Bank of China Ltd

SSE:601988

Earnings Call Transcript 2021-Q4

[Feiqi Mei, Secretary]

Honorable investors, analysts, honorable friends from the media, good afternoon. Welcome you all to Bank of China 2021 results announcement. My name is Mei Feiqi, Board Secretary of Bank of China. Today's result announcement will be quoted by myself and the press conference -- press spoke person and General Manager of the President Office, Mr. [indiscernible]. Because of the pandemic reason, we still have online result announcement which is regrettable. I hope that next time we can have in-person meeting. First of all, please allow me to introduce you the leaders from Bank of China. They are Bank's Chairman, President of BOC, Mr. Liu Jin; Executive Director, EVP, Mr. Wang Wei; Executive Director, EVP, Mr. Lin Jingzhen; EVP, Mr. Chen Huaiyu; EVP, Mr. Wang Zhiheng [ph]; CRO, Mr. Liu Jiandong.

Besides [indiscernible] with the latest version of the governance code for Shanghai Stock Exchange the representative of our independent directors, Mr. Wang Changyun is attending this meeting online. We have 2 session in this result announcement. First, we will have Mr. Liu, President of the Bank, to introduce the performance of the bank, and then we will have questions and answers.

For a long period of time, media friends, investors and analysts have provided long-term attention, support and care to Bank of China. We're deeply impressed there are many investors and customers online. We're greatly encouraged by our interest. My sincere thanks to all of you, our dear friends.

In recent time, there are many volatilities in the capital market. However, the banking board is relatively stable and make a contribution to the stability of the capital market. We hope that -- so our solid result announcement we can bring more confidence to the market. We have just announced our results for 2021. And the presentation can be downloaded on our website or you can have access to the PPT through the web link now.

And for the financial data provided today, except the special notes, all compiled according to IFRS reporting rules. Now we will invite President, Mr. Lui Jin to introduce us to 2021 results of Bank of China, [plan] of the bank and our future prospects. Now the floor is given to Mr. Liu.

[Jin Liu, Chairman and President]

Dear friends from the media investors, analysts, good afternoon. I'm very happy to meet you online to introduce you Bank of China 2021 performance. In the past 1 year, Bank of China conscientiously implement Party Committee, State Council's deployment and policies, and we work together to achieve the full year's target, and we have made a rather good business results.

We have stable financial results with operating income exceeding CNY 600 billion and after tax profit and profit attributable to shareholders increased by 10.85%, 12.28% respectively. And our business scale increased steadily. Asset and liabilities increased by 9.51%, 9.59% respectively.

Loans grew steadily especially for long-term and mid-term loans, and deposits also increased. Overseas Custodian business ranked as #1. Our ROA and ROE increased by [0.02, 0.67], respectively. And Core Tier 1 Capital Ratio increased by 2 basis points. And NIM was 1.75% and fee income contribution increased by 0.14% and NPL ratio 1.33%, a reduction of 0.13% as compared to 2020.

Overdue loan amount and ratio both reduced. Provision cover ratio 187.05%. And commercial service manufacturer, inclusive finance, asset quality maintain stable and [NPL] resolution amount RMB 147.5 billion.

Customer base further [indiscernible] effective corporate customer increased by 11.7%. FI and Custodian business is further increased. And individual customer amount ranked as #1 as compared to peers. And also Internet banking, mobile phone banking customer increased by large margins.

And our brand image further increased with increased comprehensive strengths and we have won many market recognitions by numerous awards that we have won. Bank of China have implemented our 14th 5-year plan.

In 2021, we have achieved growth in 8 key areas. In last year's result announcement, I introduced you the 8 focal points of Bank of China's development. Now I will introduce these 8 sectors one by one, and you can make a reference to our PPT.

First, IT finance. We set up product service system that cover the whole life cycle of IT company. We provide a comprehensive financial support in the amount of CNY 1.26 trillion. Our customer was 36,000 IT companies. And we setting up in the amount of CNY 30 billion with the support of Ministry of Information and Technology.

We also have small and medium-sized company to be innovative. In green financing, we support green development and transformation of traditional components. We issued the action plan and green finance planning. And in total, our growing credit exceed CNY 1.4 trillion.

We use the tools provided by PBOC and to support 270 green projects. Green bond underwriting exceeded CNY 129.4 billion domestically. And green bond business scale and green innovation is market-leading. In terms of inclusive finance, we promote SME finance and reduce the price, and fight the pandemic together with the market entities inclusive for loan incremental amount was 53.15% as compared to the previous year, and the average cost was only 3.96%.

Digitalized inclusive financing are making progress. Online inclusive loans increased by more than CNY 100 billion. We also set up a service for specialized small companies. We provide financing to 15,000 specialized small companies. In cross-border finance, we further [consolidated] our advantage in international settlement, cross-border RMB foreign exchange settlement, cross-border custodian.

And international settlement amount reached USD 7.26 trillion, up 26%. And we -- for Southbound Connect and Northbound Connect, the number of signed customers take up more than 60% of the market total. We -- for e-commerce companies, we provided them with RMB settlement, foreign exchange settlement services and other services.

We also provided services to the 4 major expos of China to stabilize foreign investment in China to stabilize the foreign trade. We take the initiative in LPR reform. And we also [suffer] Sonia and [indiscernible] to issue bond. We are the only organization that can do this.

For consumer finance, we integrate personal loans with a credit card with consumer finance. Domestic RMB consumer loan increased by 9.69%, and credit card installment also increased.

For Wealth Management, we further practice the national strategy of common prosperity. By the end of last year, total individual customer reached 495 million and total asset CNY 11 trillion. Income increased by 33% year-on-year. We also fastened the development of Asia Pacific private banking platform to provide them with online and offline services combined, provide them with financial and nonfinancial services. Private banking, customer increased by 10.80% and asset increased by 16.75% to CNY 2.16 trillion.

And domestic private banking financial asset increased by 23.63%. So the number of customers and the amount of asset management both increased.

And for supply chain financing, we make the use of corporate loan, cash management, insurance and other kinds of tools to provide core enterprise liquidity of CNY 2.16 trillion, and we have [1+N model] customer in the amount of 11.6 thousand and online supply chain financing core customer increased by 41%.

And online supply chain business amount increased by 63%. For rural financing, we are deeply involved in [helping] set up rural financial system and farmer and agriculture-related loans increased by 16%. And inclusive agricultural-related loan increased by 46%.

We have BOC Fullerton which is a focus on rural finance to support agriculture and small companies and businesses. We are the largest rural banking group in China and also the asset increase by 25.50%. And NPL ratio was only 1.3%.

We further strengthened "One Body Two Wings" strategy. Commercial Banking is our One Body and the Two Wings are globalized operation and comprehensive operation. Last year, domestic institutions profit contribution increased by [0.35%]. We focus on key industries.

Green finance, strategic and emerging loans increased by 28.8% and 135%, respectively. Our overseas institution fight against the pandemic, maintained stability and their contribution to the bank further increased. We further promote digitalization and focus on key points.

And we set up IT finance plus plan, and we set up a steering group for financial digitalization to lead the work for digitalization of the bank. Total IT investment, CNY 18.618 billion, an increase of 11.44%. We also increased the number of staff, and the staff number increased by 13.75%.

Six of our [sites] result got the rewards from PBOC. And we have made application to 4,569 patent. Among this, 194 are granted. We started the OASIS project, which is our enterprise architecture, and data governance products have made initial achievements, digital assets are playing a bigger role. IT enablement have yield good results.

We have issued a mobile banking App version 7.0, and we further improve intelligent global transaction banking platform. And we also -- we focus on 4 strategic scenario, which is cross-border, education, [silver hair, which is a senior person] and sports. We further strengthened risk management to optimize our risk management system and have process control over all the process.

We further optimize our credit structure for liquidity risk and market risk, it is rather stable. Internal control and operating risk management is further strengthened. And we further improve compliance risk, governance system and management procedures.

For this year, we will work steadily to implement the decisions of the State Council and Party Committee and try to build first-level -- [indiscernible] level bank and create more value to shareholders, society and the employee will be deeply involved in the national economic development to support the real economy.

We will further strengthen our advantage of One Body and Two Wings, establish new development pattern. Third, we will further achieve digitalization. Fourth, we will mitigate financial risk and establish our firm defense line. 2022 is a special year for Bank of China. In 2022, after serving the 2008 Beijing Olympics Games, we play our advantage of the most international bank in China again to sponsor the Winter Olympic Games of Beijing and Zhangjiakou and we bring hope and warmth to the world in the midst of the winter of the pandemic, and we work together for a better future.

We just completed our task of serving the Para-Olympic games. To serve the 2 Olympic game, both the winter and the summer Olympic Games is an important witness of our service providing -- provided to the society. And we can have 300 million person to be engaged in winter sports in China.

After serving winter Olympic games, many winter Olympic games venues and equipment producer and winter sports lovers become Bank of China's customers. And we are bringing new vitality to Northern part of China, so winter sports. And if you want to play winter sports, please use Bank of China's financial services. And I hope that you can also get involved in winter sports to be one part of this 300 million person in winter sports. 2022 is a year for us to celebrate our 110 years anniversary.

And we're also seeing the rapidly evolving world. We will stick to our original goal and try to make new achievements in a new economic and social condition, when we [all] serve economic and the social development and make new contribution to this [side]. Thank you.

[Feiqi Mei, Secretary]

Now we come to the second part of the result announcement. And we will have question-and-answer. [Operator Instructions] also please identify yourself before asking questions. Now please give us the first person who are asking the question. Now you can unmute yourself. You have the floor. Thank you.

[Ran Xu, Morgan Stanley]

My name is Xu Ran from Morgan Stanley. My question is about future prospects. Because if we look at the Central Economic Work Conference of the party, it is pointed out that the economy is facing triple pressure. And at the same time, the government specify the areas for increased lending. So I want to know from the management, what is the coverage lending demand and actual lending. And what is the expected scale structure and the pace of overall lending of the bank for the year? And what are the key industries and areas that you focus on?

[Feiqi Mei, Secretary]

Thank you Mr. Xu, credit market is a question of common interest. You have asked a very professional question. Now the floor is given to Mr. [indiscernible] EVP responsible for [corporate] banking.

[Unidentified Company Representative]

Thank you for your question. Financial sector show that the mission of serving the economic, social development and have people living a better life. Bank of China is continuously contributing its strength to serving a national strategy and the real economy. By the end of February 2022, total corporate loan reached CNY 7.4 trillion, an increase of CNY 368 billion. CNY 47.2 billion [more] year-on-year.

The growth rate was 5.19%. We focus on key areas and key industries. By the end of February, corporate green loan increased by 8.6%. Strategic new emerging industry loan increased by 11.6%. Manufacturing loan increased by 6.9%. In terms of regional breakdown, we focus on key regions of the country.

[Chengdu-Chongqing], Yangtze River Delta, [Big Bay] Area loan account for more than 70%. And in 2022, our bank will be focusing on the development trend and the priorities to keep a very reasonable growth of the corporate loans so as to intensify the lending for the real economies and continuing optimizing the credit structure for the corporate. To be specific, we will be focusing on the business opportunities, on the infrastructure, transportation, hydro construction and the municipal construction as well as new types of infrastructure.

And secondly, we will be focusing on some types of enterprises featuring the specialized refined features and innovative little giant focusing our attention to the intelligence manufacturing -- green manufacturing, high tech and et cetera.

And thirdly, we will be focusing on the green, low carbon. And fourthly, we will be focusing on the credit of the inclusive types of finances so that we'll be providing better services for the special agricultural produce and improve our capabilities in providing banking services for the agriculture businesses.

So looking into the future, first of all, we will stabilize the scale of the credit, and it is expected that the increase rate of our credit and loans will be no less than 10%. And secondly, we'll optimize the structure and from a industry perspective, we will be putting our focus to the [micro] and small businesses, high-tech green development and have a very stringent control on the 2 [highs and one] overcapacity. And from a region perspective, we'll be focusing on the coordinated and balanced development of the East to Middle East and the Northeast region. And from the arrangement of the personal loan, we would adopt to the principle of not speculation.

So under the [indiscernible] requisite of satisfying the requirement to results, we would just satisfy the needs of our reasonable residential requests, and we would also need to have a balanced development of the personal lending and corporate lending. Just now you have also asked the question about the rhythm of the lending.

And in the future, our bank will be focusing on the implementation of the manager policies so that we can play a role of stabilizer that should be shouldered by the state-owned big banks. And I would like to give the floor to the second speaker.

[Unidentified Analyst]

Thank you so much. And I -- just now Mr. Liu has given us a introduction of their performance, and we have same double digit of the growth of the performance and such momentum has been tapped. Some investors are quite concerned about whether the profit can be maintained. But first of all, to be stable and also to keep fast momentum of growth. Can you just give us a introduction of some core performance indicators and also give us prediction of the outlook of 2022?

[Feiqi Mei, Secretary]

Thank you, Mr. [indiscernible]. And also for your recognition of the performance of BOC. And we are also quite proud of the performance last year. And we would like to give the floor to President Liu.

[Jin Liu, Chairman and President]

Mr. [indiscernible] is clearly my old friend, even though we haven't seen each other offline, but I do see you quite a lot online, and I have read quite some of your articles online as well. Thank you for your recognition of the BOC for the 14th 5-year plan has started last year and the economic [development] as well as the pandemic control has been keeping [ahead] globally, which has created a very favorable operating environment for the banking business. And last year, BOC has been [kept] the general tone of trying to make improvements amidst stability as it is mentioned that the operating performance has been maintained stable and has a upward track, and we have a very fast increase of the [post-tax] profit.

And when it comes to the operating income, we have a breakthrough of over CNY 600 billion, reaching CNY 605.7 billion, an increase of 6.71%. And we have enhanced the lending, and we have also tried to provide more services to the development real economy and also try to reduce the comprehensive financing costs. So we have adopted the strategy of the double optimization of the quantity and price so that we can control the increase of the debt cost, and we have maintained a very stable NIM.

And also we have a very good performance of the inclusive financing and the cost of the financing has also stably decreased. And also, let's look at the cost structure, we will be able to see that the interest bearing cost is also maintained at a low level. Last year, we have made tremendous efforts to control the general debt. It has been achieving some great results. And the second feature is that the income structure has been significantly improved.

The group has realized CNY 180.6 billion of the noninterest income, a increase of 19.01%. The commission and fee income marks 81.4%, an increase of 7.82%. And the noninterest income accounts for 3.08% and to -- increased by 3.08% to 29.81%. So our bank has been implementing the state policy of the reduction of the fees and the taxation, so that we will be cease the opportunity of the capital market and enhance the product innovation and try to explore the online businesses and wealth management previously maintaining. President has been in control of the corporate business.

And starting from last year, he was transferred to the retail businesses because of his very rich experiences in the corporate side, he would be able to bring a lot of radiation effect to the prosperity of the retail businesses as well. So this is the second feature.

And the third feature is that our operating efficiency has been improved. The ROA and ROE stood at 0.89% and 11.28% are 0.02% and 0.67%, respectively, in a increase and the cost to income ratio is 28.17%, keeping at a very stable level. So from last year's perspective, it is a rather satisfying result. Looking into this year. For this year, we still have ongoing raging pandemic.

We have seen some rebound of the resurgence of the cases, and we haven't seen a very robust world economic recovery, there is a high volatility in the international financial market.

The development of China has been facing a 3-layered pressure of the demand contraction, the supply shock as well as the weaker anticipation. However, the long-term fundamentals hasn't been changed in the recently held the financial stability meetings as well as the central economic meetings as you will be able see that the fundamentals are kept stable.

We will have such optimism to the long-term development. And in order to promote the stable development of the capital market and try to make sure that the economic operation can be maintained at a reasonable range, the standing committee of the State Council and the financial meetings has deployed a series of very important measures.

Personally, I believe all these important measures that has been taken are sort of like the spring [indiscernible] that they are bringing warmth for us and also boost our confidence, which has also provided a very favorable opportunity for the banking businesses to grow.

So BOC will definitely implement the deployment of the CPC and the state council and try to implement the requests of the financial committees. We will try to leverage the spring [indiscernible] of the policies, and we would be able to maintain a reasonable growth of the newly added loans so to provide better services for the prosperity and the revitalization of the real economies. So at the end of this quarter, we have been trying to make better results in this regard.

We believe for the first quarter report, you will be able to see a more satisfying results. Well, in order to boost the economic development, we should also try to improve our own resource allocation and try to have a stable growth for our own bank.

[Feiqi Mei, Secretary]

Now we would like to give the floor to the next speaker.

[Zhifeng Dai, Zhongtai Securities Research Institute]

I'm from Zhongtai Securities Research Institute. I want to ask one question about inclusive loan. We have noticed that the BOC has enhanced the support to the medium and small enterprises and inclusive loan has been a fast growth momentum. So I really want to know what is your strategy and market position in this regard? And also, can you look into 2022 above your target of the inclusive loans and also what is the quality of the assets?

[Feiqi Mei, Secretary]

Thank you Mr. Dai Indeed, the inclusive loan is what we have been put our focuses on. Mr. Dai has also asked the questions about our market positions and the strategies and the logic of our operation. We would like to give the floor to Mr. Wang Wei.

[Wei Wang, Executive Director and EVP]

Thank you. As you have mentioned, indeed, BOC in the inclusive finance has been making continuous and relentless effort. On the one hand, it is how we implemented the requests of the central government and the responsibility we have shouldered in supporting the economic development.

On the other hand, we have also catered to the changing landscape of the new reforms with the further deepening of the supply side structural reform, which has generated the new business models and the new growth models, we have seen the prosperity of the micro and small businesses.

According to the statistics, we have altogether 120 million micro and small businesses. Among the 120 million small businesses, there are a large amount of them hasn't really satisfied their financing requests. So there is quite a room for us to further provide better services for these financing requests from the medium and small businesses.

Well, on the other hand, the national policy has also provided a favorable policy environment for the inclusive financing, so trying to provide services for the micro and small businesses is the definite choice of our restructuring of the BOC. And the BOC has listed the inclusive financing into the 8 priority areas of the BOC, which has markedly clarified the strategic position of the inclusive finance.

We will take multiple measures to make sure that the financing for the medium and small businesses can achieve our quantity increase and a wider coverage and reduction of the prices, which has achieved a very marked results. First of all, we have achieved a leapfrog types of development of the inclusive finance as introduced by President Liu and our interest rate has reached 33.15% (sic) [53.15%] in 2021 and #1 in our peers of the fall, and also average interest rate stood out to 3.96% and trying to give benefits to medium and small businesses.

And secondly, we have used the technology to empower the digital inclusive financing. We have come out with our business model of the online and off-line to well-driven businesses. And in 2021, we have termed it as the online product breakthrough year with our online businesses reaching more than RMB 100 billion.

And we have already increased the inclusive business from less than 2% in 2020 to 34%. And last year, we have more diversified product portfolio, and we have also tried to cater to the changing landscape in the market. And thirdly, we have more innovative featured products and services. So we have the inclusive loan amount, which we have 8 different series of more than 50 types of products.

And we have also rolled out the new year benefit loan as well as the MSE benefit loan types of services centered around the technological innovation enterprises. We have signed the strategic cooperation agreement with the National Intellectual Property Bureau, and we have set up such intellectual property financing innovative lab.

We have also tried to perfect our service system for the specialized refined featured and innovative enterprises, providing more than RMB 130 billion credit for over 15,000 such enterprises.

And fourthly, we have fully played our comprehensive strength to satisfy the diversified financing needs. So we have reached such a principle that we are not only providing the Commercial banking services, but also for the village-based bank's consumer financing, public interest financing, so such a diversified whole coverage financial services has been provided.

Looking into 2022 and taking full into consideration of the current economic situation and the regulatory requirement the newly added inclusive loan will be amounting RMB 300 billion, nearly the same increase comparable with last year.

And centered around the online product enhancement requirement for this year, our online new added will achieve more than 50%. And also when it comes to the asset quality, for recent years, we have realized the double deduction for both inclusive loan NPL and NPL ratio double reduction. However, until now, the NPL ratio cannot truly reflect the asset qualities of the inclusive loan. There are several reasons. First of all, such loans are actually newly expanded for the last 3 years and also such extension of the repayment of the principal and the interest are still further expanding.

So such a risk might be further delayed, but our overall judgment is that the quality of the inclusive financing is controllable. And if compared with the average loan quality, it is even higher and it is within our range of what policy really allows. So we hope that we can take a proactive risk mitigation approach and pay great attention to the concern and the predictions of the credit risks from the customers, and also from the approval of the credit and the post-loan management, we would be able to make sure a high-quality development of the inclusive finance. Thank you so much.

[Feiqi Mei, Secretary]

Thank you, Mr. Wang Wei. We would like to -- we will have the next question. Please unmute yourself and ask your question.

[Katherine Lei, JP Morgan]

Thanks to the management for this opportunity and around the JP Morgan. I'm the analyst Lei, I have a question about private wealth management. As we all know, wealth management is very important to many domestic Commercial banks. The capital market also gives high valuations to the business. In recent years, BOC already has made a lot of efforts and has made a lot of progress in terms of wealth management and wealth management-related financial services. So I would like to know what do you think the future opportunities and the growth points are? And also given your good advantages in terms of a high-end wealth and private banking businesses, so what's your plan?

[Feiqi Mei, Secretary]

In fact, 2 days ago, we celebrated the 15th anniversary of BOC Private Banking, 15 years ago. I also began to work for this area. So I'm also responsible for our private banking business. But still I want to give the floor to our Vice President, Lin Jingzhen, to answer the question.

[Jingzhen Lin, Executive Director and EVP]

Yes. Thank you friends from JPMorgan Chase about your interest in our Wealth Management and Services business. As our President has said in his presentation, in the year 2021, the BOC Wealth Management made new progress especially for the growth of the mid and the high end clients.

It was the highest in the past 3 years. BOC is already famous name in this regard. Then for the future trends, we are optimistic and positive. At the national level, the 14th 5-year plan has clarify the common prosperity long-term goal, therefore, providing strategic support to the development of our wealth management business.

At the market level, there are opportunities from the implementation of the new asset regulations, the continuous improvements of the regulatory policies and continued reforms of the capital markets today will help shape even better, more benign competitive landscape and bring about more opportunities for wealth management.

At the client level, our people definitely will have increasing disposable income and will have changed the wealth structure. They will have more diversified demand for asset allocation, thus creating a lot of business opportunities for us.

Then for BOC, the wealth management is one of the 8 priority segments as identified by our strategic plan. During the 14th 5-year plan, BOC will continue to grow our wealth management business in terms of the size, client base and the share of revenues.

We will continue to make new progress and ensure that the strategic targets are well attained. Dear colleagues, in the next step, we will, together with our government, implement core prosperity strategy, we will also achieve the transition of the wealth management business model. So that wealth management actually becomes an important toolkit for us to expand the client base to increase deposits and to improve our profitability.

It will become further our core competency. Specifically, we have 5 priorities in terms of wealth management development. First priority of a better product selection. We should have the bias thinking because BOC has a lot of advantages. So for example, we can provide group-wide and market-wide wealth financing platform and our product selection, monitoring, evaluation and a dynamic adjustment mechanism will be more professionalized, standardized and systemized. So our wealth management product pool is more competitive.

The second priority is about asset allocation. We should shift from the single-product focus to asset allocation mentality so as to sell more portfolio products, including FOF and the interested portfolio products. We will also provide better, smart and intelligent diagnosis and asset allocation services, so the risks will be more diversified and yet income will be increased, returns will be increased for our clients.

The third priority is about the whole life cycle company for the clients. We will shift from the transaction mindset to the whole process life cycle mentality. So we will provide services before, during and after the sales. So we continue to provide a long-term income for the clients. We -- therefore, we also expand the client base to achieve win-win. The fourth priority is about team building. Our team in the area of wealth management will be more professionalized. Our wealth managers, so private bankers and investment advisers will provide differentiated services. They will also benefit from more digital tool kits.

Fifth priority is about group-wide scope and services. Our private banking is very important and it also benefits from BOC advantages. As a globalized bank, we had a bank for the entrepreneurs. And we will also further develop the family trust business, complete the family wealth management ecosystem and to help clients better inherit and ensure the continuity of the legitimate wealth.

The Asia Pacific private banking platform building will be accelerated, and we will also further strengthen the synergy amount and between the private banking plus investment banking plus Commercial banking, so that we provide more comprehensive services to high networth clients. We will also further complete the charity platform so that the BOC will work together with the private banking clients to fulfill our social responsibility for the benefit of a common prosperity.

[Feiqi Mei, Secretary]

Thank you, Vice President, Lin. Now the next question, you can mute yourself for the next question.

[Unidentified Analyst]

Yes. I'm from Bosch Fund Management Company. I'm financial industry analyst [indiscernible] I have a question about asset quality. Last year, the domestic economy continued to recover. In the past 2 years, BOC also has withstood a lot of tests from home and abroad, especially from the COVID pandemic.

So can you give us highlights and also stress points about the BOC asset quality, especially what's your forecast of this year? Which industries and which geographic regions do you think we should pay special attention to in terms of asset quality and asset quality changes? Can you give us the forecast of the asset quality trends in 2022?

[Feiqi Mei, Secretary]

Yes. Thank you. For your question. You have asked a series of questions related to risks. I give the floor to our Chief Risk Officer, Liu Jiandong.

[Jiandong Liu, CRO]

Thank you, Mr. [Yao] for your question and also for your attention to the BOC development last year, BOC proactively responded to changes at home and abroad. And we had better early recognition and early disposal of the risks.

And therefore, we have achieved more disposal of the NPLs. In advance last year, we achieved the disposal of NPLs of about RMB 100 billion in advance. Second, about existing NPLs, we have expanded the channels of disposal. We have increased the pace the resolution of big NPL clients.

Last year, we disposed of more than RMB 100 billion of NPLs. Third, we made a steady progress of optimizing credit structure for strategic emerging industries, manufacturing and the green finance, they got a greater share of our credits. In fact, last year, our asset quality-related indicators were good and tender for the better.

In terms of the NPLs overdues and the NPL disposal, in fact, we were doing better than many of our peers. At the end of last year, our NPL balance went up for the NPL ratio went down. The overdue balance and overdue ratio doubled down the NPL balance was RMB 208 billion, up by RMB 1.5 billion. NPL ratio, 1.33%, down by 0.13 percentage points.

Overdue rates went down by 0.19 percentage points. The ceases deferred range was negative between overdues and NPLs. Then for the priority, the key industries and sectors, they are very important to us for some temporary rate and regional or localized risks, we pay special attention to. For example, some real estate developers might have cash flow problems. And in those less developed regions, some local governments have more than maturities within a short period of time. Some manufacturers and traditional energy companies have difficulties in transition upgrading and green transition. But at the same time, we have noticed that the financial market has more volatilities, which might give rise to risks. Since last year, the prices of commodities have continued to increase, now they still are high, not favorable to low-end manufacturers construction industry wholesalers and retailers. Some businesses might have the probability of a default.

And also recently, the Russian-Ukraine conflict, U.S. dollar appreciation have enabled some commodity prices to reach the unprecedented high levels, therefore, bringing more shocks to the financial market. We will monitor the implications of these risks to our client cash flow situation and to the client's resolvency, so we can further dispose of the possible risks.

We will do the following: first, the overall risk management and strengthening of the governance structure. Second, more bottom line mentality that we will increase our prewarning monitoring and emergency response capabilities. Third, digital transition. More smart and intelligent risk management, the Big Data, AI and knowledge graph will be helpful and enabling so that we can better identify the profiling, the risk profiling of the key product lines and target clients.

Fourth, the monitoring over some key areas and the concentration levels. For example, the big clients, especially those that might be affected by the volatility of the financial markets. Fifthly, we'll continue to dispose of NPLs, especially improving the quality of disposals, expanding the channels given full securitization and tapping into the value of already written off assets. We will also better manage the overseas assets quality.

They will adopt a more industry portfolio management, especially, they will control the limits or the business sizes with those industries. They are more affected by the pandemic that are in more risky countries. We will continue to proactively prevent and dispose off systematic risks. We believe we can do it. We will not let down our shareholders.

[Feiqi Mei, Secretary]

Thank you, Mr. Liu. We will have the next question -- the next question, please unmute yourself.

[Unidentified Analyst]

Yes. I'm from the [indiscernible] Securities Company. So I have a question about BOC overseas business. Last year, the pandemic was very volatile, but still the global economy had a strong size of recovery. This year, I believe the global economy will maintain that recovery momentum. BOC is the most globalized Chinese bank. Last year, I think you did a good job in terms of responding to the uncertain external environment. So my question is, what is your strategy for overseas business development in the new year, in the next step? Will you have a more ambitious target and the financial goals for overseas business for 2022?

[Feiqi Mei, Secretary]

Yes. Thank you, Mr. [Fan] Yes, we are a very globalized bank and overseas business is also our competitiveness. Now let me give the floor to Chen Huaiyu, he will answer the question.

[Huaiyu Chen, EVP]

Many thanks to Mr. [Fan] for the question. Yes, for 2021, the pandemic was volatile. Roughly, the idea is that last year, BOC managed the pandemic implications, we ensured business continuity and employee security and also the 14th 5-year plan had a good starting points, laid foundation for overseas business developments in the year 2022.

This year, the global economy will continue to recover as providing favorable external environment for our overseas business, bathe global recovery might be diverging with still an evenness and uncertainties. Advanced economies might have changes of the monetary policy. The interest increases actually are favorable to BOC, but still there are spillover risks from the advanced countries managing policies.

For emerging economies, the financial risks go up, but the BOC has only a smaller proportion of assets and revenues from emerging economies. This year, we will continue to give priority to stability. We will continue to improve the quality and efficiency of the overseas business especially for the global green sustainable transition for CEP implementation.

China is further volume trade with other countries, especially the neighboring countries. And in terms of the conglomerate syndicate loans and debt and bonds underwriting, these are our traditional competitiveness. And we will maintain the One Body with Two Wings strategy. We will provide more comprehensive services to both domestic and the international clients so that we can support the country's a double circulation strategy and high-level opening strategy. In terms of the overseas branch layout, they already are in 62 countries and regions.

In the future, we will improve the quality of the overseas branches. We will also have more regional integration. The Asia Pacific synergy mechanism will cover all our CEP economies. We will also promote the region regionalized management over Europe, Africa, the Middle East. We will build the IPU regional headquarters.

We will further improve the synergy service capability and the management capability within those regions. And we will continue to monitor the pandemic situation the local economic development situation and external geopolitical tensions, so as to ensure security of our business and personnel, we will also further and more fine-tune the overseas risk management and responds to the changes of the external environment and more heightened and tougher regulatory requirements from abroad.

In terms of business plan, budgeting and asset allocation, we will give a foreplan to our strength in the Asia Pacific region. We will further develop business in advanced countries. We will provide high-quality services to and we will stabilize the business in the other emerging economies. BOC is more than 100 years old, and we are will continue to give for play to our global service capabilities so as to support the national strategy.

[Feiqi Mei, Secretary]

Thank you, ladies and gentlemen, dear colleagues, so much of the online questions from investors and analysts. According to regulatory requirements. We, also have got questions from the small and the medium investors. So some of their questions are collected and already adjusted by the answers previously, but still there are 2 questions.

I want to ask these 2 questions on behalf of the media and the small investors. One is about capital and dividends. At ad hoc shareholder assembly, adopted BOC latest capital plan. They would like to know more about this. And also, they want to know the dividend payout policy. So I'll give the floor to President, Liu Jin.

[Jin Liu, Chairman and President]

I want to thank the shareholders for your interest in Bank of China's dividend policy. In the result announcement, I gave just now I have brief you about our capital adequacy ratio of Bank of China in 2021. In recent announced 14th 5-year capital management plan, we set several targets.

Our Core Tier 1 Capital Adequacy Ratio, Tier 1 Capital Adequacy Ratio, Total Equity Ratio should be no less than 10%, 11% and 13%, an increase of 1% as compared to the previous planning period.

To ensure the achieve the above-mentioned goal, we have made several arrangements. In terms of our management practice, capital management requires 3 work. First, increase capital internally; second, capital charge; third, emergent capital management.

Increasing capital, as you may know that the first effort needed to be made is to increase Core Tier 1 Capital Adequacy Ratio. We stick to the red track of value creation and try to create capital internally. While creating value for the customer, we can also increase our own capital by increasing profit.

We optimize economic value added and other indicators so as to contribute more to our customer. And in the performance system, we also use In this way, we can strengthen capital management, optimize business structure and promote capital transformation.

Internal generated capital is the most important channel for increased capital -- increased the capital for bigger Commercial bank. Therefore, we have to expand our business scale and maintain, first, profitability growth. Otherwise, capital replenishment will be empty talk.

Our future development will be constrained. For Core Tier 1 capital, this will be supplemented by internal capital generation and we also use other tools -- innovative tools to replenish other capital. We will communicate with our external regulators and make use of capital tools.

We will learn from international peers progress steadily with TLAC bond issuance and manage existing capital tools, optimize capital structure. We are issuing a perpetual bond and other capital replenishment tools. This is our daily work.

That's about how to increase our capital. The next aspect is about safe capital charge. In our data operation, we are deepening the use of advanced risk management method and optimize capital assessment and optimize our models, identify major risk, measure -- monitor those risk and also try to expand the use of internal rating method.

In this way, we can save capital charge. The other aspect of capital management is to improve our stress testing scheme and establish and improve emergency capital management plan. There are many market changes and internal changes, which will bring a big impact to our capital levels.

Well, serving the real economy, while increasing our lending at a fast speed, this will have pressure our -- on our capital levels. To be frank, we have a strong motivation and aspiration to increase our lending. Such motivation and aspiration comes from our responsibility to serve the real economy and to play the role of big bank.

And also it comes from our business development needs and our need to increase profit. Scale increase comes from capital increase. Therefore, we will set up and improve our capital emergency management plan. While external environment deteriorate when the business environment change, while we want to increase capital lending, we will optimize asset structure and control asset growth speed, so as to maintain adequacy of our capital. That's several points about the capital management.

Different banks have different capital adequacy ratios. Bank of China amongst big banks is enjoying very good capital adequacy ratios. And we have prepared emergency plans already and strengthened capital replenishment and management. Please rest assured about our capital levels.

About our dividend payment policy. It is normal for investors to pay special attention to our dividend payment policy. Looking at the 14th 5-year plan goals and the capital plan goals in considering shareholders' request, the needs of business development, regulatory requirements and other factors, we will decide a rational annual dividend payout policy, which remain unchanged with the previous policy.

Our big shareholder set up the dividend payout ratio of 30%, which remained unchanged for many years. Without special conditions, we will not change that. I'm pleased to be confident about our consistent policy under this payout ratio. In 2021, share price -- average price RMB 2.81 and dividend per share, RMB 22.15. So payout ratio increased by 0.8% as compared to last year. Information is not available yet. However, if we look at the 2020's figure, Bank of China's share price is not the highest in 2020. Because of the impact of pandemic and other factors, our average price was only RMB 3.41 per share. However, dividend payout ratio 5.78%, so it means that [30%] of dividend ratio such share price to dividend ratio although 5.78% is not very high, but under the current complex situation, such 5.78% of dividend to share price ratio is a rather stable income for you and also for individuals buying BOC share is a rather good choice.

If you look at wealth management tools or fund placement tools, if you do your own choices or for your portfolio, if you can 5.78% of return, it is rather handsome return. So we will maintain our dividend payout policy maintained its relatively high dividend to share price ratio.

[Feiqi Mei, Secretary]

Thank you, Mr. Liu. On behalf of small shareholders, I want to thank President Liu. Just now President Liu talk about our capital adequacy ratio, which will satisfy the regulatory's requirements. This is assuring for the small- and medium-sized shareholders. And Mr. Liu also used specific figures to show as the share price to the dividend to share price ratio, which is a good reward to small shareholders.

The second question is about digital Investors said when they look at the winter Olympic games, they experienced Bank of China's digital service. They hope to know more about Bank of China's digital services and the future plan. And I would like to give the floor to Mr. Wang Wei, EVP of the bank.

[Wei Wang, Executive Director and EVP]

Thank you for your interest in digital RMB. This is a hot topic. According to PBOs released pilot plan of 10 plus 1. Winter Olympic game pilot is the 1 among 10 plus 1 pilot. In Winter Olympic Games and paralympic games Bank of China is the only bank who have sponsored winter and summer Olympic Games.

We become the payment receiving and settlement bank for digital RMB. We make a good preparation for this work and provide soft wallet, hard wallet through digital RMB service. Especially for foreign, foreigners coming to China for winter Olympic games, we launched hard wallet called Ice Chip and Snow Ring. And we also provided to the public case account entry hard wallet. We also provide automatic exchange machine and other products to promote digital RMB.

All of this shows that digital RMB, the latest result of our IT financing became the dominant payment method during the winter Olympic games, good achievements have been made. So digital RMB pilot. The achieve met can be reflected on 2 parts. First, the product and the system is rather stable.

The winter Olympic games have participants, including sportsmen, volunteers, audience. During the pilot period, there is no problem with the product or with the system. So we have no error, no failure, no customer complaints with digital RMB. Digital RMB app, hard wallet, have one market recognition. Second, digital RMB is proven to be convenient, and it is much welcomed by the public. Digital RMB is the legal tender issued by the country, it's easy to have access to digital RMB. We can have a noncontact payment with digital RMB you can protect your personal privacy and can protect you from the virus. So it is much welcomed by the sportsmen and audience.

The auto pilot regions, RMB -- digital RMB provided by Bank of China, the total amount increased exponentially, and we also established many scenarios for using digital RMB. In future, we will make use of our experience to land during the winter Olympic games promote products and play the spirit of winter Olympic games, further promote hard wallet, Internet of tails and push ahead with pilot work for digital RMB, further optimize digital RMB systems and service levels. And integrate digital RMB into consumer finance, inclusive finance, green finance and other strategic scenarios, further improve digital RMB ecological system and use digital RMB to cover online platforms, education, schools, bank-to-bank cooperation and shopping, transportation and government and other areas and satisfy people's need for food, housing, travel, tourism, shopping and by digital RMB. We hope that digital RMB will be the preferred choice, and Bank of China will be the preferred bank for digital RMB. So for online friends, if you have -- you don't have a digital wallet yet, please go to Bank of China for digital wallet.

[Feiqi Mei, Secretary]

Dear friends, because of time limit, let's end of the session for questions from investors and analysts. If you have further questions, you can contact our Investor Relations team and we will have your questions answered. And now we will have questions from media friends, please keep on line. Now the floor is given to Mr. [indiscernible] spokesperson of Bank of China and also General Manager of our President Officer. The floor is given to Mr. [indiscernible].

[Unidentified Company Representative]

Thank you, Madam. Board of Directors, Board Secretary, Mr. Mei, dear media friends, investors, analysts, I now start the media question-and-answer session. I believe that the media friends have come up with many questions before you come here. [Operator Instructions] Now we will start the question process. The floor is given to the first media friends.

[Unidentified Analyst]

I'm from [indiscernible] My first question is about the 110 years anniversary recently celebrated by BOC. After 110 years, Bank of China has become a global big banking group with a solid strength and good foundation and sending our new starting point how Bank of China can seize the new situation and show your new endeavors in new areas?

[Feiqi Mei, Secretary]

Thank you for your question. the good inheritance of historical legacy is to be innovative about the future. Bank of China have produced 14th 5-year plan, to answer your question. And now the floor is given to Mr. Liu Jin.

[Jin Liu, Chairman and President]

Thank you to bringing us back to the ceremony when we celebrate our 110 years anniversary. Bank of China is the only bank in China which has been operating for 110 years on a consecutive basis. Bank of China has just held our ceremony, which is very simple and all people who have worked for Bank of China include all employees and new employees feel proud of ourselves feel getting excited about our own bank. After this ceremony, the management about and general managers, depute general managers of all departments are reflecting on the same question as you have asked just now.

Standing on the new starting point, how can we seize new opportunities and make new achievements? As you may know, last year, in line with the 14th 5-year plan of the country and the 2035 long-term venue of the country, we printed and published the group's 14th 5-year plan, identified the development orientation for the next 5 years.

Such developmental goals can help us to seize new opportunities and made new achievements. To be specific, we hope that -- we can follow the One Body Two Wings strategic development pattern, position our group well, the economic development of the country in helping the dual circulation of the country. And we should give full play to our competitive advantage, play a bigger role in contributing to the country. One Body Two Wings by that I want to further clarify this strategy.

One Body means we will focus on the development of a Commercial bank because we have the largest share of overseas banking asset among all domestic banks, domestic asset and overseas asset and profit accounted for the largest share as compared to other banks. Asset overseas was 24% of the total profit, 20% of the total. However, 75% of the asset and 80% of the profits are still generated domestically. As you know, that we are among one of the SOE state banks and representing the financial strength and also play a pivotal role in the national economic development. Currently, when we have seen some headwinds of the globalization will pandemic has given us an unprecedented shock well, we are facing the triple pressures domestically when it comes to the economic development as one of the largest banks in China, BOC should implement whatever required from the central government, we should provide a better service for the society, and we would be able to carry out the missions of being integrated to the world and provide better services for the society and also provide better service for the real economy.

Well, during this process, we can also fulfill our high-quality development per se. So this is first and foremost our own strategic position. We are one of the largest scale of the state Commercial banks. So in such a big landscape, we are having a pivotal role. Since having such a pivotal role, our responsibility and our contribution should be made Two Wings.

And One wing is internationalization. The other one is the comprehensive development.

I would like to focus more on our understanding of the internationalization and globalization, which is One wing. As I have mentioned, we have just finished the commemoration of the 110 years of the anniversary of BOC. For all these 110 years, we have pursued the goal of internationalization and globalization.

Not long ago, we have given the whole society a introduction. And during the advocacy process, we've made it clear that BOC, starting from the inception, it is international and global bank. Two days ago, I led some of the customers to visit the BOC museum located in [indiscernible] Street. And we've seen the first note issued by BOC. And on the front, it is [Foreign Language] in Chinese and at the back, it is Bank of China.

As you know, note is a representation of [indiscernible] the official language would be marked. However, even at that time, English, Bank of China was printed at the back of the note. This is a snapshot of the internationalization of BOC. Well, when introducing the BOC, we would divide it into 1912 to 1949 and from 1949 to 1979 and from 1979 till now several stages. And before the liberation and before the founding of PRC in 1929, we have set up the lender office, which is our first office.

And in 1930, the Tokyo branch. And there in the 1939, we have set up in the New York office. And also, we have the New Zealand and also in 1912, after we set ourselves up, we also set up the first overseas representative office in Hong Kong in 1917.

So after the funding of PRC in 1979, we set up the first overseas branch in Luxembourg, which is the first after liberation. So these are the institutions set up during the history. And also after the liberation and during the processes of opening up in reform, BOC has played a pivotal role for the opening and reform in terms of the trade services as well as foreign exchange services.

I have several points to share with you. After the funding of PRC in 1949, BOC has extensively expanded its foreign exchanges and becoming a bridge of bridging the gap of the domestic market with overseas market. We have set up with more than 2,000 branches and overseas banks setting up such business relationships with more than 120 countries.

And for the first 20 years of the opening up and reform, we have supported more than 85% of the aerospace company and more than 80% of the shipping company and also more than 70% of the textile industry and also provided the support for the Daya Bay Nuclear Power Plant become -- it becomes the main source of funding for the opening and reform.

And in 1994, we have also becomes the bank for the Hong Kong currency and Macau currency bond issuance, playing a very important role in this regard. And also, we have provided the support for the infrastructure, railway, subway, airports, shipping, foreign trade we have provided a large amount of loan, which has played a pivotal role in supporting the prosperity and the stability of Hong Kong and Macau.

I don't really want to further illustrate all these stories because many of the media friends are the new audience perhaps it is a chance for you to know more about the stories of BOC. But of course, some other journalists might have already heard these stories for multiple times.

The reason that I want to have such repetition is not for the purpose of the sake of repetition, but under such a complex and sophisticated external environment, BOC as an international bank at very inception should be able to play a bigger role in such a changing global landscape. How can we play a better role? First of all, we need to maintain our frontrunner position in the international business. As I have illustrated in the results release in all the 13 cross-border businesses, we are ranking #1 among our peers. So for example, international settlement, cross-border RMB as well as cross-border capital, cross-border bond issuance and also the cross-border green band mechanism.

BOC has been ranking #1 among our peers of all the cross-border businesses. For example, if we can look into the hot topic of the green financing, BOC, when it comes to internationalization, has been making some constructive explorations. The green bond underwriting overseas amounting to 23.4%. In the Bloomberg ranking, we are ranking #1. Among the Chinese banks, well, at the same time, in England, U.S., America, we have participated in the USG-related green bond and also in the Bloomberg global green finance and sustainable bank, we're also ranking #1 among the Chinese banks.

Other than these business indicators, globally, we have widely participated into the PRB, and we have become the TCFD supporting organizations. We have also participated into the pilot working group of the PRB financial product sustainability. We have also participated into many of the Asian-related institutions.

And also, we are the member and cochair of the GIB, and we have awarded the best practice in the Belt and Road green finances. So these are several achievements that we've got in terms of the achievement we have in internationalization and globalization.

So in the international and cross-border business, I would also like to reiterate with our colleagues, we should be able to safely stand as the frontrunner among our peers. This is our mandate and our responsibility in this new era. And secondly, we should have a better play of our strength of internationalization, fully leverage our overseas branches and our talent pools overseas. We have representative office of branches in 62 countries.

We have a staff size of 15,000 overseas. While, at the same time, we also have a very long history operating overseas. So currently, when the China financing industry are embracing a high-quality opening up and under the backdrop of a improvement of the internationalization, we should fully leverage these strengths in the product innovation, service innovation, technological innovation, we should make further explorations so that we would be able to achieve the results as expected from the society. So under this new era, your question is actually targeted around looking into the future, how can we better play the role of the BOC? So I hope that I have already addressed your questions.

[Feiqi Mei, Secretary]

Thank you, President Liu, who has our introduction of the history in a retrospective manner and also stressed the responsibility of BOC. We would like to invite the next speaker.

[Unidentified Analyst]

I'm from China Daily. My question is that for -- we have just concluded the Beijing Winter Olympic and Paralympic Games, which lasted for nearly 2 months. BOC as the only banking corporate partner, has been highly acknowledged by providing such high-quality financial services.

Can you please give an introduction of the features and the strengths of the BOC? And also, how can you further continue the dividend of the Winter Olympic Games?

[Feiqi Mei, Secretary]

Actually, these are the questions that we are very happy to answer and address indeed, BOC has tailor-made the financial service packages for Olympic Games. Now we would like to give the floor to EVP Wang Zhiheng to answer your question.

[Zhiheng Wang, EVP]

Thank you, the journalist from China Daily and also for your acknowledgment of our financial services. Actually President Liu has already given your introduction of the services providing for the Winter Olympic Games. To better serve the Olympic and Winter Olympic Games are our mandate, and we have been prioritizing our tasks and have regarded it as the priority among all the priorities we have fully implemented the deployment of the central government and the state council, we have provided financial service which is featured by zero infections, zero incidences, zero errors and zero complaints.

And I believe this speaks volume of the efforts that we've made. And the BOC has give a full play of the service advantage, which featuring internationalization and our professional service we have provided 28 foreign currency cash services, 9 foreign language consulting service and 24/7 online auto bank services, which has achieved acknowledgment from the Olympic Committee, Mr. Baha and also Mr. Samaranch as well. And just now we have also talked about the digital currency in the Winter Olympic Games.

So we believe the results of the digital transformation also reflected that we have showcased the sports scenario to the consumer growth so as to support the winter sports, so that is why our President Liu has mentioned, if you want to engage in the winter sports, then BOC is the right bank for you to engage.

And we have all together extended credit of over RMB 60 billion for the Winter Olympic-related projects. So we have signed up [indiscernible] have got 3 medals and one silver, a wonderful performance. So there are many service items in the Winter Olympic Games. Because of the time limit, I wouldn't have further illustration. For the continuing dividend that we can further yield, it has already but such a spirit for the Winter Olympic Games is still continuing.

We believe that the success of the Winter Olympic Games will be batches and support for the future prosperity of the winter and fully leveraging the image that we have set up during the Winter Olympic Games, we would be fully implementing the concept of president in advocating ourselves into building a very strong country in winter sports, we have also embraced the new winter sports plants and the BOC will just tailor made itself into a bank, providing better services for the winter and also sports-related projects, we will expand our loan of more than RMB 200 billion to fully support the comprehensive development and the green development of the sports providing services for winter sports and for other athletic sports and being able to provide better services for the digital transformation of spot scenario, while at the same time, trying to inject more capital into the sports businesses, we would also be able to realize our own development in the due course. Thank you very much.

[Feiqi Mei, Secretary]

Thank you, Mr. Zhiheng. And empowering the development of the winter sports and the sports industry as a whole is a very long-lasting go of the BOC. We would like to give the floor to the next journalist.

[Unidentified Analyst]

From First Finance, the green transformation has already become the future growth driver for the economic and society growth globally, which has also given us tremendous development opportunities. So would you please give us introduction of the green financing business in BOC? And how are you going to have a differentiated strategic position? And we believe that it is one part of our the 8 priority areas and the green finance would be 1 priority area into our 14th 5-year plan, so that we would be able to achieve a very high quality development of the green finance?

[Jiandong Liu, CRO]

Thank you very much from the journalist of the First Finance. BOC has been attaching great importance of the green low-carbon transformation, and it has already been listed as 1 of the 8 priority areas in the 14th 5-year. And based on the principal One Body and Two Wings, we would give a full play of our strength of our internationalization and comprehensiveness. So they would be able to mutually reinforcing.

And 2021 had witnessed a comprehensive leap-forward development of green finance for from corporate structure and policy systematic approach. We have overarching top design the chair of the Board has been playing a leading role in the green financing leading group. We also have the green financing committees. So in all levels and across all teams, we have the green financing teams so as we would be able to mutually put forward the development of the green finance.

And among other banks, we have set up the BOC 14th 5-year green financing plan and coming out with the action plans of the carbon-neutral and the carbon peak, we have come out with all the targets for the 2021 to 2025 in terms of carbon emissions.

During the 14th 5-year plan, we will provide no less than RMB 1 trillion of the support to green industries with the year-on-year increase. Domestic Commercial banking plays a very important role. At the end of last year, our green finance balance was more than RMB 1.4 trillion, increasing by 57% the highest among the industry.

In terms of the green launch investments and underwriting, we are #1 among Commercial banking and also in terms of domestic green bond issuance, we are also #1. And for the -- we have issued the first publicly placed transition bonds among global financial organizations. We also are the first to issue the green bonds featuring biodiversity and the first recoupling bonds featuring sustainability.

I also want to point out that this year, according to the 4 elements of the TCFD and the 6 principles of PRB, we provide disclose information. That's to say, we provide information disclosure according to the international standards. So if you read our annual report, you will get more information.

And also in terms of comprehensive services, our bank provides a green fund green wealth management in leasing, green insurance, green equity investments and other comprehensive products and services. In addition, at the group level, in the past 3 years, we have accounted the BOC's own carbon footprint, covering more than 11,000 BOC branches and institutes in 62 countries and regions as well as in the Chinese Mainland.

In the future, the good top-down design, we will continue to do a good job in terms of green finance developments along the principle of One Body and Two Wings, we will continue to improve the top-down design. We'll give more policy support of green finance, and we will also provide more incentives, so as to increase innovation.

And the second, better synergy and collaboration BOC has advantages in sense of global operations, international collaborations and comprehensive services. We also benefit from the synergies between domestic Commercial banking, overseas branches and affiliated companies. Third, risk management. Not only our banks own risk management, for the sake of a national economic development, we will also promote the adjustments to the industry structure of a credit authorization so as to prevent the risks from transition.

Firstly, BOC will also do a better job in terms of managing our own carbon footprint. BOC is fully supportive of the double goals of the carbon neutrality and carbon peaking and we will try to achieve the synergetic development between the economic, environment and the social effects. Thank you. If you go to our website, you will also get more information under the full report. Now let's have the next question.

[Feiqi Mei, Secretary]

Yes. So the next question, please unmute yourself.

[Unidentified Analyst]

My name is [indiscernible] I'm very happy about this opportunity. My question is about cross-border wealth management Connect, which was kicked off from last year by the Central Bank. The market is very interested as it will bring new opportunities for domestic banks for wealth management.

Cross-border business is BOC competitiveness. So I would like to know your progress, your development strategies and also your forecast of the BOC personal cross-border financial services?

[Feiqi Mei, Secretary]

Thank you, [indiscernible] You are right, BOC is the most globalized company bank of the country. And we of costs will continue to play a very important role in terms of double circulations and in terms of cross-border financial services in terms of a higher level opening up of the country. EVP Lin Jingzhen will answer the question.

[Jingzhen Lin, Executive Director and EVP]

Yes. Thank you. As you have pointed out, cross-border financial service is BOC's conventional competitiveness. As a veteran at BOC, I'm proud to answer your question. Then for the cross-border wealth management Connect, it's an important pilot project under the framework or for the personal accounts, capital accounts opening up as compared with the existing mechanisms such as Hong Kong and Shanghai Connect, Shenzhen and Hong Kong Connect, the cross-border wealth management interconnect actually has the banks as the most important sales channels for the cross-border wealth management market.

It's very important. It's mainly oriented towards the residents in the Greater Bay area. And since it's a commencement for the cross-border wealth management Connect, it has made a lot of progress. And BOC has maintained our competitiveness. According to the latest regulatory data, by the end of February this year, BOC had 14,700 clients for the North Connect and South Connect programs accounting for 60% of the market share. The 2-way fund transfer continues to grow.

Then for the cross-border Wealth Management Connect business strategy, it's the following: BOC has our branches, our very professional colleagues in the Greater Bay area, we have a comprehensive services. We have synergies between domestic and the overseas branches and also between the domestic Commercial banking with the wealth management and fund management and the securities company.

And, therefore, we will continue to push forward the business procedure optimization and client experience improvements. We will make more progress in terms of the wealth management product selection and investor services. BOC will monitor the latest regulatory policies and requirements to maintain our competitiveness.

We have more than 100 years of experience and competitiveness in terms of cross-border, cross-disciplinary and cross-industry service capabilities. We will provide comprehensiveness in terms of a settlement, bank accounts, consumption payments, investments and the real estate purchases, et cetera, for the personal clients.

There is also a contribution to the prosperity of the Greater Bay area. In the next step, we will promote the digital transition of the cross-border business, including the cross-border go APP, the personal banking -- the personal online banking, mobile banking cross-border special column, the small mini program, et cetera, mainly targeted at clients who are overseas students, tourists, expatriates or nonpermanent residents.

In that way, we provide a comprehensive financial and nonfinancial services across product clients. And the second, to take advantage of the new business, the country will continue to open up and there will be more trade and investment facilitation and the freedom policies.

BOC has a One Body Two Wings strategy. BOC also has a good collaboration between domestic and overseas business. In that way, we will take advantage of the new business opportunities from personal trading and capital accounts reform, we will provide more services in terms of the settlements for cross-border procurements and the trade cross-border e-commerce foreign related equity transfer, et cetera.

Dear colleagues, the international political and economic situation is complicated, the pandemic is still not vanished yet. But countries, the financial sector will continue to open up and there will be more international collaborations. So cross-border consumption will pick up. So we are very confident in the prospect of the cross-border financial services. So BOC will continue to maintain our competitiveness, and we will continue to be the market leader. Thank you.

[Feiqi Mei, Secretary]

Yes, he has pointed out that the cross-border financial service is our conventional competitiveness. I will be more comprehensive, including the cross-border wealth management Connect. The next question.

[Unidentified Analyst]

Yes. I'm [indiscernible] from the Phoenix.com. My question is at the end of last year, China's regulator issued management measures for TLAC which already were effective from last year. BOC is so I would like to know your progress in terms of attending or complying with the TLAC? Especially, I would like to know your plans for the necessary capital replenishment?

[Feiqi Mei, Secretary]

Thank you, [indiscernible] for your question. You are right, BOC is the first Chinese bank. We are the We are also the first Chinese bank to get that title. So your question is a very professional one. I give the floor to EVP Chen Huaiyu.

[Huaiyu Chen, EVP]

Many thanks for your question. Yes, so according to the regulatory's requirement, so that's management measures from January 1, 2025, BOC's external TLAC risk-weighted ratio should not be lower than 16%. So from January 1 2028, it should not be lower than 18%. And during the 14th 5-year plan, our capital adequacy is reasonable and to comply with the TLAC, the pressure is controllable. It will not affect our credit provision capability.

We are doing more research TLAC. We are communicating with the regulators. We are preparing for the TLAC related on capital debt instruments issuing so that we can be fully compliant with the TLAC. But the interest of the time is almost 7:00, so we can allow for the last question.

[Feiqi Mei, Secretary]

Yes. We will have the last question. Please unmute yourself.

[Unidentified Analyst]

I'm [indiscernible] from the Financial Daily. We can see that the government has issued a 14th 5-year plan for digital economic development. So the regulators also have issued the guidelines. I want to know BOC progress in terms of a digital transition, especially your investments and the outcome in terms of fintechs and what are the priorities for the next step?

[Feiqi Mei, Secretary]

Thank you. The question is important, I think, through all financial organizations. For fintech, I will give the floor to President Liu Jin, he will answer.

[Jin Liu, Chairman and President]

Thank you. In fact, it has been deliberated so often. Originally, I thought my colleague was going to answer your question. But somehow, the chairperson has asked me to answer. I feel very honor.

So for digital economic developments or digital transition, I think it's our consensus. Consensus for the whole society. The digital economy has opened up new markets for BOC. It also has revitalized our own development momentum. In recent years, BOC has always attached the strategic importance to digital transition with a lot of progress, laying the foundation for the future developments. From last year's press conference to my presentation at the beginning of today's first conference, I made an introduction about the Oasis, the enterprise architecture projects. which is very important, which is the guarantee of BOC digital transition.

Digital transition is a systematic program. And therefore, the top leadership at the BOC assumes responsibilities. It means also a transition from the old year to the new year. And therefore, the organization and the institution and the policy mechanisms are very important. We are now implementing the BOC reform program for technology management institutions.

The BOC headquarters has already established the leading group of financial digital transition. That's the leading group, but who is to do the job specifically? BOC now is going to establish a new department. The department's name will be Ecosystem and Innovation Department to be responsible for the products and innovation scenarios and the ecosystem building.

And therefore, it will have a close contact with the technology department. So as to translate the client demands and market opportunities into real products. In that way, there will be more synergy between business and fintechs. Our teams will also be more responsive and more effective and efficient in responding to client demands with good technologies.

We will also optimize the incentives. We will also strengthen our IT team. These measures, I think, ensure the future success of our digital transition. Second, for the online client service capability, it continues to make progress.

Just now I said that for personal banking services, last year, the version 7.0 personal mobile banking was already released. It has 4 scenario. So that's finance plus scenario, technology plus intelligent plus professionalism, globalization plus full scope of services.

For our mobile banking, it has monthly active clients of 71 million, the most important client service platform. And so also, we have accelerated the online procedures for the corporate business, including the IGBT and for the SME loans, cross-border money remittances, supply chain financing and other complicated corporate business procedures, they are now all digitalized, pushing the sales.

For example. Last year, the SME online finance already had achieved a balance of more than RMB 100 billion. And the new version of the corporate clients, online banking was [5.55] million. So dear colleagues as the OASIS project makes new progress -- and as our data governance is further enhanced we will further promote the online operations, data management and intelligence operations of the different business and product lines.

And also our enterprise level, digital service capability will be strengthened featuring digital marketing, dynamic real-time pricing, open banking and intelligence risk control. The state council not long ago had meeting about the digital transition for the banks and we are studying the decisions.

Given the BOC's own demand, given our own requirements for digital transition, BOC already has made our strategies and also made our plans for digital banking. Maybe for the corporate online banking version, you are not very familiar, but our mobile banking personal services, I think you are familiar.

I, myself, I'm a client of the mobile phone-based banking services by 4 banks, including BOC. Of course, I'm President of the BOC. Of course, I'm proud of my bank. But I also have been a client to the other big banks. I have done a lot of comparisons.

In terms of interface friendliness, in terms of the full functions, in terms of data security, in terms of convenience for users, I think our BOC mobile phone banking platform is really very good. It's a good choice for you.

Not only youngsters here, but also your parents, your elderly friends at home can also use mobile phone banking of Bank of China. So if you are above the age of 50, you can choose automatic function, that is you can choose the senior version and you can have access to bigger characters and even voice functions.

And the products shown on your app is different from the products for people under the age of 50. So we have 2 versions, one for elderly person, and you can have test run of our mobile banking app where you come back home. So digital transformation is an inevitable trend of Commercial banking development.

So the completion of our OASIS project, digital level of the bank will follow the pace of the time and satisfied corporate and individual client's needs.

[Feiqi Mei, Secretary]

I want to thank Mr. Liu Jin. Thank you for your answer to the final question. Do you have any other add-ons to your previous answers or previous questions? If no, and that's we talk about the first question. That is the 110 anniversary of the bank. The final question is about Bank of China's digital transformation, so we want to take new progress on the basis of our history. We have a history of 110 years, which is a very long history, which means that we have accumulated good experiences.

Just now, Mr. Liu have proudly promoted Bank of China's mobile app to you as a client of Bank of China. After 110 years, we are still new and we are still making innovations and enable to -- us to provide more services through mobile banking and other IT. I want to thank media friends, investors, analysts for participating this result release. I want to thank all the friends who are online to watch this results release.

If you want to show more details about our results, please get locked on to our website. There are detailed presentation of our data and you can have access to our annual reports online. And if you are for further questions, please contact us at any time. Mr. Liu Jin have one more word.

[Jin Liu, Chairman and President]

I forgot that Mr. [indiscernible] will do the summary. Before his final summary, I want to insert a few sentences. I want to offer a special thanks to journalists, analysts and media friends to share your evening with us. In this results release, China -- Bank of China's business operation, market influence and our brand cannot develop well without your support.

The senior management board members and all the people present here from Bank of China will learn from best market practice, be innovative in providing better product and services. In this way, Bank of China's comprehensive strengths and the market image can be enhanced to live up to your expectation.

As mentioned by Mr. [indiscernible] just now, after this press release, we will also arrange some online roadshows only online, no in-person because of the pandemic. And we will share with you more development story about BOC and new and new learnings of BOC.

So our roadshow -- it seems that our past roadshow don't lift our share price. This is a long-term phenomenon. However, I suggest strongly all the analysts and the investors to not only look at share price, but also look at the dividend; not only look at capital market growth, but also look at our stability; not only look at BOCs stress as a market-based Commercial bank, but also look at the advantage of socialist country.

So for Bank of China's share, please be brave to buy it, and we expect the big orders. And we expect a stable capital market and a stable growth market economy. And there is rain outside. And last year's results release happened on March 30, which have a full rainy day. Spring rain is very precious.

What's more precious is the confidence and support from investors and analysts. Now it is raining. Again, tomorrow, it will not raining, although we move ahead one day it is still raining. Such a small rain, let us feel your trust and support to Bank of China, we expect the spring wind -- the spring rain can bring health, good mood and also wealth to all of you.

[Feiqi Mei, Secretary]

I want to thank Mr. Liu Jin for your summary about not only but also and we would like to thank you for your support to Bank of China. Thank you for your attention. That's all for today's presentation.