Ladies and gentlemen, good afternoon. Welcome to the 2022 annual results briefing of BOC Hong Kong (Holdings) Limited. I'm Kenny Law, Company Secretary of BOCHK. Executives with us today. Mr. Sun Yu, Chief Executive.
May I stand up?
Madam Jiang Xin, Chief Risk Officer. Mr. Liu Chenggang, Chief Financial Officer. Mr. Xu Haifeng, Deputy Chief Executive. Mr. Chan Man, Deputy Chief Executive. Mr. Xing Guiwei, Deputy Chief Executive Designate. Today's meeting consists of three parts. Mr. Sun, our Chief Executive, will brief on the implementation progress of the group's strategy in 2022. Mr. Liu, our Chief Financial Officer, will present our financial and business results. CE Sun will wrap up with our 2023 outlook and key priorities before the Q&A session. I would like to hand over to CE Sun.
Hello. Okay. Good afternoon, ladies and gentlemen. Thank you for joining us today. After three years of a pandemic, I'm so pleased to meet our analysts face-to-face without wearing a mask. First of all, I would like to take this opportunity to introduce of new Deputy Chief Executives, Mr. Xu Haifeng and Mr. Xing Guiwei. Both of them have served on various important managerial positions of Bank of China Group in the mainland and abroad for a long time. I believe that their abundant banking experience will further strengthen our management team. I would like to brief you about the strategic execution review for year 2022. Amid the complex operating environment of last year, we continued to pursue progress while ensuring stability. We strived to stabilize profitability, refine our infrastructure development, and manage all types of risk.
These efforts were rewarded with notable improvement in financial performance and a steady enhancement in growth quality. Profit after taxation for the year reached HKD 29 billion, up 16.2%. The board has proposed a final dividend of HKD 0.91 per share, including the interim dividend. The dividend per share for the year will be HKD 1.357, increasing by 20.1%. The payout ratio is 53%, up one percentage point. We continue to strengthen our integrated service capabilities and made fresh contributions to Hong Kong's economy. We further cemented our traditional business advantages in the residential mortgage, syndicated loan, cash pooling, IPO receiving bank, and RMB businesses. We also deepened the transformation of retail banking and enhanced the cooperation with government entities.
Our private wealth customer base grew by 32%. The private banking AUM increased by 13%. We captured opportunities in financial market business to grow our RMB transaction volume of treasury business by 51%, while enhancing our green financing service capabilities. BOC Life retained its market-leading position. Our integrated service businesses, such as asset management and the trust and the custody services, all achieved solid results. Cross-border finance leadership is our core strength and the foundation for the GBA business development. We continued to optimize relevant products and services, including GBA account opening, Wealth Management Connect, GBA loan for home purchases, and GBA payments. The cumulative number of new accounts under GBA account opening scheme grew by 22%. We also led the market in cross-boundary Wealth Management Connect business in terms of both the total accounts opened and the volume of funds remitted.
We facilitated Hong Kong's development into an international innovation and a technology hub, growing our GBA corporate loans by 4.7% and stepping up our support to innovative tech companies with loan growth of 6%. Through actively promoting financial connectivity, we established a leading market position in terms of Bond Connect trading volume and the Stock Connect settlement volume. We deepened our development as a regional headquarter, enhanced the differentiated management model of our Southeast Asian entities and captured opportunities from RCEP to strengthen regional synergies and collaboration. During the year, our Southeast Asian entities made solid business progress and enlarged their contribution to the group, growing customers' deposits, customer loans, and the net operating income by 13.8%, 0.4%, and 27.6% respectively. Overall risk remained manageable with MPL ratio standing at 2.49%.
We continue to build our regional brand and enhance customer referrals while driving digitalization and improving effectiveness. The transaction volume of RMB-related treasury business rose by 65%, while the number of mid to high-end personal customers grew by 6%. We continue to consolidate of RMB franchise by strengthening internal collaboration and seizing business opportunities. We maintained leading positions in RMB deposit and the loan businesses, RMB funds number, and the newly underwritten RMB insurance policies. We saw rapid growth in cross-border RMB settlement volume and RMB-related treasury business transactions, and further sharpened our competitive advantage as a RMB market maker. We consolidated the market leadership of RMB clearing business in Hong Kong. Meanwhile, BOC Malaysia and our Manila branch grew their RMB clearing volume by 42% and 15% respectively.
To enrich of RMB products and the supporting services, we launched the RMB One promotion on the integrated wealth management product. We played an active role in researching digital currency applications, and took the lead in launching e-CNY exclusive experience events. We reinforced our tech foundations and promoted the building of smart platforms, data platforms, open platforms, and cloud platforms. We deepened the development of financial ecosystems for home purchase, education and wealth to improve of online service capabilities. Transaction volume of our mobile banking and corporate online platforms rose by 10% and 17% respectively. The customer base of BoC Pay increased by 20%, while the settlement volume of BoC Bill went up by 6%. Our virtual banking joint venture, livi, actively rolled out insurance agency, SME, and the wealth management businesses.
We deepened our intelligent operations by promoting digitalized, automated, and smart reform of the operations flow, while further expanding the capacity of our regional operations center in Nanning. We promoted sustainable development through innovation and collaboration, stepped up financial support to green industries such as clean energy, green buildings, and green transportation, assisting our customers in low carbon upgrading and transformation. Our green and sustainable loans increased by 155%, while new green deposits rose by 31%. Always seeking to create win-win results, we became a cornerstone member of the Alliance for Green Commercial Banks, signed a strategic cooperation agreement with Guangzhou Emissions Exchange, and were invited to be an inaugural member of the Hong Kong International Carbon Market Council. We have a set of target of carbon neutral operations by 2030.
Putting BOC values into action, we provided financial support to ease the difficulties faced by SME customers, launched extensive charitable activities to serve people from grassroots communities with a focus on disadvantaged groups and youth development. During the year, we received the AAA ESG rating from MSCI for the second consecutive year and were named market leader for ESG and CSR in Hong Kong by Euromoney. This concludes our strategic review. Next, our CFO, Mr. Liu, will walk you through our financial and business performance. Please.
Thank you, Shi Yu Sun. Good afternoon, everybody. In 2022, our profit after taxation increased 16.2% to HKD 29 billion. We took advantage of rising market interest rates and the favorable financial market conditions to grow our net interest income and the net trading gain. Thanks to stringent risk management, our impairment charges remained stable. In response to the market trend of time deposit migration, we deepened the product and service innovation, actively expand our e-payment, e-collection, payroll, cash management, and cash pooling, and strengthen the customer interaction. We continually refined our pricing mechanism and struck a balance between deposit rates and volume. As a result, our customer deposits grew by 2% to HKD 2.38 trillion, increasing our local market share to 15.4%, up 15 basis points. Our caps deposit ratio was 52%.
We capitalized the opportunities in the Hong Kong GBA, Southeast Asia, and overseas markets by strengthening intra-group collaboration and meeting diverse customer demands with integrated services. Our customer loans increased 3.2% to HKD 1.65 trillion, taking our market share to 15.11%, up 93 basis points. Within this, corporate loans for use in Hong Kong grew by 10.2%, while loans for individuals increased by 6.2%. Riding on the rate hike cycle, we proactively managed our assets and liabilities in order to expand the loan-to-deposit spread and enhance the yield on fixed income bonds. Adjusted for swaps impact, our net interest income increased by 28.6% to HKD 42.4 billion. Our NIM widened 27 basis points to 1.36%.
Specifically, the second half NIM reached 1.59%, up 46 basis points half on half. A weak economic environment weighed on our net fee income, which dropped by 19.9% to HKD 9.5 billion. In the second half, as the pandemic control measures were orderly relaxed, our fee income from insurance, credit cards, currency exchange, and trust and custody recorded a good recovery. We efficiently allocated resources by optimizing our cost base and pursue low common operations to meet basic operating needs and ensure strategic implementation. As a result, our cost-to-income ratio declined by 2.2 percentage points to 31.3%, continuing to outperform local peer. We remained committed to strict risk control and strengthened risk management foundations, maintaining solid asset quality. The NPL ratio was 0.53%, up 7 basis points from the end of June.
Credit cost for the full year was 0.15%, up 3 bips year-on-year. Total loan impairment allowances accounted for 0.7% of total customer loans, up 8 bips. It further increased our capability to withstand potential risks. Our capital position was further strengthened by profit growth. The CET1 ratio and the total capital ratio increased to 7.55% and 21.56% respectively. We maintained a healthy liquidity with steady improvement to our LCR and NSFR, with an average of 164% and 130% in the second half of the year. This concludes our 2022 annual results review. Ceason will now share the group's outlook and the priorities for this year. Thank you.
Thank you, Mr. Liu. Looking into 2023, slowing global economic growth, potentially lingering geopolitical conflicts, and more volatile financial markets will impose challenges for banks' risk management. At the same time, the Chinese government will implement stronger pro-growth policies and achieve economic recovery. The national opening up strategies, such as Belt and Road Initiative, RMB internationalization, and the development of the GBA will be further deepened. Moreover, the Hong Kong SAR government will strive to enhance Hong Kong's comprehensive competitiveness and leverage its strengths to serve the needs of the country. Hong Kong will play a more prominent role as a super connector in regional economic development and collaboration within the RCEP framework. In addition, the full reopening of the border will boost economic interactions between the Mainland and Hong Kong, creating opportunities for the local banking industry.
2023 marks the crucial midpoint of our five-year development plan.
Staying true to our strategic goals, we will strive to pursue sustainable development in a solid manner with a focus on building up of corporate culture and talent base. We will continue to consolidate of core competitiveness, enhance our regional and integrated service capabilities, and the push for high quality profit growth. We will strengthen infrastructure construction, buildup of digital capabilities, and endeavor to make new breakthroughs in optimizing of customer and business mixes. We will further reinforce the overall risk management and firmly uphold the risk bottom line so as to safeguard of operations. We strongly believe that with the support of all constituents of society and the concerted efforts of our entire staff, Bank of China Hong Kong will record new achievements in the journey towards building a first-class regional banking group and further contribute to Hong Kong's economic prosperity and the improvement of people's livelihood.
This is end of presentation. Thank you. You are welcome to make any questions.
Thank you very much both gentlemen for the presentation. Next, we will have a Q&A session, and we will be conducting this part in Chinese. If analysts have any questions, would you please raise your hand? You'll be handed a microphone. Would you please limit your questions to 2 each time? Before that, would you please introduce your own name and your organization, please? Shall we start? Ladies first. The 2nd row, the lady over there. Thank you so much, and congratulations on a very good set of performance.
Winnie Wu from Merrill Lynch. A couple of questions. First of all, concerning the worry in the international financial market, and that is Credit Suisse in Europe and some of the U.S. banks. Would the situation seep over to Hong Kong? Also, what about the market-to-market loss for U.S. dollar bonds?
How would that impact our balance sheet, and to what extent? Whether it is in Hong Kong or overseas Southeast Asian business, would they be affected by rate hikes? Will there be any quality of asset impact, please?
Thank you for your question. I will ask my colleagues to respond to your question. First about the fluctuations in the banking systems globally and also about the Southeast Asian market. I will ask our Madam Jiang Xin to respond. The second question will be answered by Mr. Liu Chenggang. We have noticed a very high interest environment, and there are a lot of fluctuations in the financial assets, and also there is an instability in liquidity globally. We have also seen some measures taken by the regulators to make sure that the liquidity level is safe for the banking system. We can see that the orders of the banking system has been recovered.
We can see that the situation in Hong Kong and the neighboring market, as we know, that we always adopt a very prudent policy, especially for the liquidity and asset quality. The regulator also require a minimum percentage for our capital. We have reserved enough buffer to respond to the risks and all the risk control mechanism is very mature in Hong Kong. For BOC Hong Kong, our credit line as well as our asset allocation in the region are within our risk control mechanism. Our risk exposure mainly focus on Asia market. Most of our clients are major enterprises with very stable financial situation. The risk is within control.
Of course, we will keep a close eye on the market situation and identify any potential risks to make sure that we can have a stable operation. For Southeast Asia, our asset exposure accounts for a very limited part of our total asset. For our asset quality, in Southeast Asia market, we pay more attention to those clients who suffer from the cancellation of COVID supporting policies. For some countries, they will cancel their allowance and supporting policies for the companies. We will say that the overall risk is still within control. For 2023, we will see some pressures for the asset quality in Southeast Asia, but overall, it's within control. Next is about data investment.
In the year 2022, Interest rate hike has been a key word and is coined with two sides. First, our NIM and interest income continue to enhance, at the same time, it pose a pressure for our existing assets. As you have mentioned, we have seen some incidents coming from the European banks and U.S. banks, but we have a very mature mechanism. Actually, in the year beginning, our board has already assessed the risk of the interest rate hike, and we have prepare ourselves well. There are two parts. The first one is to reduce risk, and the second one is to stabilize the market considering the fluctuations. Our debt investment scale actually has been reduced.
We have reduced also the credit investment and we can see that one-fourth of our investment are focused on the government bonds, and we have also reduced interest swap and foreign currency swap size. We had done some hedging. We have also reduced the size. Our interest risks and the credit risks have been under control, and we have control the impact of risk based on the size of our investment in debt. Our investment accounts for RMB 1 trillion, accounts for 29% of the total investment. We can see that our yields rose by 73 basis points.
Our duration of investment has been reduced. If we look at the total market, our duration is within one year, and our capital sufficient rate is 21.5%, up by 12 basis point. We can say that we have undertaken the risk in the recent incidents and turn it into the interest income increase. For the first half of the year, we believe that the interest hike would be coming to an end, and the bond investments will be stabilized. Now the yields for debt portfolio investment is standing at a very high level, which is beneficial to us.
No matter how volatile the interest rate is, it is very important for us to strike a balance between the asset and debt. We have learned from the lessons of other banks and, this is the way for us to control the risk and to enhance the returns. We believe that for 2023 we will continue to see a stable increase for our debt securities investment.
Next question. Gentleman, in the second row.
Thank you. My name is Li Jiaw ei from HSBC. I have two questions. The first one is about the dividend payout ratio has risen to 53%, and we believe for 2023 the overall prospect is better than that of 2022.
We have not seen a recovery for loans, demands. How do we see the capital re-release, and what is the overall prospect for the enhancement of our dividend payout when compared to the major banks in Hong Kong or in the rest of the world? I can see that the dividend payout is already higher. Secondly is about the opening up of the Chinese market, and also with the rest of the world. Do we see any substantial inflow of capital, or does that stimulate a loan demand and also for wealth management products?
Two questions. First of all, on dividend payout, my colleague will answer that question. The next question, I will help answer that.
The next question, I will help answer that question.
Yes, concerning dividend payout, we have always been very steadfast in our dividend payout policy. We want there to be a long-term return for our shareholders. As mentioned just now, in the 2022 rate hike cycle, and with our profitability rising, and at the same time we were able to control our risks, and we were able to increase our capital returns. Final dividend was HKD 0.91, and it is a 20.1% rise. For the whole year, it is HKD 1.35. We have lived up to that dividend promise. It is 53% payout ratio, and it is 1% up from before.
As mentioned, our policy for dividend payout is stable. It is between 40%-60% band for payout ratio. At the same time, we are cognizant of regulatory requirements and also our own situation, as well as future business growth, because given that there are jitters and volatility in the market, we have to keep our capital adequacy. With good capital adequacy, it would raise our
Capability to withstand risks. At the same time, we will be raising our profitability, and at the same time to live up to our promise to our shareholders to raise returns. For macro situation, 2022 was a difficult situation, but from a bank's point of view, we have been proactively making all sorts of preparations. Case in point, for example, for ETF Connect and other connects, we have been making measures. We have been optimizing our products. With 1,400 Hong Kong new accounts opening, and also with validation of the identities of opening up of these accounts, even though 2022 was a difficult year, but in GBA we will be able to grow our business.
Now, with the border opening this year, we have had a series of promotions and marketing campaigns. From the customer's point of view, we have grasped certain opportunities. From January to end of February of this year, for cross-border payment, it was 100% growth. For credit card expenditure, it was 75% growth. Cross-border customers, it was an increase of 3x for insurance policies. For GBA account opening service and cross-border customers increased by 1.4x and 1.3 x month-on-month respectively with. Also there was a in the first two months there was already a restoration to pandemic levels in terms of cross-border accounts opening numbers.
These figures show you that there is synergistic activity and also optimal allocation of our resources as well as products and service innovation and also synergistic efficiency. We continuously expand the business scale and market share to consolidate our position as a first choice cross-border bank. We continue to provide products such as Wealth Management Connect, GBA accounts opening, GBA loan and mortgages. On three major service scenarios including transportation, shopping, and F&B, we drive cross-border business volume with our payment service for payment service first strategy and enrich our RMB product choices, the leading-edge capability in the GBA area. We use a cross-border finance, our key product for our corporate business development in GBA, and we actively participate in the construction of northern metropolis of Hong Kong.
As well, we have a one-stop integrated service platform for our debt financing equity and capital market. We build a green plus product system to meet the demand of GBA customers for green financing to expand our business in the GBA. In the first two months, you see for our customers, business volume, there had been an increase. This year, even though the market will have certain challenges, but overall sentiment is better than last year. As mentioned, the border is now open, and a number of businesses would benefit. One, insurance, trading, and also credit card, and also in management of balances. All these would bring on better revenue and profits, so this will be helpful. Now, Gary just now asked about apart from people or people traffic, what about capital flow?
Now, our observation is as the border opens, for visitors to Hong Kong, it had increased, and also cross-border trading had also increased, and also cross-border accounts opening had also increased significantly. For the different commercial activities of our customers, for their capital flow, we provide services to them very closely. Our business there is, as mentioned, growing normally. At present, we do not see any abnormal inflow of capital into Hong Kong. We don't see that.
Next question. In the middle there, the gentleman in the suit.
Thank you for this opportunity. J.P. Morgan, Jerry. I have two questions in the main. First question concerning loans. Last year it was about 3% growth, and that seems to be lower than the mid-single digit growth expectation, it seems.
Secondly, after the border opening, there had been going back to normalcy for a lot of businesses. How do you see the loans grow for this year? The growth for this year would come from domestic Hong Kong, or would it be the weaker sectors last year? Do you see some rebound in those sectors for this year bringing on growth? Second question concerning asset quality. Just now we saw that there may be certain deterioration of asset quality, but compared to peers, it is still in a good position. At the same time, we see certain supportive measures in the mainland and also the situation of our own customers. How do you see this year? Do you see that this will be compared to 2022 more or less the same in asset quality?
Jerry, thank you for your question. For the loan growth, Mr. Xu can answer. For asset quality, Madam Jiang Xin can respond to that one.
Thank you, Jerry, for your question. For the year 2022, we have experienced the downturn of the global economy. The banking sector has been faced with a lot of challenge. For Hong Kong, the overall loan growth was -3%. For BOC Hong Kong, we have actively responded to the market changes, and we have a very strong clientele base and also very good market presence. We have realized 3.2% of loan growth. Our market share has been further enhanced. For our new loans, many comes from high quality enterprises and also personal residential loan mortgage loans. For the year 2023, we can say that there is a mix of uncertainties and challenges.
We believe that the Chinese economy will continue to enjoy great prospect, as I have mentioned, that Hong Kong has resumed the exchange with China and also the rest of the world. We have enhanced a lot of economic activities. In the recent government report, the government has also mentioned about a series of measures to facilitate infrastructure projects. We believe that the local economy will be greatly boosted. The banking environment will also become better. We expect good growth for our loan growth this year. We'll focus on Hong Kong, Greater Bay Area, as well as Southeast Asia market. We will expand our lending business under controllable control.
We will strive to outperform the market loan growth and to capture market opportunities to realize the loan growth. We'll focus on local economy and strengthen our partnership with the local enterprises and offer with them a diversified solutions. At the same time, we will focus on the green economy and build Hong Kong into a green economic hub. We will also seize the opportunity of a digital economy. At the same time, we will focus on the opportunities brought by Qianhai area and provide financing and comprehensive solutions for the key customers.
We will actively participate in the construction of a northern metropolis region in Hong Kong, also continue to provide financing for high-tech industry and provide support for high-tech companies. We will also actively expand our presence in overseas market and Southeast Asia and utilize the opportunity of the internationalization of RMB, so that we can have a stable development for our facility and loan growth. Next, about asset quality. By the end of December, our NPL ratio was 0.53%, up by 26 basis points. It's mainly because we have seen some deterioration for some of our real property clients in China. Some of our Southeast Asian countries have also experienced an adjustment for COVID support.
However, our overall asset quality is still better than the average of the Hong Kong market. I would say there is no systematic risk for our debt portfolio and the overall credit quality is within our control. Our credit cost was 0.15% up by 3 basis point and is mainly because within the year we expect a adjustment for our credit loss modeling. We have optimized the overall modeling. For those clients with low credit ranking, we have strengthened the requirements. As I have mentioned, some of the clients have seen a lowering of their credit rating, and we have added a provision for these clients.
For 2023, we can see that the market has returned to normal. We have seen the positive signals are coming from the policy side. At the same time, we will follow closely the interest, high interest environment, geopolitical challenges, which might have a negative impact on our clients as quality. We will also follow up closely the real property clients in China and see whether they can recover, and also the clients in Southeast Asia and see whether they can go the pressure attributable to the cancellation of COVID supporting measures. I would say that the overall provision is quite sufficient, and the risk is within control. Next question. The gentleman in the third row.
Uh
Hu Lukai from CICC. Thank you for the opportunity. I have two questions. As management has mentioned, 2023 will see an end of the interest hike. After several banking incidents, the Fed's expectation have been actually strengthened. We believe that the interest rate will be reduced in the second half of the year. Will that have any impact on our NIM? What is our forecast for the NIM the rest of the year and also 2024? In Q4 last year, there was a lot of competition in terms of deposit in Hong Kong. We have absorbed a lot of high interest deposit. What is the duration currently?
Do you think that this kind of competition for deposit have been released? Also, what is the CASA expectation?
Thank you, Mr. Hu, for the questions. First of all, about NIM and also the deposit. Let's have our finance director to answer the questions. Thank you for the questions. First of all, for the Fed expectations, whether they will cut or hike rates, there is a divergence of views. For our bank, of course, raising of rates would be overall beneficial. For last year, the NIM had increased by 27 basis points year-on-year and 46, quote, half year. For quarterly, it was an 11 basis points increase. In that sense, we actually are outperforming the market. Also, we have 73 per four basis points up for our debt investment. Also, because of our e-efforts, we have had a loan-to-deposit ratio or spread by 31% basis points for the year.
Going forward, the NIM growth will be moderated, and there will be certain challenges. It's hard to say whether in the second half that it will be reversing its path. We believe that there will be a lowering of growth of loans. As you know, last year it was a rare decrease in loan growth, and at the same time there will be more competition. For CASA, it will be lower CASA deposit. We should be at par with the market. It will be going down to 51.7%, but still it would be higher than the market at that rate. After that, going into the future, there will be good news and bad news.
For challenges, first of all, for this year, for Hong Kong dollar interest rate, there should be an earlier fall drop than U.S. dollars. Also there will be a further widening of the spread for Hong Kong dollars. For the first quarter, it would be the repricing impact on our deposits and time deposits will be reflected in the first quarter. Also with the CASA and also time deposit, the duration is about three months. Last year, at the end of last year, because of the high interest rates, therefore there is a delayed effect for us. For loans, we have to look at the situation closely. There had been seven months continuous negative growth in this.
There are some positives as well in the sense that the existing loans, especially in the fourth quarter, it had been a higher cause situation. As the interest rate, the high ball dropping, so for our new loans, it had also been adjusted lower according to the market. For the first month overall, for the Hong Kong market, it was 1.3% rise overall for loans. This is also something good for us in terms of NIM as a trend. For our NIM, whether it is high or low, if we have to look at the external market and the trends as well. It's highly related. Internally, it will be.
Depend on our rational structure of our loan-to-deposit and our CASA at 51.7%. This will be a positive for our NIM. We will try our very best to balance our loan-to-deposit and also to delay the tipping point and also delay the tipping point of our NIM, and we will strive to achieve steady growth in net interest income and NIM for the full year. Thank you.
Next, we will have the last question on site, and then we will answer questions online. The third row in the middle, the gentleman over there, please.
Thank you for the sharing. Jefferies, Sam Wong. I have two questions. First, about cost management. For operating, cost compared to second half of last year and whole year, it has decreased significantly. What challenges have you felt from that? Secondly, there have been some SOE reforms from the central government. SOEs will be undergoing some new regulations or management, so there may be some buybacks. In dividends payout, it will be more proactive. Concerning your bank, do you have any thoughts about this?
The first question is about expenses and spending. The second one is about dividend. Maybe Mr. Liu Changgang can answer these two questions.
Actually, our cost and income ratio has always been our strength. Our cost to income ratio was 31.34%, down by 2.16 percentage points. This is a very good level compared to the local peers. Thank you for noticing that our operating expenses has increased last year, up by 8.8%. In terms of the spending and expenses, we should see it from two dimensions. The first one is that we will give priorities to key projects and business developments, for example, for IT projects.
On the other hand, we will pursue the low carbon operations, refined management, and optimize our operating layout and processes. We will enable internal resources to support growth. For example, last year, we have promoted transformation for our outlets and also simplify our spendings. We have saved more than HKD 30 million. At the same time, our e-billing penetration rate has reached 75%. At the same time, we have low carbon emission operations, and we have saved HKD 7 million. As you have noticed, that there is an increase of expenses for our operations is mainly because we have seized the opportunities for economic recovery.
We have prepared ourselves for the business, as mentioned, before the border was opened. We have some one-off business expenses, such as personal expenses, IT, promotion, and COVID measures. For 2023, we will continue to adhere our cost and management principle and optimize resources allocation mechanism and support incremental business growth by refining existing cost base and exploring internal resources through digital transformation. We believe that we will continue to maintain a relatively stable cost-to-income ratio. In the long term, we will keep our cost-to-income ratio below 35%. I'm not so sure if I have understood your second question correctly, but I would say that we continue to maintain our dividend payout policy.
From our interim dividend payout, we will continue to help maximize the interest and return to our shareholders and to continue to pay attention to the returns to our shareholders as well.
We have questions from Goldman Sachs, which is about NIM, and also several other questions which have been responded by our management. There are no more questions from our online audience. This would mark the end of today's meeting. If you have any further questions, please feel free to contact our investors' relationship team. Thank you very much for attending our press conference.