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Fubon Financial Holding Co Ltd
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Thank you for standing by and welcome to Fubon's First Quarter 2018 Financial Results. [Operator Instructions] This call is being recorded. If you have any objections, you may disconnect at this time. Now I'll hand the call over to your host, Amanda Wang, IR Officer. You may begin.
Hello everyone. Welcome to join Fubon Financial's investor conference call today. This is Amanda. I'm the IR Officer. And in this call, we prepare to update you the Fubon's first quarter '18 interim results followed by the embedded value of Fubon Life for year '17. And later on, we will open for Q&A after the presentation and your questions will be answered by our management team and also the EV consultant from the Deloitte advisory.
So firstly, I will turn the mic to Christine Fung of our IR team. Thank you.
Thank you. Please turn to Page 4 of the presentation. Fubon Financial made net profit of TWD 16.5 billion in the first 3 months, which represents 66.5% growth year-over-year. In Taipei Fubon Bank net interest income steadily grew along with loan and investment momentum and asset quality remains quite benign. In Fubon Life on the investment front recurring income maintained steady growth and hedging costs improved. In terms of our top line, we see FYP and FYPE continue to well perform among top 3 positions. In Fubon Insurance, we keep our top line position across our personal lines and commercial lines, net combined ratio up 85.5% and investment performance led to stable earnings performance in the first quarter. In Fubon Securities, the brokerage market share increased to 6.1% in the first quarter and we see a strong growth of over 30% in ETF product AUM.
In Page 5, Fubon net profits reached TWD 16.5 billion in the first quarter which is 66.5% growth year-over-year and translated into TWD 1.61 per share. We have announced cumulative earnings for the first 4 months, which reached TWD 22.5 billion. The earnings translated into TWD 2.2 per share [ extending ] competition among our major peers.
In Page 6, earnings by each subsidiary. Fubon Life and P&C Insurance showed earnings double year-over-year and Taipei Fubon Bank also delivered 16% earnings growth. In terms of our earnings contribution Fubon Life remained the major contributor of 55%, followed by 29.4% from Taipei Fubon Bank.
In Page 7, the overall asset grew at 9.6% while book value grew higher at 20.4% mainly due to the earnings contribution and preferred share issuance. In Page 8, with earnings growth, ROA and ROE on an annualized basis improved to 0.95% and 12.87% respectively.
Please turn to Page 10, the next session regarding Taipei Fubon Bank. We see revenue line growth of 9% year-over-year in the first quarter while the contribution from interest income reached 49% with 19.2% growth.
In Page 11, regarding the fee income from the chart on your right -- left-hand side, the fee revenue showed a slight decline of 8% year-over-year as syndication fee was impacted by weak momentum in Asia market. We have seen the momentum recover entering the second quarter. On the wealth management front, sales volume continued to grow at 33% year-over-year in the first quarter. Total fee declined 3% year-over-year due to product mix shift in insurance product. The bank launched regular paid insurance product promotion program in the second quarter. We should see the momentum with some growth.
In Page 12, the total loan growth of Taipei Fubon Bank, 6.9% shows our performance compared to the market growth of 4.8%. And we can see that loan growth was mainly driven by the corporate loan of 6.4% and mortgage and other consumer loans grow at double digit.
Next page we further break down the corporate credit portfolio. As you can see foreign currency loan up by 15% and that is the main growth driver for corporate loan growth and that is largely driven by overseas market demand. While in SME, you can see on the right-hand side, which steadily grow the contribution and also loans outstanding. It is our strategy to further expand our SME customers coverage, including the retail and also corporate customers.
In Page 14, regarding the net interest margin, it improved 3 basis points to 1.06% in the first quarter year-over-year, mainly due to foreign currency loans and investment side of our portfolio. Loan-to-deposit spread maintained flattish at 1.27% quarter-over-quarter. 3 basis point drop year-over-year was largely due to market interest rate increase and the volume increase in foreign currency deposit. We expect the margin to expand by 10 basis points here at the end of the year that both come from loan adjustment and loan [ taken for our ] investment portfolio.
In Page 15, in terms of the deposit, we can see for the NT dollar book, it is pretty much stable with better mix while LDR increased to 87.2%. In foreign currency deposits, we see very strong growth of 24% largely due to our view of better utilization opportunities in long-term investment asset. Outstanding foreign currency loans and investments combined account for around 50% to 60% of foreign currency deposit.
In Page 16, the asset quality of the bank continued to be outperformed. NPL ratio mentioned a very decent level of 0.21% compared to the industry average at about 0.27%. Coverage ratio of over 600% also outperformed.
Next section, Page 18, regarding Fubon Life. Total premium in the first quarter grew by 6%, driven by renewal premium of 10% growth and you can also see the contribution now reached 66% of total premium.
In Page 19, total FYP is down 0.7% year-over-year largely due to deferred effect leading to a higher base in traditional regular-paid products in the first quarter '17. Investment-linked products grew by nearly double, driven by the strong market demand. The premiums sales momentum actually has picked up quarter-over-quarter and cumulative FYP growth for the first 4 months returned to a positive space of 7.2%. We maintain full-year FYP growth target of in the range of 10%.
In Page 20, because of the product mix change we explained earlier FYPE and VNB in the first quarter declined year-over-year, but resumed a rough growth of 12% on a quarter-over-quarter basis. In Page 21, in terms of the channel mix, FYP contribution from tied agents remained stable. Contribution from Taipei Fubon Bank and brokerage channel increased in the first quarter. The size of our agent force is now 24,000. We continue to focus on internal channel to enhance our value of the new business.
In Page 22, on the investment income front. Total investment income reached TWD 31.9 billion in the first quarter, up 21.6% year-over-year, mainly driven by sound capital gains performance and hedging cost improvement. Investment return on after-hedge basis increased to 3.68%. The realized gains from equity investment was [ quite high ] in the first quarter and pretty much reflects the favorable market environment and also the investment performance by our team.
In Page 23, the investment portfolio of Fubon Life grows about 11.2% in the first quarter and the mix is pretty much similar quarter-over-quarter. We will continue to overweigh into overseas fixed income along with interest level.
In Page 24, in overseas fixed income portfolio we kept overweighing investment-grade corporate credit and financial bonds. Over 50% are located in North America's issuers. The portfolio is repositioned in response to market volatility.
In Page 25, as you can see on the upper left-hand chart, hedging cost in the first quarter was 1.49% with the improvement coming from much lower FX losses. We experienced higher recurring hedging cost in the first quarter due to widening interest spread between Taiwan and the U.S. We maintained hedge ratio at 95.2% of bonds and hedge position and we continue dynamically adjust our hedge ratio in response to market volatility.
The recurring return on a before hedge basis declined year-over-year, mainly as U.S. dollar-denominated interest income translated to lower NT dollars with nearly 5% year-on-year appreciation in Taiwan dollar against U.S. dollar.
In Page 26, cost of liability continues to improve down 2 basis points quarter-over-quarter, in line with our 5 to 10 basis point improvement full-year guidance. And the improvement of break-even point is quite substantial largely due to the first year's strain improvement on product mix change.
In Page 27, the movement of our unrealized balance and the numbers primarily reflect the market interest rate. Next section is Fubon Insurance in page 29. We delivered 7.1% year-over-year growth in premium in the first quarter with a leading market share of 23.7%. Premium growth came across major business lines. Underwriting performance has been outstanding with net combined ratio improved to a very good level of 85.5%.
In Page 31, regarding Fubon Securities, the market ranking has been steadily in top 3 position across major business lines. Core revenue of brokerage and net interest income continued to grow along with market turnover increase. Earnings in the first quarter edged down due to one-off expected credit loss from clients default in Fubon Futures.
Next section regarding Fubon Bank China, in Page 33. We see that assets and net worth show 8% and 3% growth respectively. The bank continued to adjust loan mix and the outstanding balance grew 7.6% year-over-year along with foreign base expansion.
In Page 34, net interest income and fee income continued to grow. The earnings decline in the first quarter was impacted by further treasury as R&D appreciated. Net interest margin increased 25 basis points year-over-year to 1.69% along with lending yield pickup and loan mix adjustments. The asset quality remained at comparable level as you can see here, NPL ratio is down to 1.5%. I will stop my session here.
The next session will be from [indiscernible] team, Grace Chiu and she will walk us through the embedded value result and followed by audit comments.
Okay. On Page 36, the value creation summary for 2017. As we have been doing in the past few years, we have been inviting, Deloitte Consulting group to have a [ total ] review including the assumption model result movement and sensitivity reasonableness analysis. And the results show here for 2017 embedded value of TWD 524.3 billion with a Y-on-Y increase 13.1%. Many contributed to the historical high net worth value for 2017.
For the value of new business, the VNB of TWD 28.5 billion shows a reduction of 39.8%. That's mainly due to in 2016 we had a very strong sales traditional regular pay whole life policies. But in 2017, the interest rate reduction on reserving basis makes these kind of products less promising in the market demand. So the product mix shifted to our interest-sensitive product and investment-linked products. The value for Financial Holding share embedded value reached at TWD 51.2 per share. This is also a 13% increase and if we translate outstanding share of Fubon Life, the embedded value per share is TWD 63.2. This shows a reduction mainly due to the note we put on the bottom because we covert the returned earning to issue new shares. If we exclude this kind of new shares, the value EV per share still remains at 13% growth.
On Page 37, this shows adjusted net worth for 2016 and 2017 and also the adjustment to the net worth -- the adjusted net worth for year 2017, the mainly increase from the 2-year statutory net worth is the growth of the unrealized capital gains of TWD 30.4 billion and also the Life contribute a very high earnings of TWD 32.5 billion.
From statutory net worth to adjusted net worth, we mainly reflect the TWD 28.6 billion of URCG from available for sales fixed income. This is mainly due to value of in-force investment return assumption mainly based on the book yield return. Therefore we need to deduct the URCG from the accounting book.
On Page 38, this shows the value of in-force before cost of capital movement. As you can see that the major change include after one year or moving forward, the existing business transfer to net worth, which shows TWD 22.4 billion reduction and another TWD 41 billion, many resulted from 11% discount rate 1 year less of discounting period.
Another fixed change from the economic assumption of negative 7.8%. This is mainly due to the NT appreciation of 1.3% reduction and also we reduced the investment return of 6.5% reduction mainly due to higher hedge cost initially. And our hedge cost assumption long term still range at 100 basis point to 150 basis points. The value of new business before cost of capital contributed another 9.3% of impact. So therefore the 2 year VIF before CoC increase is 7.5%.
On Page 39, the value to new business movement. As we have FYP showed a 14.6% reduction, the sales volume is under the same basis of EV2016 shows the same result. But the product mix, as we explained earlier, the shifting from traditional regular pay product to interest sensitive and investment-linked product also contributed another reduction of 20.6%. The economic assumption change is not as high as imports. That is because we have a higher percentage of borrowing currency policy, which was about 44% U.S. denominated. For non-economic assumption changes, there is only very little change to the VNB.
At the end of that 2017, the VNB was TWD 28.5 billion. The following pages shows you the economic assumption we have been using for 2017 and previous years. We utilize a similar methodology to adapt to come up with this investment return assumption and there is no risk discount rate change, and the equivalent return here is also shown for your reference. The initial yield curve for Taiwan dollars and USD dollars 10-year rate is also summarized here for your reference.
Page 41 and 42 summarize our economic portfolio returns for value of in force and value of new business. For Page 43, the discount rate, we remain at the -- at a same level. In force, we used 11%; and VNB, we used 10.5%. Page 44 is the cost of capital calculation. This year, we used a similar methodology to reflect current regulation changes, which is mostly from the C3 extra charge from 40% to 50%. But in total, the impact to the value of in force or value of new business is not as significant.
On Page 45, we summarize the sensitivity for portfolio return impact for each main drivers, just to give you a sense if you want to compare our results with the other peers in Taiwan. Page 46 summarizes the sensitivity summary for risk discount rates. The sensitivity result for both portfolio return and discount rate, the scale of change does not change too much from these 2 years.
On Page 47, we summarize the value metric for the past few years. The VNB margin, although you see a reduction in 2017, but this is mainly due to the EV2016 we had an historical high on traditional life regular-paid product sales. So the VNB margin remains at -- back to a normal level as year of 2015.
On Page 48, the investment return assumption, we try to show you that the assumption we make in the value projection also deliver in the actual return.
I will pass on to Ophelia, our Deloitte Consultant.
Thank you, Grace. We are pleased to have been engaged by Fubon Life to review the Embedded Value as of the end of 2017 and the Value of One Year of New Business -- for new business written in 2017. Review scope is similar to that for the previous years, which focuses on the reasonableness of the assumptions, actuarial model changes, overall reasonableness of the EV and V1NB results, and movement analysis from 2016 to 2017.
Let's now review the economic assumptions applied by Fubon Life, mainly the risk discount rate and investment return assumptions, have been derived in a consistent way as the previous year and the reasonable assumptions to use as of the valuation date. We have also reviewed all the non-economic assumptions applied by Fubon Life.
We are satisfied that all the assumptions applied are reflective of Fubon Life's latest actual experience and are reflective of the business conditions as of the valuation date. We have applied a number of techniques on reviewing the EV and V1NB results, and all the results disclosed by Fubon Life fall within a reasonable range in the above context. Further details on our review opinion can be found in our opinion letter. Thank you.
Okay. Thank you, Ophelia. Now we'd like to open the floor for Q&A.
[Operator Instructions] We have one question in queue. Let me check the name. One moment, please. Our first question is from Yafei Tian of Citigroup.
I have a question when it comes to the recurring yield. I can see that in the EV calculation that we have slightly reduced the recurring return assumptions for 2018 and possibly in the near term, and also in first quarter '18 that the recurring return is quite materially down from what we have the year earlier. My question is, to what extent of this 2.9% recurring return is lower because of FX reasons? If I were to adjust the FX impact, what would have been the recurring return in first quarter '18? And the second question is, assuming that excluding the FX impact in a higher rate environment that we are seeing in the future, what kind of increase in recurring return per year should we reasonably expect?
Okay. About the -- sorry. [ The recurring yield ] before hedge, I will just say that this quarter, it's about 2.9%, and then if we adjust the appreciation of the new NT dollars [ during 1Q ] compared to this quarter and last quarter of 2017 then after adjustment, we can get a similar level, which is above 3% in the first quarter of this year and it will be our first answer. And the second one -- okay, about the new money rate, we may answer this to you rather. The new money rate recently, I would say, for [indiscernible] more focusing on that, and the new money will be say at least 4.5% recently, I would say that. So it would be good for our recurring yield for this year. And if the -- say, the U.S. should go must higher, then we can get a much attractive return in this year. Is that all your questions?
The recurring returns, mechanically how should we think about it? Let's assume that the U.S. yield curve has a parallel shift of a 100 bps, what is the sensitivity when it comes to the recurring return?
It's really hard, difficult to answer it because I would say that interest rate go has most -- in the most cases that actually our return will increase, but because we have a lot of exposure to -- so credit issues. Then the credit spread is another factor to probably think, so I will not would say it’s credit spread will keep widening. So -- although I would say that it will go higher, but sensitivity is really highly difficult, it depends on which products we're exposed to.
I think, for qualitative analysis purpose, that we have about 15% of the assets that we redeploy every year. And for this redeployment, there will be opportunity for us to capture a higher rate environment. Yes, that's one angle.
Our next question is from Anthony Lam of HSBC.
Some follow-up questions to Tian's questions first. I guess one of the things I've noticed is that the realized gains from equity investment picked up quite a bit again this year. Just wondering what sort of realized gains from equities that you are budgeting for this year. That's the first one. And the second one is [indiscernible] technically. Just wondering, in the equity that you disclosed, does that include the 36 billion preference shares you already issued. That's the second one. And for the bank side, just wondering, given the improvement we've seen in first quarter regarding costs pick up, what sort of cost income ratio are you looking for -- I mean for the whole year and going forward? So all together 3 questions.
So, your question about the -- is that capital -- sorry, capital gains expectation for this year. Is that your question?
Yes.
Okay. I would say that we are [indiscernible] to market so it’s really [ hard ] to say right now. But I would say, our strategy for this year, then the equity position maybe maintain a decent level and we will do some just minor adjustments between the [ stock ] maybe in some locations. So hopefully, for the markets, to then I would say that we can keep our equity income both from capital gains and dividends is because actually [indiscernible] this year is quite good. So we will balance on the both capital gain and dividend is our strategy this year.
And for preference share issue is already captured in the holding company's book value.
So the TWD 525,440 million on Page 57 already includes the 36 billion preference shares, is that correct?
57.
Correct.
Yes.
Last one on Costs for the Bank?
The cost-income ratio, yes, as you can see in Taipei Fubon Bank's cost-income ratio, it has been trending in the range of about 48% to 52% and we don't expect this range to vary much. We pretty much would control the cost-income ratio in a similar level.
But, any sort of improvement from last year because it is quite close to 50% last year, just trying to understand for you if there is any scope for improvement this year given what we done year-over-year already.
We are expecting a slight improvement on cost-income ratio the end of the year.
There are no further questions at this time. [Operator instructions]. Our next question is from [ Anna Go of Belman ].
I've got 2 questions on the life investment side. The first one is that we noticed the domestic fixed income has increased from 12.2% to 12.6%. So I was wondering what type of asset is that and what is the yield like and the second question is on the overseas fixed income. I noticed that you've been investing more on the Asia and others regions, so can you give us more color on exactly what countries with this incremental allocation were to and I'm sorry, I've got another question on bank side, So I've noticed that your foreign exchange -- that your foreign currency deposit is growing much faster than your foreign currency loans, so is that from the corporate deposit or the retail deposit. Thank you.
Okay, the first question is about our local fixed income prod down there. Actually, we’re pleased because the local [indiscernible] will also go higher during last quarter, so mainly we allocate to the credit issues and the relative number I don't have on hand. And the second question is about the exposure to the Asia, actually we put some great China pockets of incomes during last quarter because also interest rate go higher than [indiscernible] labels.
So majority we [indiscernible] actually, we increased just a little but [indiscernible].
Next, on the going of deposits for foreign currency, does it come from retail or corporate, actually it comes from both sides.
Our next question is from Jemmy Huang of JPMorgan Securities.
Just 2 questions from me. One is for Fubon Bank China. I noticed first quarter performance is quite weak. So just wonder what's the reason behind and also how should we proceed with operating outlook both in terms of PPOP and also credit cost for this year. And second question is I think our overseas investment at Fubon Life recently I think FSB has been talking about to change some of the regulations or maybe talking the OTC listed international funds into the regulatory seeding in terms of consideration. So just wonder from your perspective will that affect your investment strategy as a result? Thanks.
Firstly on the Fubon Bank China, the performance is largely because of the RMB's appreciation so that we too have suffered from some marked-to-market losses for treasury activities. But if we look at net interest income, specifically, the net interest margin performance, that actually we see a very strong performance on year-over-year basis that we show here. And in [ acre ] alone, the net interest margin continued to increase and also together with loan growth and also fee income upside, we expect the revenue to gradually to pick up. And as far as credit cost, I think from a asset quality perspective, we continue to be comfortable with the bank's underlying asset quality, but the provision increase basically reflects the loan growth and therefore the [indiscernible] requirement.
[indiscernible] is asking about the new guidelines about OTC International Bank's guidance or --
Yes.
65%, okay. [indiscernible] 65% actually quite far from our exposure because we have quite huge exposure in the foreign policy which is [ U.S. policy ] so it won’t be a question be in 5 years forwards.
If the 65% is really the new rule, based on your understanding or based on your capitalization, how much more percentage point of your total investments can still be located into the overseas investments including OTC international banks from what we see in first quarter this year?
Okay if I have to say, then I would say, it will be roughly 10% probability for us to invest. So that's the reason I say it won't be a question in 5 years.
Our next question is from Steven Lam of Bloomberg Intelligence.
Actually, some of the questions have been already asked previously, but maybe I'll just touch on the Asia bonds increase. I was curious, I think one of the analysts asked about the allocation to the Asian bonds and management has talked about mostly in some EM countries, high grade and whatnot. I was just curious, I would assume that the market value will also be changed because of the swings in the bond yields. So I'm curious, if we strip out the swings in the bond yields, has the actual allocation to these Asian bonds increase or decrease. And presumably those are not really in the international bond section, is that the right assumption? And the second question, it's relating to the loan growth, I might have missed the answer from earlier, but I was just curious for the Taipei Fubon Bank, the loan growth expectation of about 5% to 10% this year, if it's coming from the corporate, can you elaborate a little bit more about which corporate were you talking about. Is it mostly because of the loan mix or you're actually seeing increasing demand, for example?
So, you are asking our emerging markets holding or you are asking the strategy, I am not quite sure. Could you want to help me [ a little ]?
Okay. So for example, my calculation roughly tells me, the balance of the Asian and others category was about TWD 488 billion so that's an increase of about TWD 48 billion versus December. Now within the increase of TWD 48 billion, how much of that is actually coming from bond yield movement, right, or -- and how much is actually coming from your actual increase in allocation, so to speak? Is that more clear? Or...
The Page 24 on the right-hand side, the bar chart, we actually use the cost basis to [indiscernible] don't know in flat interest -- not interest rate movement. And in fact we increased in Asia and others primarily Chinese issuer especially the, I would say...
[ For the government ].
For the government. Also the financial institutions, more than half of new investment is close to this area.
Right, because if I'm not mistaken I think -- I mean thanks for highlighting that -- I think in 1Q even the Chinese bond yields have tumbled quite a bit, if I'm not mistaken. I checked the 10-year government bond as an example. So would that have any effect in terms of the balance or your -- I'm just curious?
The market rate doesn't impact the data point.
Okay. So these are -- these are on like a book value concept?
Yes.
So no...
Yes, correct. Correct.
Oh, I see. Okay.
Your next question is regarding our bank loans in Asia where the growth comes from, right?
Yes, yes, the source of the loan growth, yes.
Okay. Our total loan balance at the end of first quarter at TWD 1.2 trillion compared to the same period first quarter last year we had 7% increase y-o-y. So if you compare to the last year, year-end, the number is about flat mainly because of the -- in December last year, close of the seasonal event, our loan balance in that month alone will increase by TWD 36 billion loan outstanding. So compared to the end of last year, our loan balance at the first quarter remained flat. Looking forward, in the second quarter, I think our loan growth will remain the growth. To give you some numbers correct, in the first quarter our consumer lending included the unsecured consumer lending and mortgage loan, our loan balance has 10% increase y-o-y. Our corporate lending outstanding increased by 6%. However, our credit card revolving and our loan to government sectors, we have about 10% to 25% increase. All together, we registered 7% growth in the first quarter. If you look at the first year, the whole year for 2018, we still end at middle to high single-digit growth for the overall loan outstanding balance.
Our next question is from Anthony Lam of HSBC.
Just a quick one. I recall that a few weeks ago you announced you have increased the second Fubon Life to 62%. Just wondering what sort of impact on the capital ratios that would have on a pro forma basis.
You mean, RBC in Fubon Life?
I think, as well as the double -- I mean, any sort of impact on the capital leverage ratio and group capital adequacy ratio.
Less than 5%, RBC impact.
5 percentage point, right.
Yes. And for holding company, there is no impact, because the investment in the cost directly through Fubon Life.
No, no, no, indirectly.
Indirectly.
Yes, yes, it's probably 1% or 2%. I can't remember. Very, very…
Minor.
And leverage ratio, the same.
Capital leverage ratio, the same.
Yes, very, very minor in value. I mean, we will look into it but it doesn't cost much on our potential.
Speakers there are no further questions at this time. Speakers there are no pending questions in queue. Thank you. One question just came in. I am sorry, one question just came in, ma'am. Can we take it?
Okay. Yes, please.
We have a question from [ Steven Lam ] of Bloomberg Intelligence.
Just one quick one. In terms of life insurance, could we get some color? I think in the previous call you talked about new products. So the product strategy in second quarter and then towards the rest of the year, if I may, just kind of share that again, that will be very, very helpful?
Okay. The second quarter we are trying to focus more U.S. dollar denominator policy and we will try to sell more traditional products. And we also are trying to increase the share of unit-linked policies. So for the whole year we try to make our VNB grow at high single digit.
Right. So the traditional products, what kind of funding costs are we thinking about for the new ones this year?
Traditional -- actually the traditional products, the funding costs are similar to interest-sensitive product, but I think the value is higher than the interest-sensitive. So we try to create more value by spending more on traditional products.
Right. So besides the product strategy, would the increase mostly coming from demand or increasing agency force or more investment in bank assurance, for example, any other indications?
It's mainly from our agency force and we try to promote the product and encourage them to sell more traditional -- either saving or traditional product.
Okay. So does that also imply like a small increase in the agency size? Does that -- and more higher productivity and things like that?
Yes, sure. Yes, we are still growing our agency force.
Okay. Is there any rough idea of these, the size of the agency force growth for this year?
Right now, we have about 24,000 agents. We try to grow at least 1,000 to 2,000 this year.
1,000 to 2,000 out of 24,000?
Correct.
Okay.
At the same time we are trying to improve the productivity as well.
Right. That's great. And I guess the increase in -- I think just to swing back to the comment that the bank management mentioned. The increase in consumer lending, does that have a -- any way to cross on potential sales via the bank assurance channel as well or that's not really related?
Yes.
Excuse me. So not related?
So your question is consumer lending from bank assurance channel.
No, I mean, since the bank is expecting higher consumer lending, so presumably that will come through more traffic, or more interaction with the client and I would imagine those can also have a positive effect in terms of the bank staff for selling the life product or if that's not really the case?
Yes, despite the increase of our customer lending, country build by better cross sell at the branch level.
Sorry, I took your question wrongly. We do expect through our life's agency network that would help to promote our consumer retail lending business.
Okay. So it's more like the other way around, okay.
Yes, not vice versa. Okay.
I see. I see. Okay. That's very clear. Okay.
Any more questions?
There are no further questions at this time, sir.
Okay then thank you. Thank you for participating in today's conference call. If you have any further questions, please feel free to contact our IR team and we will standby here for you. Thank you.
Thank you.
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