Thank you, investors, analysts. Good evening. I'm the General Manager of Corporate Strategy and Investor Relations Department, Wang Liancheng. Welcome to our H1 earnings call. Today's call is held via on-site conference as well as call. It's our good pleasure to have the investors and analysts for today's call. Now, I would like to introduce the management present today. Mr. Liao Lin, the President of ICBC. Mr. Wang Jingwu, the Executive Vice President. Executive Vice President, Mr. Zhang Wenwu. Executive Vice President, Mr. Zhang Weiwu. Executive Vice President, Mr. Duan Hongtao. Board Secretary, Mr. Guan Xueqing. Our directors, Mr. Lu Yongzhen, Feng Wei, Cao Dong, Li Jun, Chen Yifang, and Dong Yang , also joined today's call, and we are also joined by the heads of relevant departments and the subsidiaries.
In the first half of 2023, all the core indicators of our bank have maintained stability, and the key strategic layout has also achieved new progress. We have achieved results better than expectation. The net profit in the first half was CNY 174.7 billion, 1.1% YoY growth, and 1.6 percentage points higher than the first quarter. The total revenue was CNY 428.9 billion, and maintaining better momentum than the first quarter. The net fee-based income was CNY 73.5 billion, being the largest among our peers. In the first half, the ROA and ROE were respectively 0.84% and 10.51%, ranking a better position than most of our peers.
The capital adequacy ratio was 18.45%, also the leading position among our peers. The provision cover ratio was 218.62%. The net NPL ratio was 1.36%, a drop two basis points lower than that of the big at the beginning of this year. The overdue ratio was 1.18%, four basis points lower than that at the beginning of this year. The gap between overdue loans and NPL loans was negative for the 13 consecutive quarters. NIM was 1.72%. By the end of June, the loan increased, grew by 9%, while comparing to the, that figure at the beginning of this year, and the total investment increased by 7%, and deposits increased by 11.7%.
This is the general introduction of the first half results, and our PPT of the presentation has also been posted on our website. You can refer to that. Now, we are going to the Q&A session. We advise every investor and analyst to raise one question every time, and please indicate the name and organization before you raise the question. The first question, please.
Thank you for the opportunity to raise the first question. I'm Yan Meizhi from UBS Securities. Congratulations on ICBC on achieving the stable results on the back of complex situation. I would like to ask a question which I have frequently asked in former course about the net profit growth. Maintaining growth of a net profit is not easy. However, the situation remain quite complex.
So can you elaborate on the total volume and growth rate and any highlights of the revenue? Looking forward, can the net profit remain, achieve a positive growth for the full year? Thank you.
Thank you for your question. The question is about the revenue net profit. You have already have our PPT presentation about profits, so I will answer all the question together. So I would like to talk about the highlights of our half one results. We have a lot of bright spots of our earnings for the first half. For example, the core indicators remain stable. All kinds of risks are controllable, and the strategic implementation had achieved some breakthroughs, and the operation has also achieved progress in both quality and quantity.
I would like to elaborate our achievements from two perspective or two sheets, which I believe can be demonstrate our progress in a more clear way. The first sheet is the balance sheet of ICBC in the first half has become cleaner and healthier. Clean can be demonstrated in our improvement of our asset quality and the conservation of our capital. By the end of June, the NPL ratio was 1.36%, two basis points lower than the beginning of this year. The gap between overdue loans and NPLs was -461, remaining negative for consecutive 13 quarters. In the first half, the RWA growth rate was 9.1%. 1.1 percentage point lower than the growth rate of our total assets.
So all these combined, meaning the asset quality foundation of our bank has been consolidated. The balance sheet has become healthier, can be also demonstrated through our more balanced structure. The new incremental assets exceed CNY 4 trillion, mainly coming from the incremental loans, which is CNY 2 trillion, and also new investments amounting CNY 700 billion. We have accelerated our assessment on the equilibrium and the balance so as to make sure our assets can be allocated more stably to manufacturer, green, inclusive, agriculture-related aspects, which are the key aspects of the real economy side, so as to better accommodated to serve the real economy. And from the liability side, the assets increased over CNY 3 trillion, and we have also achieved more balanced growth of all types of deposits, including savings, corp, retail, corporate, and financial institutions deposit.
Also the interbanking liability proportion has been managed at a relatively low level compared to our peers. The stability of our liability has also maintained quite solid. Second, the second sheet is the income sheet, which has become more balanced, coordinated, and sustainable. By balance, it means we have become better adapted to the risk and profits. We have always paid great attention to development and security, and the provision coverage ratio has increased by 9.15 percentage points, with the balance of allowance reached CNY 751.2 billion. The total volume of net profit increased by 1.1% and the total totaled CNY 174.7 billion. That means we have improved both the risk mitigation capacity as well as our profitability.
By coordinated, it means on one hand, we have become more conservative in our advantages because income ratio was 23.9%, also a better position than our peers. By sustainable, we have become more solid in the foundation of our operation and development momentum. For example, we have implemented key strategies like GBC Plus to build a more solid ecosystem of our clients and also D-ICBC, digitalization of our bank. The total retail customer increased to 729 million, and corporate customers exceeded 11 million. Another key indicator is the MAU of our mobile banking clients exceeded 200 million. And a series, a large area of, digital results, digital products have also been put into place, which can show our momentum for innovation has also been strengthened continuously.
These two sheets can demonstrate the solid foundation for our future development as well as the resilience. Secondly, about your question on revenue. My personal opinion is when you look at revenue, you should pay attention both to the growth rate as well as the total volume and structure. In terms of the volume, we have stabilized the revenue and improved the structure. In terms of the total volume, we remain the largest size. The first half, the rev, total revenue hit CNY 488.9 billion, continuously ranking the top among international peers, which has created adequate room for us for future profit growth as well as risk prevention. Structurally speaking, revenue has become more dependent on diversified resources.
The non-interest income ratio made up 21.4% of the total revenue, increased by 3.9 percentage points, among which basic revenue like payment and settlement and bank card increase continue to register a positive growth. Which has laid quite solid foundation for us to increase more revenue in these areas, because we know fee-based income are quite important to the total revenue growth. In terms of the growth rate, we have seen marginal improvement. You can look at the figures. Despite of the contraction of 3.4% of the total revenue, however, the contraction was one point, 0.1 percentage point smaller than the first quarter's drop. Also the contraction of the net interest income and fee-based income, also smaller than the first quarter, and the other non-interest income has registered a positive growth.
About the outlook on the full year's net profit, looking into the future, we believe the good fundamentals of China's economy, which are quite resilient and has huge potential and vitality, remains unchanged. We have seen the introduction of a series of policies to stabilize the economic growth, will also promote the economic to become stronger and better. We believe that will also create quite favorable conditions for internet, for financial institutions like ICBC. To sum up, with a huge size and strong base of customers, strong into technological advantage and eco-environment, ecosystem of clients, we have still solid foundation for future development and strong momentum to have greater growth. We are confident that we can have foster more drivers for our future revenue growth and profit growth, so as to create more returns for our shareholders and investors.
Thank you for your question.
The next question? Thank you. My question concerns net interest margin. We have seen that your NIM continue to go down. What are the main reasons? Is there any change in interest payment cost? We have seen that the loan yield still faces pressure with the policy interest rates slowing down and the outstanding mortgage interest rates adjusted down. How would you stabilize NIM, and what is your outlook? Thank you.
Just as the former questions concerning operating income, the question regarding NIM is asked every time. In our annual results announcement in this March, I have discussed this with all of you. At present, in China's banking industry, the operating model and the profitable profitability model are all the same. So the sectoral trajectory on NIM is similar, but the extent of the change differs according to the mix of the balance sheets. So the main trajectory is dependent on the sectoral one, but the extent is dependent on the bank's efforts of their own. For ICBC, we follow the sectoral trajectory in NIM in the first half of the year. It further shrinked, but we have also noticed some positive signs. Many analysts mentioned the rebound.
Well, from my side, for the change, NIM compression shrunk compared with the last half of the year. Our NIM was 1.72% in the first half of the year, remaining within the reasonable range, down by five BP compared with Q1 and 20 BP compared with the beginning of this year. In the future, it remains to be seen if we can further stabilize it, but this is a positive sign. In terms of the reasons-
... The new time deposits interest rate is going down. The change of NIM is dependent on loan yield and the interest payment ratio of deposits. ICBC's interest-bearing assets average yield was down by three basis points year-on-year, and the interest-bearing liabilities interest payment rate was higher by 30 basis points. This is attributed to more time deposits. At present, with the deposit interest rates, liberalization adjustments mechanism in place, we've seen the nominal rates of deposits is going down. Our new RMB time deposits interest rate was down by nine basis points compared with last year, and down by 15 basis points year-on-year. The marginal cost was lower for the new deposits, which will stabilize our cost of liabilities. In terms of the business mix, it is improving.
In the first half of the year, we actively adjusted the mix in terms of assets, liabilities, customers, and so on. This is our internal momentum. We improved the mix of asset and liabilities to stabilize our NIM, especially in loans. We emphasized on all kinds of loans. Of all kinds of scale, we improve the proportion of retailing and medium and long-term loans, which is priced higher. By the end of June, the personal operating, the business loans, and the medium and long-term corporate loans, their proportion was higher by 0.7 and 1.5 percentage points respectively. This is also another positive sign. You also mentioned the reduction of outstanding mortgage interest rates. Well, reasonably speaking, such adjustments will have impact on NIM.
We have pressure indeed, but from the side of the customers, it is conducive to relieve their burden of repayment and reduce their willingness of prepayment, and is also good for the commercial banks to remain their volume of mortgage loans. The highly adaptability is the requirement of constructing a modern financial system, and it is also our advantage. We will continue to improve our expansion direction and the mix, and we will continue to manage well the interest payments and loans yield. Especially manage well the balance of loans extension to remain NIM within reasonable range and increase our capabilities and sustainability of serving the real economy. We are confident to keep it within a reasonable range. Thank you. Next question, please.
I'm from Huatai Securities. I would like to ask about the asset quality. Just now, President Liao mentioned how strong NPL ratio was lower. Can you sum up the asset quality performance in the first half of your bank? Investors have concerns over certain sectors. What do you think of your asset quality in some such sectors, like retail sector and also some geographical, and also for inclusive finance? Large banks maintained high growth rate in the past several years, any potential risks in this regard? Thank you.
I would like to invite Mr. Wang Jingwu to answer this question.
The asset quality is the lifeline for bank. We have paid a lot of attention to risk management, particularly to the risk management in some key areas. In the first half, the core indicators of asset quality maintained quite stable and also improvement by the end of June. The balance of NPL was CNY 343.6 billion. NPL ratio was 1.36%, so it's lower than the beginning of this year. Overdue loan ratio was 1.18%, four basis points lower than the beginning of this year. The gap between overdue loans and NPLs was negative CNY 461.46 billion, remaining negative for 13 consecutive quarters. We can look at some details.
From the corporate side, the asset quality of all sectors, overall speaking, have been improved, and the risk in some key sectors has been released. The average NPL ratio of corporate loans of domestic branches was 1.88%, 20 basis points lower than the beginning of this year, and 8 basis points lower than the first quarter. NPL ratio of half of the industries like manufacturer, retail, and wholesale have been also lowered, respectively, by 71 basis points and 149 basis points than the beginning of this year. And for example, other sectors which have been negatively impacted by COVID, like tourism, entertainment, transportation, have also seen improvement. At the same time, due to the adjustments of the real estate, developers have some pressure on destocking, and the NPL ratio of property-related industry was 6.68%.
This is the corporate loans, 54 basis points higher than the beginning of this year. By the ratio, the proportion of property-related loans to the total corporate loans has been quite low, just around 4.9%. Besides, we have also set adequate allowance to property-related loans, so the relevant risk is controllable and impact is also limited to our total assets. From the retail side, the asset quality has also maintained quite stable. The domestic retail loan average NPL ratio was 0.66%, five basis points higher than the beginning of this year, and one basis point higher than the first quarter.
Among which, the domestic mortgage NPL was 0.42%, 2 basis points higher than the beginning of this year, and the retail consumption loan NPL was 2.36%, 17 basis points higher than the beginning of this year and three basis points higher than the first quarter. The retail business loans NPL ratio was 0.77%, 14 basis points lower than the beginning of this year, 8 basis points lower than the first quarter. You asked me about the asset quality of the inclusive finance. We have maintained relative growth rate of inclusive finance since the beginning of this year, with a growth rate higher than our peers.
This is also a key strategy and measures for us to support the real economy side, and also an actual need for us to optimize our structure and increase our revenue, as well as accelerating our transformation. Currently, the NPL ratio of our inclusive finance was 0.76%, six basis points lower than the beginning of this year, with relevant, controllable, and limited risk. In order to realize higher quality development of inclusive finance, we have adopted the following measures. First is to make full use of our advantage in our technology by integrating both internal and external data and information, and construct a customer selection model, so as to better accommodate our services to the requirements from the real economy side. Secondly, we have stick to the loan extension by our experts.
We have made full use of our advantage in terms of the offline outlets, as well as our customer relation management managers, to enlarge their information access through via offline platforms and combining with the online digital platforms, so as to effectively recognize relevant risk of our customers. Thirdly, we have also continued to enhance our disposal on NPL ratios, NPL loans, and by achieving synergy in the front and middle and back desks. In recent years, facing complex macro environment, we have stepped up our disposal on NPL non-performing assets. Over the past three years, the disposal of non-performing assets exceeded CNY 190 billion, which helped us to maintain stability through cycles of our asset quality by maintaining the NPL ratio.
... at a relatively low level, so as to present a clean and balanced balance sheet to our investors. Looking into the future, we will continue to enhance our risk governance path and prevent any potential risks in the property sector, as well as LGFV, so as to promote our risk control and prevention capability to reduce any potential losses of our credit risk assets, so as to create more room for our profit growth. About any potential impact that investor and analyst might have interest for—from the new regulation of the classification of financial assets, the impact mainly focused on the corporate credit business, and it will have smaller impacts on our retail bond investment and the banking investment and bills assets. So relevant impact is generally controllable.
The next question comes from the line.
The next question comes from Katherine Lei of JP Morgan.
Thank you for giving me the chance to raise questions. My question concerns credit growth. In the first half of the year, what are the features of your credit growth in terms of volume, mix, and pricing? We also noticed that the credit growth was sluggish in July, the whole sector. What is the latest situation in effective credit demand for your corporate and retail loans? Will you keep a relatively similar growth in credit growth compared with last year?
You have noticed the great growth in the first half of the year. I'd like to invite our SEVP, Mr. Zhang Wenwu, to answer your question.
Since the beginning of the year, we implemented the national economic and financial policies and monetary policies.
We adhere to commercial sustainability principle and grasp the chances in the demand of, in the market. We strengthen the risk prevention. Our credit volume grew stably with improved mix, and the volume and quality were also improved in supply. Our RMB loans balance domestically totaled CNY 23.5 trillion, up by CNY 1.99 trillion, and grew by CNY 187.6 billion year-on-year. We have four features. First, our support for major projects with serving the manufacturing. We support the transportation, water conservancy, and other major infrastructure in the 14th Five-Year Plan projects. We provided the long-term fund supply for the real economy. In the first half of the year, our medium- and long-term corporate loans increased by CNY 1.3 trillion. The increments improved by 12 percentage points year-on-year.
We support our domestically made airplane, the high-speed train, and other pillars of the great power. Our loans to the manufacturing balance exceeded CNY 3.6 trillion. Our balance and increments in the manufacturing loans both ranked first among the peers. Second, we prioritize major areas. In inclusive finance, we improved the volume and the coverage. Inclusive finance was taken as a breakthrough in our transformation, and we grasp the chance in digital inclusive finance. We have a series of online financing products that is closer to the market, customers, and demand. The balance of the inclusive finance loans exceeded CNY 2 trillion, with an increase of CNY 500 billion, leading the peers. We also serve the green finance. We improve our paradigm in this regard and support the effective use of clean energy, new energy, automobile, and the PV power station and other green industries.
The balance of green loans exceeded CNY 5 trillion, the volume and increments both led the peers. We also serve tech innovation. We have specialized Chunmiao campaign with construction of many sci-tech centers. Our strategic emerging industries loans exceeded CNY 2 trillion, increments was over CNY 600 billion. The volume and increment both led the peers. We also improve our agricultural finance services. We support the three agriculture major areas, cover more urban areas. By the end of June, our agriculture-related loans balance was near CNY 4 trillion, grew by 20%, leading the peers. Certainly, we keep the extension of retailing loans. We continue the implementation of number one personal bank. We also marketed more a series of major products in this regard. So we have achieved a year-on-year growth in the non-mortgage loans.
In the first half of the year, the personal consumption and operating loans increments were more than CNY 280 billion. We also increased our availability of housing loans. We have extended more than CNY 510 billion in personal housing loans. We also grasped chance in the second-hand houses. The accumulated extension was over CNY 150 billion, up by CNY 70 billion year-on-year. We also coordinated the paradigm and achieved coordinated development. Jing-Jin-Ji, Yangtze River Delta, the Greater Bay Area, Middle Region, Chengdu, Chongqing region. In these regions, our loans growth was higher than the average. In pricing, the yield and the growth have faced relatively lower down. In the second half of the year, the slowing down of the loans was down.
LPR downward pressure have some impact on our yield, but we giving to full play our advantages and manage well in the mix and duration of the loans, so that to contain the extent of the reduction in a reasonable range. In the loan demand in the first half of the year, our credit was relatively robust. We keep the robust reserve and also stabilize our pace. We achieved year-on-year growth for the Q1 and Q2 in corporate loans. In the major products, major customers and long tail customers, we have formed a unique product and service system in manufacturing, green, sci-tech, urban rejuvenation, education, tourism, and inclusive finance. We have ample demand reserve. Corporate loans will also be the major force in our future loan growth. We will continue to adapt to the new development of housing market.
Based on the adjusted mix of personal loans, we will extend our consumption scenarios. We will continue our marketing in personal consumption and operating loans, so as to strengthen our competitive edge. So all in all, we see that our effective reserve is ample and stable. We can achieve a growth that can cross the cycles. Based on the risk yield, we will continue to improve our market competitiveness. In the future, we will continue to grasp the market trajectory and continue to improve our credit business and strengthen and improve credit market competitiveness and value creation. Based on the economic development and customers' demand, we will continue to implement financial services with more strength, so as to achieve high quality development. Thank you.
Next question, please.
From Credit Suisse Asset Management. Thank you for the chance. I would like to ask, how was the development of ICBC wealth management business in the first half of the year? And in particular, in terms of wealth management products, at the end of last year, we saw some market fluctuations with quite an amount of redemptions. I wonder, what is the latest deviation, and the update, has been stabilized and improved? And finally, as we understand, the management fee rate of equity funds has been reduced. Will there be any pressure on the management fee reduction for wealth management products in the future? Thank you.
This question is about wealth management, asset management. I would like to invite the Executive Vice President, Mr. Wang Jingwu , to answer this question.
Thank you for your question.
About the wealth management business in the first half of this year, now we are in the process of constructing a big wealth management system, focusing on transformation and transition of our asset management and fund and insurance. In the first half, the total revenue from our wealth management business was CNY 12.1 billion. We have provided services to customers over 60 million, and created over CNY 160 billion for our customers. The AUM of our retail customers exceeded CNY 20 trillion, making ICBC the first one, and an increment of our AUM by CNY 1.38 trillion compared to the beginning of this year.
Now we are also in the stage of transitioning from paying attention to the balance sheet of the bank, to the balance sheet of our customers, and also a transition from the product sales volume to the AUM of our customers. We are also trying to establish a tiered service system for to different types of clients by relying on the diversified service plans with the use of AI and big data. About your question on the asset management business, you mentioned about the fluctuations of the market, which caused pressure to most of our banks due to the redemption. For our asset management subsidiary, we have maintained quite stable. The average contraction of our pure debt fixed income products ranged only between 70-80 basis points, and non-product had been closed due to the redemption of our customers.
In the first half of this year, ICBC asset management subsidiary maintained quite good momentum in their business development. Firstly, their investment profits and operation results have outrun their peers. By comprehensively using investment strategies like duration, leverage, and credit, they have seized the good opportunity brought by the good performance of the debt market. By the end of June, the average annual return rate of the existing wealth management products was 3.33%. This also ranked the top among our peers. Looking at the longer run, since the establishment of our asset management subsidiary, all the return rate of all the products upon duration was as high as 4.47%, and also with the asset quality quite stable.
Secondly, our asset management subsidiary has also improved their capability to better serve the real economy by increasing their investment in the advanced manufacturing, technology innovation, and green finance. And thirdly, they have also made great efforts to optimize the structure of their investment. The mid, middle and low risk products accounts over around 90%, among which the non-cash products totaled CNY 1.2 trillion. And by the end of June, the WMP in compliance with the new asset management regulations peaked CNY 1.71 trillion, and the daily average daily volume, average volume since the second quarter was CNY 1.63 trillion, also ranking the top among our peers. But overall speaking, we have discovered high quality growth rates for our wealth management business to better serve our customers in accordance with relevant regulatory requirements.
About the fee rate of wealth management products for banks, we have always insist on the orientation of inclusive finance, with overall fee charge rate far below the mutual funds rate, because most of our WMPs are fixed income rates, so the fee rate have been vastly lower. For example, the average fee rates of our WMP in compliance with the new asset management regulations was only 3 basis points, thirty basis points. In the future, by paying attention to the market situation, clients-
... requirements and also our operation needs, we will try to achieve the balance between the volume and the price of WMPs. The new asset management regulation is new to the industry, along with the capacity and maturity of the industry. The wealth management business industry can also become more scientific and more inclusive in the future. Thank you.
The next question?
I'm Jinghan Wang from Guosen Securities. I have noticed an issue about mortgage loans. In the first half of the year, what about the recovery of the mortgage loans demand? What about the repayment? Are there any new change? In July, PBOC mentioned the adjustments of the outstanding mortgage loans contracts. What is the latest developments? So based on such adjustments, how do you foresee the impacts on your NIM and profitability? Thank you.
Your question concerns the mortgage demand and the repayment, and also the adjustments of the outstanding mortgage loans. I'd like to invite our SEVP, Mr. Duan Hongtao, to answer your question.
In the first six months, the housing market is under adjustment, but the personal mortgage loans remains to be one of the most important parts of our number one personal bank strategy. It is an important financial product to meet the demands of the people. First, in the first half of the year, our extension of mortgage remained stable with improvements. We actively adapted to the new changes in the housing market, grasp the chance and actively, grasp the chance in second-hand houses so as to achieve, positive growth. The accumulated loans growth was over CNY 510 billion, up by CNY 48.1 billion year-on-year.
The personal second-hand housing mortgage loans totaled CNY 150 billion, up by CNY 70.6 billion year-on-year. The average interest rate of the new loans was 4.15%, achieving balanced development of pricing and quantity. Second, the growth was stable from volume. The balance of our personal mortgage loans was CNY 6.737 trillion. This is a very important loan product, accounting for third quarter of our personal loans and one quarter of the total loans. From the value contribution and the capital saving advantage, it is still an important support for our stable operation. From risk prevention, our average LTV of mortgage loans was 46%. In the first-tier cities, it's only 37%, and it's 48% for other cities, showing a resilient capabilities against risks.
The NPL ratio was 0.42%, leading the peers. For prepayment, the interest rates of loans was lower. Customers tended to adjust their allocation of assets and liabilities, so the willingness of prepayments still remains to be high. The prepayment proportion was higher in the first half of the year, leading to the reduction of the balance. However, the balance was down by CNY 57.6 billion, compared with the beginning of the year, down by 0.9% since June. The prepayment, compared with the peak in April, was reduced. We will continue to make efforts to effectively satisfy their need in their regards, so as to achieve stable and sustainable growth in personal mortgage loans.
For the adjustment of outstanding mortgages and its impacts on NIM and profits, well, the adjustment concerns a large number of customers and concerning policies, we need to consider the differentiated policies. We are communicating with the authorities and analyzing and making the implementation plans. After the adjustments details, we can make forecasts. Reasonably speaking, the adjustments will have some impact on NIM and profits, but it is conducive to boosting housing markets, relieving customers' prepayments pressure, and improving their-
... consumption willingness. It is also good for our bank to improve retail and medium and long-term loans proportion. We'll continue to actively improve the mix of asset liabilities. Through adjusting mix, we will mitigate the pace of NIM contraction and keep it in reasonable range. Thank you.
Before the earnings call, we have also consulted, collect questions from our retail investors, and now we would like to raise the questions from our small investors. About the dividend payout, will ICBC consider pay dividend half year, and now the valuation of ICBC is severely undervalued. What measures will ICBC adopt in the future to restore your valuation, and what new plans for your issuance of, capital instruments? This is a sensitive and also important question about dividend payout, valuation, and capital. I would like to invite the board secretary, Dr. Guan Xueqing, to take this question.
Thank you for the question. I would like to answer your questions, answer your three questions from three aspects. Firstly, about the cash dividend. To maintain a reasonable dividend payout ratio and also high dividend yield for our customers, for our investors, is the principle for us. We believe 30% dividend payout ratio for our bank is a roughly reasonable level for us to both meet the dividend requirements from our customers, but also to maintain adequate position in our capital for our future growth, so as to better position us to create long-term and sustainable investment returns for our shareholders. You asked about the... whether we have considered paying dividend by half year. No, we don't have any information to disclose in this regard.
Since our IPO in 2006, now we have created more than CNY 1.3 trillion cash dividend for our shareholders, ranking number one of listed company in Shanghai Stock Exchange since 2007. The annual CAGR growth rate of the cash dividend for our A shares and H shares was, since the IPO, was as high as seven point, four point seven percent and five point three percent. Considering the share price increase, the return yield will be respectively five point three and five point seven percent, respectfully, for our A and H shares. Dividend yield, calculating with the stock price at the end of June, for our H shares will be six point three percent, and for our H shares will be seven point nine percent.
All these figures can be demonstrating the strong and long-term yield for our investors if you can hold ICBC shares for long term. So we are a quite ideal target investee for long-term and value investing. From the performance and the long-term and mid-term development, a reasonable dividend payout ratio is not only a key approach for us to return our investors and also quite important for our future growth. So currently, we still think 30% dividend payout ratio is reasonable. About the low valuation and price-to-book ratio of our bank. For the hidden value of our stock, the net assets per share by the end of June is 9.04 CNY, 5.6 times of the book value per share upon our IPO in 2007.
Currently, the price-to-book ratio was roughly historic low level, despite of a better position compared to our comparable peers. This is an outcome of different factors, including the investment end, the market end, and also many other factors at play. In the past, you have also seen we have maintained quite solid in our performance, with all core indicators remaining stable. Also for the asset quality as some key sectors like property sector and LGFV have been controllable and manageable. Our other key indicators, like provision coverage ratio, NPL ratio, had been also quite strong. As Mr. Wang just now mentioned, NPL ratio was a bit lower than the beginning of this year.... We think the value of ICBC should be better acknowledged by long-term global investors and value investors, as well as ESG investors.
For in the future, we will continue to enhance our investor relations management to better inform our investors of our advantage in our key strategies of, for example, the retail strategy, our advantage in transactional banking, global markets, inclusive finance, green finance, as well as our digitalization and the exploration of our long-term, long-term customers, GBC Plus customer ecosystem construction, and also the fostering of key talents, which are all drivers for our future development of modern finance. So we believe, against backdrop of a better recovery of China's macro, as well as the invigorating measures of relevant departments and authorities of China for the capital markets, the market players, market force will better promote the recovery and improvement of our price-to-book ratio, and to enable more investors benefiting from our future development.
As to your question about the capital instrument issuance, by the end of June this year, our capital adequacy ratio and core common tier-one ratio all rank, all outrank or outperformed our peers. In the future, we'll continue to become less dependent on the capital intensive business and to optimize our assets. Currently, we think the new regulations of the capital management has limited impact on us. In the future, we will also better combine the issuance of capital instrument and non-capital tier instrument. Since this year, in the first half of this year, we have completed the issuance of CNY 55 billion tier two capital instruments, and this week we have also issued the second tier two capital instrument, totaled CNY 55 billion RMB. We will continue to take advantage of the low interest rate window and to further optimize our capital structure.
Thank you for giving me the opportunity. I'm Li Chen from China Securities. My question concerns customer development. You have mentioned the acceleration of customer ecosystem, in particular, the GBC Plus project. What's the latest development for GBC and customers? How will it transform into your financial indicators?
Thank you for your concern for our GBC Plus project. In the first place, we introduced GBC coordination from fund flow, so as to improve the closed loop circulation of our fund. Through the circulation, we find our customers. After one year, since the first introduction, we improved it into GBC Plus, from fund to customers to ecosystem, so as to construct a fundamental project, project called GBC Plus. We have several features. First, it's our leading customers. This is our advantage. Second advantage is our fintech, which is strong. 36,000 tech talents in ICBC with the investment of more than CNY 2 billion. Through service customer value chains, we formed a system with top customers leading the middle and tail customers, so as to construct a ecosystem with all kinds of customers in terms of volume.
We adhere to tech empowerment through the-
... Through the fund chain, we improve our service chain and to cultivate the customer ecosystem. Our highlights are finance plus governments, finance plus sectors, and finance plus livelihood of the people. For example, we built ICBC e-security platform with the provincial Social Security institutions. We provide all kinds of functions so that they can have their business by more than 30 provinces, so that our customers can share the services more conveniently. Second, we coordinate the group institutions. Through our service chain, we extend our customer chain so as to help customers root in ICBC. Many of the customers may not be those of ICBC. How can we absorb these customers into ICBC? We base in payments, settlements, trade, and supply chain financing. We extend our service to the upstream and downstream customers and build a diversified customer ecosystem.
For example, for a hospital, we built internet smart hospital and settlement digitalization platform. As our main supporting bank, our proportion of the business exceeded 90%. We actively extend to BC, and we serve the Medicare workers in their financial assets totaling CNY 900 million. From the best customers of ICBC, we extend to B and C and customers from service chains to customer chains. Thirdly, we vitalize the eco effect so as to transform customer chains to value chains, so that our customer ecosystem can blossom. Just now, in the 31st World College Summer Sports Games, we are the only banking partners in supporting their finance need. In multiple scenarios, we built our support, and our support, supporting fund was over CNY 20 billion. You can see the transformation and the flow of three chains in this ecosystem.
In the major scenario construction, we extended 340,000 corporate accounts. Increased deposits of over CNY 467 billion, increasing by 19% and 64%, respectively, year-on-year. So you can see seven projects within GBC Plus project, including outlets, competitiveness, improvements, the e-mobile banking. Behind that, we have 8 projects. We have seen achievements, so as to be need to full play our advantages in top customers. As we form the ecosystem, our customer mix will undergo great changes. With such a change and our huge volume of assets and AUM, we will have qualitative change. We will continue to play our fintech advantage and also strengthen our risk management system, and also improve the eco assessment.
Not only based on the commercial indicators in terms of assessment, we will see the three chains and whether they form a holistic system. In the future, this will be a important advantage of ICBC. With such a system in place, it will play vital role in value creation. And for ICBC's high quality development, strengthen our solid, it will empower and will give us, proper methods. Thank you for your concern for our ecosystem construction. Thank you.
Next question, please.
Next question from Bank of America Securities.
I wanted to ask a question about the property lending. In the first half, we have seen the QOQ increase rate of property lending of 6%. So I would ask about the breakup of the lending in the property sector. How much were the property developers, and how much was the lending related to ensuring the delivery of housing? Has the NPL ratio of developer loans peaked? And when, if not, when we'll see the peak, and how will you balance the lending to the property sector and the relevant risk management?
Executive Vice President, Mr. Wang will take your question.
In the first half of this year, the policy environment of real estate continued only the roughly easing environment since the end of 2022, to ensure the liquidity of all the developers, so as to promote the recovery of the real estate sector. For our bank, we continued on with the, or stick with the same standards of our lendings in this respect, to continue to provide our support to the quality developers and reasonable requirements for lendings. Firstly, the total volume of our lending and investment in this sector has remained stable. By the end of June, the domestic property lending totaled CNY 767 billion, accounting for 4.9% to the total group corporate loans, and 3% to the total lending of our group.
From the increment perspective, the property related property industry lending increased by CNY 42.4 billion compared to the beginning of this year, another additional increment of CNY 40 billion compared to the same period of last year. From the structure, we mainly prioritize tier one and tier two cities, and for project selection, we mainly select the developer loans and also lending to the guarantee housing. Secondly, the risk in the property sector has been released to a certain extent, but overall, the situation is controllable. NPL, the non-performing lending to the real estate was CNY 51.2 billion by the end of June, an increase of CNY 6.7 billion compared to the beginning of this year.
NPL ratio was 6.68%, 54 basis points higher than the beginning of this year, mainly impacted by the adjustment, both at the demand side and also supply side of the real estate sector, and also the liquidity pressure for certain individual private developers. For our bank, we have strengthened our risk management in this regard and also made up for risk resolving measures to every individual client. In the first half, we have seen some substantial progress in the risk digestion in this regard, and we will continue to promote the risk management in the second half of this year. Thirdly, we will continue to balance the lending growth and also risk management. To better meet the requirements of prime developers, we have signed strategic cooperation agreements with 12 developers.
Since November of last year to now, we have total extended lending over CNY 180 billion, and among which the new reextended loans totaled CNY 150 billion in 2023. In terms of the lending to guarantee the delivery of houses, we have support several projects to resume their construction. Overall speaking, the relevant projects can also help us to maintain a solid asset quality for the mortgages. Looking into the future, from the policy end, with multiple policies continue to play out, the risk for developers now may be bottomed. For our bank, we will continue to support the requirements for the prime projects of developers.
We've focused on support the common housing projects and guarantee and rental houses, and to support the M&A lendings for developers in a more cautious way, so as to ensure more balance while extending the lendings and also on the risk management.
The next question comes from Sharon of Morgan Stanley.
Thank you for the opportunity. My question concerns LGFV and its risks. In the recent years, the local governments, due to multiple factors, face tightened fiscal situations, but the volume of the debt is still large. For ICBC, what is your balance, pricing, interest, and asset quality in this regard? How do you look at the risks for LGFV?
Our SVP, Mr. Wang Jingwu, will answer this question.
At present, we don't have a standard for LGFV credit, credits. We will follow the principle of market-based rules. We will keep the volume stable with reasonable mix and controllable risks. First, our volume will be maintained stable. Our LGFV loans mainly focus on the new urbanization areas. In the first half of the year, the growth rate is lower than the average of the corporate loans, and the proportion continue to reduce. The mix is reasonable. The loans mainly went to Yangtze River Delta, the Greater Bay Area, and other cities and regions with higher level of urbanization. For example, in the Yangtze River Delta, Jing-Jin-Ji region, and Pearl River Delta region, we have seen a large proportion of the increment in outstanding. Also we focus on the projects with ample cash flow.
Certainly, the risks are controllable. The asset quality of LGFV loans is better than the level of the domestic corporate loans. Secondly, we will actively identify the risks, mitigate the risks, and orderly dissolve the outstanding loans risks. We will, we also focus on the package plans for debt dissolving introduced by the central government. We will follow the market-based, rule-based, and commercial-based principles and dissolve the debt, dissolve the risks. Thank you.
Next question. From Everbright Securities.
Just now, the management has talked about the D-ICBC and the digital transformation. Can you talk more about the major achievements in this regard? And looking forward, in what aspects can AI play more important role in your business?
Just now, some investors and analysts asked about the GBC Plus, and now is asking about the D-ICBC. I would also invite our SVP, Mr. Wang Jingwu , to take your question.
D-ICBC is a core strategy for our bank. Actually, all the senior management members just now talked about D-ICBC, and I would like to give you a brief answer. We have two directions. One is outbound, how to improve our services to customers. Second is inbound, how to better facilitate our employees. And about some details of our D-ICBC for the outbound services, how to enable our customers to better explore the markets. We improved our services both to corporate customer and retail customers… for retail customers, we improved our mobile banking, and to better integrate the services to their business and their daily living needs, our own reliable platforms and also open platforms.
So as to provide one-stop comprehensive service to retail customers. MAU of our mobile banking exceeded 200 million, the largest size among our peers. The uses of our mobile services has also increased to a large extent. From the corporate side, we have also improved our platforms and introduced some new platforms to better serve the corporate customers, like GBC Plus project mentioned by President Liao. We have covered 30 key industries, including medical care and construction, and we have collaborated with a lot of partners for our open banking platform. We have also improved our cash management services through our digital transformation with global footprint, more than 1,470 overseas branches, by increasing our domestic and foreign systems of tech systems, which include the global payment, cash monitoring and pooling, and also credit and asset management, exchange rate risk management.
For corporate customers, we have advantage in this regard. Our system has quite mature. Over 110,000 corporate customers have used our platforms. Domestically, we have also enhanced our cooperation with state-owned enterprises by introducing them to use our treasury system. We have developed or helped over 100 SOEs, around 104 SOEs. We have engaged in their treasury system construction. We have also enhanced our digital inclusive finance to promote inclusive financing products to individual business owners. About the risk management, we have also continued enhanced the comprehensive risk management, accelerated the digital transformation of our risk management by making better use of the risk penetration and enterprise-wide risk management, covering both domestic and foreign branches, commercial banking and investment banking, on-balance sheet and off-balance sheet banking, head office and subsidiaries, so as to realize the management of the entire enterprise-wide.
We have also developed the risk monitoring model in terms of the anti-fraud and to make immediate interruptions on fraud. Our experience has been awarded due to the contribution from our bank to guarantee the security of our customers' financial assets. We have also exported our risk management instruments to over 400 financial institutions. We will continue to focus on our transition to be better, to be more motivated from digital technologies by better integrating remote and on-site integration of our services. For example, the phone services and also the offline services after the modification of some core tech systems, so as to improve our marketing, both on remote and on-site, both online and offline platforms.
So as to better improve the marketing customer relation management cost, working platforms, so as to promote their marketing efficiencies and also to better satisfy the needs of our customers. For the office system, we have also optimized our smart office platforms named E-Office for our employees, which can both improve the efficiency of work and also experiences of our employees. That has helped us saved a lot of man hour due to the introduction of some e-digital platforms, which include a transaction and also risk management by introducing the robots. Another key aspect for our ICBC is the system construction. By better allocating our resources, we further promote the structure and the system to foster new drivers for more innovation, and to improve our innovation with the principle of, for kindness, for benefits of our customers and employees.
We also try to promote the synergy among different business lines and different tasks, so as to promote the key, the sales of key products like mutual funds and insurance. We are also encouraging the application of successful experience of digitalization. I would also like to talk about the underlying infrastructure of our digitalization. We have been quite active in accelerating our structure of the underlying infrastructure, so as to better manage the accounts of our customers from the mainframe, intensive framework to a more distribution framework. Now the transition has been completed. The digital factors have become richer with more data from the society outside of our bank. For example, the internet companies or from relevant government bodies, we can purchase. Another important resource is from inside of our banks.
With the use of both internal and external information, we have improved our customer selections and also scenario constructions. The available rate and system rate of all kinds of digital platforms developed by our bank has been extensively improved. We have also engaged in some key frontline pilot projects like GPS development. Another key direction for our digitalization is the application of new tech like AI. We have seen the outstanding performance of ChatGPT and relevant language model. We have also been actively engaged in development of similar big model technology in AI. We have collaborated with some key national lab and tech companies in this regard, and now we have put into use some of the pilot projects of application of AI big model. By focusing on some pain points of our key businesses, so as to improve our efficiency.
For example, now we have improved the conventional AI model application efficiency. Which can help us to improve our man power model by over 50%. Second is, with the better use of AI technology, we have explored new business production model to better help our employees at the branches to solve some complex problems. And the global market research assistant, intellectual assistant, can also help them to foster the reports from one hour to five minutes, which can help them to make better decision making at a shorter time. So in the future, we will continue on to focus on the big model and other AI big model technology, so as to make more comprehensive use of this kind of technology, to reinvent the complete innovation of our business scenarios, to foster more products with more innovation and impacts.
...For the interest of time, we will have the last question.
My question concerns personal loans. Apart from mortgage loans, what about your, what about the growth of personal loan, non-mortgage loans? Under the current economic situations, what are the growth mix and the pricing? We have noticed the personal business loans grew rapidly. What about the asset quality and the potential risks?
Our SEVP, Mr. Duan Hongtao, will answer your question.
Thank you for your question. Mr. Zhang Wenwu, while answering the former questions, touched upon this question about mortgage loans. For your question, in the first half of the year, we grasped the chance in economic and consumption recovery. Domestic branches, personal non-mortgage loans totaled CNY 2 trillion, up by nearly CNY 300 billion, up by 17%.
First, in personal consumption loans, by the end of June, the personal consumption loans balance was near CNY 200 billion, up by CNY 23.5 billion, by 13.5%. The main reason is that we increased our growth in e-lending customers. The balance of e-loan was over CNY 160 billion, up by 12.6%. Second, personal business loans. By the end of June, the personal business loans balance totaled CNY 1.16 trillion, up by CNY 250 billion, by 29%. The main reason were the growth in housing-based mixed loans and personal e-loans in pricing, marketing, customer services. We strengthened our coordination and synergy so as to improve our competitiveness in personal business loans. Thirdly, the credit card overdraft by the end of June.
The domestic branches balance in credit loan, in credit card loan was over CNY 600 trillion, up by 1.5%. The fee-based income was CNY 990 million, up by 16%. The NPL ratio both increased, but compared with Q1, they both reduced. For the risks and the resolution, we strengthened our identification and marketing in customers. We improve our risk system. From the start, we control our credit risks. We improve the securitization of the credit card loans and e-loans NPL. We construct a smart management platform and improve our capability of management in this regard. The personal business loans NPL ratio was 0.77%. Compared with the end of last year, it's down by fourteen BP, and down by thirteen BP compared with the same period last year. NPL ratio continued to reduce.
In the future, we will continue to improve our support for automobile, electric products, and the amusement, tourism, and other service consumption to improve our capability of personal financial services. Thank all your professional questions, and thank the management for their answers. That's all for today's exchanges. If you have any other questions, please contact our IR team.
Thank you for your confidence and support for ICBC, and your recognition for our stocks in its long-term investment value. We will continue to run ICBC well and bring you stable and sustainable returns. All the best for all of you. Thank you.