Welcome to the ICBC 2021 Interim Results Announcement. I'm from the Corporate Strategy and Investors Relations Department, Deputy General Manager, Tianzhong Hua. Thank you for attending this meeting. ICBC has been highly focusing on the management of Investors Relations and has maintained frequent, frank and professional communication. Affected by this pandemic, this meeting will be presented via both video link and call conference.
Prior to this, we have also collected Investors Relations via e mail. We are honored to have ICBC Vice Chairman, President, Li Lioying Vice President, Zhang Wenwu Vice President, Xu Shao Ben Board Secretary, Guan Xueqing Chief Business Officer, Song Jianhua, with us and other major responsible persons of relevant departments of the headquarters. They will be having frank communications and interactions with you. Meanwhile, Non Executive Directors, Lu Yongzhen, Zhen Fuqing, Feng Weidong, Cao Liqing, Chen Yifang, Anthony Neal, Yang Shaoxing, Weilink will be attending this meeting online. Then we will give the floor to the Board Secretary, Mr.
Guan Xueqing, to present the ICBC 2021 interim results and highlights. I'd like to introduce the first half of twenty twenty one interim results. Adhere to the theme of quality development. We, based on the strategic guideline and solidified foundation with risk control talent oriented development as well as our development directions. We have attained good direction, period development results.
We have made breakthroughs. BIG is the future. Our total assets has exceeded €35,000,000,000,000, have maintained the first the top one ranking of the globe. BIG is also our big strength. ICBC has achieved major advantages in to our clients in terms of all levels all around the globe and all other services.
Stability is one of the features of our operation. Stability is one of the features of our operation. We have gained secure development of our risk and sustainable development as well as new momentums. We have boosted our management innovation and technological innovation. We have pushed the digital transformation and of our bank is outperforming other peers and has gained trust from our clients.
We have devoted to build a world class financial with global competitiveness. The second, the quality and efficiency of our operation has been improved. The net the income of our bank has been exceeding 426,000,000,000 yen net profit of 164,500,000,000 yen ROE 11.9%, ROE11.9%, up by the NPL ratio is 1.54%. The overdue ratio, 1.33 percent. CAESAR difference, negative 41,100,000,000 yen breaking a record low.
The provision coverage, 191.97%, up by 11.29 percentage points. We have well contained the interest spread of our bank. NIM stayed at 2.12%, down by 3 bp on the prior period. The change magnitude has been outperforming our peers. Capital adequacy ratio was 17.1%, leading the peers up by 13 bp.
Over the last half year, the global pandemic is still evolving. External environment is still increasingly severe and complicated. ICBC adheres to the theme of high quality development, maintained good quality of development, and we have made new advantages in promoting key strategies. Advantageous business has remained relative edge. For institutional and interbank deposits has remained 1 among peers.
For corporate finance, clients have reached over 9,600 and 2,000 more. Loans of corporate balance reached 12,100,000,000,000 yen, up by 9%. Corporate deposits, 13,51,000,000,000 yen, up by 4.4 percent. For transaction banking, it's 8,850,000,000,000. Underwriting, agency and investment has been outperforming the peers.
Settlement Finance, we have gained over 21,950,000,000 yen income, up by 8.6%. For the number 1 personal bank strategy, personal financial AUM has reaching 16,600,000,000,000, excluding security assets, has breaking a record high and leading the market. Personal deposits, 12,500,000,000,000 yen up 7.1%. Personal finance profit before taxations occupies 46.8%, up by 5.5 percentage points. For the up by 5.5 percentage points.
For the preferred bank strategical foreign exchange business, we have been maintaining the first position
in
a lot of foreign exchange businesses. For the strategy for sharpening competitive edge in key areas, Beijing, Tianjin, He Bay Area, Yangtze River Delta, Greater Bay Area, in those five key areas, we the sum of our loan balance has been up by 6.2 percent, reaching 13,000,000,000,000 yen. The urban rural collaborative development strategy, the off line county level coverage has been up to 85%. Over 150 agriculture supported financing products was launched. And ICBC adheres to strategic legacy and innovation, bringing our strength to make up for our weaknesses and laying a solid foundation.
We have promote the implementation of our new 3 year action plan and has formed a brand new strategic system whose value is just emerging. The third, our The third, our market competitiveness has welcomed new progress. ICBC's adaptiveness, competitiveness and inclusiveness has been up and improved. At the end of June, the RMB loans balance has added 1,300,000,000,000 yen breaking a record high. The technology, green, development, manufacturing, The technology, green, development, manufacturing,
strategic emerging industry
has gained leading peers loan scale. Real estate loans has was down from the beginning of the year. Deposits has attained collaborative development. Deposits of clients, 27,000,000,000,000 yen up by 1.5 trillion yen up by 5.8 percent. The personnel deposits has been up by 7.1%.
ICP has well managed the intensive costs of deposits. The deposit interest rate declined by 2 bp to 1.61 percent. Client base has been consolidated. Our customer netting project has been implemented so as to improve the contribution and loyalty of our clients. The total amount of individual clients has reached 690
1000000.
Private banking customers has reached of in terms of institutional clients in financial, social security and inter banking sector has remained its edge. The 4th is GBC collaboration. By creating a closed chain of customers' funds and info, our bank has turned data flow into holdings. We have established a lot of business scenarios over 5,000. With the additional 6,000 government clients and additional 100,000 business clients and additional 18,000,000 consumption clients.
We have gained much more deposits. The 5th, high quality development of inclusive finance. We have optimized our structures. The first time borrower has increased by 40 And unsecured quick lending for operation has up by 70%. We have sadly control the risk, and has opened up new horizons.
Over the last half year, ICBC has promoted the people money defense line bottom line management system, abiding by the rules of active penetration, intellectual control and overall management, control and overall management path. All kinds of risks are under control. Strategic risk, credit risk, market risk, counter risk, operational risk, liquidity risk, bank book risk as well as other risks has been controlled well. We also strengthened new kinds of risk control. The 6th, green finance and ESG image has hit a new level.
ICBC has adhered to the concept of environment is in invaluable assets. We have actively implemented the low carbon development philosophy, integrating economic and social responsibility as one. ICBC has launched green financial products and services innovation and has effectively allocated resources into ESG resources. And to improve ESG information disclosure, at the end of June, ICBC's green industry loan balance has reached 2,150,000,000,000 yen, leading the peers. Of offshore green bond issuance has reached 9,830,000,000 and has underwriting 21,700,000,000 yen.
And we have underwritten the carbon neutral bonds, the first one as well as the 1st National Green Development Fund. We have communicated with a lot of global important investors with ESG topics. The 6th, reform and innovation has nurtured new momentum. ICBC always adheres to exploring new development and innovation. We focus on digital finance, green and SciTech Finance and to deepen innovation and mechanism reform.
We also further reformed the rewards and disciplinary mechanisms for the bank as well as to reform the resource allocation mechanism and to realize a light capital development strategy. We focus on clients' balance sheet and to coordinate and innovate the whole value chain. The monthly active users at whole fund scale has been improved. We'd like to innovate to take FPA as one of our management handles of clients. We'd like to channel our operation reform, and the online and the online transaction amount has reaching 363,000,000,000,000, occupying 98.8 percent.
We will we also deepened the research system reform so as to contribute more ICBC wisdom. The 7th, new look for talent oriented development.
We
use the better allocation of human resources and compensation mechanism to elevate education and training programs for our talent team building. We adhered to fully implementation of rigorous corporate governance to innovate the cultivation, selection, evaluation and reward system for our talent. We have laid a solid foundation for the future development of our bank, and we will, the future development of our
bank, and we will, based on the new
development phase, implement new development concepts, serve new development paradigm so as to realize and fulfill high quality development for ICBC and to create a better stage for the global investors to make long term investments, safe investments, green investments.
We now come to the Q and A session to give more We pay a lot of attention to wealth management, which has become arena for competition for commercial banks. With the continued opening up for the financial market in China, we see more foreign capitals entering Chinese market. So ICBC, what kinds of measures will it take to maintain a competitive edge in this new round of fierce competition? From Mr. Liao Lin.
I'll ask Mr. Song Jianhua to answer this question. I expected that someone will ask about Wealth Management, I didn't expect this to be the first question. It means that we all pay a lot of attention to this area for Commercial Bank. And thank you again for your question.
Do you have increased their wealth. And the government also proposed that in the high quality growth, we will enhance the common prosperity. Under such a background, wealth management has become a question that all commercial banks must answer. And this business is just not about retail business. It also has something to do with the corporate banking business and the wealth management business and investment banking business.
But of course, it poses a lot of influences on the wealth management for the bank. For ICBC, we have a strong competitive edge, at least from 2 aspects. First, at the customer side, ICBC is the largest wealth management bank in China. We are managing RMB1.66 trillion personal financial asset. It is something entrusted by our customers to the bank.
The figure is RMB16.6 trillion. That's the scale we manage for our customers. From another perspective, we rely on wealth management, custodian, pension and investment banking, all these kinds of sectors. We also coordinate with funds, insurance, wealth management. We have a strong ability to invest and to do research to better allocate in whole market and to provide this whole system across the whole business chain to provide We have the following.
1st, full customer service. ICBC emphasized that wealth management should be facing all the population to all our customers. Tomorrow, we'll have the ICBC Wealth Management season. It's the 4th ICBC Wealth Management season. This wealth management festival from ICBC.
And many of our peers try to emulate this practice of ICBC. And this is also our practice to make the wealth management face all our customers. 2nd, we have a series of products such as fund insurance and precious metal. We have strength in this regards, especially that we have this ICBC Wealth Management Fund Index. This is an index to help customers screen and choose fund.
And our FOF, we follow the ICBC Active Mix Fund, and it accumulated revenue rate of more than 100%. It shows our ability to help customers manage their wealth. And we also provide for corporate customers to provide family trust and such high end products. This is the scope of products that we could provide. And as for the allocation, IBC has built a smart brain to provide all customers tens of millions of plans for our customers.
For each customer, we have our own service plan. We also have all channels. Besides the offline banking offices, we also have cloud offices, the and smartphone calls to provide a a pertinent service to customers. These are the 4 aspects of ICBC's advantages. In the next phase, ICBC's wealth management business, we will follow the trend.
1st, head end customers but also for our all our customers. We need to fit into such a trend. We have a slogan that with our smart a smart ability, we will help the wealth outreach to all customers. We also take into consideration of all risk advertisers of all our customers. We provide it to our high end customers with high risk and high return products.
And we also meet the need for customers to have secure products. And that is to say, we will recommend proper products to proper customers. We can say that when we talk about wealth management, we only refer to the high risk and high return products, but we also provide more secure wealth management choices. 3rd, we will build a wealth management product, providing all kinds of products. And based on the regulatory compliance, we'll explore
new
channels for wealth management to meet need. 4, we'll build smart wealth management allocation plan. These are the aspects of my answer. Thank you for your question. Thank you for the response from Mr.
Song. Next question please. I'm from Lian Securities. I want to ask a question about strategy. This year marks the 1st year for the 3 year plan for ICBC.
Would you please introduce how we began this plan? In the next 2 years, what's your main areas to development and targets? We are paying a lot of attention to the 1 personal bank strategy. And what's your progress and your results? This is Mr.
Liao Lin speaking. I would This year is the 1st year for our 3 year strategic plan, and we propose the idea that is to build ICBC into a modern financial institution with global competitiveness. We have 4 layouts that is to give full play to our advantage and make up for short boards and strengthen our foundation. In the our advantages, we have long term experiences such as settlement, finance and institutional finance, etcetera. Meanwhile, our short boards and in terms of short boards and coordination, we have 4 directions: 1st, personal banking second, For X business 3rd, key regional development 4, the coordinated development of urban and rural areas.
This is the part we would like to make up of short boards and make more coordination. And our to consolidate our foundation, such as we have risk management, risk governance. And to solidify our foundation, we have this linked operation of the government side, bank side and customer side. This is our strategic target and strategic pathways. This is an important year.
To have a good start is quite critical. After achieving the goals for the 3 year plan, our total asset might exceed RMB40 1,000,000,000,000 from the first half of this year. The 4 short long balls, we are doing pretty well. Institutional finance, deposit is good and we are the 1st among peers. And corporate banking, deposit and loans, the growth of deposit and loans are both good.
And transactional finance, we have about RMB 9,000,000,000,000 investment, and we are the 1 in the sales of bonds. And we also have agency businesses, and we show the advantage in all these aspects. As for settlement finance, we have a lot of customers. In the first half, settlement and clearing and cash management, the transaction reached RMB219 1,000,000,000,000. This shows ICBC's competitive advantage.
You also asked about number 1, personal banking strategy. This is our shop board where we want to make progress. Mr. Song just introduced our wealth management sector. And I would like to say that for this strategy, in the first half, we have achieved good results, better than expectation.
By the end of June, the personal banking asset reached RMB16.6 trillion. This is a historical new high. And deposit divided by AUM, we are doing better than peers. This is a very good interaction between deposit and AUM. This is quite important.
And this indicator, we maintained the leading position among in this sector in the banking sector. And the personal mobile banking application, we have a lot of active customers. We have mobile bank users by 44 1,000,000 and monthly active customers is RMB0.1 billion. And the proportion of the contribution through personal banking business increased by 5.5 percentage points. We noticed that our deposit is quite stable, and we made new breakthrough in terms of credit business for personal customers.
We need to thank our technology for that. Mr. Song just introduced that our wealth management have benefited from FinTech. And have benefited from FinTech. And in the next phase, personal banking business will play a major role in our strategic layout and will be fully give full play to our strengths online and offline.
Online, we have more than 400,000,000 customers. Among them a quarter of them are mostly active. And off line, and we have 16,000 banking offices, which we also need to transform, combine the online and line channels and with
the
enable support from FinTech. I believe that in this year, we will achieve very good results as the 1st year for the 3 year strategy period. Thank you for your answer. 3rd question, please.
Chen Shui, thank you very Thank
you very much for this opportunity. I'm very sorry the signal was pretty bad just now.
Thank you for the question again. Congratulations that you have achieved such a good results. According to the market prediction, we are facing with some downward pressure. Moreover, the policies has reaching an edge point of QE. What is the future credit demands of ICBC as the largest commercial bank?
Moreover, to the next half year, what is our plan to give out our loans? Will it be bigger? Your question is very accurate. Vice President Xu Xiaobin will answer your question. Thank you for your question.
From the perspective of ICBC, the credit demand for ICBC is going into a better direction because the economic recovery is pretty good in the first half.
And all the banks have given out a lot of credit during the
1,260,000,000,000,000 1,260,000,000,000,000. Through many measures, including credit assets securitization, loan
given out.
We our loan given out. The major direction of our loan credit goes to the major strategic important areas according to the 14th 5 year plan of the national of the nation. There is growth in our loans of all respects. In key areas, the sum of our loan has reached 70 6.8%, which is higher than expectation. The result of total loans given out is pretty good for the first half.
In the next half, the reserve of our bank is adequate, and we can guarantee a robust growth in the next half. Our development strategy will our development strategy will be combining the market change and economic recovery, and it will match the risk appetite of our bank. And the growth and the growth rate will remain quite the same as the first half year. Inclusive Green Tech supply chain will be the major areas of our loan given out. As for allocations, We will combine loans, bonds and equity to inject capital into the real economy and to satisfy multiple financial services demands of our clients.
Yanmei Ju from I want to ask a question about the NIM. We noticed that the NIM of ICBC is quite stable. But since the second half of last year, we see a drop of NIM. So my question is that looking forward, we noticed that the monetary policy in China have a relaxing trend in the margin. In the future, in the next half of this year, what's your opinion about the monetary policy?
And the regulators expect the loan interest rate to drop to support the economy. So what's your opinion about NIM in the next half of this
year?
Mr. Zhang Weiwei. Thank you for your question. For the first half, our NIM is 3.12%. And compared to the end of last year, it's 2 basic points lower.
It's mainly because the revenue is lower. On the asset side, we try to reduce the cost for the real economy. And such a background, in the first half, our revenue rate from the asset side dropped. And compared to 2020, it's 8 basis points drop, but we make more efforts in terms of stabilization of our liability side and to properly manage the interest rate cost for our deposit. So the interest rate cost is mainly stable.
In the first half, this rate is maintained at 1.61%. But general interest cost for liabilities, it's a drop by 4 basic points as compared to last year. About the trend in the future. I think in general, the PBOC guide is guiding the financing cost to go downward at the liability side. Though it is under decrease, but from the asset side, we have this asset structure, and we have a different profit from all kinds of sectors in the asset structure.
And by capturing market opportunities, our revenue could be maintained at a sound level. And in the aspect of choosing the customers, though some of the return dropped, However, we protect, support the market players, and our the relevant costs are also lowered. On the liability side, On the liability side, currently speaking, the competition is quite severe. The PBOC also guides that the decrease of the liability cost. So the PBOC is also doing its work at both sides.
Our liability cost dropped by 4 basic points. And across the quarters, our liability cost, we have reversed the trend for our liability cost. In the past, it is under increase, and now it is quite stable. And the structure also shows differences. And for personal customers, it's not so resilient.
But despite such background, the management is making our to optimize the structures of our assets and liability to maintain that the our NIM is at above average level compared to our peers. And we are going to do the work from the following aspects: 1st, build our customer base, strengthen the GBC coordination to build a good ecology for our customers. Mr. Guan introduced ICBC's advantages. Our institutional business and corporate banking business are our long balls.
And we'll give full play to this long balls. And among our different customers, by more better coordination, we enhance the woven of the network of customers and manage the source of our customers to control our cost for capital. Besides, we enhance wealth management for customers and implement the number one personal banking bank. And the call is to provide better service to our customers, so customers are more willing to maintain their capital with ICBC so as to achieve our goal of maintaining a good cost for liabilities. And we could formulate to our advantages of channels and our FinTech.
The channels of our ICBC, we have both very strong online and offline channels. I can say the strongest in the market. Our domestic and international channels are also the number one among peers. Our international network is quite wide. So for our customers, both at home and abroad, our ability to provide services is strongest.
So in general, I think the management of ICBC could give full use of our ability to manage our asset and use our ability to serve customers and give full play to our advantages in Fintech and in channels to provide better service to customers and control the cost and control our NIM at a sound level. Thank you for your question. Next question. Next question. I want to ask about ISAT quality.
In the In the first half, what's the highlight and stress point for asset quality? And what's the trend? Thank you for your question. This is Mr. Liao Lin speaking.
The background is that we have 3 major points deciding asset quality: 1st, GDP trend 2nd, the bank's the bank's asset structure. 3rd, enterprise risk management ability. These are the three factors deciding the asset quality of a bank. In the first half, ICBC's asset quality, as introduced by Mr. Guan, our NPL ratio is 1.54%, down by 4 basic points.
And the GAAP CSIS GAAP is reduced by is showing very good momentum. And overdue loans and overdue rate both decreased, and loans falling into the category of attention also dropped. So from these indicators, we could see that in the first half, our asset quality is quite sound, especially for the real estate sector, which attracts a lot of attention. In general, the NPL rate and NPL balance is quite stable, rising slightly. But this is the rise is completely under control.
Another factor is the moratorium of the principles of interest. It's also under control. ICBC have monthly supervision, and we have different policies for different categories of customers. And for customers with difficulties and with no hope, we have proper management and make them add them into the management of NPL. There is another aspect that is collection and disposal.
In the first half, we enhanced our disposal of bad assets. With various measures, we improved the quality for disposal and collection. We also used our resources to write off. We the proportion for collection and write off is 1 compared to 2. And for corporate loans, we have higher proportion.
More than 80% of our bad loans are corporate loans. And bad loans for personal customers, loans is less than 20%. And loans are mainly in the sectors of manufacturing, retail and wholesale and leasing and commercial service. Well, abroad, our asset quality is generally good. Despite the pandemic, the NPL ratio is quite good at about 0.52%.
So the overseas asset assets make a contribution for the total asset quality of the bank. You also asked about the trajectory for asset quality in this year. So as I mentioned, I think the 3 factors contributed to the wealth, the asset quality, GDP structure and risk management. And from these factors, after these the asset structure, after years of adjustment, it is going towards our expected direction, and the structure is relatively sound. And our risk management ability, we have enterprise risk management.
And in this whole system, we manage operational risks, and we manage all these assets at the entry side and at the major points and also at the exit points. And we also stick to the three lines of defense, and we also manage our bottom lines well. Especially in terms of management of asset quality, we have thresholds and 7 color pools. And all our branches have learned such a methodology.
And for our key branches, we have
this major battle against bad assets. To enhance their battle against the bad assets. And for major and key customers, for example, customers with the largest amount of finance with ICBC, we make key management. Meanwhile, for real estate sector, we credit card, strengthened our management and optimized the structure. So with the comprehensive measures, we have the confidence that we will maintain a stable asset quality for the next half of this year.
Now we have a recurrence of the pandemic, but the economy is recovering. And we expect the pandemic only have limited and lessened impact on our asset quality. And risk management will go back to normal. And ICBC's asset quality will maintain a good momentum to be stable and picking up for the better, and we have confidence in that.
Thank you for your answer. Now the 6th question. The 6th question is from CICC, John John Shui. I'm from CICC. My question is about the supplement of capital.
We noticed that ICBC's capital adequacy ratio is pretty solid, but actually, PB is still quite low. So So it would be hard to supplement the CET1 capital through external funds. With the implementation of future TLAC, capital requirements bottom line will be increasingly higher. In the We have a big plan for credit and it will influence the ROE. Now Board Secretary, Guan Xueqing, will answer your question.
Mr. Guan Xueqing? Now you can see the capital adequacy ratio of ICBC is 17.1%. We are supporting the development of a real economy. The RWA growth rate should be reasonable.
For the first half, the RWA growth ratio is 4.7%, but the loan growth rate ratio is 4.7%, but the loan growth rate is over 7%, which means we have maintained a good control on RWA. The second, we The second, we have relied on the internal capital and profit reserve to supplement our capital, which is a quite strong measure. Last year, we have issued a 70,000,000,000 perpetual AT1 bond as well as 30,000,000,000 T2 bond in total 100,000,000,000 yen. Therefore, our will be a higher asked about the TLAC implementation, there will be a higher requirement. Now we have several considerations.
First, we will satisfy the demands of real economy development. We will enhance the ability to supplement the capital through internal ways
and
to better use external capital instruments to add our capital. And we need to follow a capital intense development path. In the first half, we focused on a thing that our CET1 capital ratio is going down a little bit, but other tiers of capital is going up. Now we have a better structure of capital, which can balance the downwards pressure of ROE. Now how we integrate the ROE and capital adequacy ratio.
You mentioned that ICBC's PB is pretty low, which is related to the economic structure of the whole country. If the strategy of the market of China will transform from indirect financing to direct financing. It will ease the pressure of supplementing the capital, and we will promote the transformation to a light capital development path and will balance better balance the ROE and capital supplement. When you can see, the ROE of our bank was 11.9 percent, up by 20%, which is a good result comparing to global peers. Implement relative measures so as to satisfy the TLAC regulatory requirements to enhance our ability to cope with
Now the 7th question from online. Penbo from Citic Securities. I'm analyst from Citic Securities. My question is about digitalized transformation. Since last year, the financial regulation has been strengthened, especially on the management of this order expansion of assets, which has exited impacts on the Internet industry.
However, it's an opportunity for the banks facing this new opportunity. What kind of changes will ICBC have in terms of digitalized transformation? What kind of achievements has ICBC made? Could you please give us some outlook? President Liaoning is speaking.
Your question is very good, whether an elephant can dance. I will invite Vice President, Mr. Zhang Wenwu to answer your question. Thank you for your question. Recently, the regulators has issued a series of measures development of financial industry and the whole economy.
I would like to make a brief introduction. In the first half of the year, ICBC has implemented the 4th 5 year plan centering on establishing an IT strong bank and establish a digital finance.
I would like to give you a brief introduction.
In terms of a brief introduction. In terms of establishing an agile bank and the good foreplay to the vitality of IT. On one hand, we have strengthened the cooperation with domestic and overseas partners to study and introduce latest IT, including the infrastructure of Fintech, application of 5 gs and AI. We have timely introduced the latest technology into our business operation. On the other hand, internally, we have accelerated incorporation and integration of business in the IT.
We have strengthened cooperation among the staff. For some new staff, we have trained their FinTech capacity. Meanwhile, we have chose some core IT areas and introduced high-tech talents to solve bottleneck problems. In terms of establishing an intelligent bank, we have give full place to ICBC's advantages in terms of online and offline channels. And ICBC is the first to launch Cloud Bank among payers and to provide financial services in all channels.
For instance, the mobile bank, we have continuously optimized its function. By the end of 1st year, our personal mobile bank clients has reached 443,000,000. Corporate Internet Bank Clients' growth rate exceeded 23%. Incorporated Bank growth rate exceeded 50 8%. ICBC has give full play to its online and offline channels and combined and incorporated our outlets with online services as well as introduced some new media channels to facilitate the clients and to provide one stop in comprehensive services for clients at all time.
As President Liao has introduced, our 90 over 99% of business are studios for our client relationship managers. Besides, we have established over 10 scenarios to substitute the traditional businesses. ICBC has also advantages, which has topped our peers. Besides, ICBC has developed Nova and FoVa systems independently. For both corporate and individual clients, we have provided global and multi currency global settlement system, which has increased our service capacity for clients.
Domestically, we have improved our operation efficiency. We have a lot of overseas and domestic branches and institutions. We have tried our best to concentrate our operation to 2 major regions and to accelerate and maintain business consistency during cases such as coronavirus. We have also used satellites to monitor the intelligent ends and use the Quanta computer technology to accelerate the application of scenarios. 3rd, in terms of establishing an eco friendly bank, we have empowered the establishment of an eco friendly bank with our IT.
For example, through API and Cloud ICBC, we have strengthened the cooperation among different areas. We have increased about 1,000 scenarios compared with the beginning of the year, and the activity of our clients has increased by 4x. We have also provided a comprehensive platform such as e social security service to facilitate the public and the government departments. In terms of Medicare, last year, ICBC has successfully bid for provide cloud services for medical instruments and projects under the Industrial and Information Ministry. Is accelerated and very fast.
Besides, we have also established a digital countryside platform to provide government fair management, finance services for countryside, which has covered 181 countryside. Besides, we have
provided
services for over 50 in terms of established and digitalized bank, we have promoted digitalized industrialization. We actively participated in this regard, established digital elements market. We established digital elements market. We cooperated with 26 provinces and municipalities. And to empower SMEs with these digital elements, based on 50 categories of digital information, we provided loans for anti coronavirus, etcetera.
Our inclusive finance loan balance has exceeded RMB1 1,000,000,000,000 for first half of the year. The post loan management also relies on our systems in IT. The NPL ratio has decreased by 4 bp for the first half of the year, which also shows our advantage of IT in management of asset quality. We developed data middle desk, which is strongest among pairs and achieved GBC whole train client relationship identification and to facilitate internal circle of clients' funds, so as to improve our service capacity to ensure the high quality of IT systems. Currently, the use rate has maintained over 99.99%.
And based on our core businesses, and and over 400 overseas institutions and to provide facilitate and safe financial services for our clients. The transaction peak The transaction peak has reached 870,000,000, and we aim to provide more stable and safer services.
Her answer questions from me, miss. We received one question from Mr. Yim. I'm ICP's shareholder from Asia. The PE of Bank of America is 12.3, PB1.23, but ICPC PE is 4.81 PB0.63 BOS income and net profit are lower than ICPC, but capitalization is higher than ICBC.
What are the measures do you take to improve investors' confidence by improving PE and PG? 2nd, what are your measures Okay. What are your measures to improvise the business future compound growth by 2 over 10%. And my third, my suggestion is that you repoll ICBC's shares when PB falls below 1. Board Secretary Mr.
Wang will answer your question. Thank you for your question. This is a very good
Thank you for your question. This is a very
good question. And we are also considering these questions, and we are analyzing the capital market, especially for the different valuation of American and Chinese Banking Industries. The PE and PB of ICBC outperform other peers. We rank 1st in this regard. However, our PB compared with BOA, we still have a gap.
We also analyze the difference from the end of 2020 so far. John Jones index Zhangjou's index increased by 9%, but the A share of ICBC only improved by 4%. So the market environment is quite different. 2nd, I also mentioned that ICP China's financial institutions are different from some countries. The indirect financing is the main channel RWA.
I see basis doubles that of this bank. We have 3,000,000,000,000 yen but BOA only 1,000,000,000,000 yen. The financial structure and the stage of development of the industries are quite different. Thirdly, China's A share also have different investment style. In China, the capital market is still the initial phase for the high quality development.
So we are still cultivating our investors. Again, such background market style is preferring the growth rate for the long term value growth value rate of the shares. The valuation shows a low trend. Our dividend payout ratio is quite high for ICBC and the dividend payout ratio also ranked 1st among all listed companies for long term and safe investors for those value investment investors. So ICBC shares is a quite good target.
Again, background of the market environment. PB of ICBC is undervalued by the market. So we are also expecting that more investors, when they select shares, they can follow the high quality development of the Chinese economy and the value of ICP's shares and further improve their recognition for ICP's shares values. We are also actively managing the IR management for domestic and foreign investors in Asia and Asia. We will tell good story of the Chinese economy and Chinese Banking Industry and ICBC's own story so that investors among the complex information of the capital market, they can understand more of ICBC's investment values.
Based on the status quo, I think our IR team can further improve their IR management capabilities so that more investors can share ICBC's information in the market. I also believe through the power of market, ICBC has full confidence to improve the value of PB. For the investors with high vision, they will share the rebound of ICBC's PB and they will share the market value. Secondly, for compound growth, the net profit of ICBC since listing shows great trajectory. ROE also shows positive growth.
11.9% is the result of the of the first half of the year, up by 20 bp compared with the last year. The profit volume is very high of ICBC. So the increased volume cannot be similar than that of the volume in the first half of the year. We compared with some international large banks, PPOP increased quite low. Operating income also shows the same trajectory.
And recovery of provision is the main reason of the increase, but ICBC adheres to the long term increase. We will go through the cyclical fluctuations. We will increase our profits to improve our safety margin so that the growth of our profit will grow sustainably. The third question, I think I believe the power of the market will promote ICBC's PB to a higher level and the market will improve investors'
Yuehua from Haoge Shanghai. Internationally, its attention to ESG has increased. For ICBC, as an internationally concerned bank, how will it fulfill ESG responsibility? And how do you regard the relationship between ESG and Kapolei based bank? In terms of fulfilling ESG responsibility, we stick to disclosure of ESG.
For years, we have released ESG report and social responsibility report. In the half year, we have also released Green Finance report. Besides, ICBC has established a sustained ESG financial system from a sustained ESG Financial System. From BOD to senior management, both paid a lot of attention to ESG Financial Development. The Board of Directors has reviewed relevant has reviewed relevant proposals on ESG, and we have established CSR and Consumer Rights Protection Committee under BOD to perform ESG related responsibilities.
Besides under senior management, we have established relevant committee to perform ESG responsibilities and functions. Green Finance to the whole group. Besides, we have paid a lot of attention to SDGs of United Nations, to SDGs of United Nations, including biodiversity, fairness, education, society finance, marine, environmental protection, etcetera. We have arranged the financial services in all regards and aspects. In terms of risk management and product strategies, we have laid relevant arrangements.
From this point of view, we believe ICBC will become a sustainable green finance provider and promote green development of China. Besides, among and during our overseas development, we have required our overseas institutions to do business in a green way. In terms of environmental protection, protection of rights and interests of stakeholders and ensure governance efficiency. We require our overseas branches and institutions to be an excellent global citizen and meet the expectation of local government and societies. ESG will be an important area of ICBC.
We will deepen information disclosure in this regard and strengthen strengthen internal measuring product and management systems in this regard as well as risk management system. Besides, Besides, according to 30, 60 carbon peak and carbon neutral targets committed by the Chinese government, we will also control our own carbon emission and give foreplay to our financial service advantages to facilitate industries and enterprises during low carbon transformation and control high carbon consumption and emission industries and effectively control financing risks among our loan business and financing services. In the future, green investors and stable investors, for these investors, we will give sound returns.
The number of people online have exceeded 3,000. We will have another question. Xiawei Wei with Haitong Securities. How is ICBC implementing the series of macro adjustment policies? For example, the concentration in 3 red line regulation requirements of PBOC, What are the management measures?
Vice President, Mr. Xu Shobeng will answer your question. Thank you for your question. On August 2020, the Ministry of Housing and Infrastructure as well as PBOC has convened a seminar, which invited 12 real estate enterprises. From long term, we believe the 3 lines of the 3 red lines is conducive for the development of overall real asset enterprises.
But for some enterprises with relatively large amount of financing and relatively high liability ratio, it may face capital pressure in the short term, and it needs some time of transition adjustment. On one hand, we will actively implement the policies of the state and rationally control the financing amount for commercial real estate sector and implement whole caliber financing and investment limit management for commercial real estate. Before the 3 lines policy, we have already lines policy, we have already adopted credit control measures to control the financing amount, and we believe the overall risks are under control. 2nd, we have strengthened the categorized management of products and regions. Our new financing supports general commercial housing, residential housings and we strictly controlled the we strictly controlled the financing for commercial real estate development.
3rd, we have chose the real estate groups with relatively strong strength, sound financial situation and reasonable rational liability level. 4th, we have implemented the closed loop management for real estate loans and effectively control the key risk links. Our development loans project mainly concentrated in the 1st and second tier cities, and most of the enterprises and projects has a relatively high pledge ratio. In terms of concentration ratio, we have implemented macroeconomic and adjustment policies, strictly implemented prudential macro management requirements and controlled the proportion of real estate loans. We have rationally controlled the total amount increment and proportion of commercial real estate development loans to maintain the overall stability of asset quality.
By the end of June, the concentration ratio of ICBC has already reached regulators' requirements, and there is no mature pressure.
Many more questions are coming in. May we have another question? I'm Wang Jiang with Guozheng Securities. My question It is the priority at present. You have a strategy in inclusive finance.
How is the situation? For example, how is the interest rate? Is there any change this year? And what's your outlook in the future? And also, as COVID-nineteen is contained in in inclusive finance strategy, will you make some changes?
For example, previously interest rate was low previously. Will you increase such low interest rate? Vice President, Shishouben, will answer this question. Thank you for your question. Gwan also mentioned that in the first half of the year, the balance exceeded 1 trillion, up the growth is over 40%.
The development of inclusive finance business, the volume, the structure, all the indicators are good. The interest rate, we believe the comprehensive cost has reduced compared with the previous situation because when we do inclusive finance now, it is a very important strategy for ICBC. Now we are welcoming new technological innovation. We have digital Inclusive Finance. We have new practice for onboarding of customers for risk management, operations, refine management, the risk costs, operation costs and the national macro regulatory supports for the inclusive finance development, we still have large space and we can also keep the sustainability in a commercial sense.
Thank you. Thank you, Mr. Liao. We will have the last question. Jin Lanfeng from China Southern Funds.
Thank you, senior management, for the opportunity. My question is about fee and commission based income business. People concerned a lot about fee and commission based business. Its composition is very complex. Of fee and commission based income, what do you think is the nature of it?
How to create the capacity to create and the increase fee and commission based income from the fundamental. President Liao Lin is speaking. I would like to invite General Manager, Liu Yagang of Finance and Accounting Department to answer your question. Mr. Liu Yagang speaking.
I think it's an important base for your valuation. Fee and commission based income is a traditional name in China. In international market, we usually call it as noninterest income. It includes transaction income as well as our traditional fee and commission based income. For ICBC, fee and commission based totaled about RMB160 1,000,000,000 for the past 3 years.
The the difference between interest income and noninterest income is that the interest income mainly from financing services and noninterest income is related noninterest income is
related with
other businesses. In the first half of the year, ICBC has achieved good results in terms of noninterest income, which increased by 9 point 3%. Fee and commission based income has maintained a positive the regulation policy of the state is changing fast. For banks, we have to sacrifice impact of our profits to the real economy development. With adjustment of the policies, some of our account crude oil, account precious metals business have been suspended.
For the banking industry in China, the transaction income is relatively low so far and it has great opportunity. ICBC has actually done a relatively better work among the big four Chinese banks, but it only accounts for 3% to 4%. For JP Morgan, its proportion is about 30% and for Citic, it has reached 30%.
Percent.
ICBC is the bank with largest amount of RMB around the globe. We have the largest amount of RMB loans and RMB bonds and RMB equity investment.
If the transaction costs can increase to 20%,
If the transaction costs can increase to 20%, the income structure will change by a large extent. These are all capital efficient businesses. And if we can increase this proportion, our valuation will increase by our large extent. We applied amortization accounting in our banking
book.
For JPMorgan, 80% of its business are calculated by market value. ICBC is very prudent and applied AC in our accounting methods. So if we can adjust this perhaps in the future, if we apply this, we can also increase our income by a large extent.
So we are
actually So we are actually making use of our wisdom to serve the clients. ICBC is a market maker in terms of RMB Business, so CBC.
Thank you,
Thank you all investors for your questions and thank the senior management for your answers. Due to time limit, that's the end of today's meeting and thank you for your participation. If you have any more questions, our Investor Relations management team will contact you after the meeting and answer your questions. And we welcome you for further communication. Thank you again for your concern and care of ICBC.
We will strive our best to create value for all investors and return sustained profits for all of investors. Happy weekend.