Hello. Welcome to first half earnings call of ICBC. I'm Wang Liancheng, General Manager of Corporate Strategy and Investor Relations Department of ICBC. Thank you for joining today's earnings call. Also thank you to you for your support and attention to our bank. In today's call, the management team of ICBC led by President Mr. Liao Lin, will have a free and in-depth communication with you. Today's call is a global investor call. We are joined by President Mr. Liao Lin, Vice President Mr. Zheng Guoyu, Wang Jingwu, Zhang Wenwu, and Board Secretary Dr. Guan Xueqing. We're also joined by our directors, namely Mr. Lu Yongzhen, Feng Weidong, Cao Liqun, Chen Yifang, Song Jianhua, Liang Dingbang, and Shen Si. We're also joined by the Chief Economist and General Manager from Financial Accounting Department, Credit Management Department, and ALM Department.
Our general managers from other 21 relevant departments in the head office are also joining us via phone. Now, I would like to give the floor to Dr. Guan Xueqing to give you highlights of first half earnings of 2021. Since the beginning of the year, facing the increasingly complex, severe and uncertain external environment, ICBC implemented in-depth the important requirements for COVID prevention, economic stability and safe development. We have made stability as our top priority and pursued progress while ensuring stability, and with aim to pursue a high quality development. We have continued to pay attention to people and customers, adhere to the balanced development path with Chinese characteristics. As a result, we have delivered return results which was better than expected and outperformed the same period of last year.
Firstly, the bank fulfilled its responsibilities as a large bank to assist in maintaining stable macroeconomic performance by giving full play to the dual functions of volume and structure of investment and financing. We have achieved crucial breakthroughs in implementing our development plans. Fully demonstrates the feature of strong, excellent, large and distinctive operations. Thirdly, we have solidified the lines of defense in risk management by giving priority to actively forestalling financial risks. We have unleashed the drive for reform and innovation. We have revised the articles of association, and the stability and effectiveness of corporate governance was further improved. Fifthly, the bank ushered in a new stage of team building and continued to create a highland for talent and a leading bank by talent. To give you more details.
Firstly, we have improved our services to the real economy and made our due contribution to stabilize the macroeconomy. The domestic RMB loans exceeded CNY 20 trillion, up by CNY 1.61 trillion compared to the end of last year, an additional increment of over CNY 34 billion. The bond investment balance hit CNY 8.93 trillion, up by 10.1%. We continue to enhance our support to the key areas with distinctive features of our credit extension, among which the balance of our loans to the manufacturing sector totaled CNY 2.79 trillion, up by 29%. The balance of loans to strategic emerging sector totaled CNY 1.42 trillion, increased by 38.7%. Green credit.
The balance of green credit was CNY 3.5 trillion, and balance of inclusive finance was CNY 1.4 trillion, up by 27.4%. Agriculture-related loans was CNY 3.08 trillion, up by 16.2%. Secondly, we continued to enhance our value creation capability and demonstrated strong, excellent, large and distinctive features. With core metrics continued to improve for the first half. For example, at the strong front, the capital adequacy ratio was maintained over 18%, ranking the top among the global peers. ROE 11.025% and ROA 0.93%, both ranking roughly good levels compared to our peers globally. Against backdrop of margins contention in the banking sector, our NIM stood at 2.03 continues to be positioned in a reasonable range.
We continuously improved our strength in terms of the size of assets, capital, loans and deposits. In the first half, we realized an operating income totaled CNY 4,443.8 billion, up by 4.9%. Net interest income grew by 4.5%. Net fee based income totaled CNY 76 billion, registering a positive growth. Other non-interest income grew by 15.4%. PPOP increased by 3.1%. Net profit grew by 4.9%. Thirdly, we continue to leverage our strengths, tackle areas of weakness, and solidify the foundation for further development. In terms of the strong sectors for us, the corporate loans grew by 9.2%. The size of institutional deposit and interbank deposits continued to rank first among our peers.
The corporate settlements accounts also increased by 0.62 million compared to the end of last year. In terms of the number one personal bank, the personal AUM totaled nearly CNY 18 trillion. The proportion continues to grow in the personal business. In terms of the Forex business, the balance of our Forex deposit also grew by 5%. In sharpening competitive edge in key strategic areas, the deposits and balance of loans from the key five areas continue to rank first among our peers. We have also progressed our urban-rural collaborative development strategy. Another key important sector for us is the acceleration of our ICBC construction from the five dimensions of digital ecosystem, digital assets, digital technology, digital infrastructure, as well as digital genes.
The ICBC won the first place in the annual integrated FinTech supervision rating from CBRC. We continue to deepen our GBC Plus initiative by promoting synergies between G and business end and the consumption end. We have developed our customers for both GBC end by a large margin. The customer ecosystem continued to be optimized both in terms of the total volume. The personal customers exceeded 712 million customers, and the corporate customers exceed 10 million, and private banking customers totaled 216,000. The number of customers with daily average assets over 10,000 continued to grow by a large margin. The total number of personal mobile users and MAU and also legal customer online customers all ranked first among all peers. Through all this work done, we have managed to grow our deposits quite substantially.
By the end of June, the deposits, incremental deposits, for the first time exceeded CNY 3 trillion. Fourthly, we continue to enhance our risk management by effectively manage five account books, namely the domestic and overseas institution, all franchise and off-franchise business, commercial bank and investment banking and other business, online and offline business, as well as the parent company and subsidiary companies. We continue to pay attention to conventional risk as well as other newly emerging risks to ensure all kinds of risk is manageable. We further improved our asset quality with core metrics continued to improved. By the end of June, NPL was 1.41%, down by 1 basis point compared to the end of last year, and overdue ratio was 1.2%, down by 3 basis points.
The gap between overdue loans and NPL loans was CNY -47.3 billion, remaining to be negative for consecutive nine quarters and creating the historical low. The provision coverage ratio was over 200%. Going forward, ICBC will continue on the path of building a financial development with Chinese characteristics and make high-quality development. Thank you. Thank you to Dr. Guan Xueqing's highlights. Now we are opening the line for Q&A. Please state your name and organization before raising the question. The first question, please.
Xu Shouben from Morgan Stanley. Thank you for this opportunity to ask the first question. I am concerned that the economy in the first half of this year with the complicated international environment coupled with the pandemic domestically, I think the macro economy of the country is under pressure and the long interest is decreasing. We also have the pressure of lack of proper assets. I would like to ask, in the next phase, how will you maintain the growth, the stability and sustainability of the growth of fees and operating income, and what's your outlook for this year, and what's the main driver for the growth?
Thank you. Mrs. Xu is a very familiar friend. Thank you. A question about our operating income. Of course, operating income and net profit are very important. In the first half, the whole bank
Our operating income maintained a very sound growth with the increase of 4.1% under the international standard. Among our peers, we exceeded the threshold of CNY 400 billion. You could also notice that the structure is optimized. From the first half, we could see the three features. First, we continue to enhance investment and financing to help support the stability of the economy, and we make up the price with the volume. We realized that our net interest profit is growing very stably. In the first half, new loans is at a volume of CNY 1.6 trillion. The speed for growth is more than 8%.
The increment is CNY 350 billion. With this volume, we made up for the narrowing of the NIM through our measures to share our profit with the real economy. In the first half, the interest and net income is CNY 351 billion, and the growth is 4.5%. That's to say that this is a feature for the first half of this year. That is, we make up for the narrow down of the NIM with increased volume. Second, we tap our potential and try to counter the factors that will lead to a reduced income. Our fee and commission-based income maintained a positive growth.
Indeed, in the first half of this year, some of the income are under impact, but we tapped the potentials. In the areas of asset management, settlement and clearing, and bank cards, in these sectors and products, we increased our income. We also would like to remind that we also reminded that the whole bank that we need to pay attention to the key products. For example, asset management products, settlement, clearing products, and bank card products. For these areas, we have achieved 8%-10% increase in terms of income increase. With such a very good growth in four key products, our fee and commission-based income is fully supported.
That made up for the gap in other areas, such as the agency sales of funds, commitment, and investment banking business. We correctly judge the situation that we realized that the agency sales of bonds and commitment and investment banking in these areas, we will have reduced income. With such a judgment, we correctly chose other products to make up for the gap in these areas. I'm very satisfied with our achievement. Our fee and commission-based income maintained a positive increase. For the first half, that is about RMB 76 billion. Third, we take the initiative to carry out innovation and to have a diversified income source. We expand the transaction and improve the other non-interest income. This is also important.
With a larger transaction volume, we have debt to equity swap, and we increase our income in this area. The income increased by CNY 2 billion. We chose the good opportunities and chose the good bonds and enhanced our transactions. We have this advantage of our non-bank subsidiaries. Our other non-interest income realized the growth of CNY 16.3 billion, up by 15%. That amounts to as much as 2%. That is a proportion of this, the contribution in this area is increased to 4% from the 2% in the previous years.
From this aspect, we could realize that ICBC is such a big bank, and since we are a very large flagship, and we have a very ample space for maneuver to support the structural change of our business operation income. That's the three features for the first half of this year. As for the next half, I believe that ICBC, according to such correct judgment and timely adjustment of our strategy and with the implementation of the bank. In the next phase, our operation income for the next phase will be balanced and coordinated and sustainable. We'll maintain this momentum of high quality development. We'll also serve the real economy, especially that we'll optimize the mid- and long-term asset layout.
As for the mid and short-term liability layout, these are two sectors that is very critical to us. That is, the mid and long-term asset layout and short and midterm liability layout. In the next phase, we will also focus on our wealth management businesses and investment attraction as well as other non-interest businesses. We'll further have detailed development of wealth management products and build resilient operation and management system. In the first half, we have this GBC Plus ecology project in terms of settlement volume and transaction and customers. Our head customers could lead our SME customers. Such ecology has already yielded very remarkable results, and I think that the pressure on the economy will be eased and the economy will pick up again.
Looking out for the whole year, I expect the operating income will maintain a balanced, coordinated, and sustainable growth. Thank you.
The next question from Daniel of Credit Suisse. ICBC has a large deposit with rapid growth in the first half of the year. However, the cost of deposits also increased. How did you balance the quantity and pricing in terms of these deposits? What is your outlook for deposit growth in the future? Furthermore, this year we've seen mounting pressure faced by the entire wealth management sector. What is the latest development of ICBC's wealth management business? What is your outlook on wealth management contribution to the bank's value from the full year's perspective? Thank you.
This question will be answered by Vice President Mr. Zheng Guoyu. I will try my best to answer your question. You have noticed that the deposit of ICBC is very eye-catching. By the end of June, our client deposits have increased by RMB 2.83 trillion compared with the first half of the year, an increment of RMB 1.4 trillion. The balance of deposit, including interbank deposit, has exceeded RMB 30 trillion, which ranks first in the market. There are two features. Since the beginning of the year, we have achieved a sustained and faster rate of growth of deposit. Second, all kinds of deposits have achieved good growth and has reached a historical high. Mr. Guan has mentioned this while introducing our performance of the first half of the year. This result is achieved due to two reasons.
The first of the market factors. The willingness of the residents to pursue fixed term deposit has increased. I believe the major reason is that we are forming high-quality development of deposit. Meanwhile, we are promoting the establishment of client ecosystem by implementing GBC Plus and networking and the pension program. Our foundation of clients are more consolidated. In recent years, we are pursuing the best mobile banking bank and increased the efficiency and the quality of physical outlets. Our capacity to serve clients have been increased. Besides, by digital transformation, we can accurately match our services with clients' demands.
While our deposit is increasing, we have noticed the problem of increasing interest payment cost. This is due to both market factors and some other factors. While the capital market is very weak, the residents' willingness to pursue deposits has increased. This has contributed to the increase of interest payment cost to some extent. While providing sound services and optimizing client ecosystem, we have done the following works. First, to stabilize the growth of deposit. Our deposit growth rhythm is very sound. Second, we have optimized the term interest rate, product interest of deposits, and controlled the extension rhythm to maintain the interest rate of deposits at a relatively sound level compared with the peers. Third, we have optimized the structure of deposits.
Since June, the interest rate of new fixed term deposits is lower than the industry average level, and the interest rate has decreased notably compared with the same period of last year. This means our capacity to coordinate the volume and price of deposits has been notably increased. For the next step, we will constantly optimize the client ecosystem, and optimize the full deposit structure and term structure to control the cost of deposits and maintain the deposit growth at a moderate level. Your second question is also concerned by the market. ICBC is a large wealth management bank among the peers and in the market. The propaganda is relatively weak in this regard. We have nearly 60 million wealth management clients, increasing by 9.8% compared with the beginning of the year.
The AUM of the wealth management clients has stood at RMB 6.3 trillion. The fee and commission-based income from wealth management business has increased by 3.3% year-on-year. Overall, ICBC has achieved a steady and sustained growth in terms of wealth management business. We have done work from full aspects. We have established our own development path to promote inclusive and steady growth of wealth management products. Second, to adapt to the changes in the market. In the first half of the year, the market is relatively volatile, especially the capital market, so we have adjusted our strategies. We have strengthened the cooperation with the flagship operations in the market industry. Second, we have increased the life insurance products and the guaranteed wealth management products.
Besides, we have increased the matchings between the product and client's demand. Finally, we have strengthened the education for investors. For the next phase, our wealth management community will open to the market, and we will increase our team building in R&D in the wealth management development. We have expectation as well as confidence in our wealth management development in the next stage.
Next question from CICC. Thank you for giving me the opportunity to raise a question from CICC. My question is about the credit mix. Over the past three decades, ICBC has been the leader of China's banking industry. Now standing on the new turning point of China's economic growth, we are facing the decline in demand from conventional industry like property and for banking sector, the credit also converts into some other new areas like green and inclusive and advanced manufacturing. What is your outlook on your credit extension? And as a leading bank, how will ICBC cope with this change and continue to remain as the leader?
I would like to invite Mr. Zhang Wenwu to answer your question.
In the first half for ICBC, our R&D loan growth by CNY 1.6 trillion. That's just been an extra incremental volume of 346.5% YOY. With that balance, with the loans extending to manufacturing sector of CNY 2.79 trillion, a growth of 29% with a balance of the loans to manufacturing and growth rate ranking the top one in the market. The balance of inclusive finance totaled CNY 1.4 trillion, a growth rate of over 27%. Currently, the prioritized area for our credit extension mainly includes the following. First is the advanced manufacturing industry, because we see bright future for the development of manufacturing industry in China, and we think the development risk is also totally manageable.
Secondly, we see opportunity in developing green finance, and we'll continue to make more efforts to grow our green finance. Particularly to low carbon areas like new renewable energy sector. Thirdly, we will step up our efforts to fintech financing. Fourthly, we will also enhance our support and credit extension to some key infrastructure areas, particularly those kind of projects in the new infrastructure area and the central and western China. We will also step up our efforts to grow our credit demand, credit extension to inclusive customers in the agriculture area. Another key area for us will be the personal prime mortgage. We will continue to grow our personal consumption loans, including the card overdraft business.
We will also pay a lot of attention to the business owners over 100 million, and to provide more relevant services to them. Going forward, we will continue to leverage our comprehensive strength to acquire more synergy between the parent company and our subsidiaries and branches. Also synergy between commercial banking and investment banking. Synergy between credit extension and bond investment. To provide comprehensive services to meet diversified demand from our customers. In terms of the regional location, we are mainly focused in the area like Jingjinji, Yangtze River Delta, and Chongqing, Chengdu, Greater Bay Area, these five key areas. We will continue to enhance and leverage our strength in terms of talents and other kind of resources and continue to optimize our credit mix. Thank you. Further questions, please.
Thank you. I'm from Fidelity International. My question is about asset quality. We know that the NPL ratio of ICBC maintained stable, but there is a slight increase. Currently with the pandemic and the complicated external environment, what are the key risk points we are concerned with? How about the fluctuation about risks? I know that the exposure of ICBC to the real estate industry is relatively low. How about our exposure to the high-risk real estate developers? Will the NPL ratio in the real sector further increase? Will you strengthen your write-off?
I'll ask Mr. Wang Jingwu to answer your question about asset quality.
Thank you. Since this year, ICBC effectively conquered the multiple difficulties such as the rebound of the pandemic and the complicated internal and external environment. The risks are quite stable, and the core indicators are stable and getting better, though we have a slight increase in terms of the deterioration of loan quality. We use the write-off, the provision resources and the profit increase. We strengthened the disposal. We managed to maintain the decreasing momentum for NPL ratio. The overdue loan is about 1.20%, down by 0.03 basis points. The gap between overdue loan and NPL loan is negative CNY 47.3 billion.
It's negative for the ninth consecutive quarter. The loans falling to the category of attention is 1.87%, down by 0.2 basis points. The proportion of risk loans and the further is further reduced. In areas such as real estate, wholesale and retail and credit cards, we have a slight increase of NPL ratio. In some for some big borrowers, we have exposure of a credit risk. In terms of risk management, we have this philosophy of 9+X and five account books philosophy. The risk concerning the management is risk, credit risk, market risk, since the global market is constantly changing, and also we have the impact of geopolitical issues, et cetera.
In general, our market risk control is very assessed. We also pay attention to new risks such as climate risk, data risk, information security risk, and third-party risk. This year, we pay a lot of attention to the risk management in the real estate sector, already taking serious measures to strengthen management and the disposal. Till the end of 2020, the NPL ratio for the real estate sector is 5.47%, up by 87 basis points as compared to last year. This is mainly a result of the default of some large borrowers, but the disposal and restructuring are in very good progress. In general, I think the risk exposure in the real estate sector is fully exposed.
The quality for the asset in the real estate sector is also stable, and we have recovered a lot of the NPLs. The actual loss is limited and the value reduction is limited. We have strengthened ability to control risks and our strong financial ability on the basis that we will be able to embrace such impacts.
The next question. From Goldman Sachs Asset Management. This is John from Goldman Sachs. My question is about internationalization. How have recent geopolitical tensions impacted ICBC's ongoing international strategy? For example, is there any impact on your business in Russia from the recent conflict in Ukraine? With this backdrop, what are some of the biggest risks the business is facing overseas, and what are your plans over the next 2-3 years to mitigate such risk?
This is a good question. It's in line with the international background in this area. I would like to invite Mr. Guan Xueqing, Board Secretary, to answer your question. He has experienced, a working experience in overseas.
Mr. Guan Xueqing speaking. I'm very delighted to answer your question. Goldman Sachs has close contact with ICBC. As China's largest commercial bank, ICBC has promoted international development for over 20 years. We have established 421 overseas institutions in 49 countries, and our development capacity in overseas has basically been formed. Despite of anti-globalization, geopolitical pressure, and the impact of COVID-19, ICBC's confidence in international strategy will not be changed. In ICBC, we will adhere to international strategy so as to service our major clients. Second, facing these new changes, we will still seek progress while maintaining stability. Timely and dynamically adjust our strategies and policies while pursuing global development. To ensure high quality development of overseas institutions, we adhere to the bottom line of risk management.
Closely followed country risk, credit risk, market risk and compliance risk, as well as AML risks, sanction risks, and controlled well the exposures of various risks. Our overseas institutions complying with regulations and supervisory requirements. In the first half of this year
The overall operation of overseas institutions is sound. By the end of June, the total assets of overseas institutions have reached $44.2 billion. Profit before tax, $2.3 billion, and the NPL ratio is lower than the group level. Meanwhile, we closely follow the changes and impact of regional conflicts and changes, pay high attention to the impact overseas institutions by these geopolitical conflicts. We examined the risks, established preparation. Currently, the ICBC Moscow's operation is well and sound. In the coming two-three years, ICBC will adhere to international development strategy, promote compliance, development, and operation of overseas institutions, serving high quality, opening up of the state, and conduct various businesses according to marketization principles and professional operation standards, so as to increase the quality and efficiency of international development. Thank you for your question. Next question, please.
Thank you for giving me the opportunity to raise the question from UBS. My question is about the net interest margin. We have seen the entire banking sector facing the pressure of contraction of margins. Going forward on the asset side, we have seen the continuous declining of LPR, particularly for the five-year term LPR, and governments are asking the banks to provide to lower the loan rates to support the very economy and the demand for loans have been also weakened. On the liability side, we have seen the mechanism for deposit pricing, self-disciplining adjustment can help to alleviate pressure on the deposit cost. Against the backdrop of the trend of term, trend for deposits, could you give us some color as to the trajectory of margins for the second half of this year?
What is the impact of the repricing for the existing mortgage by January next year on the margins? Will costs continue to be lowered? Thank you for your question. I think margins are paid a lot of attention by investors and analysts. However, I don't see there is need for investors and analysts to concern too much about the compression of margins for China's banks. We have studied the margins trend for our peers, both from domestic and abroad. Particularly for the international peers, we have seen a U- shape of their margins recently. For some of them, margins stood at 2%, some of them are higher than 2%, and some of them are lower than 2%. Basically, we have seen a U- shape trend for margins development. We believe the margins for China's banks will continue to be stabilized in a reasonable range.
For ICBC, due to the impact of COVID-19 and slowdown of the macroeconomic growth and also some other unexpected factors, the margins contracted overall speaking. For ICBC, we are also in line with our peers. For the first half, our NIM was 2.03%, which has seen a contraction comparing to the beginning of this year, but also in the same trend with our main peers. I think it's closely related with our GDP growth, LPR reform, et cetera. The contraction of our margins is also related with the changes of our deposit and loan mix. You just now mentioned during your question, on the asset side, we have seen the lowering of interest rate of loans. On the liability side, we have seen a very good growth of deposits for large banks.
However, we do see a trend of the deposits to become term deposits, because as a result of which, the liability cost will also be rising. Compared to our international peers, the margins of our domestic banks are actually in line with them. We have a strong team which are working closely on the strategic assets on their core indicators. We have also started on the indicators of the 1,000 banks published by The Banker magazine. Besides that, we have also studied closely on the performance of the four big banks from America. We do see there are a lot to be comparable with them. Based on our study with our international peers, we are also working closely as to the future work, how to stabilize our margins in the future. Currently, we do think.
The changes of our margin is in line with the global environment and also our international peers. For large banks in China, we do not see a fast decline for our margins in the near future. For ICBC specifically speaking, we would adopt multiple measures to slow down the further declining of our margins and try to stabilize margins. Maybe just like before, big banks in America to make sure the margins perform like a U-shape, and we will try our best to slow down the declining of our margins. From the management and strategically speaking, we will continue to implement our key strategies, namely the number one personal bank, and to become the preferred bank for Forex business, and also the synergy between rural and urban areas, and also to enhance our competitiveness in the five key areas.
Another effort we will make is to accelerate our D-ICBC construction to enable and empowering by technology and the digital transformation. In the first half, we have seen a very good growth of our deposit. Because that is attributable to the solid foundation of our customer base, and most of them are prime customers and the leaders from different industries. That constitutes a very good ecosystem for our clients, which enables the flow of our capital, of our customers within ICBC. We will also try to improve our assessment and evaluation system to mobilize the branches to strike a balance between the volume growth and pricing, and try to achieve a sustainable growth. In terms of the customer client base, we will continue to try to optimize the client base. As we all know that ICBC is quite strong at our prime customers.
We will also try to step up efforts to grow our midsize and then also small and retail customers. While exploring more potential, tap more potential from our primary customers, we believe we can also further optimize our customers of mid-sized and small-sized and micro-sized customers, which has already been proven quite effective from our first half performance. On the asset side, we will continue to improve our asset mix. On the liability side, as Mr. Zheng just now answered the question, ICBC has a very strong deposit growth. We cannot also change the trend of the deposit becoming more term deposits. At the same time, we can. We have taken the initiative to compress our active liability products, so which can help us to lower the liability cost to a large extent.
As to the asset allocation, while providing our support to the key projects, we will also step up our efforts to grow our personal business and retail business, particularly for the medium-term and the loans and personal loans. Also try to increase the yield for our personal customers by leveraging our strength in the settlement and transactional banking, which we have heritage legacy strength. Previously, we have paid a lot of attention to grow our corporate banking and wholesale banking. Now we are also trying to grow our personal and retail business. With all those measures taken, we are confident that our margins will be managed at a reasonable range and also be stabilized within a reasonable range. Thank you for your question.
Pia Asset Management. Thank you for this opportunity to ask question. I know that in the first half, you have a huge growth in terms of the inclusive and SME loans and under the pandemic impact of the pandemic, how about their demand for credit? I'll ask Mr. Zhang Wenwu, our Vice President, to answer your question. About ICBC carry out inclusive finance as a key strategy out of the need to fulfill our social responsibility, as well as the need to gain more commercial value. We maintained a very high speed and high quality development in inclusive finance, and the structure is also huge. By the end of June, the volume for inclusive finance loan is RMB 1.7 trillion.
Our speed is leading in terms of our peers. Our risk management is also sound. The NPL ratio for inclusive loans is only 0.78% or down by 0.06 percentage points. The interest rate also reduced to 3.9%. The growth is also sound, is also fast. I should say that we maintained the very good momentum. For example, we continue to deepen our models. We have online product lines and have the digital application. Our digital inclusive finance is pertinent, fluid and smart. We expand and enhance the integration of information and the connection of ecology, so that the financing service is more convenient and accessible.
We continue to provide comprehensive service. We provide not only the funding but also the intelligence and the business opportunities. We have diversified and whole chain financial support for SMEs. For the manufacturing industry and for the specialized, smart and new sectors, we also stress our support. With all these measures, we want to achieve more effective inclusive finance supply. We also coordinated development and risk management. We have coordinated risk management online and offline, and we have this closed loop management of all the risks. I think that we still have quite some demand for the sector, and we will enhance our ability to provide and achieve healthy development. The next question from Martin Pan of China Securities.
Thank you for the opportunity. My question is about capital and dividends. ICBC has to reach TLAC standards in the coming two years, and there is still some lagging behind in terms of capital. How is ICBC's plan for capital management for the coming years? How to balance capital management and the dividend payment? According to our calculation, if we maintain the current 30% dividend ratio and maintain 5% profit growth for the coming years, we need to supplement CNY 100 billion capital to reach the TLAC standards. Our calculation may not be that accurate, but my question is about how to balance this kind of business demand for capital and the expectation of investors for dividends.
President Liao Lin speaking. I believe ICBC's CAR is relatively high, and while conducting roadshow in North Europe, the investors all mentioned that our capital adequacy ratio was very high. I would like to invite Mr. Guan Xueqing to answer your question.
Mr. Guan Xueqing speaking. Thank you for your question. Your question is very long, but very important. Indeed, we need to balance dividends payment and capital management. To serve the real economy and develop our business. We will balance the short-term profits and long-term interests of our investors. As you can see, the current CAR of ICBC is relatively high, about 18%. The time for us to reach TLAC standards is not that sufficient. According to our analysis, we have established a three-year plan for capital management, and the relevant departments have refined the calculation for capital management. We believe our capital tools for capital management is very sufficient, and the pressure for reaching the standards is not that high. At appropriate time, we will launch the issuance of TLAC bonds.
Overall, we will stick to supplementing our capital by endogenous way, that is, supplementing core Tier 1 capital through retaining profits. On the other hand, we will supplement capital management by issuing other Tier 1 capital and Tier 2 capital. In terms of profit sharing, you can see that our profit sharing level is at a moderate level, and we have won the recognition of investors in terms of long-term value. The senior management will balance serving real economy, long-term development, capital supplement as well as profit sharing. Based on endogenous supplement, we will pursue capital saving businesses and restrain capital management to increase our capital management capacity and optimize the capital structure so as to stabilize ROE level and give return to investors. Thank you for your question.
Next question. Next question from CLSA. Thank you for the opportunity to raise a question. I'm from CLSA. I have several questions about the mortgage, about the demand and the asset quality. From the demand side, we have seen a relatively low transaction volume of the property market, and a lot of customers prepay their mortgage. Judging from ICBC, how is the prepaid mortgage of your customers for your bank? The shrinkage of the residential mortgage, is this a trend or just a transitional problem? From the perspective of asset quality, we have seen a rising of the NPL of your mortgage loans. What is the outlook for the NPL of your mortgage loans for the second half? As a lender, ICBC, how will ICBC participate in the disposal of the uncompleted property projects?
Mr. Cheng will take your question.
It is a very heated topic which was paid close attention by the market. I think it's a quite difficult question, but I can share with you some figures. As for the first question of the prepaid mortgage of our customers due to the low transaction volume property markets, judging from ICBC, few mortgage customers prepay their mortgage mainly because of improving their assets and liability structure of the family, but compared to previous years, it's not a remarkable change. In the first half of this year, the total mortgage repaid totaled CNY 381.9 billion, and with the prepaid mortgage totaled CNY 363.9 billion. Only increased by CNY 32.3 billion compared to the same period of last year.
However, we have to take into consideration of the total volume growth of the mortgage in the first half, so we can see the prepaid volume also is in line with the general growth of our mortgage loans without any remarkable changes. You also asked me about the compression of residential mortgage, whether it's a trend or transitional question. We don't think it's highly likely for the leverage of residential mortgage to be recovered. However, we do think the trend will not be altered, which is the investment nature for property will continue to be trend for consumption. At the same time, there are also huge room for the demand and rigid demand for house purchase and also demand for improving their living conditions.
This is a solid foundation for our mortgage loan growth. These two factors will lay solid foundation for mortgage loan growth in the future. By providing mortgages, we will also try to enrich our product lines to meet more diversified product demand from our customers for housing purchase or renting. As to the asset quality of our mortgage loans, I would also like to give you more data to show up your confidence. The mortgage NPL for our bank was 0.31%, up by seven basis points. NPL relating with the suspension of mortgage totaled CNY 637 million, same as we made the information disclosure back in June. We haven't seen any changes, remarkable changes as to the NPLs relevant with the mortgage boycott. Among our total mortgage, the first house loans making up 76% and the new house making up some 6%.
The first-time buyers making up 90%. The LTV is over 50%. All those data have shown that we have a solid quality for our mortgage loans and also a security buffer for our mortgage asset quality. According to our monitoring statistics, the mortgage loans relating with the uncompleted real estate projects is quite small, which has no obvious impact to the total mortgage asset quality. As to the part we will play in terms of disposing the uncompleted property projects. Firstly, we will make our due contribution to coordinate and support the work to guarantee the delivery of buildings and to maintain the stability and to support relevant property developers to mitigate their risks.
Secondly, on the precondition of implementing guarantee and effective risk insulation, we will give more grace period of existing loans and also provide to meet the demands from developers and mortgage borrowers. also to conduct more M&A loan business. Thirdly, now the market are paying close attention to change in requirements for the presale proceeds. for our bank, we will also try to optimize the monitoring system for the presale proceeds to make sure they will be adjusted to the particular projects and to guarantee the legal rights and lawful interest of the home buyers. Fourthly, we will try to monitor more closely as to the relevant risk of our mortgage and try to prevent from any more further risks. We have answered a lot of questions. Now we will invite two more questions. Question from Temasek.
Thank you. Thank you management for this opportunity. My question is mainly about green finance, which is ICBC's main focus for the past several years. We noticed that we have seen the fast growth of green loans. What's our target for this year, especially considering the macro situation, especially the climate change this year and some energy issues for this year. What's the target for green finance for this year? How about the pricing for green finance? In terms of insurance, do you have some regional concentration?
I also noticed that the various banks under the guidance of the government 3060 target are accelerating the issuance of green loans. What's the competition situation for green finance project reservoir?
I'll ask Mr. Wang Jingwu to answer your question.
Thank you for your question. In the recent years, under the target of the carbon peak and carbon neutrality, ICBC pays a lot of attention to ESG, green finance and climate change management. We see the opportunities for green finance development and operate increase our support for the clean energy, green upgrading of infrastructure and the ecology development. We have a plan for every year and continue to increase the proportion of green loans and also enhance the green transformation of our loans. By the end of June, the volume for green finance is RMB 3.5 trillion, and we underwrite green bond by the amount of RMB 26.7 billion. We are the number one in this area.
In the areas where the green transformation is faster, and we have faster growth of green loans. It is ICBC's opinion that our green finance is very critical for the green transformation for the national economy. According to the 3060 target, we also have our action plan. First, we will manage our own carbon emission. On the other hand, we will properly manage the low carbon transformation of our financial assets. Our target is to continue to maintain and solidify our position as the number one green loan bank to optimize the threshold pricing and resource allocation for green loans. First, we increase the assessment weight for green finance. Second, optimize the threshold standard.
Third, we also have proper FTP. Fourth, we have favorable quotation for green finance. In general, we are quite competitive in terms of capital, customer, and funding. We are also quite competitive in terms of the resources for a potential green finance project. In the next phase, we will further implement the growth of green finance. First, optimize, strengthen our support for industries, and properly push forward the transformation of eight major industries to have this low carbon transformation. Second, properly manage climate risks, reduce our credit risk exposure to brown finance, and support the transformation of our high carbon industries.
Third, we will continue to manage ESG and develop this sustainable finance, construct a more optimal ESG management disclosure and a sustainable financial development system. At the management level, we have ESG and the Sustainable Financial Development Committee, and we have issued ESG and green finance annual report and interim report. Here, I would like to ask our analysts and investors to pay attention to our ESG and green finance report that we're going to release. ICBC is a responsible bank. We'll fulfill our commitment, push forward our ESG building, our green finance and sustainable development finance to enhance a diversified disclosure system, tell ICBC story. We expect more attention and recognition from the investors and the society. Thank you. I would like to ask a question about monetary policy.
We noticed that the environment is going through a downward trend. Overseas, we also have some pressures. I would like to ask how about the monetary policy in the government. We noticed that MLF interest and we also have a symmetrical downward trend. I would like to ask, do you think there will be further space for the reduction of interest rates and the economy under pretty better pressure? Without opening the faucet for the unlimited liquidity, what kind of macro tools could be used? I think you have asked three questions, the trend for the interest rates and the further space and the monetary policy tools.
The trend, I think we need to first look at the whole economy. Let me review the economy for the first half. I think the government coordinated the pandemic prevention and economic and social development. I think the economy is picking up and the GDP growth is 2.5%. For Q1 and Q2, the growth is 4.8% and 0.4%. Indeed, I could say that we have faced the pressure and realized the positive growth. It shows the strong resilience of the Chinese economy.
Well, in the second half of this year, in the political bureau meeting, there's a sentence that is, we'll solidify the trend that the economy is picking up and stabilize employment and price and make sure that the economy is in the proper spectrum and strive to achieve the better outcome. I think this is a very important layout for the macro economy. I think the government have already taken a series of fiscal and monetary measures to maintain growth, maintain the market players, maintain institution, and stabilize employment. With such policy support, I think compared to the first half, the next half, we'll see better economic growth. This is one angle. Another angle is that the global economy.
We realize that the global economy is faced with quite some daunting challenges and pressures, especially that in Europe and in the United States, they are faced with very severe inflation. Which is quite different from China. The inflation is about 8%-10%, while the cumulative CPI for the first seven months is only 2%. The environment for monetary policy is totally different. Basically, in terms of choosing the monetary policies, they have to have this fast increase of interest rates. However, overseas increase of interest rate, of course, we will have this pressure of imported inflation. As we previously said that our CPI is at a relatively low level.
I think that, compared to Europe and United States, and America, we are faced with a different environment for monetary policies. I think that our monetary policy will stick to the keynote that is to see our own situation as the main base for judgment to provide strong support and high quality support for the real economy, whereas for the space for adjustment of interest rates. You mentioned that recently, the one-year LPR dropped by five basis points, and for five-year LPR, it just dropped by 13 basis points. It fully shows that the government sticks to the policy that will not turn on the faucet for the limited liquidity, and we stick to the prudent conduct for monetary policy.
ICBC, as large commercial bank, will partly conduit this monetary policy to the economy and guide the downward trend of the actual interest rate to enhance the real economy and the market players' willingness to invest and consume. This is also a very good choice for the commercial banks, which will open up for a very good environment for commercial banks to operate. Which is also conducive for the management of asset quality and management of risks. Certainly, the monetary policy tools in terms of volume and in terms of price and structure, I think that the government have plenty for monetary tools to choose from. These tools can also combine. Monetary policy is not isolated. It can also work together with other macro policies such as fiscal policies.
The two can work together to create synergy. It could also be used together with regulatory policies, industry policies and regional policies to create better results. I think this is my opinion on your question, and this is also on my own judgment. Thank you again for your question. I think the investors have asked a very last question, please.
The next question from CITIC Securities. Thank you for the opportunity for the last question. My question is on fee and commission-based income. For a long time, ICBC has maintained a high proportion of fee and commission-based income by transformation of business structure. In recent two years, the growth of fee and commission-based income is relatively weak, especially against the background of surrendering profits by reducing fees. What's your judgment for the outlook for the fee and commission-based income for the 2022 whole year? What will be the major drivers for the income for the coming years?
Actually, I have mentioned these issues while talking about operating income in the first question. Your question is very good because it's from a long-term perspective. ICBC is a bank with a long history.
From 1984 to 1994, the first 10 years of ICBC has achieved good development of personal finance. In the next 10 years for a different 10 years development, ICBC has different features. Now we have made full preparation to serving modernized economy and the country. We are improving the implementation of strategies and the coordination and coordinated development capacity, as well as digital transformation capacity, the risk control capacity, as well as the visionary judgment capacity. It's very rational to look at the bank's development from long-term perspective. For your specific question about fees and commission-based income, I think we don't have to worry about this issue. The operating income has changed a lot. The structure has changed a lot.
For the first half of the year, the net income of fee and commission-based income reached RMB 76 billion positive income, and we have consolidated our leading advantages. The contributions mainly comes from two aspects. First, the clients, and second, products. The products are mainly insurance, wealth management products. The AUM of fund and wealth management subsidiary have contributed a lot in this aspect. Second, the expansion of customer base, especially in corporate settlement and acquiring business. These two aspects have contributed a lot for fee and commission-based income in the first half of the year. These are two pillars for fee and commission-based income. For other aspects, agent to sales fund, investment banking, commitment and guaranteed business have been decreased due to the impact of downward economic growth and the volatility in capital markets.
For the next step, we will increase our fee and commission-based income from three aspects: digging the potential, expand the sources and save expenditures. We will increase investment, bond investment and other transaction income to stabilize the sustained development of fee and commission-based income. We will seize the major businesses such as third-party payments, RMB settlement, and foreign currency settlement. Besides surrounding the demand of our clients, we will increase our potential for income in digging the potential fund, custody insurance, et cetera. In particular, we will play our advantages in GBC coordinated development, strengthen the coordination of wealth management, asset management, and investment banking. Of course, we will control the expenditures to refine our management in terms of fee and commission-based income. Meanwhile, we will still surrender our profits by cutting the fees. We will accompany our clients and retaining our clients.
This is also the base for our sustainable development and increase the contribution and the loyalty of our clients. A strong ecosystem will be established to support our development as well as the fee and commission-based income. Thank you for your question. That's the end of Q&A session, and thank you for your enthusiastic participation. The senior management has candidly answered the investors' concern and questions. We believe this will help the analysts and investors to make a better judgment for the future development. Thank you for your long-term concern in ICBC. If you have any more questions, we welcome you to contact with us. Wish you all the best. Thank you.