China Construction Bank Corp

SSE:601939

Earnings Call Transcript 2022-Q4

[Changmiao Hu, Secretary of the Board]

[Foreign Language]

Dear investors, analysts, friends from the media. Ladies and gentlemen, good afternoon. Thank you for joining us in the 2022 Annual Results Announcement Conference by China Construction Bank. Thank you very much for your support and interest in the CCB. The results announcement conference today is held in Hong Kong and Beijing simultaneously through a video link. This conference is also live streamed for shareholders, investors and the public.

With us in person in Hong Kong, Mr. Jinliang Zhang, the President; Mr. Wang Bing, Vice President; Mr. Zeng Jianhua [ph], the Chief Financial Officer. In Beijing are Mr. Yong, Vice President, Mr. Zio Hong [ph], Mr. Lee Ming [ph]; Mr. [indiscernible]. Today, we also have Mr. Shi Ziantong [ph], Equity Shareholder Representatives, and Mr. Wang Hei [ph], Supervisor Representative; they are with us in the Hong Kong venue, and we have Ms. Low Fang Lei Lun [ph], Shareholder Representatives; and [indiscernible], Supervisor Representative in Hong Kong and Beijing. Present -- also present in charge and personnels from relevant departments of the headquarters.

The results of our bank for 2022 have been disclosed yesterday, and the results presentations have been published on the bank's website for your review. Before we take questions, Mr. Jinliang Zhang will give a presentation on the business operation of 2022 of the bank. Mr. Zhang, please.

[Jinliang Zhang, President]

Dear investors, analysts and friends from the press, good afternoon. Welcome to this results announcement conference. I'd like to express my sincere gratitude for your continued interest, trust and support. Today, we are here again in Hong Kong, seeing so many old and new friends face-to-face. I'm very pleased.

Next, I'd like to report to you on CCB's overall operation of last year and the focus of our work in the next phase. In the past year, we have thoroughly implemented the decisions of the CPC Central Committee and the State Council adhere to the general keynote of seeking progress instability insisting on high-quality development carried out the new development concept precisely and continues to strengthen the customer base and the quality and efficiency of operation and dealt with risk challenges and achieved good operation and financial performance.

By the end of 2022, total assets exceeded RMB34 trillion representing an increase of 14.37%, credit investment and bond investment achieved rapid growth. Total liabilities RMB31.72 trillion, up 14.77%. Deposits exceeded RMB25 trillion, an increase of 11.81%. Net interest margin RMB31 million up -- the net interest margin was 2.02%, ROA 1%, ROE, 12.27% comparable to the leading level of the industry, the NPL ratio 1.38%, down 4 basis points from the beginning of the year, the provision coverage ratio is 241.53% capital adequacy ratio 18.42% resulting a steady increase in asset quality and risk resilience.

We have continued to create value for our shareholders since the listing of our shares in 2005, CCB has paid a total of RMB1.0357 trillion in dividends. The Board meeting held yesterday recommended a cash dividend of RMB0.389 per share for 2022 to all shareholders totaling RMB97.254 billion, a dividend payout rate of 30% in recent years.

In the past year, we insisted our strategic leadership, integrating our development with the national development. We continue to cultivate new business momentum with traditional advantages serving the new development pattern with new financial practices. We explore new modes of support of real estate development actively participated in rental housing business and initiated the first rental housing fund in China and build a complete service loop from investment, financing management and exit. We lit the inclusive finance market with a loan balance of RMB2.35 trillion, up more than 25%, making our bank the largest financial institution in the world in terms of inclusive finance supply.

We stimulate business growth potential with financial technology with agile in responding to business needs internally and empowering social governance externally. We have built the brand of CCB cloud and accelerated the construction of digital infrastructure. We have built a comprehensive financial service system for rural revitalization. The balance for agricultural loans exceeded ¥3 trillion and public loans in countries exceeded ¥2 trillion, bringing financial liquidity to revitalize the rural areas. The balance of green loans exceeded ¥2.75 trillion, an increase of more than 40% and a record high, which strongly supported the green transformation of infrastructure clean energy and clean conservation and environmental protection made CCB a green bank.

The digital operation continued to be deepened. The Twin Star ecosystem of mobile banking and CCB life has begun to bear fruit. The number of mobile banking users reached 440 million. The number of users of CCB Life reached 100 million. We have undertaken the issuance of government consumption vouchers in more than 220 cities helping to expand domestic demand and boost consumption. Over the past year, we have focused our MIM business and responsibilities, but here to serving the real economy, deepening the structural reform on the supply side, and strive to achieve a virtuous cycle and hope prosperity between finance and real economy.

First, we continue to increase financial support and implement financial in the full and targeted manner providing support to the economy in the down cycle. We have added ¥2.39 trillion in loans, an increase of more than ¥370 billion year-on-year and added ¥935.6 billion in bond investment and maintained the top position in the market in terms of underwriting volume and subscription ratio of government bonds providing strong support to the rapid stabilization of the economy. At the same time, we also actively expanded funding channels, enhanced the ability to expand deposits and reduce costs and maintain the coordinated development of assets and liabilities.

Second, we optimized the resource allocation structure. Through strategic layouts, we optimized financial resources to specific areas and improving assessment mechanisms, we support major regional strategies and coordinated development. Beijing, Tianjin, Hubei, [indiscernible] Delta, Greater Bay Area and Chengdu, Chongqing, regions have increased their shares in our business. This credit in Central and Western and Northeast China have increased more than -- have increased year-on-year. The balance of infrastructure loans ¥571 trillion, an increase of more than 12%. The balance of loans invested in manufacturing industry is ¥2.24 trillion, an increase of more than 32%, the balance of strategic emerging industries is ¥1.47 trillion, support the stable and healthy end of the real estate market, increased the credit support for high-quality property developers guaranteeing the delivery of building with targeted financial services.

Thirdly, we continue to improve the ability to create value by adhering to asset-light and capital-light strategies, giving full play to the group's multi licenses and enhancing the comprehensive financial service capacity, we will need to strengthen our services to small- and medium-sized customers and long-tail customers. And adjust our asset allocation strategy according to the market situation, improve the yield of our assets, striving to expand low-cost settlement tons and tap into the revenue potential of refined management. Over the past year, we have adhered to the customer-oriented approach, integrated and optimized our 3 business segments: corporate, financial, personal and capital management to better serve our clients with focus and strive to create value for our customers.

Our corporate finance has been steadily advancing. We built a leading scale and convenient service system for public customers and corporate customers with 9.35 million institutional customers. The amount of non-discounted loans to public customers increased by ¥1.43 trillion. The Personal Finance business contributed more value. We continue to deepen our stratified group and graded personal customer managed system. Personal customers have reached ¥739 million accounting for 56.65%, personnel loans amounted to RMB82.4 trillion, maintaining its position as the number 1 bank in retail credit. Personal consumer loans amounted to around RMB300 billion, up 26%. Personal loans and farmer loans among other products have been growing very well.

The bank promoted the deep integration of digital services and wealth management, managing nearly RMB17 trillion in financial assets for personal customers, a record high. The capital management business developed steadily. The group maintains its professional and prudent position and enhanced its comprehensive service capabilities. The asset size of its financial market business exceeded RMB9 trillion, the asset management scale is RMB5.79 trillion. The asset under custody is around RMB19 trillion, maintaining its industry leadership.

The group also depends its financial service system for the elderly and ranked first in the industry for pension wealth management. Over the past year, we have promoted the improvement of our comprehensive risk governance system and strengthen the 3 lines of defense of business operations, risk control, compliance in auditing so that our risk management capabilities have continued to improve and effectively supported high-quality development. We continue to strengthen our credit risk control by adhering to the concept of comprehensive whole process, whole staff in the whole situation and performed well in key areas with NPL of public loans volume by 19 bps on the quality of loans in infrastructure, manufacturing in the wholesale and retail sectors have further improved. We actively and steadily helped to resolve risks in the real estate sector and the quality of related goods and services was at a better level in the industry. Risk classification was prudent and solid with the overdue rate 35 bps below the NPL rate and overdue NPL negative price reserves of RMB74 billion.

The risk monitoring and early warning system provided 98% of early warning coverage for large and medium-sized accounts with an average advance of 29 months. And 87% of early morning coverage for SMEs with an average 8 months ahead of time in terms of the warning, promote early detection and the control of credit risk. We strengthened the control of market risk, liquidity risk, cybersecurity risk and any other new types of risk and continue to promote the construction of a digital universe compliance system with solid effectively an anti-money laundering network and safety and stable business operations.

Over the past years, CCB's business development has been widely recognized behind our achievements, we have benefited from our phase for adherence to the decisions and deployment of the central party committee and the State Council, our thinking and exploration of the loss of economic and financial development, the joint efforts of the group's 380,000 employees and the support and the companionship of our customers and shareholders. This is the inaugural year of the comprehensive and thorough implementation of the spirit of the 30th of spirit and in addition and the 20th party Congress, it drew up a grand blueprint to promote the great rejuvenation of the Chinese nation. And after the 2 sessions, the Premier [indiscernible] attended a press questions from the journalist summarizing the outlook for Chinese economy. It will break winds and waves and sell towards a bright future.

Despite the great uncertainties in the international economic and financial markets, we are confident in a full of expectations for the long-term positive future of Chinese economy. CCB will actively seize the vast opportunities in China's modernization process. fully accurately and comprehensively implement the new development concept ride the momentum and the strive to achieve new breakthroughs in quality development.

In the new year, we will maintain our strategic determination, deepen our financial initiatives and promote the convergence of the first and second curves. We will consolidate our first-mover advantage in housing leasing strongly support the construction of subsidized rental housing, actively participate in the issuance of rental housing REITs, bring into play the demonstration effects in a driving role over housing leasing funds, explore new models of real estate financial services and contributed to the stable and healthy development of the real estate market, promote the construction of a greater inclusive finance ecosystem and improve the new digital inclusion model, we will vigorously promote the application of the [indiscernible] platform, promote the building of ecology and smooth operation and consolidate our leading position in the market of inclusive finance, strengthen the -- empowering role of financial technology continued to improve our technological governance capabilities, improve our R&D and operation structure system, strengthen our digital operation capabilities and deepen the integration and development of the Twin Stars of mobile banking and CCB Life.

In the new year, we will firmly fulfill our mission and give full play to our strengths to serve the real economy. Construction bank was born out of construction and has strived because of it. Wherever there is construction, there is a construction bank. And this has been deeply rooted in our DNA. We will continue to enhance our ability to serve the country's construction, continue to increase our credit investment, support the promotion of a major national strategies and to do a good job in supporting the financing of the 2 new and 1 priority. We will help develop the basic role of consumption and the key role of the investment, accelerates the development of personal consumption credit, effectively meet reasonable housing finance needs and strengthen resources going in manufacturing, science, technical innovation, green and low-carbon areas.

We will deepen and deepen the layout of common prosperity finance to help serve the revitalization of the countryside actively explore County business expansion models improved the integrated online/off-line service system for the revitalization of the country side and promote the expansion and penetration of products and services such as Immunoexpress. With the power of financial technology, financial services are seamlessly integrated into the production and lives of urban and rural residents, making financial services a basic right available to everyone and the tool for the public to pursue a better life.

In the new year, we will accelerate the construction of a customer group grading stratification and classification management system, deepen group synergies and comprehensively improve the marketing and the service capacity of our customers as well as deepen the integrated operation. The competition for commercial banks is ultimately the competition for customer service capabilities. We will continue to improve the group's integrated management system, strengthen the synergy between the parent and subsidiary, the head office and the branches, the various business segments in domestic and overseas branches and the online and off-line sector, so as to enhance the overall management synergies and meet the integrated and diversify the financial needs of the customers.

Deepen the synergy between financing and intelligence continue to optimize the layout of assets, drive the development of price setting, consultancy, settlement, investment banking and trading business and accelerate the transformation to light-asset and light-capital, strengthen the integration of domestic and foreign currency operations effectively consolidated the foundation of foreign currency business capacity, further enhance the level of cross-border business services and strengthen the ability to participate in international competition. Deepen the balanced development of asset and liabilities to optimize the allocation of major types of assets and liabilities, strengthen measures to stabilize and increase the deposits balance quantity, price at risk and strive to achieve a unified development in terms of a quality structure, scale, speed, efficiency and security.

In the new year, we will enhance our bottom line thinking, better coordinated development and safety, strengthen market research and judgment, strive to stay ahead of the market cycles and risk curves. Firm regard the bottom line of risk compliance. We will always respect and follow the laws of financial development, insist that our business operations are bounded by our risk management capabilities and always give top priority to improving the quality and efficiency of our development. We will continue to optimize and improve our comprehensive active intelligent modern risk management system, improve the group's unified credit risk management system and ensure that the core indicators of asset quality are in a reasonable range.

We will pay close attention to financial market fluctuations in international developments and guard against new types of risks and external shocks. Continue this -- continuously strengthen internal control compliance and AML capacity building to effectively protect the rights and interest of financial consumers. Standing at a new historical starting point, we will ride on the wind of the era of Chinese modernization create a better future with practical work and continue to create greater value for our clients, shareholders and society.

Thank you, all.

[Changmiao Hu, Secretary of the Board]

Thank you, Mr. Zhang. Now we will take questions. This conference is taking place in both Hong Kong and Beijing. We have a lot of investors joining us. So we will alternate questions between Hong Kong and Beijing conference rooms so more analysts will have opportunities to ask questions. We suggest that you limit your questions to only 1 each time. And before that, please identify yourself and your affiliation. We will start from the questions in Hong Kong. The gentleman on the third row.

[Richard Xu, Morgan Stanley]

Thank you for the opportunity. My name is Richard Xu. I come from Morgan Stanley. Congratulations on the stable performance of CCB. Last year was full of challenges. But despite that, most of the indicators have shown very steady growth what are the drivers behind the stable performance? In 2023, the economy is becoming stable and it's moving upwards. So do you have any other new plans and new strategies to address that?

[Jinliang Zhang, President]

Thank you, Mr. Xu. In 2022, faced with complex situations, the CCB implemented the deployment of the CPC Central Committee and the state council and achieved a stable and excellent business performance last year. Net profit was up by 6.33% ROE maintained at a comparable level. The first-tier capital has increased instability. Net NPL ratio is down steadily and the proficient level is on the rise. Our liquidity risk indicators have been in line with the regulatory requirements. Last year was a difficult year. We have strengthen the balance between security liquidity. This is [indiscernible] faced with the risks in the macro economy, we've been committed to our responsibility as a major bank and enhanced our credit expansion, stabilizing the economy. [indiscernible] was down last year, and there was some negative impact. But internally, our net interest spread was down by 11 basis points, but the dollars of interest-bearing assets is up by 11.91%. The net interest income is up by 6.2%, which is satisfactory.

In 2023, I believe the banking industry will embrace a better economy. The new leadership of the Chinese government aims to expand domestic demand through reform and innovation and address and mitigate possible risks. This combo of policies will create better opportunities to banking industry in China. In 2023, we will fully implement the spirit of the 20th National Party Congress and served the real economy by mitigating financial risks and deepening financial reform. We will stick to our main responsibilities and main business seeking progress from stability and improve the quality and efficiency of our operation, providing better services to our customers and creating greater value to shareholders.

I'd like to focus on some specific areas, especially increasing revenue and reducing cost. In terms of reduced -- increasing revenue, first of all, we need to maintain the stable progress in net interest income. We have a very high asset adequacy ratio. We will continue to offer greater support to the real economy, so credit expansion and bond investment will rise in a stable and reasonable manner our capital adequacy ratio will be enough to -- for us to do that. We need to look for better structured business and high efficiency. Last year, the asset size of our bank was nearly 35 trillion. So there is some potential for structural reform over the years. We have been increasing our efforts to adjust major assets and reduce low interest assets, improving on high interest assets like bonds.

Last year, the proportion of these 2 asset types was up by 0.79%, contributing a lot to business growth. Besides, the CCB attaches great importance to retail credit services, personal loans are 39% in total loan size. Last year, retail loans were not in good markets, but retail loans of our bank maintained very good growth. Mortgage balance was up by 90 billion. Consumer loans and small business loans have achieved 27% and 83% growth, respectively. This year, we will see the opportunities of economic recovery and see and increase credit expansion, especially in retail loans, this is about interest income.

Secondly, on non-interest income, as you see last year, bank fees and commissions accounted for 15.31%, making us 1 of the best-performing banks in the industry. In 2023, we will seize the opportunities of economic recovery and give full play to our advantage of having multiple licenses in bond issuance, consultancy, wealth management, custodian services, credit cards and consumer loans. We will make us bigger effort Other noninterest income, other than bank commission income, we will keep a close eye on the changes in equity and bond market and adjust our off-balance sheet and in balance sheet assets, managing risk exposure well, making sure that we can reduce and minimize the market turbulences and its impact on our noninterest income.

On cost, we need to reduce cost and improve efficiency by better cost management. There are 3 aspects. The first 1 is asset cost, capital cost, we need to strengthen our thinking of operating like a platform and digitalizing business, we need to build scenarios and building ecosystems. So our financial products can be integrated into customers' life scenarios, we need to strengthen our customer base, both in individual and corporate customers. We offer diversified multiple financial services to customers by offering them by -- we will receive a low-cost capital. We strengthened the stratified and categorization of customer management.

There were a few numbers which were covered in the presentation. For example, personal customers reached 739 million. Mobile banking, 440 customers. CCB Life saw over 100 million customers. Corporate customers, 9.35 million. RMB settlement accounts 13.27 million customers. Inclusive finance, 2.53 million customers. We are expanding wealth management business, achieving very good results. Personal customers AUM is nearly RMB17 trillion and private banking AUM reached around RMB2.25 trillion. The asset management size, including fund, wealth management, trust, pension, etcetera, has reached nearly 600 million. Custodian services have surpassed 19 trillion. We believe with the implementation of our strategies and a higher customer base, higher AUM in personal loans and FP total size, our liabilities and capital cost will be improved a lot, that's for capital cost.

Another cost comes from business operation. Last year, cost to income ratio is 28.25%. A good one compared with other banks. In expenses, we have seen increase in staff expenses and a decline of 5.81% in non-staff cost. We have been very strict in reducing expenses, but we strengthened our investment in strategies and technologies last year. We invested RMB23.3 billion in technology accounting for 13% in our expenses.

In the new year, we will strengthen our efforts to control cost, minimizing regular costs so we can spare more investments for strategies and technologies as well as customer expansion.

The third one is to reduce the cost of credit services. Credit cost is the highest among all the costs for a bank. The cost was 0.66 down 1%, making new contribution to the business growth of the bank. In the next year, we need to strengthen risk management, and we need to learn the lessons from the European and U.S. banks, which went through some crisis, we need to optimize our risk management system, and we need to adjust our asset allocation strategy. Dynamically, we need to coordinate credit risks, liquidity risks and market risks, so we can with stand the test of market cycles and economic cycles and become a valid stone for national economic development. Thank you.

[Changmiao Hu, Secretary of the Board]

Thank you. So we now pass the floor to Beijing [ph].

[Unidentified Analyst]

I'm from CCTV, and we have also noticed that there is -- what are the credits are going into in addition, considering the current financial situation and what are the credit expansions and the extensions will mainly go into which area?

[Changmiao Hu, Secretary of the Board]

So we have Mr. Yong [ph] from Beijing to answer this question.

[Unidentified Analyst]

Okay. Thank you. Thank you for your question. Yes, indeed, we pay attention to credit expansion and the credit expansion is also a core area of our management work and for the whole of last year for CCB we have carefully and prudently implemented the parties spirit. So -- on one hand, we need to extend the credit well. And the second, we need to extend it to the right areas. And in the last year, we have also realized some very fast credit extensions. As we have heard, with our fast credit extension, and there is an increase of 12.7% and the total amount is 2.39 trillion. So the scale is really very big. And there are 2 questions in your question just now, and 1 is on directions in the second leap and which areas are we going into? And let me give you a set of data for 2022. Hence, this will help answer some of your questions. And first is inclusive of finance. And again, this is an area whereby our government and our party focuses greatly.

And for last year, we have about 470 billion increase. And the speed is 15.29% of increases. So this is a very important area of a credit expansion increase, and this has ensured where inclusive finance customers a steady growth. And the second is in manufacturing and in green industries. This is an area whereby state council pays great attention to and is guiding everyone to go into this area. And for this area, our growth has exceeded 40%. So this area for green loans as well as this sector of growth, and you can see that it's faster-growing.

And thirdly is in the new industries, our growth has reached 60%. So this, again, is a very fast growth. And the third area is for the revitalization of the countryside. And we have heard that for countryside revitalization has already exceeded 3 trillion, and the growth has reached 21.8%. So for CCB, this is a huge area of a market for us. In addition, the asset quality is very high.

The fourth dimension is to play our strength, which is infrastructure. Actually last year from the central government and state council, they have also guided very fast for banks to go into infrastructure and therefore, we focus on the 2 new and 1 priority work. So this is the area of work that we focus on and for infrastructure the balance is already at ¥5.72 trillion, and so the growth is roughly in line with the group's growth.

So number five, and this is to support the personal aspirations for a better life, and we actively support our citizens for their structural demand as well as upgrading of housing demand. And in addition, we also support consumption upgrading and to support some of our SMEs and micro businesses. And here, for personal consumption, and it has gone up by 28%, and for mortgages has gone up by 80%. So you can see that all of these figures it has reflected whether it is in terms of the growth for volume and the speed we have really sped up. And in terms of targeted expansion. We have also realized our targets.

And in terms of 2023, we have the following areas that we focus on. First is in terms of volume. We need to maintain stable growth. At the moment, we have just rebounded from the pandemic the economy is in the early stage of a recovery. As we have said, as a major SOE bank and we need to shoulder our responsibility to continue to help the real economy and to ensure the stable recovery of the economy. So you can see that from beginning of this year. Yes, indeed, in terms of the demand for credit is still quite strong. At the moment, the competition in terms of pricing is still quite aggressive. And therefore, we need to realize a stable growth.

Second, in terms of the rhythm, we need to be faster. So we need to look at the real economy's demand. In addition, we have also looked at our previous 4 quarters of expansion in different areas. And based on this, combining with the need of our customers, and we are investing in a reasonable fashion so that we can move forward. In the first 3 months of this year, we can see that actually, we are ahead of our peers. In addition, in terms of structure, we will continue to improve our structure as we have heard from Mr. Zhang, and we will continue to consolidate our strength as a retail bank. In the meantime for our personal credit there has been some dampening. And we believe that in the next few months, we will see some recovery and perhaps for some of our small farmers in a small business and so proprietary business, and we will see some recovery, and we hope that we can achieve some breakthroughs.

And on corporate business, we need to be targeted and precise and to look at precision finance and precision finance is an area that we have focused on, and you have also seen that we have made deployments in all these areas. So we will launch new products in precision finance.

In terms of manufacturing and green finance, innovation, technology and on the basis of last year, we'll continue to grow, and we will continue to push forward the development in these areas. In addition, we also have an area that we have gone in this year, and this is basically looking at the current situation whereby we are trying our best to satisfy the personal aspirations for a better life. And this area is mainly for education, health, sports, tourism, etcetera. And we are calling this the happiness sector here and focus on the well-being of our citizens. And so those are my answers for your question. Thank you.

[Changmiao Hu, Secretary of the Board]

Thank you, Mr. Cui. Now back to the Hong Kong venue.

[Unidentified Analyst]

Thank you, Mr. Hu. From UBS. Thank you, Mr. Zhang for visiting Hong Kong, along with your delegation. I'd like to ask about your asset quality. The asset quality of the bank has maintained a stable situation despite the difficulties in the last year. I'd like to ask about the reasons behind, I guess, there were difficulties in different aspects like inclusive finance, but retail business, including mortgage and credit cards, is looking at higher NPL ratio. So in this year, which segments do you think we'll expect some problems that are with special attention? On top of that, from a provision and credit cost perspective, provision was down 50% compared with last year. And how do you look at the possible level of provision in this year?

[Jinliang Zhang, President]

Thank you. Long time no see. Last year, the NPL ratio was 1.38%, and special mention rate was 2.5% provision rate, 214.52%. There are two things. Number one, CCB has a very prudent and solid categorization of asset categories. Our NPL rate is 1.38%, but default rate was 1.03% and the Caesar difference is negative RMB74 billion and it has improved for 3 consecutive quarters. So our categorization is very stable and solid. Second, on provision the NPL was RMB292.8 billion, but our provision is above RMB700 billion, RMB772 billion. It's 2.5x the NPL. So we have sufficient capability to cover current risks, and we are fully confident to mitigate possible risks.

In other segments, corporate loans see an NPL ratio of 2.08%, down year-on-year. Personal loans, see an NPL ratio of 0.55%, which is slightly increased, but it's still at a lower range. You are interested in personal mortgage loans, the NPL ratio is 0.7% and it's up by 0.17% year-on-year, which is up to our expectation, and it hasn't had any impact on the asset quality of the bank in general. As for 2023, the asset quality of the bank is both affected by the real economy and also its own capabilities to control risks. From a macro economy perspective, we are very confident as the Premier Lee said, it will break wind for a bright future. As for our bank, we believe that has always maintained [indiscernible] for internal risk control. In the coming year, we need to strengthen internal risk management and continue to manage our existing loans and other assets and dispose of nonperforming loans in a good way. We will safeguard our in balance sheet like protecting our own eyes.

Specifically speaking, in new loans, we will be more careful in customer selection and concentration risk management so we can invest our credit in the right way. We will adopt a so-called see through principle. So in our group and in both China and abroad and in subsidiaries. And in the headquarters every type of asset will be under management, adopting the same risk appetite and risk management standards. We need to make sure that the risks will not be passed through subsidiaries and headquarters, and we need to prevent the implicit concentration risks and cross dissemination of risks between different subsidiaries.

In terms of existing loans, we need to give full play to fintech and continue to strengthen the monitoring system so we can discover and identify risks as early as possible and dispose of them. As for existing loans, we need to strengthen our operating thoughts to think out of the box in risk management method. As for promising enterprises, we need to provide active financial support. At the same time, we need to make a bigger effort in disposed nonperforming loans, adjusting credit structure and offering very good support to the asset management in the future, we are capable of managing different types of risks well. We believe in 2023, the asset quality will be in a normal range and credit cost will be maintained at a stable level.

[Changmiao Hu, Secretary of the Board]

Thank you. We now go back to Beijing. So we have this gentleman in the third row please.

[Unidentified Analyst]

Thank you. Thank you for this opportunity. This is [indiscernible] from CICC, and I would like to ask with respect to the European and American banks risk events and what are the impacts on CCB? And second, what are the premium what are the impacts on your business? And thirdly, and what has done in this area.

[Changmiao Hu, Secretary of the Board]

Well, we will have Mr. Ji Zhihong to answer this question.

[Zhihong Ji, Vice President]

Thank you very much. Actually, the question that you have asked is a question that in the market and a lot of thinking about what has happened and a lot of reflections. And so first of all, in terms of Credit Suisse, and we do not have any exposures and the direct impact is very small. And even if we talk about indirect or derivatives and the impact is very limited. And our analysis are as follows.

Looking at the market, we can see that the monetary policy and we are not very correlated with the international world, especially in Europe and America, you asked about the spillover effects and our monetary policies are always very stable. And in terms of the financial system as a whole, we have very sufficient liquidity. And for our financial market, it is operating very smoothly. So this is 1 question.

Second question, I would like to emphasize in terms of the group, we continue to adhere to the very robust and stable policy. And just now, Mr. Zhang has specifically mentioned about this point, so I won't go into details. We will continue to make sure that we will consolidate the relationships between the parent and the subsidiary. In addition for overseas business, we continue to focus on our development, and we focus and follow the European and American risks. And in addition, we look at the duration management and we look at this with plenty of stress testing. For Fed has hiked for quite a while, and our relative business have maintained a very good operation. In terms of the duration management and it is a very short duration and in terms of the fluctuations in the international market, and we have plenty of capability to cope with this.

And the third answer is that we look at the management of liquidity and liquidity's safety. This is our bottom line. So overall speaking, for our group and in terms of our business expansion, it is all based on a robust asset, and we always look at the merging of our total volume and assets. Just now, we have heard Mr. Zhang talking about continuously improving the structure of our assets and looking at our liabilities. We have many different channels. And we have many different types of customers. Therefore, this is a very stable. And in terms of foreign currency, where we continue to manage this with the capital allocations and for overseas banks. And in terms of our pricing, and there is a great match for our group, we continue to follow the liquidity management for the systematically important banks, especially for overseas institutions as well as for the parent company and subsidiaries, the liquidity management, and it is always at a stable and robust level. And all of these are above the requirements of the regulators that you have also managed -- talked about the management of market risks.

And overall speaking, the management of liquidity and the market risks are well correlated. And for the group, we continue to adhere to very prudent investment policies and we talk about and emphasize a fast response and whilst exploring management, and we also have 3 aspects of importance that we focus on. And 1 is in terms of the total system, we continue to complete the risk system and for our risk control system department, and they will be going into the front line and to understand about the business and to cover all our counterparties and we focus on a comprehensive risk management as well as a whole exiting system.

And secondly, it's also something that we continue to explore, and we have seen good results, which is that we continue to enhance the empowerment of technology to have more rules and to make sure that the traditional risk control is moving into the smart, intelligent risk control and in terms of our risk control that is in place. And through this new risk control system, and we have established our investment business and which is helping us to establish our risk management automated warning system in to help us to manage the front, middle and back office and to help us in terms of our price setting and as well as the valuation and stress testing, and this has enhanced our analysis capabilities.

On this basis, We would also like to talk about with the support of this information system. And for us in our group, in terms of coping with these different risks we have established the mechanisms and completed the system and the systems capability is to continue to be unleashed in terms of the risk management timeliness continues to be improved. In the past 2 years, we have followed very closely, for instance, Credit Suisse as well as the major loss incurred because of the derivatives trading for CCB.

In terms of the hedging business, we have also taken active measures and with the high interest rate going on and with the instability in the financial market, and we also see the interest hike by the Fed and the impact on the financial derivatives and these effects are continuing to spread. Going forward, we will continue to focus on the macro economy as well as the changes in the market and to do our jobs well and to make sure that we will hold on to our bottom line and to better coordinate our business and to ensure that CCB's development is for the long term. Thank you very much.

[Changmiao Hu, Secretary of the Board]

Thank you. Let's invite a question from friends from the press in Hong Kong.

[Unidentified Analyst]

Good afternoon, management from Phoenix TV. We know that the downward pressure on net interest margin is a pressure imposed on the Chinese banking industry across the board, what are the implications? What's the outlook for this year? I'd like to know what measures will be taken by the management to boost the level of NIM?

[Jinliang Zhang, President]

Thank you for the question. Friends from the press and analysts, both asked about the good performance of our operation but I'd like to take a difficult question you asked. NIM, as mentioned in the presentation is down by 11%. This is in line with the trend of other banks but the decline is comparable to other peers, we are doing quite good actually. The Euro PR is down. The market rate is down. These are the [indiscernible] last year was down by 15 basis points for 1 year and 35 basis points for a 5-year term. There are a few reasons on asset side. Our asset yield is down by 6 basis points. There are 2 aspects. First, we have committed to our responsibility of serving the real economy. LPR decline will lead to lower interest rates. The income is down by 5 bp. Market rate was going downwards last year, most of the time, albeit some slight increase in October. So the yield of our bonds is down by 6 bp.

On liabilities, the gearing ratio is up by 6 bp. Our President mentioned in the presentation that we were faced with 3 pressures in the economy and among companies and households, people have opted for term deposits and long-term loans. And this is a natural choice of all in difficult position. So the cost-to-income ratio is up by 5%. Other banks have changed their interest rates as well. So altogether, there is an impact of 6 bp. Based with complex situation, we take the initiative to manage our assets, for example, adjusting the structure of major assets increasing the proportion of interest-bearing assets and using derivatives for risk management. With those measures, we have offset by 1 bp. So with our active management, we have withstood the test by improving by 1 basis point. We are not the 1 doing the best. But compared with other banks, we have maintained a leading position.

As for the outlook for 2023, we believe we will still face some downward pressure in the coming year. Lower LPR will have more implications, especially in the coming year. So there will be continuous downward pressure. If you look at the breakdown by quarter, Q1 will be under the biggest pressure because personal loans have higher proportion in Q1, but in Q2, Q3 and Q4, NIM will see their decline go slower. The management is taking that very seriously. We hope that we can improve on our NIM indicator offsetting its decline in 3 aspects. Number one, on asset, we will continue to structure in an optimized way at our assets. Adding more high-yield assets and minimizing low-yield assets. In the first 2 months, we have done that those products and services with low yields saw negative growth. So we could allocate more resources in higher-yield businesses and products. So when serving the real economy, we can still achieve a stable yield.

Secondly, in interest-bearing assets, we need to strengthen the management by building scenarios and ecosystem and with digitalized services, we can offer low-cost settlement funds to customers, both private and corporate customers, we need to strengthen the circulation of funds between upstream and downstream customers.

And as for personal business, we need to manage existing loans and the greater wealth management business, so more low-cost fund will be deposited in CCB's account in order to reduce interest costs. Second, we are actively managing time deposits with long term. We cautiously reduce the interest rates of these loans, which paid off. Thirdly, as I said, last year, we tried to use some interest swamps and other derivatives to manage interest-related risks. However, risk management derivatives in Mainland China are quite restricted. Last year, that worked pretty well. And this year, we want to strengthen our efforts to use interest derivatives to hedge against some interest risks and by strengthening pricing management, we can better manage the interest cost and interest cost. So NIM will be -- the downward pressure of NIM will be diverted. We hope that the pace will be slowing down.

[Changmiao Hu, Secretary of the Board]

Thank you. And let's now go back to Beijing. And we have this gentleman on the left in a third row.

[Unidentified Analyst]

This is Mark [ph]. And I'd like to ask a question about deposits. And the last year, deposits have grown quite well. What are the reasons behind this? And going forward, what's the deposit rate? And secondly, in terms of measures, what measures do you have to continue to push the faster growth of deposit. Well, let's have Mr. Li Yun to answer this question.

[Yun Li, Executive Vice President]

Thank you for your question. In terms of the faster growth of deposits in 2022, there are mainly 2 reasons. And the first 1 is that the government macro policies has increased and strengthened. Secondly, for CCB, we have adopted to the changes in the market and to become a very innovative in terms of our deposit structure in the last year. For our deposit, we have 2.4 trillion, and it is up by 87 billion -- 807 billion, and the growth speed is 11% in terms of deposit interest rate and they cost for us and the future trend. Looking at 2022, our deposit cost, we still think that it is still implicit and in the meantime, looking at -- compared with our peers, we are still ahead of them. There are mainly 3 features. The first is that for our personal deposit for interest payment rate, it is a decreased and it is about 1.83%. It is down by 3 bps compared with the previous year. This is because we have very intentiously looked at how to better manage the long-term deposit rate. And in the meantime, we have also perfected. We have also seen the regulators are now perfecting the interest rate of the system and which is why we have seen that for our bank and in terms of the interest that we need to pay out has decreased as a result.

And the second, for corporate deposits, we predict that it is better than our peers for the last year, and we have seen that the corporate business and mainly for the CASA account and it has decreased. Of course, we have utilized our strength, which is the large customer base. We have used the whole process management of the corporate deposits and the changes in the corporate accounts, we are performing better than our peers. And thirdly, in terms of our deposit structure, innovation, this is better for us to manage the deposit cost. For CCB, we have strengthened for instance, differentiated deposits as well as digitized deposits management and to help us to launch big wealth management and to focus on the areas whereby we can do better and strengthen our further capabilities and we can see that this has helped us to offset the uptick of the deposit cost.

Looking into 2023, we will continue to grasp the opportunities in the market to continue to push forward the high-quality development of deposits, and we are looking at this in 3 areas. First is to devise and implement an active deposit growth strategy. And we predicted that in 2023, the national economy, overall speaking, we will see a recovery. The capital in the market will be reasonable and sufficient. Therefore, to help for us to have this strategy for deposit growth, it is also quite a reasonable one, and we are very actively approaching this, and we have felt that the deposit generally speaking, has increased. And compared with the same period last year, it has gone up further. This is a good opening.

And secondly, we continue to improve the deposit models in terms of corporate deposits, and we are synergizing this with the corporate loans and to make sure that there is a better linkage and using our platform scenarios and to further expand our corporate business. In terms of personal deposits, there are mainly two ecologies, one is big wealth and to make sure that we utilize the existing wealth of our customers and the second, to grasp this opportunity of consumption ecology. And we need to look at the deposits of the individuals for their consumptions. And thirdly, we will continue to promote the coordination of deposit volume as well as pricing, and we will need to see the continuous effect of this licensing for deposits. And so we will continue to add on more expansion of CASA accounting and to continue to perfect the term deposit structures.

And looking at the first two months for our bank RMB deposits, the interest payment rate has decreased further. And overall speaking, we are very confident for 2023. Our deposit business will continue to realize high-quality growth and to serve the real economy and to provide a very solid foundation for the development of real economy.

[Changmiao Hu, Secretary of the Board]

Thank you, Mr. Li. Let's invite 1 more question from the Hong Kong press.

[Unidentified Analyst]

Thank you. From Hong Kong Business Journal. I'm very pleased that we finally have the opportunity to meet with the management in person. After the pandemic, every bank is trying to catch up with fast development. Fintech is 1 of your development focus areas, and you said that you will invest more in fintech development. Can you please elaborate on the development plans of your bank on fintech?

[Changmiao Hu, Secretary of the Board]

Mr. Wang will answer the question.

[Unidentified Company Representative]

Thank you for your interest in our fintech development. CCB has attached great importance to fintech. In 2008, we came up with a top plus strategy. Over 5 years, we have invested over RMB100 billion in Fintech. Last year, we invested 22.3 billion, 3.07% in the total operating expenses, R&D and staff costs have risen continuously. We used to have only 7,000 staff members in fintech segment. Now we have 15,800 tech talent of CCB are at a leading position of the industry. We have received 1,245 patent applications making us 1 of the top banks in this regard. Fintech is 1 of our 3 major strategies. Our vision is to build our bank into a professional bank in technology. Without technology, there will not be any fines. So technology is integrated into every and each link of our bank's business digital technologies as 1 of the effective means to address financial problems, restructured the credit and financial systems. And it's in line with our philosophy of serving the mass public and offered strong support with strong momentum. CCB will continue to strengthen its capabilities to build a digital foundation with technology and digital services, we look at more financial innovation. We have a self-owned distributed system. This new system is responsible for serving 183 million customers, 1/4 of our total workload, we have built AI capabilities based on different scenarios, we have self-owned AI platform supporting 742 scenarios. For example, the accuracy rate of optical identification of receipts is over 90%. 1/3 of trading services is down digitally, reducing 90% of inquiry and quotation time.

On 31st January this year, we published CCB Cloud. CCB Cloud is now under control, and it's operational in every department of CCB. It's 1 of the representative project of CCB in fintech, the computing power and services of CCB Cloud puts us at a leading position of the industry safety security and stability, our priority. We have a multifaceted security system, boosting the digital transformation of the bank concentrating our digital capabilities, blockchain, big data and AI strengthened our capabilities in middle office. We hope that CCB can be the cloud platform of choice for our customers.

Better fintech capability can be reflected in supporting businesses outside the bank. We export our technologies to other industry players as well to support the digitalization of our country rising our responsibility as a major bank in China. So I'd like to introduce to you our smart governance services. We have made strong progress in smart intelligence governance services. We signed agreements with 27 provincial governments and provided 14 provinces and 13 municipalities with the Internet plus platforms covering governance and other scenarios. For example, in Yunnan province, we developed a system where people can do everything on the mobile and in [indiscernible] in Chongqing and in Hunan, we have developed a comprehensive service platforms enabled by fintech for these provinces. We have over 200 million customers, and we have initiated 4 billion pieces of services and we try to build a digital government services for low-cost citizens. We have 40,000 branches. And in every branch, we offer teller services and counters for digital government services. We can cover 8,000 items of services, so people don't have to travel far for handling government services. And on top of that, by relying on 444 service points in rural areas and our online application for farmers, we extended our services to countryside, helping them revitalize local economy. So people living in distant areas can enjoy smart administrative services and financial services. These are all relying on improved fintech.

We have more multifaceted mobile payment services covering education, health care, legal services, etcetera. We have over 16,000 service items and the total consumption exceeded RMB300 billion. In line with the regulatory requirement, we offer our peer banks and other financial institutions, our important experience and practice our core systems have been copied by policy banks, stock -- joint stock banks and local commercial banks. We have received very good feedback for the proved safety and stability of the system. So we will continue to use our financial technologies to serve the real economy and push forward the practice of new finance. We will cover inclusive finance, rental housing, rural revitalization and smart governance. So our new finance initiative will enjoy high-quality development and the CCB will serve China's modernization with digital technologies.

[Changmiao Hu, Secretary of the Board]

Thank you, Mr. Wang, and we'll go back to Beijing. So we have this lady in row 5, please.

[Unidentified Analyst]

Thank you management team. This is [indiscernible]. My question is mainly in real estate. Since last year, we can see that the government has come up with set of policies that support the real estate development and what has CCB done in this area. And in addition, we have also seen that in the banking sector. We have seen a lot of pressure in terms of people would like to pay down their mortgages early. How do you cope with this? Finally, I would like to understand for CCB in terms of the housing, new innovative model as well as the push forward for your housing and rental leasing area? And what are your measures.

[Changmiao Hu, Secretary of the Board]

So we'll have Mr. Yuanguo Cheng to answer this question.

[Yuanguo Cheng, Chief Risk Officer]

For real estate sector, this is a sector that the market pays great attention to. For housing mortgages and loans then this is an area that has always been our strength. And therefore, we adhere to the central government policy, which is that houses are for living not for speculation. And the main purpose is to stabilize the market and to stabilize the land price. We try our best to push forward the housing sector to develop in the innovative fashion. And 1 is that we continue to provide all fronted help and assistance and support for instance, is through bond and through debt and through equity and through various measures for the high-quality real estate company's development.

And the second, to continue to improve our work efficiency and streamline the process for the companies that meet the requirement in terms of the whole process and the approval time is increased dramatically. And thirdly, we continue to optimize the real estate sector business and looking at the market, and we continue to optimize real estate loans -- development loans, and we differentiate the different projects.

And fourthly, and we continue to make sure that there is a guarantee of delivery of the buildings and to make sure that it is legal and to ensure that we are protecting the livelihoods, protecting the stability and protecting the delivery of the houses. And for those customers who are within this scheme, we actively implemented the 16 new measures by the regulators. And in terms of -- whilst ensuring the guarantee from the judicial system and to make sure that the delivery of these houses will be guaranteed. And ensure the rights of the consumers are protected. And you know that for CCB actually we are 1 of the commercial banks with the largest mortgages in China.

In terms of serving for the livelihoods and the benefits of our citizens, this has always been our strength. And looking at 2022, and we have taken multipronged approach to continue to expand our business and to ensure the healthy development of our mortgage business. On 1 hand, we have a dedicated plan and looking at the fair value principle and established a dedicated line for customers to call us. And in addition, we also have offline counters for consulting and advice services and to make sure that the online and offline business are aligned and to ensure that there are no agencies in the [indiscernible] to carry out, for instance, the transfer of mortgages and to make sure that for the paying down of the mortgages in advance can be carried out in an orderly fashion.

Second, we need to make sure that there is a good marketing with the customers and to continue to meet their demand. And for firsthand housings and it's mainly to make sure that there is a sufficient guarantee of mortgage and the second way ensure that there is improvement of efficiency and continue to work with the agencies and thirdly, to continue to promote business promotions and innovations, and we have come up with an innovative measures such as secondhand housing mortgage collaterals and to improve our efficiencies. And number four, to continuously improve the digitization foundation of mortgages and through our research and innovation and to replace the face-to-face signing of mortgages to continue to improve CCB's speed and to work with this market. So last year in terms of real estate and mortgages, we have seen quite a big percentage of improvement in this area, and this has reached about 28.23% of the market share, and it has also increased by 6.2% and our quality of the asset, it continues to improve, and the overdue is over only 0.37, so quite ahead of our peers.

In the meantime, we are also expanding our business and implementing the housing and leasing business. So we are trying our best to build a new model for our housing business, and we have the following measures. For instance, number one, we look at the diversified business development by end of last year. For the rental leasing business, we have about 200 billion, and it is up by 81.75% the previous year and it is growing very healthy. And secondly, we have established a housing fund and with the guidance from the relevant authorities, and we have established a housing fund, and we already have 13 projects that are established, for instance, in Beijing, Shanghai and in these first and second tier cities, and we have provided about different flats. And together with the China Bank, we have established a subsidiary fund. And in addition, in Chongqing, and we will also be utilizing all these social resources and to continue to ensure a healthy development of the real estate.

And thirdly, we are ensuring the development of ensuring of the delivery of housing to the citizens. And we have established different funds, and we have dedicated staff and push forward in Guangzhou, Tianjin and projects as such in those cities, and they have received very good feedback from the market. Number four, we have built a housing rental leasing ecosystem. And we are working with our staff and to provide leasing services. For instance, this would also include consumption, credit, loans, etcetera, through enhancing the different ecosystems and for our customers, and we have about 51 million of our customers, and this has brought us about million new customers, and the total volume is about 218 billion. So you can see very good results. And you know that for CBSRC and they have issued their opinion paper on supporting the housing leasing market and to further expand the channels in this area for CCB going forward, we will continue to look at expansion of our services for house leasing business and to make sure that there is an upgrading of the business and in addition to ensure the new transformation of the business model and to continue to create better value. Thank you.

[Changmiao Hu, Secretary of the Board]

Thank you, Mr. Cheng. Next question from Hong Kong.

[Unidentified Analyst]

Thank you management for the opportunity from CLSA. My question has to do with inclusive finance. The President said that the bank is in a leading position in inclusive finance. Can you please talk about some special measures that have been taken? The market is quite interested in knowing your risks and interest will roll out policies to allow late payment. Can you please also talk about the yield in inclusive finance? You also said that you are a leading bank in revitalizing rural development. Can you please elaborate on that?

[Changmiao Hu, Secretary of the Board]

Mr. Koi [ph] from Beijing will take the question.

[Unidentified Company Representative]

Thank you for your interest. Inclusive finance is indeed an important topic. I'm prepared for that question, but I was a bit concerned that no one will ask about that. I met a few foreign clients. When I presented inclusive finance, no one would understand, but I was wondering why that happens has been close to finance was actually burgeoning from other countries and imported in China. I think you asked 3 questions indeed. If you asked -- since you asked about inclusive finance, I would like to take initiative to answer 1 more question regarding inclusive finance. Many people who didn't know much about inclusive finance would see it as something very difficult for a commercial bank. For myself, I experienced 3 stages, number 1, there was a stage where people were wondering if large commercial banks should be involved in inclusive finance.

In the second stage, people were worrying that they might not be doing a good job in inclusive finance. But in the third stage, which we are at, we need to think about how we can build a good and sizable inclusive business finance business. We have a sizable inclusive finance business. You also asked about yield and investment return and risks. I'll give you a few numbers. Inclusive finance is [indiscernible] trillion. The NPL ratio is only 1%. This is lower than the NPL ratio of the group, and it's much lower than the NPL ratio of our corporate business. As for investment return, it's around 4%. And this is achieved when we are still conceding benefits to customers. So this was achieved in a difficult position. In a normal time, we can still increase the investment return but the national government wants us to assume our responsibility. So with risks being controlled, we will try our utmost to concede profit to our customers. So, I believe if you compare the numbers above with other businesses, you will understand inclusive finance better.

And by the way, the inclusive finance business also bring to us a lot of private banking business and supply chain financing business. And our bank's supply chain finance business is more than other banks combined. So we have a lot of benefit, but controllable risks, you would also ask how we achieved that. I think the key is having a sizable customer base plus digital technology and database as well as risk appetite and restructuring credit model and other specialized systems for inclusive finance. These are our special characteristics of the inclusive finance business. For example, we have a very sizable database in inclusive finance. The group has established a data-driven and digital model-driven business model for inclusive finance. Internally, 80% of our business is totally online. Many of you have used our [indiscernible] platform with a few clicks you will get access to customers' profile and their credit rating. This is thanks to the development of big data technologies in China, for example, information about tax payment and transactions is available on this mobile system. I believe we benefit that a lot from our national development, 2.5 million customers will benefit from such a platform. Without technology, with our data, people would still linger in the first stage.

And at the second stage, it all breaks down to people's -- that the bank's risk management capabilities, we are very selective about customers. We have a huge network of physical branches which were involved in the development of inclusive finance. Sometimes, even 1 branch would achieve a 200 million business volume for inclusive finance. We are very confident with the support of digital technology and data. This year, the management required that the bank should take more measures to develop inclusive finance in 2023. For example, credit customers in our plan, we'll see a higher proportion in the customer portfolio. We have 170 million market subjects but only 50 million customers have credit profile. In CCB, we have only 200 to 300 million customers who have credit profile. So we need to cover more customers.

Our loan balance is around 10% of the total market size. It's a high level, but we are even more embed to increase the proportion of credit profile customers, and we need to accelerate the development of some platforms so we can cover more smaller-sized customers last year, the 3.0 version of Huidongni platform was released. It added other features like wealth management, legal services, tax services, logistics and supply chain services that connect both upstream and downstream catering to the needs of SMEs. This is the feature of our inclusive finance business. You also asked about the impact of late payment of loans. I think the national policies on that worked very well. They worked well in protecting this market participants so banks -- and banks would also develop new management models. People were probably concerned about bigger risks and potential issues after the policy is implemented in June this year. We come through all the loans that involve late payment. They're not in a big size. It's only 3% of the total bank loan balances around RMB60 billion, we will categorize these loans in a structured way according to their repayment capabilities and needs.

And in general, the risks are still under control. We have full confidence that through internal management policies and other measures, we can provide better services to these customers, and the risks are totally under control. Please don't worry. These types of loans are not of a large size. And secondly, low NPL ratio is attributed to higher credibility and better credit environment of the businesses in China. When it comes to inclusive finance people think of those companies that couldn't sustain for long but we believe there are still a huge number of good customers because we are talking about a market size of 100 million companies, small companies, especially. So I'd like to call upon everyone to support the development of inclusive finance and the bank will continue to make better contribution to inclusive finance customers.

You also asked about our progress in rural revitalization, indeed, revitalization of rural areas is 1 of our focus areas and our measures have been implemented very well. I'd like to report on that. First, we have a rural revitalization platform through 440,000 service points. We have 14,000 bank branches, but our rural service points cover 440,000 service points across the country. We serve 52 million customers. When serving these customers, we provide [indiscernible] application, we can get access to those customers who were not banked in the past. We cannot cover every and each service point but through this smaller micro service points, we can expand our market coverage. We have 2 special loans for rural revitalization. For example, we have special loans for high standard farm field. So last year, we made breakthrough in agricultural loans with this product. That's why we achieved 21.8% in loans to revitalized rural areas.

Besides, we have established a number of different scenarios of rural revitalization, for example, custodian services and other partnership with farmers. So, we set up a so-called French circle with the farmers by offering more financial services through the different scenarios and better access and service points, we can extend our service portfolio to rural areas. Fourthly, we set up a risk management system, it is implemented at each rural service point. They offer a smart risk management system to farmers. So inclusive finance, coupled with revitalization will offer our customers a large and broad sector. So the 4 aspects above where my answers to your question. Thank you for your interest again.

[Changmiao Hu, Secretary of the Board]

Thank you, Mr. Cui. Actually, time is almost up. Perhaps the Hong Kong and Beijing, we can each have 1 more question. So Hong Kong media, media from Hong Kong. Do we have any questions? Yes, please. This lady.

[Unidentified Analyst]

We can see that CCB has achieved a very good result last year and full of confidence for your business this year as well. I have 1 question in terms of dividend payout. And will you continue to increase? And what is the percentage for dividend payout?

[Changmiao Hu, Secretary of the Board]

So Mr. Sheng, please take this question.

[Unidentified Company Representative]

Thank you for your question. CCB's growth, overall speaking, is to serve all our customers as well as serve all our shareholders and it is thanks to your support that we are able to achieve such good results. The good results of our performance is really inseparable from the support from our shareholders. So we will, of course, should share this with our shareholders. And overall speaking, 30% of dividend payout, this will not change. And on the basis of this 30% in terms of the dividend final figure will depend on where profitability and how well we do for 2023 and with the recovery of the economy, overall speaking, we believe that with CCB's continuous growth, as we have mentioned, for instance, in terms of our non-interest income, etcetera, we believe that we will do better this year. And in terms of NIM, as we have heard, there is some pressure. So in terms of the dividend, the payout ratio is the same, but the actual amount will depend on our business performance. But overall speaking, of course, we hope that every year, we can have a better and better performance for our shareholders.

[Changmiao Hu, Secretary of the Board]

Thank you. One more question from Beijing.

[Unidentified Analyst]

Thank you management for the opportunity. I'm from [indiscernible] Commercial Bank. We know that comprehensive finance is a megatrend. So investment banking capabilities are 1 of the keys in your development. So can you please talk about that in terms of underwriting and other aspects, how do you look at the outlook of building a stronger investment banking business?

[Changmiao Hu, Secretary of the Board]

Mr. Cui?

[Unidentified Analyst]

CCB has seen high-quality development as a priority, light asset development is 1 of the major strategies with light asset and light capital through direct financing and indirect financing and with finance and fintech, we can build special capabilities of investment banking. But more importantly, we need to play the role, bridging different markets, so we can give full play to multiple licenses we own at the head office when serving important customers, our investment bank has played an important role, equally important with technology. Many customers are familiarized with traditional markets, but investment banking and fintech will come down to intelligence.

I'd like to report back to you in 3 aspects. First, last year, through investment banking, we offered over 1.8 trillion of investment volume. This offers a very convenient services to our bank's business. Stock underwriting business, there were 747x offering services to more than 400 customers and we are -- we have the most highest number of services among 4 major national banks. We offer services to existing customers in every aspect. So in business volume and the number of customers, we are indeed the number 1 among the 4 major banks. And we focus on key industries in China, industry like energies and agricultural industries. So we have a very high quality of investment banking business. We also underwrote 44 innovative categories of securities, 33.2 billion, increasing by 166%. We have utilized 112 billion market capital. So investment banking is not only about services, it's also about connecting different market factors and we have implemented mergers and acquisitions notes for real estate developers and tech companies. We have REIT business as well. We have issued 51x of green bonds, and we served over 8,000 SMEs as the only 1 underwriting bank, which covers a whole range of investment banking businesses, we are number 1 among the 4 banks.

In sovereign funds, we built a broad range of products. We have built a matrix of services that serve tech companies, and there is a key market demand from coastal areas where the economy is vibrant. Last year, we served 972 tech companies and invested RMB120 billion. And the intelligent technologies as an investment bank were fully obvious. Besides, our credit products and equity products among other special products have observed the differences in market demand. So we created the first assessment system in Investment Banking changing the old business model.

Third, we have established system for mergers and acquisitions, and we have participated in mergers and acquisitions worth of more than 400 billion. There is still a great room for further development because the M&A market is getting -- is gaining steam and many enterprises will need the opportunities for further M&A and structuring their stock structure.

We have played the important role by digital technologies and intelligent enabling technologies. In 2022 on our 3 major platforms, we have over 650 customers registered customers meaning 650,000 corporate customers used our investment platform. There were over 6 million visits. We have over 300,000 research reports covering 120 sectors and 664 economic indicators. So to many customers, we offered intelligent services and financing services in general. Through these 3 platforms, we have built CCB Investment Banking, a well-known brand, and I look forward to your continuous interest in our investment banking business so we can offer better branded services to the customers.

[Changmiao Hu, Secretary of the Board]

Thank you, Mr. Cui because today, we have also had the online platform. And so we have a question here and asking about CCB's international business. And this is a question with respect to [indiscernible] road RCEP and support Hong Kong's economy and social development and what are the effects that you have achieved. Thank you. Please welcome Mr. Wang.

[Unidentified Company Representative]

Actually, last year, this is quite a challenging year for the international community, whether it is for the pandemic or geopolitical conflicts who are the major monetary countries and in terms of the monetary policies that they have adopted, and there are fluctuations in the market. However, for CCB in terms of our business and we continue to push forward digitization and continue to push forward for the stable development of our international business. We have achieved highlights.

So I would also like to brief you and in terms of supporting export and trade, we continue to extend credit to make sure that the finance supply to the export and trading business, we have realized about 1.8 billion financing -- 1.8 trillion financing for the export and the trading business realized a 15% growth. In addition, we have also provided help and relief for the micro and small export business, and this has realized an input of 2.5 -- of 25 billion credit to the micro and the small business and to support them. And in terms of cross-border RMB business, this is well underway. For the whole year, we have a completed RMB3 trillion business. Our London branch has continuously to maintain as the biggest RMB settlement bank outside of Hong Kong and realized RMB settlement of RMB7.5 billion.

In terms of digitalization, we have a digitalized platform and this platform last year has played a very important role. And in 35 countries, we have provided services for 170,000 [indiscernible] customers and to provide them with business matching services and actually with the pandemic happening as a background, and you can see that CCB has played a very important role in this area, and we have also received a very, very good feedback from our customers. And the last year, we were also awarded the Asian banks ecological development. And apart from this, we have also worked on our blockchain development, and there are about a transaction of 12,000 blockchain transactions. And in addition, we also have been awarded 1 of the 100 -- top 100 companies utilizing blockchain. And at the moment, we have about over 200 international agencies. We also have a business that is multicurrency and across different time zones and continuously to provide financial services to our customers. And in this ever-changing market and our positioning is that we will be fully compliant and focus on our development and expansion, our overseas business not only has realized our total business expansion as well as total revenue growth.

With respect to One Belt One Road, we continue to follow the One Belt One Road initiative. In addition, we are also playing an active role. We utilize the international syndicate for overseas merger and acquisition, we have mid- and long-term financial products and to provide financing services and convenience to countries along the One Belt and One Road pathways. And last year, we have provided countries such as Poland, etcetera, and over 60 countries and provided them with the financing for energy and infrastructure and total amounting to RMB50 billion. In addition, apart from this, for our overseas business, we also provide a guarantee business. And for this area, for instance, this would mainly be for some contracting business overseas. In addition, we are also very innovative, and we have provided about 140 small various currencies for our customers, and this has also been well received. In addition, we have also launched One Belt One Road bond, and it raised the funds of 1.7 billion with. One Belt One Road, CCB has played a very active role in RCEP, this is always 1 of our priority overseas market.

I have 2 sets of data to report, and you will understand about our priority policies. In terms of RCEP, our total asset account for our overseas business of 66.3% and overseas financing has reached about 73.5%. So you can see that they are both above 2/3. And for our overseas balance has accounted for more than quarters and for overseas business, RCEP is definitely 1 of the very important part. And with respect to Hong Kong, we have 2 businesses here, CCB Asia, which is the building that we are in at the moment. CCB Asia is mainly working from this building. In addition, we also have a CCB Hong Kong branch. So we have 2 institutions and 1 management team. Our Hong Kong institutions as 1 of the biggest our overseas business, and this is a leader in our business, and we continue to insist what the President Xi has said in the Hong Kong's return to China and in his main speech and to support Hong Kong to be integrated to the development of China and to further consolidate various different industries, such as trading and logistics, etcetera.

And in last year is a very complicated situation. Hong Kong has achieved very good results. On one hand, they have realized a positive profit growth, and it has increased its profit by 1.5% year-on-year. In addition for Hong Kong's loan business and Hong Kong's loan business whilst everybody is suffering a negative growth. Hong Kong has actually realized a positive growth in loan business. In addition, in major business such as cross-border RMB and product innovation. It has played a very important leading role and to lead our group to move forward and to realize a very stable growth they have grasped the opportunity of RCEP. At the moment in 6 RCEP signing countries have realized their business and project implementations and also strongly support the GBA's development for the past 3 years and the total investment of 470 billion.

In addition, also helped Hong Kong to build a green finance -- green finance center and ESG has 3 trillion. And for Hong Kong, our Hong Kong institution is also and appointed -- specifically appointed liquidity provider by Hong Kong MA and last year for the bond connect to the northbound. And at the moment, we are in top 4. So all of these great achievements, you can see that they will reflect our Hong Kong institutions in terms of helping and supporting Hong Kong's economic and social development. We have also received a very good development ourselves.

[Changmiao Hu, Secretary of the Board]

Thank you, Mr. Wang. Ladies and gentlemen, in the interest of time. This concludes today's annual results announcement. If you have any further questions, please feel free to contact with our Board office as well as the PR department, and we will answer your questions in different ways.

Again, thank you very much for your longtime support for CCB. I would also like to thank everyone for your participation today. Wish you good house and all your dreams will come to. Thank you very much for coming again.