Dear investors and analysts, welcome to ICBC Q3 earnings call. I'm Wang Liancheng, GM of Corporate Strategy and IR Department. Today, Board Secretary, Guan Xueqing, and other management personnel from departments and subsidiaries are here to communicate with you. Our directors are also online. They are Feng Weidong, Cao Liqun, Dong Yang, and Yang Siu Shun. Our Q3 results have been released online. We can see that the Q3 results continued the robust performance. Core indicators are stable and robust. Financial account totaled CNY 269.9 billion, up by 0.8%. ROA was 0.86%. ROE was 10.56%, leading the peers. Net interest margin was 1.67%. The decrease was the same as the Q2, and the trajectory is the same with the main peers.
NPL ratio was 1.36%, slightly lower compared with the beginning, and the scissors difference continued to be negative for 14 consecutive quarters as their quality improved further. Capital equity ratio was 18% more, and provision coverage ratio was over 20%. The deposit and loans increased robustly. The loans increased more than CNY 2.5 trillion, investments improved by more than CNY 850 billion, and the deposit increased over CNY 4 trillion. Savings, corporate, and institutional loans increased all the peers. The government, business, and customer GBC+ customer ecology and DICBC, the digital ecology continued to optimize. Personal customers increased to 736 million. Corporate customers, over 1.18 million. All kinds of customer base continued to solidify, and the active customers of mobile banking exceeded 200 million with ever-growing innovation. This is a brief introduction of our third quarter Q3 results. Now we enter the Q&A session. Please identify yourself before raising questions. Thank you. The first question, please. Richard Xu from Morgan Stanley.
Thank you for the opportunity to raise questions. In the future, for my question is the outlook for the credit growth in the future. This year, we have seen the rapid growth of credit growth. What's your plan for the credit growth in the future? And also, we heard the PBOC had some meeting. How do you take on that about the future trajectory? And also we see some progress in diffusing debt for LGFVs. From the platforms or the non-standard business, I think we have more momentum. Is there any new demand in this regard in Q4 or next year? What's the contribution of it to the credit growth, and how do you evaluate this issue?
Thank you. I'll invite Mr. Zhou from the Asset and Liability Department to answer your question. Thank you very much. For the credit growth, I would like to respond as follows. Since this year, we adhere to the strategy of the central government, and we continue our commercial sustainable principle. We grasp the market need in the resumption of the real economy, and the aggregate volume increased stably. For the first Q3, three quarters, the increment was CNY 2.49 trillion. The increment and the year-on-year growth recorded historical high. Contribution comes from the major projects and also the green innovation, rural area service, private sectors, and also this consumption promotion area are the major momentum.
In the regional lending, especially in the major strategic regions, the proportion of the, in the growth and the outstanding are both leading other regions. In the mix of the loan book, the medium, long-term loans proportion was 63.6% of the total and increased by over 20% year-on-year. The loans growth also account for more proportion, increasing by 4 percentage point. The inclusive finance loans and other loans are the major momentum. The banknotes and the discount increase, decrease. For the whole process, the lending would be focused on Q1. Its proportion is 34% of the total increment, and then the Q2 and Q3 will see a slower pace. But that's the increase still totaled CNY 200 billion. For the end of this year, we will continue to maintain a year-on-year growth.
Last year, and also after the lending, for the consumption of capital, just now, Mr. Wang introduced the Q3 results and also the capital adequacy ratio. The adequacy ratio was over 18% in the mix allocation, the upgrading of mix, we are taking active measures. The capital adequacy level lead the peers domestically and also internationally. We are in the first class among international peers. Despite the high growth of assets, our capital adequacy is still robust and balanced. Next year, for the credit extension, every year in Q4, ICBC starts to make plans for the market, connection and the credit extension for the next year. We have seen the arrangements from relevant departments, and for the reserve of the loans, we are making plans. For next year, we will hold meetings about the specific targets.
ICBC will adhere to the requirements of the macroeconomic requirements and also make due allocation. For the market opportunities and resource preparation, we will, we will make our ample support for the credit extension. On the one hand, in the future, we will have a, an important meeting in the future. In the economic operation, according to the position, we will respond to the requirement. And second, I've issued a five-year development plan. Under such framework, we will properly manage the growth and of the loan extension. We have seen some positive growth quarter-on-quarter, so we are confident about the extension of the credit and the upgrading of the mix. ICBC has been emphasizing the prioritized position of retaining loans and its proportion in a whole loan book. In the future, I think we can foresee some positive effect. Thank you. I'll give the floor to Mr. Zhang from Credit and Investment Management Department.
I'll make some supplements. After the credit plan, the debt plans in this region, we see the external liquidation is improved. For our risk prevention, it plays a positive role. Second, for the demand of credits in this area, we will follow the law-based principle in cash flow, the requirement, we will make our assessments so as to ensure that they are sustainable. The second question?
Thank you for the opportunity to raise the question. I wanted to ask about NIM. The NIM for the first three quarters were 1.67. The single Q3 NIM was lower than Q2 and was contracted to a large extent. If we exclude the impact of LPR, and suppose LPR will remain unchanged in the future, when can we see NIM start to be stable? Another question is about asset quality. What's the NPR ratio of developers' loans in Q3? And what's the balance of the impairment for developer loans? and provision level. The first question will be answered by Mr. Zhou, General Manager of Asset and Liability Management Department. When can we expect to see NIM can be stable?
As to your question about NIM, for Q3, we have seen ICBC's NIM was 1.67%. Maybe later you can see for the entire banking sector, all of us face pressure of continuous contraction of NIM. It's mainly because of the lowering of LPR and also the adjustment of the existing mortgage loan interest rate. So that's the major pressure for NIM. Against this backdrop, the banks can also take multiple measures to deal with this pressure. For example, we have optimized and strengthened more refinery internal management so as to optimize our performance in NIM. So for the result of adjustment for mortgage, retail mortgage interest rate, and LPR lowering, we have done our best. And you can see some marginal changes of some positive signs. For example, for the deposit cost, for the newly deposit cost, it was lowered by 1 BIP. And for the newly savings, the deposit cost was also lowered by around 13 BIP.
From our assets, particularly from the loans, have continued to face pressure, and it was 30 BIPs lower than that of the same period last year for the Q3 of last year. However, along with the adjustment of the mortgage interest rate level, we have seen some changes of the prepayment of mortgages. For example, recently we have noticed some positive changes after the adjustment of mortgage rate. And even after adjustment of mortgage rate, the current rate is still above 4%. So it's also a good contribution to, for us to stabilize our NIM. In the first three quarters, the medium and the long-term loans all account for over 60-70% of the total loans. The pricing of the medium and the long-term loans is also conducive for us in the future.
From our micro perspective, Q3, the deposit rate, deposit cost, and loan yield through our internal management improvement, have some positive signs and good momentums to go better. This is not only our way and the direction for us to, a goal for us to achieve. After twice of deposit rate lowering from the bank, we have seen the lows of our new deposit cost, and this momentum will continue to be play out in next year. And now the banking sector has formulated a kind of practice of self-disciplinary and to lower our deposit cost. We will also continue to discuss with our main peers and to see good opportunity to continue to guide down the deposit cost. so as to stabilize a reasonable level of our NIM.
On the demand and the term structure of liability and also the structure of our loans, along with the mechanism of deposit cost adjustment, we expect to see continuous pressure for NIM. At the same time, we have seen some active positive signs for marginal changes for better. That's why we have confidence for us to stabilize NIM in the future.
Now, for the question about the asset quality of developable loans and impairment, I would like to give floor to Mr. Chen from Credit Management Department. In Q3, along with the active effects of local government's policies, we have seen NPL ratio of our developer loans have been lowered. For the impairment of forward several loans, in accordance with requirements of regulators, we have set aside adequate impairment to develop loans, and we have also stepped up our efforts to resolve the of developed loans. Usually, the actual loss will be lower than the impairment we set.
Mr. John from Cinda Securities. Thank you for this for this opportunity to ask a question. My question is about retail. The government has issued a lot of policies about personal banking. What's your prediction of the demand for consumption and in terms of retail credit, what's your new policies and strategies? Another question is that this year, the mortgage for the banking sector is under a lot of pressure, and what's the status of ICBC, and what's the status of mortgages provision of ICBC? Thank you.
I ask Madame Hua from the personal banking department to answer your question. Currently, for consumption credit, our provision of credit from the perspective of the first three quarters, I think is quite proactive. For the first three quarters, credit consumption loans and consumption loans with collaterals, we witnessed a great increase. And we also see that the consumption trend is getting better. So in the next phase, we are confident to expand this area. In the next phase, in terms of provision of consumption credit, our choice would be first, on one hand, in terms of credit loans, we focus on cooperation with the leading enterprises in terms of new energy cars, and to also pay attention to the scenarios of online retailers, and help boost the development of consumption financing. Besides, you also mentioned about mortgages.
In this year, in the first three quarters, mortgages provision is better than the same period last year from the figures on the book, due to the factors such as the early payment of the mortgages, as introduced by Mr. Zhou from Asset and Liability Management Department. We also noticed that very positive changes in the first in Q3. The early repayment is reduced in Q3, especially in September. We did make a comparison between September and June, when it was the peak for the early repayment of mortgages. So we could say that in terms of all retail consumption loans, we are quite confident in that phase. Another question is you answered about your consumption loans.
I noticed that there are also focuses on the cars, electronic products, decoration of apartments and tourism, overseas education. ICBC's consumption loans—we have credit loans, easy loan, we have this product. And we also have a credit card overdraft. We have a large amount of credit card overdraft balance, and we also have the down payment for the vehicles and decoration. And we also focus on the scenario build, the building of scenarios of consumption, and I provide strong support for the recovery of consumption. Thank you for your question. Next question, please.
The next question is from Guotai Junan Securities. Thank you for the opportunity to raise questions. My question also concerns mortgage. On 25th of September, banks started the work on the adjustment of the first home loans interest rate, and also the second home to the first home transfer interest rate. What's the impact on this action? Was there a resumption in the mortgage business for banks? First?
The amount is not large for ICBC. Its influence on net interest margin and net interest income is limited. The interest rate for new term deposits has decreased by more than 10 basis points. Coupled with the improvement of the mix and also the interest rate decrease in the outstanding loans. These are conducive to the development of ICBC. So our yield led the average level of the sector. For the outstanding mortgage and its influence, the outstanding mortgage, your expression about it can be concluded as, first, the adjustment, including the second loan to the first loan. Positioning is quite favorable to the consumers. For banks, there is pressure for all banks. At the same time, you are concerned every time about that if you decrease the interest rates, the consumers will refuse to repay the loans.
But in July, if you refuse to repay the CNY 10 billion loans calculated by today's interest rate, there is still offset effect for banks. The decrease of the outstanding mortgage can have shocks to all banks. On the other hand, however, we focus more on the marginal change and the decrease in the prepayment of mortgage. There is an offset impact for ICBC. Next comes from Zheshang Securities. Thank you for the opportunity to raise question. I have two questions. The first question is about for the PBOC's monetary report in Q2. They also wish the commercial banks to maintain a reasonable profit. So what's your view on this? Are there any more measures to stabilize NIM in the future? Second question. We have noticed the Political Bureau's July meeting proposed to introduce a series of measures to defuse local government treasury bonds.
What more measures can we expect to see? Thank you. The monthly report, policy report, PBOC, stating that commercial banks should maintain reasonable level of profits, has been noticed by the market. We agree with that. Commercial banks should maintain reasonable profits to maintain sustainable development, and which can also be a safe and safe development. My view is that the external economic macro environment is beneficial for commercial banks to be able to maintain a reasonable level of profit. Since we are a publicly listed company, so we have to guarantee reasonable returns to our shareholders, which can all be only guaranteed by maintaining a reasonable level of profit. Actually, this is a frequently asked question. Recently, in recent years, we have seen the pressure of NIM contraction, but we think this is related with the macro environment.
We have seen our NIM now has been contracted to 1.67% because we think current market rate is relatively on the low level. So that's relevant with commercial banks' low NIM currently in China. We think ICBC has been quite precise and optimized its management of NIM, even facing with such downward pressure. You always ask, when will be the lowest level of NIM? And when can we see the NIM will change? for better. It's hard for us to predict the precise moment, precise time. It will be dependent on the changes of demand and supply, and also the market rate, and also the capital markets. Maybe when we see more deposit become demand deposit, and maybe also if we change our risk appetite. We have been always neutral to our risk appetite.
We will not pursue high risky assets just for the sake of high long yield. Either from the liability cost and long yield, we have been paying a lot of attention to optimize our management. In the future, as PBOC's monthly post report mentioned, we will also maintain a reasonable level of profit and a reasonable NIM. As to your second question of our LGFV bond diffusion, we have seen quite good progress in this aspect. As our exposure to LGFV is mainly loans, and at a higher tier level, like provincial level, and mainly in the developed regions. But as my colleague, Mr. Jinjusa mentioned, we will participate in the debt diffusion in the principle of market-oriented. And currently, the asset quality of relevant loans are quite sound.
And we also expect to see the measures to diffuse local government bonds will also be good for us to maintain the soundness of our asset quality in this regard. And we will also expect to see we can maintain a reasonable level of profits in our assets in this regard. I would like to see whether my colleague from credit department would like to add up. Okay, that's all.
Next question from Zou Ying of CLSA. My question is about asset quality. And in which areas we are facing a lot pressure in- including credit and non-credit. Some overseas banks also disclose their figures and the exposure to the real estate sector. What's your opinion about the asset quality in the real estate sector?
I'll ask Mr. Zhang to answer your question. In terms of asset quality and the different sectors, asset quality, we think that we need to pay constant attention to real estate sector and relevant industry chains. Your question also addressed a question about that. In Q3, we see signs of improvement, and we expect that the trend is that things will get better, and the positive signs will remain. Local governments all have their relevant policies in terms of market, and we see very positive responses. In the increasing real estate sector, the relevant risks are being cleared out. In the next phase, I think the new policies will be supportive to new, to new, to new insurances, and we have a very good foundation for growth. So from this perspective, in the real estate sector, despite the current pressure, we expect that in the future, the marginal changes will be getting to the better. Thank you. Next question, please.
The next question comes from Ma Kunpeng of China Securities. My question concerns defusing debt. You have emphasized the principle, which is market-based and rule-based. In the last round of the swap of debts in 2015 and 2016, when the swap happens to the high rate debt, we have seen the fiscal deposits in 2017 and 2018 have played a greater role in the process. In the future, for the new round of the debt swap, under the market-based principles from local government's perspective, is there any makeup for banks as exchange for the help? And especially for the loan, with the loan interest rates loans. First, we say it's based on market-based rules and rule-based rules is transactions. When the players can develop sustainably, we can reorganize the loans or extend the loan's term or change the financial conditions.
No commercial banks around the world is an exception. This is according to the judgment of the banks. I think the financiers are the companies, they do infrastructure like high-speed railway and other infrastructure construction. Many of them are the productive projects covered by ample cash flows. I think the strategies are case by case. There is no such a thing like a makeup or remedy between banks and the companies. It's according to the risks and the risk premiums. From the pricing, first cost of pricing of the fund, the lowest capital returns and other factors, these can form our pricing. Whether to extend or other arrangements, it is according to our judgment based on risks. This is what we call rule-based and market-based. It is not what some people say, the change with the low interest rate loans.
ICBC always follows the market-based and rule-based principles, and also our subsidiaries and branches. The large banks all have branches. The local governments and platforms are negotiating with the local branches, and in the head office level, some teams will have case-by-case judgment for the projects and support diffusing the debts. It is good for debtors and creditors. We do not hope to see a large amount of non-performing loans. This is also good for the shareholders, so when they are willing and also capable to pay back their loans with the adjustment measures like extension or reorganization, this is the common practice for all commercial banks. I hope you can agree with me. Mr. Marcel, it's quite clear. Thank you. Next question from the line.
Thank you for giving me the opportunity to ask a question. I would like to ask about a question of fee income. We have seen the pressure continued on your fee income. Can you give us the breakdown of fee income, and what's the future trajectory? And currently, we have seen tightened regulatory requirements on fee reduction. Can you give us more information?
I would like to give the floor to my colleague, Mr. Tao, General Manager from the Financial Accounting Department. It's a very good question because the fee income is the very important part of our revenue. For the first three quarters, our fee income, net fee income continued a stable level. The total, the size of our fee income continue to remain the largest among our peers. Of course, as you mentioned, certain fee income growth rate have been subject to some changes. I would like to give you some information as to the breakdown and analysis. For the bright side, we have continued to drive the innovation and improve our service level. For the fee income in some key areas, we have witnessed a faster growth. For example, the bank card, bank card fees have increased rapidly as a result of the large increase of our transaction and business owners, customers.
As a result of the implementation of our strategy of becoming the number one personal banks, and fees from the investment banking has also increased a lot. Another area is the fee income from the agency sales of insurance have witnessed a fast growth, which includes also the products of our subsidiary, ICBC AXA Insurance. Another example is the traditional advantage of our large customer base, including the wholesale customers. So our cash settlement fee income in the first three quarters have also achieved fast growth. So all the four above mentioned areas have contributed to the volume of incremental volume of fee income. Some other fee incomes have seen contraction. For example, we have continued to implement the fee cut for some of the from the commissions, but the general impact is completely controllable.
The growth rate of our fee income is negative for the first three quarters. It's our judgment for the negative growth rate is first in line with our peers. Secondly, it's also a result of the volatility of our capital markets. And also uneven distribution, which is structural in different quarters. But generally speaking, the fee income in the first three quarters have some bright areas and also positive signs. As to our outlook for the entire year's fee income, we have our advantage in the customer size and products and service. And also we expect to see the capital markets is quite likely to perform better, which can also bring some positive changes for our fee income in the future. So in the future, we will continue to promote our fee income in the four areas. First is wealth management products fee income.
We'll continue to improve our services to key clients, and also comprehensive services, and also, the performance and value contribution from our subsidiaries, like ICBC Credit Suisse and ICBC AXA Assurers, and also to increase our income from our investment banking business. And other areas we have already achieved the first growth, like bank card fees, so as to maintain the leading position of our total volume of our fee income. And that's all from me for your question about the fee income. You also asked about the regulatory requirements to lower the fee for the bank insurance business. I would like to ask my colleague from the personal banking department to add up to that. We think, the policy, the requirements from our regulators in this regard will cause some negative impact for certain periods.
Now we are implementing; we are trying to negotiate with our, with the insurance companies to implement the new requirement. The adjustment period phase, we hope to be minimized. Within the remaining months of this year and also the beginning of next year, which will be the jumpstart for the in-sales of insurer products. We will try to minimize the impact and try to maintain the stable contribution from this area. I would also like to add up to that. Firstly, we will definitely implement the requirements from regulators. Secondly, we will also try to increase our fee income from the sales of insurance. First is to increase the size of the, the volume of the insurance products we sell, we sell. Secondly, we try to optimize the structure to step up the sales of regular premium products. First, offset the negative impact of the fee income decrease.
Next question. Thank you for this opportunity to read the question. I have two questions. First one is, is that the Fed has ended its cycle of interest rate increase, and I see some improvement of interest rate. And what's the influence on our business, including asset and liability yield and investment? Another question is about the Forex rate change as influence on our foreign exchange businesses. I also noticed that there might be some government policies having influences on our foreign currency deposit and loan businesses. These are no small questions, but the two are very important and major issues. And I ask Mr. Zhou to answer your question. First, about assets and liability and the fast increase of interest rate.
Indeed, it has a global impact in terms of, of the trend that it did, it take up a lot of RMB, but, what's the trend for the future? We cannot say, but we are doing continuous research. In terms of the interest rate system, we have quite advanced measures, such as the fintech measures to support our analysis. And we are predicting the future trend for interest rate so that so as guide us to deploy our asset and liability deployment overseas and the foreign exchange businesses. From the current status, the 10-year U.S. bond is picking up.
This is a very important reference of pricing, and such influence is still exist, but as a commercial bank, especially ICBC, we are renowned for our stability, so we are not likely to bet on some certain kind of businesses. And from certain indicators, you may have noticed that the deployment of our overseas assets were quite prudent, including the duration, exposure of the asset and liability and the structure of loans and bond, the duration of customer deposits and pricing were quite prudent. And we also faced with the regulations of different governments, especially after especially that the U.S. regulators put a lot of regulation on us, and we are, our indicator are compliant.
You know, we do not want to show you our ability in terms of compliance, but I want to stress that the indicators themselves already indicate our prudence in terms of asset and liability deployment. For example, the bond duration for bond is quite short, at about 1.6 years. We are quite prudent, quite careful, even if there is a rapid increase of interest rate. And when we carry out stress test, we could say that in terms of regulators indicators, we have a lot of buffer space, so our priority is prudence. And currently speaking, ICBC's overseas asset, we still have a positive growth in terms of maintaining and grow their value, including bond, the categorization of bond and deployment.
We all have a very good positioning and very sound strategies, and there's no great impact on our business performance. Another issue is about the domestic foreign exchange business. Since Q1 of this year, with overseas governments increase of interest rates, it also has impact on the deposit rate. Deposit rate also increase. However, at certain point, some mechanisms will play its role, and we think that we cannot allow it to increase. Through the peer disciplinary measures, we have a cap of the interest rate for the deposit of foreign currencies.
So after such discipline measures, we could see that in Q2 and Q3, the interest rate payout ratio dropped, and the internal pricing and external pricing are both helping the interest rate for foreign currency deposit to go down to a reasonable level. You also mentioned foreign exchange, the settlement, the sales, and purchase of foreign currencies. We mainly do it on behalf of our customers in the global market department. However, throughout the year, we also, according to our reasonable positioning, took care of regulatory orientation and requirement, and we'll properly manage our foreign exchange business. Generally speaking, you may have noticed that, after the interest rate for deposit is dropped, generally speaking, it is conducive to maintain a very good foreign exchange status.
If the interest rate is higher, more people would like to have their RMB exchanged into US dollar and have their, put their deposit in US dollars. After the interest rate in foreign currencies dropped, the stress is released, and the deposit is more balanced. However, indeed, the Fed has already have such a kind of strong stress. It is commendable, recommendable that we have such a sound level of interest rate. Our scale is not large, but we are quite prudent, and we make rational pricing and properly manage our, the asset and liability business. Let me supplement saying, Mr. Guan, under such a cycle, ICBC's overseas institutions maintained a very stable business operation and properly centered against the interest rate risk and the credit risk.
Credit risk is at a sound level. So generally speaking, the overseas institution is quite sound and within our expectation. With the end of the interest rate increase of dollars, we are also adjusting our structures. You also pay attention to the sales and purchase of Forex domestically. Our increase in this sector is around 12%, so that's at a sound level. And ICBC's overseas structure is sound, and we also have advantage in domestic market, and we have measures to manage all these resources. And the loan and deposit business in foreign currency is having structural changes during this interest rate changes. And we have also disclosed that. You can notice that in our interim report and Q3 report. Next, please.
The next question comes from Wang Yifeng of Everbright. First, about the real estate loans. From January to September, the extension of the loans increased by over 100% year-on-year. What about this number in ICBC? And for the extended loans, do you have more, like, punishments for the interest? What about the situation, second? For the fund interest rate, what's your take on that and measures about this? And also, what's the impact of Basel III through the financial market business of ICBC?
I'll invite Mr. Zhang from risk department and also the asset and liability management department to answer your question.
The first question, for ICBC, the change is not that large. The reason is that the real estate market is sluggish previously. The sales today are entering into a slowdown period. We are positive, however. Through negotiations, we do extension under the framework of the regulators, and we do arrangements. For the punishment of the interest, according to the contracts we made, if there is any default actions to the contract according to provisions of the contract, we will charge and calculate more interest according to the calculation in the contract. Second, for the strategies for the debt transaction and also the impact on the financial market from Basel III, you said that the fund interest rate is increased. We are looking at the market every day.
The lending rate increased largely previously, but in these two days, it has decreased. I think there are multiple reasons for the increase. First, the bond issuance changed the fundamentals of the fund in the market, and also with the ending of the term for some tax payments. So seven-day fund interest rate increased. In the recent two days, it's decreased. After the bonds are going to the market, it is an objective phenomenon in the market. But for PBOC, MLF, and the repurchase of funds, they are using them quite flexibly. When we see the statements of PBOC, we can see that they are studying the situation of the market fund. After they monitor continuously, they will have due arrangements. From the perspective of ICBC.
We do not adjust our strategies only according to some days of change. We will decide our strategies based on comprehensive situations. We have CNY 700 billion more debt in the recent terms. In the future, we will have new investments in bond. In bond investment, apart from the returns, we also have some favorable tax returns, so its influence on ICBC is positive. For the strategies, we will continue to orderly arrange the investment of debts for the whole year. Last year, the increment totaled CNY 1 trillion. You also mentioned the new Basel III's impact on financial market business, the change of Basel III. We are looking to the change closely. We're drawing to the window period. From today's situation, we can make a conclusion that the impact on ICBC is, tend to be quite positive, but it's hard to have specific data.
Financial market business have a part of the modeling risks. We also mentioned internally, it related to the repositioning of risks. After seeing that, we can draw a conclusion to the measurement of its influence on ICBC's business. So I think it's relatively positive to ICBC for the lending and also financial market business. We believe the impacts are both positive. In the last two rounds of the adjustment of capital regulations, we are prudential, so we believe it will not form a shock to our business. This is my, this is my judgment at the moment. Next question from J.P. Morgan. Thank you for the opportunity to ask a question. I have two questions which might be relevant with the questions other colleagues have already mentioned. First is about the LGFV debt resolution.
According to the Xinhua News Agency, the banks are required to extend externally for some local government LGFV bonds. So what's the size for the external extension? Secondly, about developer loans or other LGFV, the banks can give extension to their loans. So how will you categorize them, as to NPLs or special mention loans? And what are the size of those kind of loans? As to your first question, what's the size for LGFV debt that qualifies for extension? And I would like to explain that for extension, the debtors should make an application for extension, so as long as they are qualified for extension, then we can sign the agreement. Currently, we do not have, we haven't seen a statistical level of a large size of those loans which have already applied for extension, not yet.
We also don't have large amounts of available data. In the future, if we see qualified debtors, we will negotiate with them one-on-one case individually to see whether we will give them extension or restructuring, reorganization, or we are not restricted to only extension of LGFV loans. As to the provisioning, Mr. Guan, the board secretary, already introduced that for our exposure to LGFVs, we mainly focused on the provincial high tier level, and so the provision is set aside in line with normal loans. But for some specific exposure, the lower tier local government with not so good asset quality, we will also accordingly and set aside adequate provision for potential risks. Next question, please. Wang Xinshu of Guangfa Securities.
Thank you for this opportunity to ask questions. I want to ask about the growth of scale. We are quite fast in terms of growing our assets at 13% this year, and I think this is a common phenomenon for all the state-owned banks in China. And my question is that we have such a rapid growth speed. This is a phenomenon for this phase, or do you think this trend will last? If this trend will last, it will mean it means that we'll have a larger proportion. And in which sectors we will have such rapid growth?
If it's just a phenomenon for this phase, what's your prediction for the next year? I think that you mentioned Agricultural Bank. Yeah, yeah. I mean that the four banks also have a very rapid growth. You mean that Yeah, and Bank of Agriculture also have very rapid growth. Whether such a high speed growth could be sustainable. To answer you, Mr. Zhou, if we all continue this trend of growth at a double digit growth, if on the long term, longer term, you won't see that any bank would have such a rapid growth.
We know that in the past three to four years, we have a particular scenario, and we are also focused on monetary policy, and the monetary policy is still focusing on stabilizing growth and stabilizing economy. And as for next year, whether we'll reverse this trend or whether there will be a great change, for the first question, I, when I addressed the question of Mr. Xu from Morgan Stanley, I mentioned that there will be a very important meeting, and we have our own planning to have a very sound deployment of our business structure in terms of serving the real economy and serving the economy. I think, I've been in the banking sector for many years. The double-digit growth, about 13% growth, is not constant phenomenon.
For me, personally, I think the double digit growth for a long time won't be a constant trend. The speed of growth is only manifested in the past 3-4 years. In the past several years, if you look at it in the longer term, we don't think this trend will be very protruding. The asset growth of banks and credit growth, if we put it in a longer cycle, in a longer term, look back in the history and coupled with the common rules of international peers, I think we can have a more objective opinion. Sometimes the monetary policy, when it's very tight, we will have only a single digit growth at the lower figure because there will be restraint, restraining us from over expanding.
But currently, major banks will play a role as to serve the real economy and stabilize the economy. So it's only in this phase that we have such rapid growth. And I don't think that growth will be very abrupt. And in the next, I think the changes will be quite smooth. That is my preliminary judgment. I don't know whether my personal judgment could address your concern. Next, please.
Next question is from Zhang Shuaishuai of CICC. My question is a comprehensive one. In Q3, we can see that for the NPL formation, what's the mix? And looking forward. And also, we can talk about from the sectors, the reasons for the NPL reformation and also the change trajectory in the future. F or the deterioration mix of loans, the real estate and real estate-related sectors, like building materials, we can see the NPL ratio are decreasing, but the increase is not that remarkable.
From the traditional categories like the manufacturing, business circulation from the volume, it's maybe the largest ones, but for the deterioration rate, the level is slightly lowering down compared with before. For the industrial chain related to property, in the future, as the measures are taking effect and the demands are picking up, we think there are positive effects in the future for the building materials, decoration, and the areas influenced by the property industry, I think there will be positive changes. You also mentioned the measures of defusing debts, and the improvement will be conducive to the capability of cash flows and the debt repayment of related companies.
Next question, please. Thanks. I have two questions about the inclusive loans. For several years, as advocated by the regulators and policymakers, we have seen large banks like ICBC develop quite rapidly in inclusive finance. Against the backdrop of weak economy, what is the latest risk of your inclusive loan and the future trajectory? The second question, about the wealth management business. We have seen some volatility in the capital market in September, and due to the lack of good assets in the market. What's your expectation for the full year's performance of your wealth management business, and what changes can we expect to see in next year? And the government is encouraging more capital to be injected in the capital market. Can we expect to see good performance in the capital markets in the future? Your first question is about the NPLs of inclusive finance.
This question will be answered by Mr. Tian, the General Manager of our Inclusive Finance Department. The second question will be answered by my colleague from ICBC Wealth Management subsidiary. Actually, this is a combo package of questions about the wealth management business. First, thanks to Madam Shen from Huatai Securities. As you mentioned, ICBC, same as our other large peers, have developed quite well in our inclusive finance. We have seen faster growth of our inclusive loans. For ICBC, we put priority of prevention of relevant risk in the asset quality of our inclusive finance practices. By the end of September, the NPL ratio of our inclusive finance is 0.83%. The demand from micro-sized enterprises, after many years of fast growth of them, now have entered a relatively slower phase and period, but the momentum will continue.
In this kind of situation, we pay a lot of attention to the asset quality of the inclusive loans, and we are well positioned and prepared for the potential uptick of the NPLs of our inclusive loans. Through strengthening enabling from our digital technology, we enhanced the criteria for customer entry, loan extensions, and post-loan risk management. So we can combine better with the digital technology and loan management by our experts. So we have introduced the digital technologies into different scenarios of our inclusive finance, and try to pick more prime customers for our inclusive loans, and also to recognize the potential risks through digital means to give pre-warning, active recognition of any potential risk of our increased loans.
We have also strengthened the cross-validation of online and offline information via by people and also by digital platforms, so as to better recognize and diffuse risks. Based on our practices, the entire asset quality of inclusive finance have been managed quite well. In the future, we expect to see it will be also completely controllable, and we will continue to explore and strengthen more ways by best to take advantage of our expertise to support the fast growth of our inclusive finance. We expect to see large room for us to further develop inclusive finance in the future, so we will try to achieve a better quality development of our inclusive finance. As to your second part, core question of wealth management business, I would like to give the floor to Mr. Li, the Vice President of ICBC Wealth Management subsidiary.
As to your question, you asked us about the arrangement of our products. ICBC Wealth Management subsidiary has already established for 4 years. We have introduced a series of new products which can be better accommodated to our customer needs. In accordance with different risk appetite of our customers, we have fully enriched our products, including mutual fund products, fixed income products, monetary fund products for PR1, PR2, PR3. Proportion have increased to 1 to 2 to 5. As to your second question about the research and the investment, particularly at the equity market. For our company, we have always put a lot of attention to the research and the investment, so as to diversify our investment capabilities and assets allocation. So we have investment committee, which will guarantee the sound decision making of our investment at a company level.
About the equity market investment, we are also trying to improve our capacity to meet the goal of better serve the real economy. I want to add up to his answer. With the volatility of the NAV of WMP, we think it's quite normal because it's relevant with the market, capital market performance. For our subsidiary, they will strengthen the ability of research, investment, and also product sales capability, so as to enrich their supply from the assets end. Some high-yield assets are not so easy to be developed. But for the performance of the fixed income products or fixed income plus products of our subsidiary, they have achieved quite good performance. For next year's products arrangements, they are now studying quite closely about the capital markets, and with a large balance of wealth management, AUM.
They will make the products investment arrangement in accordance with their research and study of the entire capital market. About the equity market, ECM, we already have some exposure to the investments of equity capital market, and in the future, they will also continue to be a long-term investor and increase their investment in the equity capital market. Within the framework of our regulatory requirements, we will also try to make more contributions to the ECM. Thank you. Next, please.
I'm Yan Wenjie from UBS. Thank you for this opportunity to ask a question. I have two questions. The first is about the real estate development. Until recently, on September, could you please share with us your status in terms of your NPL status, in terms of real estate development and mortgages? And for the real estate development, what's the proportion of those with collateral? And as for the existing on the repricing, and I think there's no, do you have a new contract? Or do you continue with the old contract and change the interest rate? That is, say, do you sign a new contract or change the term of older contract? My other question is about a general question.
The economy is not on the rise, and I think the banking sector is also under impact. The profit growth for ICBC indeed is, I think it's lower than our peers. And I think your peers released some provision to support the profit growth. And in Q3, for the shareholders, I think the dividend, you know, we have a zero profit. And when you consider the profit growth and you reduce some provision, how do you make such a decision? And do you have similar considerations when you have the positive profit growth? That's my questions. Thank you. Thank you for your very professional questions. The detailed number will be given by the credit and investment management department.
I think we have disclosed such figures that the NPL ratio, the NPL ratio with collateral or pledges. That is to say the interest rates for the mortgages. Do you change the contract or yeah, I think my colleagues will make a detailed response. First, about the real estate development loans, the NPL ratio will be disclosing the interim report and annual report. I think the figure is on a trend of decreasing. Those with the collateral, Q3, do you-- have we disclosed that for Q3? It's at about 6.2%. That is better than the interim report. The 6% have collaterals. As for mortgages, the NPL ratio is 0.45%. Okay, let's continue. The existing mortgages, how do we adjust the interest rate?
For the existing mortgages, we adjust the interest rate, mainly by the way of changing the interest rate, but we also supported a measure to change the contract itself. The second question, I would like to say that, we do not make our profit by releasing our profit. It's not our practice. Why? You pay attention that in the first half and the Q3 report, that our disruptive income dropped. This is due to the interest rate decrease. However, we have indeed a lot of growth in terms of scale. We have a growth of trillions of assets, and it in some way made up of the drop of the influence of the drop of interest rate. Our net profit growth is due to the following factors.
First, you already noticed the negative factors. First, the NIM contraction. Second, the drop of interest rate. And the positive factor for our interest rate grow, profit growth is that we grow in scale. Second factor, our tax dropped. Third, provision. Actually, the provision is not reduced. The provision of our credit asset is actually on the rise. We, so we do not release the provision to make up for profit. That is not our practice. Last year, we have put aside a provision for the non-credit sector that is due to the asset, different asset. And we do not put aside a provision for that sector this year. This is a normal practice. Third, the several banks, I think the profit growth are showing different signs.
This is a result of actual and accurate accounting. So there's no such thing that banks have different figures. I think all banks follow their own follow the accounting rules and reach their own conclusion. And the provision is a object factor, and we just put aside a provision according to accounting rules. And if the profit will be negative, we'll let it be negative. So we do not follow the have the practice of making the profit positive due to our measures about provision. I think it's not it's common practice, and it's common for major banks in the world to lose money for one year and make money for the next year. So it's all natural.
And we have a very strict ECL model, and we have followed very strict accounting practices, and the profit is concrete, not manipulated. And I suggest that you focus on more momentum, new momentums for us. First, on the competitiveness, we have changes. Second, customer structure, we have changes. Third, we also have changes in terms of asset and liability structure. And four, we also have changes in terms of risk management as well as our structure for income. I think you support, you've put a lot of focus on NIM. However, we have other growth factors. And we also have the recovery of bad loans that are already written off, but we have reclaimed and recovered some of our asset.
That is also one resource, one source for our income. This is also a huge amount of our income, of our growth of value. So I encourage analysts to open up your vision and have a more thorough analysis of our balance sheet. Any supplement from Mr. Tao of Finance and Accounting Department? Let me supplement briefly. First, ICBC, in terms of accounting, follow strictly the regulatory requirement and the accounting rules. As mentioned by Mr. Guan, that in terms of the division, categorization of a credit, credit asset, we follow strictly the rules of the regulators. In terms of a provision, we have the ECL model. The utilization of this model will be followed by very strict mathematics model support.
According to the regulatory requirements, we have effective categorization of assets, and we use ECL Model. The provision we put aside could amply reflect our expected loss, and we have ample ability to fend off risks in the future. From the management level, we don't have the intention, now the necessity to balance profit and provision, which is against the regulatory requirements. Our profit growth, as Mr. Guan mentioned, this is a result of our endeavor to fight against all the negative factors, for example, to enhance our management on asset quality, to better effectively support our profit growth. For we made a lot of measures, and we reached this profit. Third, the growth of profit by ICBC is relatively lower than our peers.
First, different banks have a different, differentiated business operation. Another factor is that you should not ignore the scale of ICBC. ICBC is huge, and the profit scale is also different from our peers. The percentage growth for ICBC indicates a large differentiation in terms of the absolute measure, the absolute number of profit. The percentage might be smaller, but our profit is huge. Thank you for your question, and thank you for a very professional question. Due to time limit, let us have one or two questions, since the meeting have been lasting for one and a half hours. So next one, please.
The next question comes from Liu Yiwei of HSBC. Some of the investors raised questions about bancassurance issues. For the, what's the proportion of bancassurance fees for your operating income? According to your perspective, is there any recovery from the demotion of wealth management products from investors in Q3? In the future, will we see a better sales of insurance products? You also mentioned the provisioning. In the first half of this year, the provision increased. The non-credit assets, is there any recovery of the asset quality? And the impairment also decreased, but there is no classification. Is the reason from the non-credit assets? And what's your outlook for the asset quality in this regard? I'll invite the personal banking department to answer your questions about the bancassurance fees. The finance and accounting department will respond. ICBC is a large company.
The fee and commission income exceeded CNY 100 billion, while the operating income exceeded CNY 600 billion. So in the bancassurance portion, in the whole, well, it's not high. The fee-based income's impact on operating income is low, and it can offset by the growth in other parts of the income. Questions about wealth management products. We have also seen that for the time deposits allocation, customers are increasing this part. The trajectory is that the time deposits are growing this year. From our point of view, as personal banking department, behind the growth of time deposits, it is the choice of the households for their money. In Q4, in bancassurance products, especially the high yield products, our judgment is the same with you. Some of the funds will go to the deposits again, and some investment fund will also go to the wealth management products.
So for Q4, our view is quite positive. The NAV changes can satisfy personal customers' demand for the yield and stability in the relevant proper products, then we think the volume of WMP will resume. For the non-credit assets, the provisioning and its outlook in this part, last year, we use ECL model and make calculations. And we provisioned more for the non-credit assets. And also the increase of CNY 220 billion, I think it's fully provisioned last year, so this year we do not have any need for provisioning more. So the proportion decreased this year. For the credit assets, we will provision more according to the risks, but it's not high according to the performance of the first three quarters. And also we manage properly the asset quality and the risks, and also our positive view about the development of real economy in the future.
The provisioning for both kinds of assets, non-credit or credit, we will follow the accounting principles. We will make sure full provisioning and keep it over 200% is high in the banking sector. Thank you for your questions. For the interest of time, we will have the last question. Last question from CITIC Securities.
Thank you for giving me the opportunity to ask the last question. I have two questions. First, I would like to ask about the active liabilities. We have seen the similar trends for the banking sector in the assets allocation, so what about the active liabilities? Secondly, about the credit card loans. Now, the pandemic has already ended, so what's the future direction for the credit card loan growth?
For your first question, you mentioned about the similar trends of the assets growth, assets allocation, and Mr. Zhou, General Manager from the Asset and Liability Management Department, will answer your first question for the active liabilities.
The first three quarters of this year, actually quite similar with several years in the past. The one thing quite obvious is that we have become quite less dependent on the active liabilities. For the entire ICBC bank, we have introduced the strategy of encouraging GBC + customer ecological project, to formulate a better ecology of our customers. So on one hand, we can continue to play out the heritage advantages of our customer base, and we have also improved our prime service to customers. So this year, compared with last several years, we have seen reduction of the size of active liabilities. By coming. We have seen positive changes, marginal changes of the deposit cost, liability cost. If we have the same size of active liabilities as we had in the past, it's hard for us to reduce the liability cost.
So since the beginning of this year, we have attached great importance to the management of deposit cost and liability cost, including the less dependence on the active liabilities. So that has contributed to the better management of our liability cost. And about your question about the credit card, as you mentioned, the pandemic has caused some impact of our credit card loan extension, and we have also adjusted our business structure to stabilize our growth and maintain. We have successfully maintained the advantage in the size of our credit card loans. Meanwhile, we have also tried to optimize our customer base, customer structure, to stimulate the vitality and more demand of our customers. So after the pandemic, we have seen the increase of consumption demand.
For the Q3, we have seen the consumption loans increased, particularly from some other new emerging areas, like installment, card installment products from the car sales and decoration. Since the Q3 have realized the fastest growth of credit card loan growth since 2020. That has also driven the growth of our profit from our credit card business. Thank you. Due to the limited time, so that's the end of our Q&A session. Now, let's give the floor to Mr. Guan for his conclusion. Thank you to all our investors and analysts in participation and your questions.
Secondly, I would also like to advise our investors and analysts to pay attention both to the short-term performance and indicators, as well as our mid- and medium-term and the long-term changes, particularly about the changes of the entire banking sector, and also positive changes of the macro of China. So in the future, if you need any one-on-one meeting or one-on-one or group meetings, please contact our IR team. Thank you for your time and participation. Thank you. Also, thanks to Dr. Guan and the heads of relevant departments from our head office. Welcome to contact IR for any further questions. So that's all for today's meeting. Wish you all the best. Thank you. Bye.