Ladies and gentlemen, good afternoon. I am Geng Wei, General Manager of Board Secretary of Bank of China Limited. Welcome to our 2014 annual results presentation. This presentation, the major venue is in Hong Kong, and its audio and video linked to our Beijing venue. The analysts who are not available to attend the meeting can watch the live webcast through our website. Our 2014 annual results have been published on Hong Kong Exchanges and the home bank's website. The newsletter and presentation are also available on our website. Before we proceed further, please take note of the disclaimer on this slide. All the financial data in our presentation here are prepared according to IFRS, unless otherwise stated. There will be a Q&A session at the end of the presentation, during which we will allocate time between Hong Kong and Beijing.
First of all, I would like to introduce our presentation team here today. Mr. Tian Guoli, Chairman. Mr. Chen Siqing, President. Mr. Zhang Jinliang, Executive VP. Today, our presentation includes two parts. First of all, Chairman Tian will walk you through 2014's strategy implementation. After that, President Chen will introduce our 2014 key results and 2015 outlook. Now, I would like to invite Chairman Tian to make his speech.
Ladies and gentlemen, good afternoon. Welcome to today's results announcement. I'm very pleased to meet you again. The development of Bank of China has received your longtime support and help. I would like to express my sincere gratitude to all of you and hope that you can continue to take care of and support Bank of China in the future. Today, I will walk you through our 2014 strategy implementation, especially the implementation of internationalization strategy, which stands as our competitive edge and backbone. In 2014, we firmly set the strategic goal of serving society, delivering excellence, strive to improve profitability, enhance the competitive edge, and tighten risk management.
Our comprehensive strengths continued to enhance. In 2014, our bank recorded a profit after tax of RMB 177.2 billion and a profit attributable to equity holders of RMB 169.6 billion, increased 8.2% and 8.1% respectively. Pre-provision profit achieved a rapid growth of 18.4%. The board of directors has recommended a final dividend of ordinary share of RMB 0.19 per share, subject to approval of the forthcoming annual general meeting scheduled in June. Asset quality was controlled in the target range, and provision remained sufficient. The NPL ratio stood at 1.18%, and the ratio for provision to total loans of domestic institutions increased to 2.68%. The bank has successfully implemented its capital replenishment project and issued preference shares and Tier two capital instruments at home and abroad. The capital adequacy ratio and Tier one capital adequacy ratio increased to 13.87% and 11.35%.
Today, economic globalization are entering into a new development phase. The nation's strategic new system of open economy, the new pattern of all-round opening up are shaping alongside the Belt and Road strategy, which will accelerate China's globalization of the economy and inject a new growth impetus. During its 100 years operation, the bank always takes its responsibilities to follow the nation's development. It should give full play to its competitive edges of overseas and diversified platform to shoulder the historical responsibility of China's economic globalization.
In 2014, following China's diplomatic advances, the bank continuously enhanced its international operation and raised its international status. President Xi Jinping inaugurated our bank's New Zealand branch and witnessed the signing ceremony of several major projects. Premier Li Keqiang visited our Shanghai FTZ branch and highly praised our global cash management business. Hungary Prime Minister and Czech President visited our headquarters to negotiate a cooperation plan. The bank ranked seventh in top 1,000 world banks by Tier one capital and advanced two positions from previous year. As a global systemically important bank for four consecutive years, our bank led the 30 global systemically important banks in terms of after-tax profit and ROE.
As of the end of 2014, the bank's overseas assets totaled $ 745.1 billion, an increase of 18.1% compared to the prior year-end, and accounted for 27.4% of the total assets. Overseas profit before tax was $ 8.66 billion, an increase of 29.9%, accounting for 23% of the bank's total profit tax. All of the above indicators led the major peers. Bank of China optimized its overseas resource allocation, improved the global network coverage, enhanced the service capability with increased competitive ability and influence in overseas markets. At the end of 2014, the bank owned 628 overseas institutions in 41 countries and regions.
The bank consolidated traditional business advantages in foreign currency trading and international trading. International settlement volume reached $ 3.92 trillion, maintaining global leading position. Market share of spot forward trading of foreign currencies against RMB and proprietary gold trading volume on Shanghai Gold Exchange ranked first in the market. The bank further improved cross-border service capability actively supported going global enterprises, and reinforced the cooperation with Fortune Global 500.
At the end of 2014, the bank cumulatively extended $ 121.9 billion loan commitment to going global projects and successfully provided financial support to several large overseas M&A projects. RMB internationalization has deeply shaped the global financial layout. On the frontier of RMB going global, the bank strive to expand the RMB internationalization businesses, which is not only its historical responsibility, but also the inevitable choice for it to stick to its internationalized operation mode and grasp the strategic opportunities. In 2014, our bank's RMB internationalization businesses continued to lead the market. The cross-border RMB settlement volume of the group reached RMB 5.3 trillion, an increase of 33.7%. Maintaining its leading market share, the volume of its cross-border RMB clearing transaction totaled RMB 240.8 trillion, up by 86.6% compared to the prior year, maintaining its first place among global peers. The global RMB clearing network was further improved.
The bank was designated by PBOC as the local RMB clearing bank in Frankfurt, Paris, Sydney, and Kuala Lumpur after being designated in Hong Kong, Macau, and Taiwan. The development of the China (Shanghai) Pilot Free-Trade Zone are the nation's significant initiatives in deepening reform and expanding opening up. In 2014, the bank actively enhanced the construction of business platforms, including bulk commodity trading and financing, global cash management, cross-border investment and finance and M&A trading, asset management, and cross-border personal wealth management, and established an industry-leading position. The bank become qualified to conduct all Shanghai-Hong Kong Stock Connect business, acting as the exclusive settlement bank for the northbound trading link and providing a cross-border fund settlement service for the southbound trading link.
The bank emphasizes its own product innovation and became one of the first market makers in direct use of RMB against the British pounds, euro, New Zealand dollars, and Singapore dollars. The bank leveraged its global resources and has successfully issued Lion City Bond in Singapore, Oceania Bond in Sydney, Schengen Bond in Luxembourg, the Arc de Triomphe Bond in Paris, and Formosa Bond in Taiwan. As the only Chinese underwriter, it successfully assisted the U.K., Australia, Canada, and Malaysia to issue RMB-denominated sovereign bonds and further improved its international influence. The more active policies of opening up and more vibrant diplomatic activities of China provided the bank with a broad stage of development and room of growth.
Taking advantage of its biggest differentiated advantages in internationalization, the bank will tightly follow the nation's new framework of opening up and insist on innovation to improve globally integrated service capacities, capabilities, and enhance the international operations with an aim to further increase the proportions of its overseas assets and profits in a gradual manner. The bank will improve top-level design, seize market opportunities, and accelerate network expansion, striving to become the financial artery of the Belt and Road development strategy. The bank will accelerate the building of the global integrated payment and clearing system, and constantly consolidate its position as the main channel for RMB internationalization. The bank will also pay close attention to the cross-border financial demands of major industries, high-quality private enterprises, financial institutions, and personal customers, and continue to promote financial services for going global enterprises.
The bank will continue to develop the China Shanghai Pilot FTZ platform, making it more professional, convenient, and universal, and will strive to be the first-choice bank of FTZ businesses. The bank will vigorously support coordinated development among Beijing, Tianjin, and Hebei, and construct the Yangtze River Economic Belt, fully support the implementation of the nation's major regional development strategies. The bank will deepen business collaboration, optimize resource allocation, and continue to improve the development mechanism and measures for overseas businesses. This is my introduction to the bank's international business development and strategy. Next, President Chen Siqing will introduce you the details of the bank's 2014 operating results and outlook in 2015. After that, I will be willing to have an open and in-depth exchange with you on topics you are interested in. Thank you very much.
Thank you, Chairman Tian. Good afternoon, ladies and gentlemen. I am very glad to introduce our 2014 annual results and outlook in 2015. In 2014, the bank continuously optimized its credit structure to satisfy the needs of the real economy and maintain modest growth of its loan book. The bank's loans and advances to customers amounted to RMB 8.48 trillion, increased RMB 875.5 billion or 11.5% compared with the prior year-end. The domestic RMB loans increased RMB 550.4 billion or 9.9%. The overseas loans recorded rapid growth of 20.9%. New loans were primarily directed to the key national strategic opportunities, key areas related to the livelihood initiatives, and key projects undergoing global efforts. SME loans grew fast. Small-size enterprises, enterprise loans by BOC Credit Factory, and loans to medium-sized enterprises realized the rapid growth of 16.9% and 16.5%.
Domestic RMB personal loans grew 12%, with the proportion to domestic RMB loans increasing 0.5 percentage point. Loans granted to strategic emerging industries, culture sectors, and agriculture-related industries grew rapidly, and the mixture of customer loans were further optimized. The bank customer deposits amounted to RMB 10.89 trillion, an increase of RMB 787.4 billion or 7.8%. The domestic RMB deposits recorded an increase of RMB 432.6 billion or 5.6%. The overseas deposits recorded rapid growth of 18%. The funding cost is under pressure due to the rise of market interest rate. The bank strove to enhance service innovation to optimize liability structure. It explored deposits from administrative institutions and expanded business from payroll disbursements, agency and agency of collection and payment. It actively developed global cash management and custody businesses to gather stable funding. The bank also took advantage of internationalization edges to expand overseas funding resources.
As a result, its customer base expanded with steady growth of customer deposits. The funding cost was under control by optimizing liability structure. In 2014, the bank proactively optimized its assets and liability structure to stabilize net interest margin. In 2014, the bank expanded net interest margin by 1 basis point from last year to 2.25%. The bank fulfilled its social responsibilities by actively providing financial support to small and micro-sized enterprises and the real economy with regulated fee charge policy and practice. It also strengthened product innovation, fully leveraged on the competitive advantages arising from overseas and a diversified business platform to expand our non- interest income. In 2014, non- interest income increased 9.1%, while net fee and commission income increased 11.1%. Non- interest income represented 30% of total operating income, maintaining leading position. The bank continued to improve integrated operations, enhanced competitive edges.
Its overseas and diversified businesses include investment banking, insurance, investment, and leasing have made a new progress, which drove the non- interest income of overseas operations to record a rapid growth of 12.4%. Last year, the non-performing loans and overdue loans rebounded due to slowing down of macroeconomy and economic structure adjustment. Facing the rigorous pressure on assets quality, the bank took multiple measures to strengthen comprehensive risk management, strictly carried out risk classification, actively resolved stressed assets to ensure the assets quality stable and the credit risk under control. As at end of last year, the non-performing loans ratio was 1.18%, up by 0.22%. Special mention loan ratio was 2.37%, down by 0.12%. The provision was sufficient and the ratio of provision to total loans of domestic institutions increased 6 basis points to 2.68%. The bank resolved the non-performing assets with comprehensive solutions.
In 2014, the non-performing assets resolved by domestic branches amounted to RMB 71.6 billion, up by RMB 28.4 billion. The bank strengthened the risk management on local government financing vehicles, over capacity industries, and real estate sectors, strictly controlled the outstanding loan balance and increased risk mitigation. The bank set up a specialized unit for interbank businesses in line with new regulatory requirements. Adhering to the balance of safety, liquidity, and profitability, the bank maintained sound liquidity situation. Last year, the bank consolidated its infrastructure construction through numerous measures. It continued to enhance functionality and advanced the coordinated development of its physical outlets and e-banking. The outlook network was further optimized with smarter functionality. The bank's substitution ratio of e-banking channels for traditional outlets increased to 71%, as e-banking transaction volume grew by 23%. The bank continued to improve information technology development and operational ability.
It optimized architecture of IT infrastructure and steadily pushed forward the integration and the transformation of overseas IT systems, streamlined operational process of e-channels, and intensified centralized operational management. In 2014, to fully grasp their strategic opportunities from Internet Plus, the bank attached great importance to the online financial service innovation, and rolled out online banking development plan. The plan includes three aspects. Firstly, push forward online business innovation and transformation. Secondly, build up a network service platform broadly based on openness and cooperation to create new financial service ecology. Thirdly, reshape business structure and procedures by means of enhancing technology, sharing products, channel and customers, as well as intersector integration. In 2014, the bank established Internet Banking Department to coordinate the group's e-banking innovation and the business development.
Focusing on cross-border microbusiness, communities, livelihood, the bank has built up four platforms of big data analysis, virtual payment, cloud service, open platform, and rolled out 29 online financial innovative products for six business lines covering payment, wealth management, financing, cross-border, supply chain, and O2O integrated services. The scope of cooperating clients for cross-border e-commerce service and the market share of cross-border trade tax payment service, led peers and the online savings financing payment business took shape. The bank made significant achievements in the areas including BOC Easy-trade, Cyber-tariff, cross-border e-commerce payment and settlement services, new mode of internet financing based on big data, BOC open platform and the e-community, eco-construction and online wealth management service. In 2014, the bank adhered to the principle of enhancing bank-wide capital constraints and continuously optimized its on-balance sheet and off-balance sheet asset structure.
It actively implemented capital replenishment plan and led the market to introduce new capital replenishment instruments with successful issuance of preference shares and Tier two capital instruments in both overseas and the domestic market. It also proactively pushed forward conversion and the redemption of A-share convertible bonds. The bank's total capital enhanced significantly with the capital adequacy ratio and the Tier one capital adequacy ratio increasing to 13.87% and 11.35% respectively. Meanwhile, the bank's capital structure was further improved, which laid solid foundation for the bank's sustainable and robust growth. Looking to the future, the world economy is undergoing deep adjustment, while China's economic development is entering a new normal. The operational environment for banks has witnessed profound changes. The new normal will bring new opportunities for banking industry. First, cross-border finance will embrace the new blue, the blue ocean.
Second, the transformation of China's economic structure will create new demands. Third, market-oriented financial reform will generate new driving force. Meanwhile, in the changing period from old normal to new normal, financial markets are experiencing more complicated risks, which easily spread. Market competition will grow fiercer in the diversified development of financial system. Under the new normal, the bank will strive to realize three transformations. The first transformation is pursuing quality rather than size to realize intensified development. The bank will enhance capital constraints and continuously optimize its assets and liability structure to improve the quality and efficiency of development. The second transformation is seeking innovation rather than the comprehensiveness to realize differentiated operations. The bank will fully leverage its internationalized network and diversified platforms to enhance operational unique edges. It will fully leverage internet thinking and the technology to boost innovation and improve customer service and internal management efficiency.
The third transformation is aspiring precision rather than the speed to realize fine management. The bank will improve their comprehensive management capability to realize better customer management, systemize the risk management, and a flexible operation safeguard system. Looking to 2015, adhering to the strategic goal of serving the society, delivering excellence, and the development direction of internationalization. The bank will plow deep the blue ocean to consolidate advantages, push forward transformation to improve profitability, strengthen risk control to ensure quality, and bolster their grassroots to reinforce the foundation driving forward new development within the new normal, and bring long-term sustainable value to our shareholders, employees, and the society. Thank you.
Thank you very much, President Chen. In our announcement part. The speech part is finished here. Now we come to the Q&A session. Please put up your hand to let us know. Before you give a question, please do a brief self-introduction. Due to the limit of time, probably we will limit the number of the total questions. Every friend, maybe one question allowed. Let's first start with the Hong Kong venue. Okay. The lady in black suit, please.
Thank you very much, Mr. Geng. Thank you for the opportunity. First of all, congratulations to all of you in 2014, which is a challenging year, but you have made a great performance. My question is concerning about the overseas business. As Mr. Chen already introduced that the general strategic development direction of our overseas business. Most of the people think that Bank of China, under the current strategic policy of Belt and Road, you are one of the banks that benefits most. I would like to know what kind of business opportunities are you facing and what kind of specific measures are you going to take? Thank you.
Thank you for your question. Yes. We have about more than 100 years operation experience, and our internationalization layout is one of our key strategy. For example, in London, Southeast Asia, in Europe, we have operations for more than several decades, even in London, about 86 years history of operation. Rome can never be done within one day. Bank of China has a history of more than 100 years. We have a very good layout in all the countries in the world. When China's economic power was not so strong, then our position globally was not so prominent, and we would even make jokes like we were being lonely as a loner for more than 100 years.
But now China's economic power has been greatly improved. Then we are advocating the policy of bringing in, from bringing in status to going global. The national policy or strategy of Belt and Road is basically a symbol of China's globalization and China's investment in global community. In the past three years, Bank of China is closely following the new pattern of China's all-round opening up to vigorously enhance its overseas businesses and consolidating its competitive edge. The group's profitability and operation performance has been continuously improved. Belt and Road strategy is the major content of China's new mechanism of open economy. Alongside the Belt and Road, there are 65 countries, most are developing countries, emerging market countries, which is complementing with us in terms of interconnectivity, infrastructure, construction, finance demand.
We estimated that in the next 10 years, China, with the relevant countries, trading volume will exceed $2.5 trillion, and the outbound direct investment will be accumulated to $300 billion-$ 400 billion. In terms of in banking industry, with the Belt and Road economic and trading cooperation level up, we will enhance the investment, and this will bring a great opportunity for banking, trading, and cross-bordering businesses. Different banks and funds, for example, Silk Road Fund and other supporting financial institutions will bring a better cooperative chance for us. RMB internationalization will diversify the regional settlement and investment vehicles. Internationalization as the major feature and strength of Bank of China, we will seize this opportunity to become a financial artery of Belt and Road.
We say that if you are one step forward for one time, you will be in the leading position for a long time. Bank of China, we want to excel the extreme function of being the leading position. To be more specific, further expand the relevant country's institutional layout to realize the Belt and Road regional business coverage. By the end of 2014, Bank of China, we have set up institutions in 15 countries along One Belt, One Road. Another three countries are in the preparation phase. In the future, we will expand our institutions in South Asia, Middle East Asia, West Asia, and South Africa. We will try to cover more than 50% of the countries.
Secondly, we focus on the key projects and critical businesses, for example, high-speed train, nuclear power, to push them going global, to support the fine business and enterprises to go global. To fully push the export-oriented credit services, project funding, ship funding, leasing funding to level up our market impact. As you see, last year, the reason why globalization will become a more highlighted feature for Bank of China is because we have the capacity to go global, and our market advantage or strength is very obvious. To improve the synergy and multilateral cooperation. To give full play to our integrated service strength. To adopt the system of global account manager. To realize the targets selected, lifted projects focused, marketing and breakthrough. To enhance the communication.
To gain more cooperation with the policy-oriented banks and state development banks, Asian Investment Bank, Silk Road Fund, the BRICS countries, and other financial institutions. Fourth, to offer more diversified products. Thank you very much.
The second question will be also from Hong Kong venue. That gentleman in glasses.
Thank you very much. This is [uncertain] . My question is more about your strategy and the supervisory authority. I just remember that you used to work in the non-banking sector as in Cinda, and there were rumors in the market saying that the brokerage licenses will be open for banks. That is to say, some of the banks can get a license. For example, the Industrial Bank as well as the Bank of Communications. C SRC is also studying this matter. I just want to know how you think about it. Business is getting more complicated, and customers are demanding more. Just want to know how you think about your mixed operations.
Actually, I can share with you, I used to work in Cinda, and perhaps you can feel that we do have confidence in releasing the idle assets, and this is very professional. As for other questions, I would leave them to Mr. Chen Siqing.
Thank you for your question. Just want to make more points. I think this is a very good question, and actually, this is also a hot topic among the financial institutes. It's about the brokerage licenses as well as the mixed operations. Three points I want to make. Number one, for a bank to hold a brokerage license. Actually, it is one direction of our businesses. For us, from the operations point of view, I think this is the major trend in the market. No matter how it comes true, no matter how this breakthrough comes, we do think that it is a big trend because the mixed operations stands for the future. Demands are getting more and more diversified from the customers, and we have to provide all-around services to satisfy the customers' needs in their financial consumption needs.
Of course, so far, this matter is still under discussion, and there's no specific measures from the central government. However, we do think that we are expecting results soon. The second point I want to make is that for BOC, we have basically got everything ready for such mixed operations. In addition to a commercial bank, we do have a very diversified business model. Among all the banks, you can see we have already set up our competitive edge. That's why Mr. Chairman said when he talked about our strategy, he used a metaphor. He said that this is just like a platform of 18 disciplines. This is a very big platform.
We have all the 18 disciplines in place. No matter what you need, we've got it for you. As a matter of fact, we do have our investment banking functionality. In Hong Kong, we have BOC International. In mainland China, we have BOC International Securities. These two platforms can be used for IPOs, investment banks, including the brokerage of a security business. Actually, from our platforms, we have already got the license of a brokerage indirectly. In Hong Kong, we have our insurance companies, two of them. They can handle life insurance, they can do the treasury insurance as well. In mainland China, we have our licenses for treasury insurance as well as other retailing license in an indirect way through our cooperative partner. We have already set up our security fund, which is already equipped with retailing functionality.
In addition to all this, in Hong Kong, we have our BOC Group Investment for PE activities. In Singapore, we acquired another company. It is the BOC aircraft leasing company, ranking the third place in the world. All these licenses basically are available, and we are trying to integrate all these licenses into our solid businesses in our platform. That is why we have already got the mixed operations in place in the group. You have already noticed in our annual report that the reason why we have over 30% of our security business is because of our diversified platform. For BOC, we have two wins: internationalization of institutions, and the diversification of our businesses. When the market moves on, we believe that with these two wins in place, we will fly faster and better. Meanwhile, we also noticed that the supervisory authorities are working on new policies.
We will wait and see how these policies will be in place, and we will adjust ourselves to these policies and make better use of our platforms for mixed operations. Thank you.
Okay, we will come to the third question in our Hong Kong venue. Maybe the gentleman with glasses.
Ladies and gentlemen, dear leaders. I am from CICC, Mr. Mao Junhua. I was saying that with the economic downturn pressure, the investors are very concerned about the non-performing loans and the NPL ratio both going up. For the management team, how do you estimate the asset quality in 2015? I see that Mr. Shao from Ping An Bank also said that the turning point will be in Q3. What do you think about that? What do you think about his comment? Another part I would like to ask is related to this, about the financing platform as well as the local government debt. The State Council has issued a series of documents, and I would like to know your result of local government debt.
W hat about the ratio, and how much will be included as government budget, and how much will not be, and what measures are you going to take? Thank you very much.
Thank you. Thank you for your question. In late years, with the slowing down of the economic development, NPL rebounds is a general issue that all the banks are facing. By the end of 2014, our bank's NPL total volume is RMB 100.5 billion, increased by RMB 27.2 billion compared to 2013. NPL ratio is 1.18%, increased by 0.22%. NPL ratio of Bank of China is lower than the average NPL ratio by 0.07%. From the industrial rise, the new NPL is majorly concentrated in cycle-oriented industries such as manufacturing, retail business. From the region-wise, the major newly occurred NPL is concentrated in the export-oriented and coastal regions, as well as some Midwest part, resource-oriented provinces. What kind of measures are we going to take?
First, we increase the degree to release the continuously increased pressure brought by the highly risk credit supporting, and we have successfully resolved about RMB 80 billion. Second, actually, to be more specific, is RMB 79.4 billion. Thirdly, we enhanced to resolve NPL. In 2014, the domestic institution accumulated NPL has reached RMB 71.6 billion. About 49% is collected by cash. About RMB 24 billion is the write-off. We try to make the credibility risk generally within control and resolvable. You mentioned that last year, State Council and the Ministry of Finance, they issued two documents concerning local government debts. This has helped to regulate local government fundraising, which has also drawn the general concern from the society. We think these series of measures will help improve the transparency and liquidity of local government debt to strengthen the regulation of the market and to keep the risk within control.
We think in the regulations and the restrictions of the policies. Bank of China has a set of policies to accommodate that, but this is still in secret. We are not publicizing it yet. Most of the time, our projects, in terms of financed platform, the remaining is stably decreasing, and the NPL ratio is kept in a low level. 98% of our loan belongs to cash coverage and the basic coverage type. 96% is invested to provincial and the city-level platform. 64% is invested to eastern regions of China. In general, the situation looks optimistic. The risk is within control. For next step, we will even further improve the regulations to adjust our business strategy to keep all the risk within control, and no systematic risk will show. Thank you.
After three questions from Hong Kong venue, I would like to hand this opportunity to Beijing venue. The gentleman in blue in the fourth row, please.
Thank you for this opportunity. This is Tang Wei Cheng from BOC International. Two questions. The first question is that this year we saw that the interest rate marketization is going faster and faster, along with the hike of interest rates last time. The four big players are trying to differentiate their interest rates, one after another. I just want to know how you see about the in-depth marketization of interest rate in the market, and what are your countermeasures for this? The second question is about the ongoing interest rate in China. How do you see the future, particularly think about the changing NIM, the net interest margin, together with the ongoing interest rate in the market. What kind of a strategy would be there for you to ease the pressure because of the ongoing interest rate, the NIM? Thank you.
Thank you for your questions. Last year, the marketization of the interest rate has been speeding up all the time, and the NIM is actually narrowing down. We are taking every active measure. Through fund management and visionary strategy, we try to ease this issue. Actually, our NIM performed much better, up by 1 basis point to 2.25%. Last year, we managed our balance sheet very well, and there was a very big improvement there. If you look at our annual results, our interest-generating assets as well as the high-margin products, both proportions improved quite a lot. Meanwhile, we took the good opportunities in the market to improve our profitability or the yields of our assets up by over 2 basis points.
The interbank business also witnessed a 74 basis points up to 2.48%. Differentiation is another area we worked on. Through all these measures, we were able to fight back the impact from the ongoing interest rate. As you said about there were two ongoing interest rate in the market, and the net interest margin was getting narrower and narrower. We will take more measures in order to optimize our asset structure. Meanwhile, we will give better play for our overseas business, hoping that through our business in the overseas market, we can trade off the impact from the lowered interest rate. As for the deposits, we see a very good growth of our deposit's performance by RMB 784 billion, leading among all the big players in the market. In terms of cash business, custody business and so forth, we also made some progress.
Just one point about this, the deposits from the overseas branches increased by 18.4%, a very big increase. In 2015, we will manage our liability even better, particularly along with the marketization of our interest rate. We will work more on the custody business, the cash management business and so forth, which were the fundamentals to us. Meanwhile, we will take more measures to work together with other financial institutions, particularly in terms of the issuance of opportunities. By taking advantage our internationalization, we will try our best to deliver better result. Thank you.
Okay. Let's invite the Beijing venue to raise another question. Okay. Next, we will give another question chance to our Beijing venue. Okay, so this gentleman who is raising his hand, please.
Okay. Thank you for the management team. I am Mr. Huang Yao Feng from Ping An Securities. Congratulations, first of all. When all the banking industry is facing such a big pressure and challenges while you are still outperforming with greater results. My colleagues from banking industries already mentioned, asked you a question concerning savings, and my question will be targeting loan. We see that there is a good optimistic general increase of loan volume, and the volume is exceeding the total volume of saving. I would like to know the reason behind it. Why is it so? In general, when the general demand is comparatively weak, what kind of recipe or secret weapon does Bank of China have to stimulate such an optimistic direction of personal loan?
The macroeconomic policy is easing, and I would like to invite you to give us a perspective and progress brief of the future loan direction and the general scale of the personal loan, as well as domestic and international loan situation. Thank you very much.
Thank you for your question. In principle, 2014, the total group saving and loan is increasing at a good speed, good volume too. One is about RMB 7 trillion, the other one is RMB 8 trillion. Comparatively speaking, saving is a little bit less than loan. So where do we spend the money or direct the money to? We adjust our own credit and loan structure to support the real economy development of China. The directing of loan to support real economy development, to realize our historic responsibility, and to realize our strategic goal.
In 2014, our group loan total volume is RMB 8.48 trillion, with RMB 875.5 billion as increase. The increase rate of 11.51% compared to the prior year end. The total international loan increase speed is 21%, 9% more than the domestic loan speed. The private loan increase speed is 12%, which is higher than the domestic corporate loan with the rate of 8%. Therefore, we say the newly increased loan direction is in concern of the tendency and the risk control. Domestic volume is more than international out-abounding volume, private is more than corporate, and the annual loan saving ratio is 72.97%, which is very reasonable.
The newly increased loan direction is majorly focusing on the key projects and the strategic projects, as well as benefited to livelihood areas, to support the key projects of going global, including the up level of industrial upgrading in the eastern regions, industrial transitional credibility support. Secondly, we enlarge or increase the personal loan direction. As you see, domestic RMB personal loan has increased by 11.7% by volume and 0.55% in proportional compared to the total loan. The key support for household and family reasonable housing loan, we support the residents to realize their reasonable consumption demand. The increased housing mortgage loan has reached 96.5% of the total newly increased private loan. Thirdly, we enhance our support to our nation's out-abounding investment strategy. We support all the fine enterprises to going global to realize the cross-bordering finance.
On one hand, we help the fine Chinese enterprises to finance, to collect funding support. At the same time, we support them to go global. Comparatively speaking, the overseas commercial banking loan is increasing rapidly, which has reached 21% in 2014. In such a big context of Belt and Road policy or strategy in 2015, our bank will take into consideration of our self-capital sufficiency, and globally, client saving increasing, as well as the risk management and control elements. We try to reasonably realize our target for loan increase.
To seize the good opportunity of a Belt and R oad and the free trade zone opportunity to enhance going global and across bordering business support. To improve the infrastructure construction of the country. To improve the support to Beijing-Tianjin-Hebei district and Changjiang River Economic Belt construction. Based on the state economic transforming and the industrial structure adoption, we continuously enhance the supporting to the new business. By 2015, the domestic RMB loan is estimated to increase by 11%.
Due to the limit of time, we will have the last question leaving to our Hong Kong venue. Anyone who would like to ask a question? Maybe here. The lady in gray suit, please.
Thank you, Mr. Geng, for this last opportunity. This is [uncertain] from Barclays. My question is about assets management and the dividend policy. We noticed that BOC successfully issued the preference shares and the senior bonds, so on and so forth, and there are also convertible debts as well. You have a very good capital adequacy ratio. I just want to know, what is an appropriate adequacy ratio for you for the Tier one capital market, for example, so on and so forth? What about the dividend policy? Will you pay out more? A lot of investors like BOC shares because of their higher dividend. What will be the changes? Thank you.
Thank you for your questions. For a long time, as I said, we have been strengthening our assets management all these years, and you have to look at your own capability for your business growth. This is something strategic for us. Meanwhile, we are working very actively to steadily promote our external financing route. Last April, we got approval from CBRC, and we will be able to implement the advanced assets management from the legal person point of view, as well as the group point of view, and we are one of the banks that have got already Basel protocol for new capital. We fully make use of our two platforms and issue the preference share and senior bonds.
We also take the opportunity of a stock market rally, and our accumulated asset capital adequacy ratio was 1.36%. In the first quarter, we successfully completed the rest of RMB 28 billion of issuance. As for the conversion of the debt to bonds, we also converted successfully RMB 39.974 billion, and the conversion ratio was 99.94%. According to the approval from the shareholders' conference, we have already set up our capital adequacy ratio as 11.5%. We will continuously stick to our principle of taking the internal sources as the major sources and external sources as a supplement in the capital management.
We will further improve our awareness of capital assets management and optimize our off-balance/on-balance sheet structure. As for the dividend payout, it is suggested that the dividends will be paid out at a rate of RMB 0.19, basically the same level last year. The total dividend payout will be RMB 55.934 billion, up by 2%. The dividend ratio will be 33%, up by slightly 2 percentage points. Along with the deepening reform being carried out in China, along with the going global strategy, we are facing a lot of pressure, yet a lot of opportunities. Because we have been looking the market not only in China, but also the global, therefore, we will be able to have more opportunities.
We will need to further enhance our capital strength and build up our own capacity. In the future, the supervisory authority will raise the bar of requirements for the banks. So, we need to further consolidate our strength in order to improve our capability of risk mitigation, in order to ensure stable and healthy business growth. Finally, bringing good returns to our shareholders. We will also look into the operating environment, the requirements from the supervisory boards, as well as the business opportunities. We will work our best to return to our shareholders in the best way. Some quick comments. Of course, I know that you are all analysts, and you know well that in China, we have a very adequate capital replenishment through preference share issuance from our senior bond issuance, so on and so forth.
Actually, we have already replenished RMB 180 billion. When we got listed, our core capital was only RMB 220 billion or so, and now it is almost doubled. You are all analysts, you must have already analyzed these figures. Thank you.
Thank you all for your questions. Just for the interest of time, I'm afraid I cannot take any questions from the floor. If you haven't got any chance to ask a question, please contact us after this results announcement. We have our IR teams ready, and we will be glad to provide more information to you. With this, I would like to conclude this results announcement and thank you once again for the support you have given to us all these years. Thank you.