Welcome to 2025 annual results briefing of BOC Hong Kong (Holdings) Limited. I'm Sophie Huang, Board Secretary. To begin with our results briefing, let me introduce the senior management with us today. Mr. Sun Yu, Chief Executive. Mr. Xu Haifeng, Deputy Chief Executive and Chief Risk Officer. Mr. Xing Guiwei, Deputy Chief Executive. Mr. Wang Huabin, Deputy Chief Executive. Mr. Chan Man, Deputy Chief Executive. Madam Li Tong, Deputy Chief Executive. Today's meeting consists of three parts. First, our CEO, Mr. Sun, will introduce the implementation of our strategy in 2025. Then our Deputy Chief Executive, Mr. Xu, will present our financial results. Finally, our Mr. Sun will share with us the outlook and key priorities for this year before our Q&A session. Now, I would like to hand over to CE Sun. Mr. Sun, please.
Good afternoon, ladies and gentlemen. In 2025, faced with a complex and volatile global economic environment, the Chinese mainland economy continued its stable growth while Hong Kong accelerated its economic recovery. However, interest rate volatility persisted while credit demand remained weak. Against this backdrop, BOC Hong Kong earnestly pursued high quality development and recorded satisfactory progress, bringing its five-year plan to a successful close and proactively formulating a future blueprint. Attributable profit for the year reached HKD 40.1 billion, up 4.9% year- on- year. ROE remained largely stable at 11.5%. The board has proposed a final dividend of HKD 1.255 per share, including the three-year interim dividends already distributed.
DPS for the full year will be HKD 2.125, representing an increase of 6.8% year-on-year. We further consolidated our competitive advantages in the local market, maintaining leadership in new residential mortgage loans for seven consecutive years, and the largest mandated arranger in the Hong Kong and Macau syndicated loan market for 21 consecutive years. We achieved leading position in IPO receiving bank business, helping Hong Kong to reclaim the top spot in global IPO fundraising. Capitalizing on business opportunities in asset and wealth management, we increased assets under custody by 29% and the value of bonds underwritten by 65%, while the personal payroll amounts grew by 17%. For the fourth consecutive year, we gained market share in fund sales, reaching a record high. Our integrated service capabilities were significantly enhanced.
BOC Life grew its standard new premiums by 50%, while BOCI-Prudential increased its MPF assets by over 20%. The BOCHK Asset Management expanded its AUM by about 40%, maintaining leading position in their respective markets. In addition, we were appointed by the Shanghai Gold Exchange to operate its first International Board certified vault in Hong Kong, supporting Hong Kong's development as an international gold trading center. We stepped up efforts to enhance regional operation and the management capabilities across the GBA and Southeast Asian cross-border markets. We maintained our leading position in various mutual market access businesses, expanded the service coverage of GBA account opening, enriched the product solutions of GBA loans, and introduced comprehensive cross-border elderly care solutions. The number of cross-border high-end customers grew by 21%, driving a steady growth in cross-border income.
In alignment with Hong Kong SAR Government's Go Global Task Force, we launched one-stop cross-border financial service solutions to address the financial needs of going global enterprises. We also assisted HKSAR Government in issuing infrastructure bonds to support the construction of the Northern Metropolis. Fully leveraging our leading role as a regional headquarters for SEA operations, we refined our capabilities in integrated marketing and expanded product and service offerings of SEA entities, delivering steady growth in the number of corporate accounts and the personal payroll accounts, while enhancing their treasury business capabilities. During the year, SEA related deposits and loans grew by 20.2% and 9.6% respectively, both exceeding the corresponding growth rates of the group. While SEA related income increased by 6.2%, the NPL ratio of our SEA entities fell to 2.11%.
We fully supported Hong Kong in playing its role as an offshore RMB business hub, while further consolidating RMB business capabilities. We achieved steady growth in RMB assets and RMB public bonds and renminbi volume. BOC Hong Kong led the industry in RMB clearing, while BOC Malaysia, the Manila branch, and the Phnom Penh branch held strong market positions in local RMB clearing services. In addition, the Vientiane branch became the acquiring and clearing bank for e-CNY in Laos. Furthermore, we acted for the first time as a settlement agent for RMB green bonds issued by the Ministry of Finance, and became the first offshore clearing member of the Shanghai Clearing House.
We engaged deeply in the HKMA's RMB business facility arrangements as one of the first commercial bank participants, and assisted the government of Indonesia in issuing Dim Sum Bonds and the Malaysian bank in issuing Panda Bonds, further encouraging the international use of RMB. Focusing on digital currency innovation, we participated in the HKMA's Project Ensemble and studied the values and risks associated with the trading of digital assets. We also facilitated the innovative development of e-CNY version 2 and optimized mBridge related business, contributing to the construction of a digital currency ecosystem. Sharpening our efforts to enhance the financial service convenience, we utilized HKMA's interbank account data sharing initiative and cross-boundary credit referencing to simplify personal loan approval process. We delivered solid growth across our digital platforms, with active mobile banking personal customers up 19%.
iGTB transaction volumes up 66%, and the BoC Pay+ customers up 12%. While BoC Bill settlement volumes rose 13%, reaching almost a nine-year high. To generate greater value from AI capabilities, we established an AI committee to conduct top-level planning and push forward implementation. We implemented AI in various application scenarios and used AI assistance to boost work efficiency. We also deepened the application of smart technology in anti-fraud management through active participation in HKMA's GenAI Sandbox. In addition, we enhanced our smart operations by expanding the capacity of our regional operating center in Nanning, Guangxi. We comprehensively implemented the concept of sustainable development to build new green business models and strive to transition towards net zero. Over the past five years, our green and sustainability related loans increased by 7.2 x.
ESG bonds underwritten grew by 34%, and the greenhouse gases emissions per employee fell by 22%. In 2025, we supported various mainland local governments in issuing ESG bonds, and once again assisted the HKSAR Government in issuing green bonds in multiple currencies. We strive to create a better and more collaborative society, supporting significant charitable initiatives through over 50 projects and more than 170 volunteer events, contributing a total of over 30,000 service hours. During the year, we were again awarded the highest AAA rating by MSCI ESG Research and named Hong Kong's Best Bank for Corporate Responsibility by Euromoney. This concludes strategy review for 2025. Next, our DCE Mr. Xu will walk you through the financial performance. Please.
Thank you. Thank you, CE Sun. In 2025, we further optimized customer base, expanded income sources, improved operating efficiency, and strictly adhere to our risk bottom line to proactively cope with market challenges. This results in solid growth in income and earnings, with profit after tax increase 5.3% year-on-year to HKD 41.2 billion. We expanded our high quality deposit base through diversified products and services. We have deepened the relationship with large enterprises, financial institutions, government and public organizations, while enhancing the high-end, young, and cross-border customer segment to promote the payroll, cash management, and IPO receiving bank services. All these efforts help us attract new funds with customer deposit increasing 7.9% to HKD 2.94 trillion.
Our deposit mix was further optimized, with CASA deposit increasing by 24.3% and the CASA ratio improving by 7 percentage points to 53.4%, outperforming the market average. Building our strong positions across local, cross-border, SEA, and other key overseas market, we deepened inter-group collaboration and reached RMB usage scenarios while providing integrated and comprehensive services to local blue chips, multinationals, leading going global enterprises, and major Southeast Asia corporates. We also captured opportunities arising from the recovery of local residential market and maintained our leadership in the new residential mortgage loans, achieving rapid growth in the mortgage loan balances. Our customer loans grew by 2.3% to HKD 1.72 trillion, of which loans for use in Hong Kong increased by 3.7%.
We proactively manage our assets and liabilities by enhancing pricing and the tender management for time deposits. We also solidify low-cost funding sources and optimizing the asset deployment across our loans, banking book fund investment, together with effective implementation of FX swap strategies. This enabled us to successfully mitigate impact of the lower market interest rates. Adjusted for swap impact, our net interest income increased by 1.4% year-on-year to HKD 59.7 billion, while NIM narrowed by 6 basis points to 1.58%. Our fourth quarter NIM was 1.71%, up 17 basis points quarter-on-quarter.
Capitalizing on the opportunities arising from strong capital market sentiment and steady recovery in the private consumption, we enhanced our products and services capabilities to expand fee businesses, resulting in a 13.9% growth in the net fee and commission income to HKD 11.3 billion. We step up wealth management business development with securities brokerages, fund distribution, and insurance business income rising by 45%, 43%, and 96% respectively. We also refined our credit card product portfolios with credit card income growing by 7.9% and bill settlement volume up 13%, reaching almost a nine-year high. In line with our strategy focus, we prioritized resource allocation for key development areas while refining our branch network layout and pursuing a low carbon and smart operation strategy to enhance resource utilization.
Operating expenses increased by 4% with cost to income ratio improved by 0.93 percentage points to 23.6%, continuously outperforming the market average. We further strengthened comprehensive risk management, closely monitor the market and industry trends, tighten the control over high risk credit portfolios, and conduct timely reviews of customers' internal credit ratings. Asset quality remained solid. Our impaired loan ratio rose by 9 basis points from the previous year end to 1.14%, remaining at a solid and manageable level. We conduct more stringent stress test on high risk customers and increase the provisions to ensure sufficient coverage.
As a result, our credit cards cost increased by 19 basis points year- on- year to 0.49%, while the provision coverage ratio is up by 0.2 percentage points to 1.09% of total loans, further consolidating our capability to withstand potential risks. We remained well-capitalized with a total capital ratio and CET1 ratio rising to 25.98% and 24.01% respectively, driven mainly by earnings growth and a 7.5% reduction in RWA resulting from the implementation of the new Basel III rules in early 2025. During the year, we endeavored to enhance shareholder return by utilizing capital more efficiently, increasing the ordinary dividend payout ratio, distributing quarterly dividends, and refining our governance process for share buyback. In early 2026, we completed acquisition of BOCI Private Bank.
To share in the fruit of our sound business development with shareholders, the board proposed to launch a three-year shareholder return program for 2026 to 2028, with details subject to external regulatory review and internal corporate governance procedures. This concludes our result review for 2025. CE Sun will now share the group's outlook and the priorities for 2026.
Thank you, DCE Xu . Looking ahead, a rapidly changing global geopolitical landscape will add further complexity and uncertainty to the international economic environment, potentially increasing volatility in global trade and financial markets. Banks will face the challenges from shifting of growth dynamics and increasing risk management demands. At the same time, the 15th Five-Year Plan provides clear guidance for the country's future development, with a focus on advancing high quality growth and enhancing technological capabilities. The latest HKSAR Government budget proposes to deepen the development of key industries such as innovation and technology, finance, shipping, and trade. Together with various national strategies supporting Hong Kong's development, this will help the city consolidate its position as a super connector and a super value adder.
Furthermore, with going global Chinese enterprises optimizing their industrial chain layouts, alongside the rapid development of AI and digital assets, the Hong Kong banking industry is well positioned to capture new growth opportunities, providing sustainable momentum for high-quality development over the next five years. In the year ahead, BOC Hong Kong will remain confident and dedicated to achieving further growth. Strictly adhering to the development strategies of the nation and the group, we will effectively perform our role as a regional management center, strengthen our function as a business center, and drive the development of integrated businesses. We'll strive to set new standards for cross-border financial services, enhance our wealth management brand reputation, consolidate our RMB business advantages, and accelerate the development of our custody and asset management businesses to actively expand our diversified income sources.
Furthermore, we will enhance intelligent operations, strengthen our comprehensive risk management capabilities, cultivate a robust corporate culture to maintain high operating efficiency. We will strive to make a strong start to the new Five-Year Plan, delivering greater value for our stakeholders through high quality development and sound operating performance, while making greater contributions to Hong Kong's long-term prosperity and stability, as well as regional economic development. This concludes our presentation. Thank you. You are now very welcome to ask any questions you may have.
Thanks for the presentation by CE Sun and DCE Xu . It is time to answer a question from our analyst. The Q&A session will be conducted in Mandarin. English-speaking friends, please feel free to ask for headsets from our colleagues for the simultaneous interpretation service.
If you have any questions, analysts, would you please raise your hand, and we will bring you a roving mic. Also, would you please introduce yourself and limit yourself to two questions each? Thank you.
Thank you. Thank you, management, and congratulations on the very good performance in 2025. I have two questions. There have been questions asked in the past couple of years about the management framework for the capital and also for this framework when you introduce it now, what is the ultimate point of that? That is, will there be a target ratio, let's say, as some of the peer banks would have? Will there be a level? Because I see that for this dividend framework, it is from 2026 to 2028, and in the calendar year, we already see repatriation of capital to the shareholders.
That's the first question. The other is about the impairment of our loans. There is a slight increase from fourth quarter compared to the third. Can you talk about the outlook for 2026, and what about property developers? Will these be normal, or will they be impaired, or will they be under watch? Well, thank you very much. First of all, about capital management and the other one about impairment of our loans.
Thank you very much. Mr. Xu will answer the question.
Thank you for the questions. First of all, in terms of dividend and capital management, for a long time, BOC Hong Kong has been adopting a stable dividend policy, striving to balance between shareholders' interest maximization and long-term growth of our bank with high regard to realizing a long-term stable dividend return. In 2025, we continued to increase our shareholders' returns by enhancing the earning capability and strengthening capital utilization and giving out quarterly dividends, raising the ordinary dividend payout ratio.
We refined our corporate governance procedure to add the terms of treasury shares in the general mandate related to share buyback. In the year, our attributable profit grew 4.1% year-on-year to HKD 40.1 billion, ROE reaching 11.51%, and the board declared a final dividend of HKD 1.255 per share. Including the three interim dividends which had already been paid, our total dividend was HKD 2.125 per share, which is 68% growth year-on-year. The dividend payout ratio was 56%, up one percentage point from 2024 levels.
For 2026, we will continue to take into account our earnings performance, shareholders' return expectations, regulatory requirement, risk changes in various business needs, and will determine the full year dividend within the payout range of 40%-60%. At the same time, as was asked, and we have mentioned before that the board has, in principle, approved the framework of the three-year shareholder return program for 2026-2028, aiming to enhance shareholders' return through flexibly implementing the capital management measures, including orderly increases in our dividend payout ratios within the range, with share buybacks, special dividends, et cetera, in accordance with market conditions. As for the details of the program, remain subject to external regulatory review and internal corporate governance procedures.
It is expected to be implemented upon the re-release of interim results announcements for 2026 after due process by the management of the bank. In the future, we will have to wait for the announcement of the interim results for 2026 before we can release the details and the process. For the other question concerning the fourth quarter, our impaired loan and provision situation, let me just tell you about the asset quality overall, and then I will talk about the impaired loan ratio, et cetera. For 2025, with Hong Kong's economic growth accelerating with continued improvement in external trade, retail sales, and also in the residential property market. However, we do notice that office and retail commercial properties still face pressure from high vacancy.
We continue in our efforts to closely monitor the market information and customer dynamics and strengthen credit risk control mechanisms and measures to maintain strict monitoring of high-risk credit portfolios and timely review internal credit ratings and loan classifications. As at the end of 2025, our impaired loan ratio was 1.14%, up 9 basis points from the end of last year, continuing to outperform the Hong Kong market average, which is 2.01%. We make adequate provisions with full-year impairments of HKD 8.25 billion, which is an increase of HKD 3.3 billion year-on-year, and credit costs were 49 basis points, which is up 19 basis points year-on-year.
Primarily, this is driven by impairment increases from internal credit rating downgrades of certain property customers and the weakened cash flow projections for certain existing NPL customers, given the ongoing pressure in the property market. Also, as of the end of December, our impaired loan coverage ratio was 95.9%, which is up 11.1 percentage points from the end of last year. As mentioned, with some of the customers with their weakened cash flow situation, we are able to see that for our provisions, it is increased. Overall speaking, I would say that we expect for our impairment ratio, overall speaking, there is certain pressure, but we will continue to perform at a better than market average level, and we will continue to be consistent with our prudent strategy to maintain adequate provisions.
If there are no big swings in the global economies, we expect the full year credit costs to improve compared to 2025. In the fourth quarter, we see certain faster increase for our property customers in particular, and this is because of the reasons that I've mentioned just now.
Thank you. I have a question concerning provisions and impairment and macroeconomy. Now, this year we saw a lot of things happening. If you look at the ECL and macro situation and some of the risks, what do you think are some of the risks that will impact us, for example, in our exposure for Middle East or certain private credit situation in the U.S.? Are there such exposures? If the oil prices continue to be high and this impacts negatively the trade and economy of Southeast Asian countries, for example, or their Forex situation, how do you see this reflected in our financials?
DCE Xing , please.
Indeed, from the external environment that we did observed some dynamics, including the dynamics in Middle East, the conflicts there, and the tensions has brought about the fluctuations of oil price. From credit risk perspective, what we can see from Middle East, our exposure there are very small, despite the fact that the Middle East tensions are still unclear. However, in general, for our exposure, it is small and limited and the risk is manageable. You mentioned the upward trends of oil price; however, how will it evolve and how long will it persist, and through what means and what processes will that affect global inflation? The pathway should be under observations. Therefore, in general, when we look at our RC and business, of course, we are conducting research in a appropriate manner, and we have been doing examinations.
In general, we believe the risk is controllable and manageable. Thank you. From private credits perspectives, currently we do not have direct private credit exposure. As for private equity customers, yes, we do have them. However, we do not have direct exposure to private credit. We do not have such product. We believe the overall risks remains manageable. We do not have direct exposure again. For private equity customers, we have exposure, but it is relatively small and we are observing related risk. We believe it is manageable.
Thank you, DCE Xing . We would like to invite the next questions from the next analyst. Michael, please.
Thank you, management. I'm from CITIC. My name is Michael. I've got two questions for the management. Number 1, I would like to ask for the outlook of NIMs. HIBOR in Q1 has come down, so will that have any pressure on our margins? Of course, the expectation for U.S. dollar interest rate have fluctuated. The rate cut expectation has come down as well. Facing the dynamics of U.S. interest rate changes, how would that affect our NIMs in 2026? Could you please talk about the outlook? Question number 2, the fee income, as I can see, there are some pressure, so could you please talk about the outlook for the wealth management business and the fee incomes in 2026? I've got two questions.
Let us answer the question about fees and commissions, and then Mr. Xing will come back to answer your first question. Thank you very much, Michael, for the questions. First of all, for the overall 2025 situation, if I can start with that and look into 2026. In 2025, Hong Kong's economic growth accelerated with continued improvements in retail and tourism, as well as active trading in stock and property markets. We seized business opportunities, focusing on customer demand for wealth management and cross-border consumption. We strengthened products and services and expanded our source of fee income. Full year net fee and commission income was HKD 11.27 billion, up 13.79% year-on-year. Among this income from investment, insurance businesses grew by about 60%, mainly driven by securities brokerage, insurance, and funds distribution.
We also capitalized on the positive sentiment in the Hong Kong stock market and also the rising IPO demand. I also mentioned that it is 45% and 43% in terms of our securities brokerage and funds distribution incomes respectively. Our fund sales market share also increased for the fourth consecutive year. With our product promotion and credit cards, et cetera, we have also experienced some growth. As we have mentioned, the fee income there is a 3.9% growth. At the same time, for the single quarter of the fourth quarter, there had been some higher demand, but at the same time, there had been some structural changes to our businesses as well, and they had brought on higher net fee and commission.
In terms of our policies in terms of macro with the employment and also with investment increasing, we believe that there will be further growth for net fee and commissions growth. As mentioned, we will continue with the efforts in the 2025 investments, including in wealth management, focusing on the needs of high-end and cross-border young customer segments, and also in line with our strategy, we will continue to work together with our parent bank, and it can bring on custody service and other services. It will bring on higher net fee and commission income. We will be working together with our parent bank and also with market development to bring on higher income in this regard. Next, I will talk about the interest rates trend. This is how we see it.
First of all, from the U.S. dollar point of view, from the beginning of the year to now, the Fed rate had been 3.5%-3.75% within that range. Now, because of political changes, there had been fluctuations in prices, including in oil, and there had been more concern in the market concerning inflation. On the other hand, we see for futures Fed funds rate, it is more or less the same within the period.
That is to say for the U.S. dollar, lowering the interest rate, it has significantly decreased in that expectation. As for the U.S. dollar loans, we see that the yield curve has already reflected the market expectation. Going forward for the market, we believe that it will depend on oil prices and its impact on inflation, and that would also include the global economic outlook. These will continue to affect the economy and also the U.S. dollar interest rates.
From NIM point of view, the U.S. dollar situation's impact on NIM for our bank, there is still a small negative gap for U.S. dollar, so the exposure is controllable. As for Hong Kong dollar, we are in a small positive gap, and so this will benefit us. But at the same time, as we analyze Hong Kong dollar, as you have mentioned just now, starting from the beginning of 2026, liquidity had been good. For HIBOR, from the beginning of the year to 3%, it has come down to 2%, and at the end of the quarter, it is at 2.4% or so.
If we look at HIBOR changes, it depends on the demand for Hong Kong dollar, the capital market movements, and also end of quarter factors. Overall, for HIBOR coming down and also the gap is about 120-130 between the HIBOR and U.S. rates, so it has brought on some pressure on the banks, and we continue to monitor closely the market and also we will be looking at the very dynamic market situation and interest rate situation, and we will continue to mitigate any factors concerning interest rate fluctuations.
Well, thank you very much. Helen, next question, please.
Thank you very much for this opportunity. I am a UBS analyst, Helen. I have two questions. First of all, concerning the overall this year, concerning capital growth for our bank.
In the past two years, we see that for capital growth for the bank had been rapid, and one of them is about the liability side structural drive. For overall, Hong Kong deposits have been increasing rapidly. For the deposit side, what is the growth target, please? As mentioned, for the capital structure and arrangement, for example, investment in bonds and also for loans, what is the target, please? I have a second question concerning cost. In 2025, we see that cost income is already at a very low level.
I do not know how you see the future. For instance, how do you see the cost growing? Is there a target for cost growth or whether for cost to income ratio there is a target? What are some of your investment areas? I see a lot of peers of yours are already deploying a lot more AI, for example. Will this be an investment for you? And how would it impact or, benefit your efficiency, for example? That was way more than one question. It was two big questions and a lot of small questions.
In terms of asset, I would like to ask, DCE Wang to address that, and then mortgage, DCE Chan , please. For deposit, DCE Xing. In terms of CIR, I would like to have DCE Xing to address that as well. For AI, other colleagues will address that. Altogether, there will be five questions.
Thank you, Helen, for the questions. In terms of loans, DCE Xing has mentioned in the presentations in 2025 our mainland and Hong Kong economic recovery remained on solid trend with full year GDP growth of 5.0% and 3.5% respectively, so we can feel that the demand for loans has bottomed out. We seized business opportunity and grew customer loans by 2.3% this year to HKD 1.72 trillion, maintaining leading positions with local market share of 16.27%. Corporate loans, SOEs has grew rapidly, and mortgage grew rapidly, for RMB loans and Southeast Asian loans, they are the drivers.
Looking into 2026, affected by factors such as uncertain U.S. tariff policy and elevated geopolitical risk, global economy may continue a low growth trend, presenting challenges for the banking industry. We also have positive sides, say for example, Chinese mainland macroeconomic policy expected to produce impact upfront, driving increases in investment, steady growth in export and consumption, and rapid development in new quality productive forces. On the other hand, Hong Kong will accelerate cultivation and application of innovative technologies, optimizing industry structure, while Chinese are going overseas. All these presents positive trends, helping Hong Kong to integrate into the bigger development strategy. On top of that, we have China-ASEAN FTA 3.0 Upgrade Protocol. It will further enhance trade facilitation, and all these will help us to bring out the demand for loans.
The liquidity sufficiency will help the Hong Kong dollar interest rate dynamics. However, it is still affected by U.S. dollar interest rate. While RMB were maintained at a low interest rate ratio, all these will help us to improve the financing of customers. It will also support the steady growth of the loans in Hong Kong. Therefore, we will set foot in Hong Kong while helping cross-border business, will serve real economy. We will utilize the mortgage in RMB. We'll leverage the advantages of green technology finance. Adhering to the bottom line of risk management, we will balance between profit and scale to outperform the market. In relation to loans, yes, in 2025, growing, benefiting from positive factors such as sustained local economic improvement, a prosperous stock market, falling Hong Kong dollar interest rate, and increasing rental yields.
Hong Kong's residential property market achieved a steady recovery. In 2023, average price rose by over 3%, transaction volume exceeded 62,800 cases, up 18.3% year-on-year, and the rental index hit a record high of an increase of 4.3%. For us, we, in 2025, our numbers of new mortgages for the full year was 21,989, up 38.7% year-on-year, with a market share of 32.1%, ranking first in the market for seven consecutive years. We also maintained market leadership in mortgages for uncompleted properties, completed properties, reverse mortgages, and government subsidized housings.
As of the end of December 2025, our mortgage loan balance stood at HKD 471.8 billion, an increase of 5.2% compared to the end of 2024, outperforming the market growth rate of 3.4%. Overall asset quality remained good with an NPL ratio of 0.131%, and delinquency and rescheduled loans ratio of 0.08%, better than the market average. Looking ahead to 2026, we can see that the market has been very positive, and with the economy continues to develop steadily and Hong Kong interest rates remained in a moderate downward trend, with a cheaper renting than buying situation persisting, we expect that the residential demand is expected to continue its recovery. Residential mortgages are a core business for BOCHK.
We remained committed to serving the community by providing comprehensive and professional mortgage services for different property types. We'll continue to leverage our advantages of having the largest branch networks in Hong Kong. We serve the citizens in Hong Kong and maintain the high-quality development of our mortgage businesses. I would like to address the deposit topics. In 2025, by the end of 2025, we have HKD 2.9 trillion in Hong Kong dollars in our deposit. It is an increase of 8.9%. Our market share has reached 16%. CASA reached increase by 24.3%, exceeding the market average growth rate. Our CASA ratio increased by 7 percentage points to 53.4%. Our deposits growth has been positive. We leveraged diversified products and services to drive deposit growth, further consolidating and expanding the high-quality customer base.
We deepen relationship with large corporations, financial institution, government, and public institutions to explore need in areas in many business. We will sustain steady deposit growth for the year while maintaining a market leading cost ratio, and we will manage our time deposit pricing and tenure. This is our presentation in relation to deposit. Another one is in relation to expenses. In 2027, our expenses is HKD 18.19 billion. It's an increase by 4%. While benefiting from the growth of income, our CIR has dropped by 0.9 percentage points to 23.6%. We are still leading in the industry. As we can see that in 2023, our human costs increased by 5.2%. IT expenditure has increased as well. However, that mitigates the decline in part of our rental expenses.
Our equipment expenses increased by 6.2%. Marketing and IT related expenses has increased. The overall increase of expenses are 5.4%. In 2026, our outlook is that through refined management, we'll achieve cost saving and efficient utilizations of our resources. We will also continue to develop in comprehensive marketing manners to replace traditional telemarketing models. We'll also deepen integration of regional operations and platforms to and achieve economies of scale through intensive operations. We'll continue to perform low carbon operations and enhance management of both existing and new resources to optimize cost structure. Operating expenses for 2026 are expected to increase steadily, with long-term target of cost to income ratio remaining within 35% remains unchanged, and to remain at a competitive level among peers.
In terms of AI, especially GenAI, it brought great opportunities for financial technologies. We actively explore and implement in AI. We will increase investment in AI. With the goal of risk bottom line, we have established AI governance mechanisms to organize and promote AI scenario application and risk management. In 2025, we have implemented dozens of AI application in scenarios, including precise marketing, intelligence customer services, risk management, and intelligence operations. We fully promote AI office assistance for our employees to improve office efficiency. In the future, for all employees, we'll offer AI knowledge Q&A bot to front office employees, and to consolidate multi-source product and business informations. It has been broadly applied to our front-lined customers. We have provided the new AI facilitation in marketing. We have also leveraged market leading AI technologies to improve customer experience.
We also leveraged GenAI in precise marketing. We also integrate AI to our business flow. We have achieved AI marketing documentation formations. In terms of risk management, we have applied AI to translations of negative news. We also apply AI to news monitorings, so that help us to improve comprehensive risk management capabilities. We have also participated in the sandbox program for GenAI, jointly promoted by HKMA and Cyberport, completing AI avatars and anti-fraud solutions. Facing the future, we can see the profound influence of AI in banking industry will uphold the principle of making steady progress, pursuing technology empowerment, and actively embrace innovative technology from perspectives of practical applications to create better value for our business.
Thank you for the management. The last opportunity will be handed over to analyst online. Lu Songtao, analyst from CICC, raised two questions from Shanghai. Number one, wealth management business has achieved rapid growth for many quarters, so how do we see its sustainability? Number two, for deposit, CASA growth in 2025 has been very fast. What are the contributions? What are the main customers and business scenario contributions? How about the trends for 2026?
For the first question on wealth management. Well, thank you very much for the question. Concerning wealth management and its outlook, from a macro point of view, let us look at the Hong Kong SAR government and its policy, focusing on strengthening Hong Kong's competitiveness as a leading asset and wealth management center. Also, the national policy is also for Hong Kong to be an IFC and also wealth management center. With the economy warming back up in a number of areas, we have been putting in efforts. First of all, for our wealth management income, as mentioned just now, it had grew strongly. There is some 80% for our fund sales transaction. Personal wealth management income grew by 40% year-on-year, and private banking fee income grew by 29%.
Please notice that our structure of customers had also optimized, and the SAR government family office policy has strengthened our group collaboration and enhanced our influence in the area. During the year, our private banking AUM grew by 10%, and with the acquisition of BOCI Private Bank we have completed in January 26, this gives us increased drive as well. It will continue with our comprehensive investment in succession, wealth succession and needs in value growth. We continue with our TRB and which had rose 13% for our high-end customer. It is an income contribution of 63% from high-end customer. This is from the customer structure point of view. We continue to vigorously develop cross-border business and also with sovereign funds and also these cross-border funds custodian.
Also within the year, it had grown some 29% in terms of our AUM. This is a very important part of our business, and that is in total custody assets under custody grew by 29%. Full year standard new premiums for BOC Life increased 49.5% year-on-year. There had been a 37% growth in terms of AUA. For our overall fund management commission income, it has also increased substantially for almost 2.5%. That is BOCHK Asset Management continue to promote product innovation and launching our all-weather Hong Kong dollar money market fund.
Looking ahead for 2026 with the 15th Five-Year Plan, the HKSAR Government continues to bring on connectedness, including optimizing securities market reforms, expanding the scope of tax concessions and for family offices and funds. We will step up with these efforts to have more high-end cross-border and family segment customer segment focus. We will continue to fully unleash the potential for a number of areas, including digital intelligence, expand the construction of Wealth Plus ecosystem platform, and also our insurance business to push forward our private banking business and overall asset management capabilities. The question on deposit, actually, I have already answered that question quite fully just now. Just on 2026, our development, the target is that the growth will be the maintaining a market leading CASA ratio with steady deposit growth for the year.
Overall speaking, we will continue to leverage RMB business advantages and internationalization of RMB use, expand our multi-channel RMB funding sources, and also we will manage time deposit tenors. In business development, we will fully utilize the going global development of Hong Kong and connect up to Southeast Asia, and also to continue with our leading position in the market, and also to strengthen segment coordination and product planning. By tapping into new customers and retaining our quality customers, we continue to explore new products in a number of areas and with product planning and together with the low cost on and off balance sheet, we will continue to increase our CASA performance.
Well, thank you very much for the questions and the answers. Because of time, we will have to close the meeting here. If you have further questions, we'll be very happy at the investor relations team to answer your queries. Thank you very much. See you next time. Thank you.
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Ladies and gentlemen from the media, good afternoon. Welcome to 2025 annual results briefing of BOC Hong Kong (Holdings) Limited. We are about to begin. Firstly, I would like to introduce the senior management with us today. Mr. Sun Yu, the Chief Executive. Mr. Xu Haifeng, Deputy Chief Executive and Chief Risk Officer. Mr. Xing Guiwei, Deputy Chief Executive. Mr. Wang Huabin, Deputy Chief Executive. Mr. Chan Man, Deputy Chief Executive. Madam Li Tong, Deputy Chief Executive. Today's meeting will consist of the following parts. Our Chief Executive, Mr. Sun, will provide a briefing on the strategic implementation for 2025. Then DCE, Mr. Xu, will present the financial results and CE Sun will come back again to share with us the outlook and key priorities for 2026 before the Q&A session.
Good afternoon, ladies and gentlemen. In 2025, we've faced with a complex and volatile global economic environment, the Chinese mainland economy continued its stable growth while Hong Kong accelerated economic recovery. However, interest rate volatility persisted while credit demand remained weak. With this, BOC HK earnestly pursued high quality development and recorded satisfactory progress, bringing the five-year plan to a successful close. Attributable profit for the year reached HKD 40.1 billion, up 4.9% year-on-year. ROE remained largely stable at 11.5%. The board proposed a final dividend of HKD 1.255, including the three interim dividends already distributed. DPS for the full year is HKD 2.125, an increase of 6.8% year-on-year.
The successful conclusion to our five years work would not have been possible without the concerted efforts of the board of directors, the management team, of our colleagues, and the trust and support of our stakeholders. We would like to express our heartfelt gratitude for this. We consolidated our competitive advantages in the local market, maintaining leadership in new residential mortgage loans for seven consecutive years, and the largest mandated arranger in the Hong Kong and Macau syndicated loan market for 21 consecutive years. We are in the leading position in IPO receiving bank, helping Hong Kong reclaim the top spot in global IPO fundraising. Capitalizing on business opportunities in asset and wealth management, we increased asset under custody by 29% and value of bonds underwritten by 65%, while personal payroll amounts grew by 17%.
For the fourth consecutive year, we gained market share in fund sales, reaching a record high. Our integrated service capabilities were significantly enhanced. BOC Life grew its standard new premiums by 50%, while BOCI-Prudential increased its MPF assets by over 20%. The BOCHK Asset Management expanded its AUM by about 40%, maintaining leading position in their respective markets. In addition, we were appointed by the Shanghai Gold Exchange to operate its first International Board certified vault in Hong Kong, supporting Hong Kong's development as an international gold trading center.
For cross border business and GBA, we stepped up efforts to enhance regional operation and the management capabilities across the GBA and Southeast Asian cross-border markets. We maintained our leading position in various mutual market access businesses, expanded the service coverage of GBA account opening, enriched the product solutions of GBA loans, and introduced comprehensive cross-border elderly care solutions. The number of cross-border high-end customers grew by 21%, driving a steady growth in cross-border income.
In alignment with Hong Kong SAR Government's Go Global Task Force, we launched one-stop cross-border financial service solutions to address the financial needs of going global enterprises. We also assisted HKSAR Government in issuing infrastructure bonds to support the construction of the Northern Metropolis. Fully leveraging our leading role as a regional headquarters for SEA operations, we refined our capabilities in integrated marketing and expanded product and service offerings of SEA entities, delivering steady growth in the number of corporate accounts and the personal payroll accounts, while enhancing their treasury business capabilities. During the year, SEA related deposits and loans grew by 20.2% and 9.6% respectively, both exceeding the corresponding growth rates of the group. While SEA related income increased by 6.2%, the NPL ratio of our SEA entities fell to 2.11%.
We fully supported Hong Kong in playing its role as an offshore RMB business hub, while further consolidating RMB business capabilities. We achieved steady growth in RMB assets and RMB public bonds and renminbi volume. BOC Hong Kong led the industry in RMB clearing, while BOC Malaysia, the Manila branch, and the Phnom Penh branch held strong market positions in local RMB clearing services. In addition, the Vientiane branch became the acquiring and clearing bank for e-CNY in Laos. Furthermore, we acted for the first time as a settlement agent for RMB green bonds issued by the Ministry of Finance, and became the first offshore clearing member of the Shanghai Clearing House.
We engaged deeply in the HKMA's RMB business facility arrangements as one of the first commercial bank participants, and assisted the government of Indonesia in issuing Dim Sum Bonds and the Malaysian bank in issuing Panda Bonds, further encouraging the international use of RMB. Focusing on digital currency innovation, we participated in the HKMA's Project Ensemble and studied the values and risks associated with the trading of digital assets. We also facilitated the innovative development of e-CNY version 2 and optimized mBridge related business, contributing to the construction of a digital currency ecosystem. Sharpening our efforts to enhance the financial service convenience, we utilized HKMA's interbank account data sharing initiative and cross-boundary credit referencing to simplify personal loan approval process. We delivered solid growth across our digital platforms, with active mobile banking personal customers up 19%.
iGTB transaction volumes up 66%, and the BoC Pay+ customers up 12%. While BoC Bill settlement volumes rose 13%, reaching almost a nine-year high. To generate greater value from AI capabilities, we established an AI committee to conduct top-level planning and push forward implementation. We implemented AI in various application scenarios and used AI assistance to boost work efficiency. We also deepened the application of smart technology in anti-fraud management through active participation in HKMA's GenAI Sandbox. In addition, we enhanced our smart operations by expanding the capacity of our regional operating center in Nanning, Guangxi. We comprehensively implemented the concept of sustainable development to build new green business models and strive to transition towards net zero. Over the past five years, our green and sustainability related loans increased by 7.2x.
ESG bonds underwritten grew by 34%, and the greenhouse gases emissions per employee fell by 22%. In 2025, we supported various mainland local governments in issuing ESG bonds, and once again assisted the HKSAR Government in issuing green bonds in multiple currencies. We strive to create a better and more collaborative society, supporting significant charitable initiatives, including the Tai Po disastrous fire. Through over 50 projects and more than 170 volunteer events, contributing a total of over 30,000 service hours. During the year, we were again awarded the highest AAA rating by MSCI ESG Research and named Hong Kong's Best Bank for Corporate Responsibility by Euromoney. This concludes strategy review for 2025. Next, our DCE Mr. Xu will walk you through the financial performance.
Thank you CE Sun. In 2025, we further optimized customer base, expanded income sources, improved operating efficiency, and strictly adhere to our risk bottom line to proactively cope with market challenges. This results in solid growth in income and earnings, with profit after tax increase 5.3% year-on-year to HKD 41.2 billion. We expanded our high quality deposit base through diversified products and services. We have deepened the relationship with large enterprises, financial institutions, government and public organizations, while enhancing the high-end, young, and cross-border customer segment to promote the payroll, cash management, and IPO receiving bank services. All these efforts help us attract new funds with customer deposit increasing 7.9% to HKD 2.94 trillion.
Our deposit mix was further optimized, with CASA deposit increasing by 24.3% and the CASA ratio improving by 7 percentage points to 53.4%, outperforming the market average. Building our strong positions across local, cross-border, SEA, and other key overseas market, we deepened inter-group collaboration and reached RMB usage scenarios while providing integrated and comprehensive services to local blue chips, multinationals, leading going global enterprises, and major Southeast Asia corporates. We also captured opportunities arising from the recovery of local residential market and maintained our leadership in the new residential mortgage loans, achieving rapid growth in the mortgage loan balances. Our customer loans grew by 2.3% to HKD 1.72 trillion, of which loans for use in Hong Kong increased by 3.7%.
We proactively manage our assets and liabilities by enhancing pricing and the tender management for time deposits. We also solidify low-cost funding sources and optimizing the asset deployment across our loans, banking book fund investment, together with effective implementation of FX swap strategies. This enabled us to successfully mitigate impact of the lower market interest rates. Adjusted for swap impact, our net interest income increased by 1.4% year-on-year to HKD 59.7 billion, while NIM narrowed by 6 basis points to 1.58%. Our fourth quarter NIM was 1.71%, up 17 basis points quarter-on-quarter.
Capitalizing on the opportunities arising from strong capital market sentiment and steady recovery in the private consumption, we enhanced our products and services capabilities to expand fee businesses, resulting in a 13.9% growth in the net fee and commission income to HKD 11.3 billion. We step up wealth management business development with securities brokerages, fund distribution, and insurance business income rising by 45%, 43%, and 96% respectively. We also refined our credit card product portfolios with credit card income growing by 7.9% and bill settlement volume up 13%, reaching almost a nine-year high. In line with our strategy focus, we prioritized resource allocation for key development areas while refining our branch network layout and pursuing a low carbon and smart operation strategy to enhance resource utilization.
Operating expenses increased by 4% with cost to income ratio improved by 0.93 percentage points to 23.6%, continuously outperforming the market average. We further strengthened comprehensive risk management, closely monitor the market and industry trends, tighten the control over high risk credit portfolios, and conduct timely reviews of customers' internal credit ratings. Asset quality remained solid. Our impaired loan ratio rose by 9 basis points from the previous year end to 1.14%, remaining at a solid and manageable level. We conduct more stringent stress test on high risk customers and increase the provisions to ensure sufficient coverage.
As a result, our credit cards cost increased by 19 basis points year-on-year to 0.49%, while the provision coverage ratio is up by 0.2 percentage points to 1.09% of total loans, further consolidating our capability to withstand potential risks. We remained well-capitalized with a total capital ratio and CET1 ratio rising to 25.98% and 24.01% respectively, driven mainly by earnings growth and a 7.5% reduction in RWA resulting from the implementation of the new Basel III rules in early 2025. During the year, we endeavored to enhance shareholder return by utilizing capital more efficiently, increasing the ordinary dividend payout ratio, distributing quarterly dividends, and refining our governance process for share buyback. In early 2026, we completed acquisition of BOCI Private Bank. Over to [CE Sun].
Thank you, DCE Xu. Looking ahead, a rapidly changing global geopolitical landscape will add further complexity and uncertainty to the international economic environment, potentially increasing volatility in global trade and financial markets. Banks will face the challenges from shifting of growth dynamics and increasing risk management demands. At the same time, the 15th Five-Year Plan provides clear guidance for the country's future development, with a focus on advancing high quality growth and enhancing technological capabilities. The latest HKSAR Government budget proposes to deepen the development of key industries such as innovation and technology, finance, shipping, and trade. Together with various national strategies supporting Hong Kong's development, this will help the city consolidate its position as a super connector and a super value adder.
Furthermore, with going global Chinese enterprises optimizing their industrial chain layouts, alongside the rapid development of AI and digital assets, the Hong Kong banking industry is well positioned to capture new growth opportunities, providing sustainable momentum for high-quality development over the next five years. In the year ahead, BOC Hong Kong will remain confident and dedicated to achieving further growth. Strictly adhering to the development strategies of the nation and the group, we will effectively perform our role as a regional management center, strengthen our function as a business center, and drive the development of integrated businesses. We'll strive to set new standards for cross-border financial services, enhance our wealth management brand reputation, consolidate our RMB business advantages, and accelerate the development of our custody and asset management businesses to actively expand our diversified income sources.
Furthermore, we will enhance intelligent operations, strengthen our comprehensive risk management capabilities, cultivate a robust corporate culture to maintain high operating efficiency. We will strive to make a strong start to the new Five-Year Plan, delivering greater value for our stakeholders through high quality development and sound operating performance, while making greater contributions to Hong Kong's long-term prosperity and stability, as well as regional economic development. This concludes our presentation. Thank you very much. You are welcome to ask questions.
Thank you, CE. Before the Q&A session, we would like to remind our friends in media, you are limited to two questions, and please identify yourself before asking questions.
Tracy, HK01. Greetings. I have two questions to ask. First of all, for your provisions, you have increased that last year. Is it because of the Hong Kong property market? Can you talk about your exposure overall in this sector? Will there be risk of higher provisions this year? The second question concerning the Middle East. How do you see the changes in the Middle East, and how would this affect the operating environment in Hong Kong? What about the interest rate situation and Hong Kong property market situation?
Well, thank you very much. There are more than two questions there, I believe. First of all, on provisions, Mr. Xu Haifeng will answer that question. As for the Middle East, the macroeconomic situation, I will answer that question later.
Well, thank you very much for your questions. First of all, in terms of provisions and impairments, it has to do with the asset quality. I will be first talking about the asset quality in general. In 2025, Hong Kong economic growth accelerated with continued improvement in external trade, retail sales, residential property market. However, for office and retail commercial properties, they still face pressure from high vacancy. Our bank continued to closely monitor market information and customer dynamics to strengthen credit risk control mechanisms and measures, and to maintain strict monitoring of high risk credit portfolios, and timely review internal credit ratings and loan classifications.
Our provisions are solid, and as of the end of 2025, our impaired loan ratio was 1.14%, up nine basis points from the end of last year, continuing to outperform the Hong Kong market average, which stood at 2.01%. We made adequate provisions with full-year impairments of HKD 8.25 billion, which was up HKD 3.3 billion year-on-year. Credit costs were 49 basis points, which is up 19 basis points year-on-year. Primarily, this is driven by impairment increases resulting from internal credit rating downgrades of certain property customers.
We therefore had to increase our provisions for these customers. For certain assets, we also had ongoing stress tests for them because of the pressure in the sectors. We had some weakened cash flow projections for certain existing NPL customers. Given the ongoing pressure, as at the end of December, our impaired loan coverage ratio was 95.9%, up 11.1% from the end of last year. Total impairments was 1.09% of total loans, up 20 basis points, strengthening our capability to withstand risks.
Now looking into 2026, major economies are expected to continue expansion with the mainland and Hong Kong economies progressing steadily. However, the external environment remains dynamic and complex, and we'll continue to monitor our strategy for credit portfolios. For 2026, we believe there will be some stress for impairments, but we will continue to adhere to our consistent prudent strategy and maintain adequate provisions. Without big swings in the global economies, we expect the full year credit costs to improve compared to 2025. So that's about our impairments. Now, about Hong Kong's economy for 2025, I would say it had been resilient, the Hong Kong economy. You know, GDP increase is 3.5%, external trade is performing well.
Things are warming back up and also the drop in retail had been some 1% and the property market and property prices had increased by 18% and 3% respectively, and also IPO and securities transactions had been very active. As for IPO market, it has increased by 225% and it is at top spot around the world. Going into 2026, I would believe there will be challenges as well as opportunities. It will be highly complex in terms of macro economy around the world. We all know that geopolitics and trade friction is happening everywhere in the global market, and at the same time, we will continue to implant ourselves deeply to serve the country in terms of its development.
We believe that the GDP growth will be 2.5%-3.5% in between that range, so we believe that Hong Kong's economy will continue to steadily recover and also consumption will be active as well as investment into science and technology, and also investment activities will be active as well. The property market will probably have already hit its low and will be climbing back up. Trade in the short term may still have its ups and downs, but overall speaking, there are opportunities as well, there's regional connection will also bring on further opportunities.
For 2026, we believe that the financial market will be stable with a lot of liquidity, and with the Middle East war and also with the Fed policies, as you know, with the Fed funds last year, there had already been from a expectation of lowering of rates to a small expectation of increasing its interest rates. Overall speaking, the Hong Kong interest rates would also slacken its pace, but at the same time, we continue to benefit from a safe haven role and also our connectivity with the outside world. Overall speaking, we believe there'll be more funds inflow into Hong Kong and will bring on commodities and wealth management capabilities, and also, for our bank, our exposure to the Middle East is very, very small. The risk is very controllable. Thank you.
Commercial Press, Chung Wei Shang. I have a question about NIM. Last year, the overall NIM had narrowed. However, when it came to the fourth quarter, it had broadened the NIM. How do you see the first quarter of this year? What is the outlook for the entire year for NIM, please? That's the first question. The second question, concerning your new loans. This year we see some challenges and difficulties, but also opportunities. How do you expect the new loans creation? What is the speed of that, please?
Mr. Xu will answer the first question and Mr. Wang will answer the second question.
Thank you very much for the question. For NIM, if we look at 2025, the NIM performance in 2025, the one-month so far down by 91 basis points year on year, and the average one-month HIBOR down 164 basis points. In this context, after adjusting for swap, our net interest income has increased by 1.4% to reach HKD 59.7 billion, and our adjusted NIM was 1.58%, down 6 basis points year on year. This solid performance is primarily attributed both to our proactive and dynamic asset liability management. In 2026, USD, Hong Kong dollar liquidity remained abundant with one-month HIBOR gradually easing from over 3% to about 2% levels. At the end of the season, it will trend upward.
In the future, HIBOR trend will be determined by demand for Hong Kong dollar and major capital market events, and also quarter-end seasonality. Overall, declining Hong Kong dollar interest rate and wide USD-Hong Kong dollar interest rate spread will weigh on the bank's NIM. In the first quarter, if we look at the fourth quarter last year, the NIM has rebounded to 3% and above, so the lagging effect on deposit cost would fully be reflected in the first quarter. So for the first quarter, on a quarter-to-quarter basis, it will declined. However, in general, we will continue to capitalize on the RMB cross-border business and also high-end customer development opportunities. We will follow the market closely and conduct forward-looking asset liability management to mitigate the downward pressure on NIM.
Thank you very much for the questions in relation to loans. In 2025, driven by macroeconomic development as well as residential property market recovery, the demand for loans has bottomed out. We seized business opportunities. By the end of the year, our customer loans increased by 2.3% to HKD 1.72 trillion. Market share, 16.27%, leading in the market. For loans in Hong Kong and RMB loans to SEA, they are the drivers. Looking ahead in 2026, as you mentioned, we are affected by the uncertain U.S. tariff policy and elevated geopolitical risk. Global economy may continue a low growth trend, presenting challenges for the banking industry, but also we need to see the positive side.
Chinese mainland's macroeconomic policies are expected to produce impact up front, driving increase in investment, steady growth in exports and consumption, and rapid development in new quality productive forces. Hong Kong will accelerate its development in residential market and also the cultivation and application of innovative technology. We also have the advantage of going overseas trends that will also drive the demand for loans. The signing of China-ASEAN FTA 3.0 Upgrade Protocol will also further enhance trade facilitation, and trade flows will become more efficient. Hong Kong dollar remains liquid, and the wide U.S. dollar HKD interest rate spread is wide. Therefore, customer funding costs might be able to improve. These positive factors will support steady growth of Hong Kong's loan market.
Facing both challenges and opportunities, we will hold firm positions in Hong Kong, cross-border, SEA, and other overseas markets, and remain fully committed to serving the real economy. We'll leverage distinctive advantages in RMB business, residential mortgage, and green loans, while striving to capture business opportunities from new quality productive forces. We want to outperform the markets this year. This is the goal. Next, please.
Hi, I'm from Phoenix TV. In recent years, mainland companies are expediting their going overseas trends, especially in high-end manufacturing. For BOC HK, how do you step up your policies in serving those companies?
This is about the GBA and cross-border service. Mr. Xu will answer that question.
Concerning cross-border business, first of all, I would want to talk about the policy. In 2025 for GBA development as it deepens, our Hong Kong, in terms of two-way flow in people, in capital had increased, and also with technology, it had also increased in investments. With this, there is more connectivity in the capital markets. IPO, as we have mentioned, a lot of the IPO new companies come from the mainland. Also it has brought on to Hong Kong capital markets a wide development opportunity and also a deepened opportunities with the GBA, leveraging our group's global service resources, strengthening our product and service innovation.
Specifically speaking, relying on the Wealth Management Connect and other policies, we continue to leverage the customers' demand and needs. In the period, it is 100% increase in terms of individuals' new account opening, and 21% growth in high-end customers, driving the continued growth of cross-border personal banking income, contributing 30% to overall personal banking income. At the same time, we give full support to GBA Connect in a number of connects, including account opening and loan products, et cetera. We continue with our Bay Area servicing of accounts, and with the Guangdong, Hainan governments and also the various regional governments in floating their bonds in Hong Kong. We have been able to grasp business opportunities there. Looking into 2026, we are coming up with a global bank.
Through the group, that is, we are able to satisfy our customers in terms of cross-boundary and cross-border needs. This is a new platform, and in the year there will be further connectivity in GBA in a number of areas. We will continue to leverage this unique experience in cross-border financial field and to bring up our capabilities with the policies and also to strengthen our cross-border capabilities to strengthen synergies within our group's institutions to remain focused on the business concerning people's livelihoods and cross-border needs. We will continue to innovate product services and also convenience for cross-border financial services. Now, in particular, the question was about going out for the enterprises. Mr. Wang, would you want to supplement?
Yes. On the answer that was given just now, I would want to elaborate that Bank of China as a very important bank serving the institutions and enterprises going out, this is one of our strategic focuses in answering to the country's development. In particular, we have a one plus five service platform that we are developing for those enterprises going out. This is to build a going out ecosystem utilizing Hong Kong's unique place as a connector, and also to utilize the advantage of internationalization of RMB to assist the capital management, risk management, access into the foreign markets for these going out enterprises.
These are their pain points, and we continue to provide solutions to their pain points, such as their high financing costs, fluctuating Forex risks, et cetera, so that we continue to leverage on the advantages of Hong Kong as a treasury center, and also to build on Hong Kong's offshore fund pools, and also to use the RMB, which is offshore, with its overseas capital advantages in order to provide low-cost financing for these enterprises. At the same time, we use swaps and other derivatives to assist these enterprises in mitigating their interest rate risks. At the same time, we provide our consolidated services as a commercial bank, as an investment bank, and investments and also in insurance so as to serve these enterprises which are going out, including into the Southeast Asian market, and we will continue to provide this bridge.
Oriental Daily, I have a question concerning NIM. There is a 5%-5.3% increase. This 5%, is it because of increased investment or is it from the returns that there is a 5% returns? Can you give more light on that? Also on the Middle East, the oil prices is affecting our enterprises. For your bank, do you have any assessment as to how many enterprises are related to the Middle East in terms of their business, and do you worry that there will be certain NPLs appearing? What about the impact on oil prices, logistics, et cetera? How would this affect you and your customers?
I would like to address the questions in relation to NIM. I have talked about NIM before. General, we follow closely with the market development. We conduct proactive and dynamic asset liability management to maintain the relatively good NIM. On the liability side, we solidified low cost funding sources. We balance between volume and pricing. We leverage the business advantages and capitalize on the robust development of capital markets to promote a good development. On the SSI, we capitalize on RMB business, cross border high-end development, high-end customer businesses, rationalize pricing and structure, further driving solid loan growth. In terms of bank book, loan to investment, we are actively arranging the timing and tenure of our deployment to solidify our growth in bond market to increase.
We also increase wealth management services to achieve good growth of non-interest income to achieve a balance of our diversified income balance, and so this way will help our banks to improve our business while mitigating the negative impact on NIM, given the context that I mentioned. In 2026, we will take several measures to promote the steady development of NIM in relation to Middle East. Currently, the Middle East dynamic has been in high tensions. However, our exposure are very small. We do not have a direct exposure in relation to Middle East conflict. The risk is manageable.
Next question, please. The lady in the middle.
I'm from Caixin. Hi, management. The first question is in relation to Middle East as well. After the conflict, some local trade, say for example, their local gold has been in high tensions. They want to store their gold in more diversified locations, and Hong Kong has served Shanghai Gold Exchange as well in building a warehouse, and Hong Kong is building itself as an international gold trade center as well. What are the new deployments or new opportunities in relations to gold? Number two, RMB, you have already mentioned RMB 2.0. We know that in Chinese mainland, RMB has been improving, so do you upgrade your RMB business as well?
Mr. Wang will answer the gold question, and then will answer the second question.
Now, Hong Kong is an international financial center. Globally, it has been a very important player in the global gold market. In 2025, the Chief Executive had pointed out that Hong Kong is building its central clearing system for gold. In the future, there will be connectivity with the mainland market so that Hong Kong will continue to be an international market, and also in the gold trading market. We leverage on our rich capabilities and experience in gold transactions, and as you have mentioned, the Shanghai Gold Exchange has already set up this settlement facility and the storage in Hong Kong. We will continue to build on this infrastructure to help the HKSAR Government in building the depth and the breadth for the Hong Kong gold market in terms of innovative products and also infrastructure development, and we would want to be the bridge for this.
Now thank you very much. Well, we have been the first to provide offshore digital RMB business, and we are the biggest player in this field. We are also the biggest settlement bank for it. Just now, as you have mentioned, we are going into a new age from going into e-CNY situation. This is 2.0, e-CNY version 2.0, and this is a major positive for us.
For digital RMB banking, there had also been certain policies, and our bank is working with the central government, I mean, the central bank in the mainland and also with the government to bring on a more important role so that e-CNY will have a bigger role to play. Just now, you mentioned the Middle East in this present situation. Hong Kong, connecting up the motherland and also the international arena, its security, safety, stability, and certainty as a financial center are more and more important. In this regard, Hong Kong actually has a very advantageous position in terms of asset allocation globally. If there are no further questions, we thank everybody for your participation. Thank you. Good day.