringent in terms of the announcement of that asset. So what is your plan to further reduce your exposure in those [indiscernible] assets.
The first question will be answered by the -- Mr. [ Sheehan ], head of the Retail and Private Banking sector.
In terms of the retail loan, grew less faster than the corporate loan book. I think there are several reasons. One is, retail loans including -- includes 3 areas. One is mortgage loan. The second component is the non-collateralized or consumption loan, consumer loans. The third is the credit card loans. The credit card will be calculated at the retail loan book. But the mortgage and the consumer loans, the balance is faster than the average of the whole bank. The credit card loan, due to the fact that we have seen -- there are some contagion of the risk from the B2B companies, there is an increasing trend of the risk exposure. So for this -- for those customers who have defaulted on other banks and other B2B platforms, the credit card -- the total balance has been decreasing year-on-year. So when these 3 components offset with each other, then the total average growth rate of the retail loan book is lower than the corporate loan book.
You mentioned the consumer loan and the mortgage loan, these 2 parts are higher than the average. It is about the exponential of the asset book. And in terms of the liability, the retail deposit has been growing faster than the corporate deposit. This is due to the good -- the benefit we have from the FinTech. And this effect has become increasingly obvious. Previously, our clients manager can only handle those mid- to high-end customers. For example, they used to only handle those 60,000 deposit decline. But now, since we have the Big Data and mobile banking, the empowerment from these 2 factors. So this machine can manage all those customers who have a smaller amount of the deposit, which is, for example, less than 50,000. So this customer base, they are -- they're all -- they will benefit from a large deposit base from this customer. And also, the wealth management -- in retail wealth management products when they become mature, they will become -- and now -- and 90% of the matured wealth measurement of products can be translated into new retail loans or retail wealth management products. So this will all lead to the growth of the retail department. So behind all this growth, we can see the empowerment of the FinTech on the retail sector.
The second question will be answered by [indiscernible]
In terms of the wealth management and [indiscernible] asset policy. At the end of the September, the off-balance sheet grew by 220% at the beginning of this year. The total scale has been increased by RMB 920 billion in a month, among which, the net worth products has been increasing and the proportion has been 36%. So from these figures, you can see the conclusion that on one hand, people have more money to invest. But due to some risk exposure of the mortgage -- on the mortgage loan, the property loan, and also the absorption of the capital markets, so the off-balance sheet wealth management products have been a demand investment vehicle for the general public. And for the -- so we have a huge demand in this area from the customer. We have a huge increase of our bank because the net worth products that are compliant with the regulator, and they also meet the demand of the customer, we have so many, this kind of products. The [ net worth ] products grew by 1.5x, which is the major reason for the huge growth. And also previously, we expand our personal AUM and the personal deposit. The personal AUM grew to more than RMB 3 trillion. So this has been a huge growth. So this all explains the growth of our wealth management products. So this is due to the products and also ourselves. This is about the growth.
And about the nonstandardized assets, we see the new policy from this year from the PBOC. This is a draft version of the new policy. In terms of the non-standardized assets, they will have a more stringent definition towards what is a long-term best asset. Especially [indiscernible] in those financial element markets. Previously, they were not recognized, as not an asset. But currently, they are classified as the long-term assets. So this was a negative impact or pressure on the ceiling of the long-term assets as a proportion of the total assets of 35%. And we had a stringent classification of the long-term best assets and our proportion is 17%, far below the ceiling of 35%. Therefore, we think we are -- so we're comfortable with the proportion. And this policy will be conducive for the long-term growth of this area.
Dear analysts, dear investors, [ we have reached our time ]. That is the end of our press -- the results announcement. Thank you for your participation and your long-term support and attention for Bank of Communications. If you have any more questions, you can contact our office of our Board of Directors. They will be willing to answer your questions and deliver services to all of you, and we hope you can take more time to visit our bank. So that is the end of our -- this conference call. Thank you.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]