Dear investors, analysts, good morning. CMB 2023 third quarter result announcement will now begin. I am China Merchants Bank Securities affairs representative, the General Manager of the Office of the Board of Directors, Xia Yangfang, also the host of today's conference. We released our third quarter earnings results on October the 27th. Today, our conference is being held through live video webcast. Now, I would like to introduce the bank management who are present today. They are Mr. Peng Jiawen, Executive Assistant President and CFO, and Secretary of the Board of Directors. Mr. Xu Mingjie, General Manager of Risk Management Department. Ms. Li Li, General Manager of Finance and Accounting Department. Mr. Hou Weirong, President of Corporate Finance Department. Mr. Li Mingdong, General Manager of Wealth Platform Department. At the same time, we also have independent directors, Mr. Wang Shixiong, Mr. Li Menggang, Mr. Liu Qiao, Mr. Tian Hongqi, Mr.
Li Chaoxian, Mr. Shi Yongdong, to attend the conference online. On behalf of CMB, I would like to welcome you all to the conference. Thank you for your long-term interest in and support of CMB. The conference will be divided into two sessions. Firstly, Mr. Peng Jiawen will review our financial highlights and operational performance for third quarter, takes around 15 minutes. We will then move on to a Q&A session, which will last around 75 minutes. Simultaneous interpretation in English will be provided for both sessions. Now, I would like to pass the floor to Mr. Peng Jiawen, Executive Vice President, for CMB's 2023 third quarter results.
Dear investors, analysts, good morning. Last Friday, the bank released the 2023 third quarter report. Today, together with relevant head office department heads, I would like to communicate with you all, taking this opportunity.
Firstly, thank you for your long-term support and investment in CMB. I would like to explain for the third quarter's performance, and as our traditional practice, the below mentioned, the financial statistics were put under IFRS caliber. As we are faced with complicated operating environment since this year, we continue to create the value creation bank and stick to our quality, efficiency, and scale, dynamically development philosophy, and maintain a stable asset quality, continue to remain our strength of the fortress-style balance sheet. Our operations are exhibited by the following five characteristics. Firstly, we maintain stable profitability and a high level of ROAA and ROAE. Our net operating income was CNY 260.2 billion, down by 1.74% year-over-year. Net income, CNY 113.8 billion, year-over-year increase of 6.52%.
Annualized ROAA and ROAE attributable to the bank's holder and ordinary shareholder were respectively 1.46% and 17.38%, year-on-year downward of 0.04 and 0.84 percentage points. The group CET1 under the advanced approach and weighted approach were 13.7, 13.37 and 11.4%, maintaining ample and high capital levels. Secondly, we continue to strengthen balance sheet management, NII remains stable. We strengthen asset origination, continue to explore effective credit demand, and enhance retail loan extension to further manage liability costs. The group's total asset was CNY 10.67 trillion, up by 5.22%.
Total loans and advances were CNY 6.46 trillion, up by 6.68% compared with the end of last year, among which retail loan, CNY 3.39 trillion, up by CNY 226.8 billion, a growth rate of 7.17%. Corporate loan, CNY 2.54 trillion, up by CNY 168.2 billion compared with the end of last year, a growth rate of 7.08%. Total liability, CNY 9.65 trillion, up by 5.03%. Total customer deposits, CNY 7.98 trillion. Demand deposits daily average balance accounts for 58% of the total, remaining at high level.
For the first three quarters, the group's NIM was 2.19%, down 22 basis points year-on-year, mainly influenced by several LPR cuts, low market interest rates, along with insufficient effective credit demand, a yield of interest-earning asset declines. Secondly, we continue to see more deposits trending towards term deposit. Higher U.S. interest rate hikes, that promotes the liability costs of foreign currencies. We continue to optimize our structure of liability and asset, and mitigate the narrower interest rate spread. Our first three quarters net interest income was CNY 162.2 billion, up 0.1% year-on-year. Thirdly, we actively respond to the challenge and strive to increase our revenue.
Our net non-interest income remained at a high level, with CNY 97 billion, down by 4.64% year-on-year, and accounting for 37% of the total revenue, on which net fee and commission income, CNY 67 billion, down by 11.5% year-on-year. Other net non-interest income, CNY 30.9 billion, which is mainly contributed by bond investment revenue and operating leasing income. Among the key items, wealth management fee and commission income were down by 6.02% year-on-year. Asset management fee income down by 8.14%. Custody fee income down by 6.79% year-on-year, and bank card fee and commission income down by 8.62%. Clearing and settlement fee income up by 2.17%. Fourthly, we maintain solid and effective risk management, good asset quality, and strong risk compensation capability.
The group's NPL was CNY 61.7 billion, up by CNY 3.7 billion, which is mainly by the further release of real estate sector risks. NPL ratio 0.96%, which is flat compared with the end of last year. We attach strong importance to the real estate sector's risk management, and along with the good development trend of the domestic economy, the company's special mention loan balance and proportion both declined, among which the balance was CNY 65 billion, down by CNY 8.2 billion compared with the end of last year. Special mention loan ratio 1.01%, down by 0.2 compared with the end of last year. We consistently adhere to the strict classification of assets, which truly reflects our asset quality.
NPL and loans overdue for 90 days accounts for 1.27%, while those for 60 days accounts for 1.15% of the total. New formation NPL ratio annualized was 1.03%, down by 0.1 percentage point. We continue to stick to prudent and stable provision policy, and make adequate provision for credit risk loss provision. Allowance coverage ratio of the group was 445%, loan provision ratio 4.27%, and the group's and the company's credit cost annualized was 0.9%. Fifthly, we continue to consolidate our extensive wealth management business. Retail customer number and AUM number continue to grow. The company's retail customer number was 194 million, up by 5%.
Sunflower, Golden Sunflower and above customers was 4.52 million, up by 9%. PB clients, 146,000, an increase of 8.38% compared with the end of last year. Under the stringent market environment, extensive wealth management continued to consolidate its foundation. Our retail AUM was CNY 13.08 trillion, up by CNY 957 billion. For AUM of Golden Sunflower and above clients and PB clients increased by 8% and 8.38% respectively. The group's asset management business totaled CNY 4.53 trillion, up by 2.72%. China Merchants Fund, CMB International, and CIGNA & CMB's asset management business grew by 6.67%, 6.78%, 36.65% respectively.
CMB Wealth Management managed WMP balance totaled CNY 2.58 trillion, down by 3.37%. Looking into the full year, we see the current world economy is faced with insufficient recovery momentum, inflation remains high, there are increased volatility in the financial market, and the economy is characterized by wave-like development and waning progress pattern. We will continue to build a value creation bank, continue to strengthen our three capability of wealth management, fintech and risk management, and maintain retail finance as the strategic main thing unchanged, and to promote the four business segments to be both characteristics and balanced and coordinated, and deepen the regional development strategy, and strive our new strength in the niche business sectors, and to promote the quality, efficiency, and scale dynamically balanced development to create better value and return for customer, shareholders, employees, partners, and society.
Thank you for the introduction, Mr. Peng. Now we will move on to the Q&A session. Please follow the instructor's instruction to raise the question.
Now, we're entering the Q&A session. If you are joining from the mobile end, please press the Raise button. If you are joining from the PC end, please press the Participant button. Please open your microphone and camera. State your name and the agency you represent before you raise the question. The first question is from J.P. Morgan, Lei .
Thank you for giving me this opportunity. I am analyst Katherine Le i from J.P. Morgan Asset. Question for NIM: In the repricing of the housing loan, are we gonna mitigate the pressure coming from the early repayment of the housing loan? Can it offset the impact of the repricing?
Among the LPR, assuming they no longer decrease, what will be the trend of the interest rate spread next year?
Thank you for your question. I will take your question. Well, generally speaking, as you can all see, that the banking industry is faced with the pressure of the narrow NIM. Our NIM was down by 22 basis points quarter year-on-year, and 5 basis points quarter-on-quarter, and we have to admit, the pressure is still there. You have mentioned the early repayment of the housing loan. I would like to explain as follows: that in the existing loans of the repricing, the early repayment volume has been decreased. The peak was in March this year, of the repayment. After the repricing of the existing loans, I have noticed that the volume has been downward by around 50% of the repayment in total.
However, in general, the repayment volume was generally higher than normal than in normal cases. We believe that the repricing could, to some extent, contribute to lower the amount of early repayment, but we are yet to see the gap to be fulfilled and to back to—to be back to the normal stage. We believe that the interest rate spread, the NIM, will be still put under pressure. These are the several of our consideration. So firstly, the LPR cuts, or maybe because of the supply-demand of the asset, which leads us to the repricing, lower repricing, these factors will continue. Even though the deposit rate has been decreased, however, due to the structural factors within the deposit portfolio, we consider the NIM could still have a trend to going down.
Therefore, in September, although it is still a temporary influencing factor in September, we still consider it to be casting influence in the fourth quarter for us. Even though we will continue to strengthen our management over our balance sheet, and we consider our previous work towards our balance sheet could contribute to mitigate the pressure brought by NIM.
For instance, our asset allocation, how could we make the structure to be more reasonable? And for another aspect, how could we better manage our asset and liability to mitigate the pressure brought by the NIM?
Thank you, Mr. Peng. We will have the next question. The next question is from Ma Tingting from Guosheng Securities.
Thank you, senior management, for giving me this opportunity. I am Ma Tingting from Guosheng Securities. I have a question regarding real estate.
We have seen from the third quarter report that the corporate real estate NPL has shown a quarter-on-quarter decrease, but recently development, developer, Kaisa, encountered difficulties. The bond value of Vanke has experienced fluctuations, indicating that the market concern about their operations and real estate companies continue to be exposed to risks, and there is uncertainty about these asset qualities. I have a question regarding your understanding of the trend of the asset quality of these loans, and what is the improving trend of these assets? Additionally, after several consecutive quarters of decreasing balance in real estate business, that the bank did not assume credit risk, why did it increase in the third quarter? Has there been any change in the bank's real estate strategy? I have a question regarding this.
Thank you for your question. I think Mr. Xu from the risk department will take your question.
First, thank you for your question. As we disclosed in the third quarter report that our on-sheet real estate loan was CNY 229.5 billion, with an NPL of CNY 115.9 billion, and the NPL ratio was 5.31%. These figures has triggered the market attention. Our corporate real estate loan, which experienced a decrease in both balance and ratio in NPL for 10 consecutive months, have experienced a slight rebalance, so that people pay attention to CMB's real estate loan development trend. But generally speaking, we consider that through a series of measures taken by the government to stabilize the real estate market, including recognizing the second home loan with the first home's mortgage and et cetera to lower the down payment ratio of the first home, to reprice the existing home housing loans.
These measures all contribute to promote the real estate market's stable and healthy development. At the same time, we should see that the progress of recovery is fluctuated. We can see from the media that they have taken a description as wavy development recovery. It takes time for it to recover. From our assessment, it is possible that by the end of the half year, real estate NPL could already peak. But it is depending on our progress of write-off, collection, and other disposal measures, and also the market's own development and evolution. This is for the first point that I would like to answer. For the second point is that you have mentioned in the market, some bond prices have experienced large decrease, including individual enterprises, which has pretty good performance earlier.
Their bond prices, or they may have experienced delayed repayment in the open market. So I would like to respond to your question that about CMB's real estate strategy. Since the year 2021, as we begin to experience the adjustment in the real estate sector, we have also acted accordingly to adjust our strategy. We will focus on quality regions, quality customers, and projects to extend our corporate loan. At the same time, we will strengthen our management over concentration, individual projects and groups. We will strengthen our ratio management over the ratio of the development loans in certain regions that cannot exceed certain limits. And at the same time, we conduct closed-loop management over our projects.
Especially when we see that in enterprises with overseas financing, after its entities have defaults, how are we gonna deal with it? And as for their project financing, the most important measure for us is to take closed-loop management, to depend on the project's own financing to conduct repayment. Due to the large range and time span of the market adjustment, we can see that some of our clients are under pressure in terms of its repayment capability. If the customer has already default or shows signals of default in the open market, and for us, we will take several measures to cater to this situation. Firstly, we will keep closely to the national policy to guarantee the housing delivery, guarantee people's livelihood, and et cetera. Based on these principles, we will act accordingly to solve our post-loan management.
Second principle is that we will work together with our customers to face difficulties together with them, especially for certain projects of our clients that would have encountered issues such as repayments. We will follow the regulations of the 16 rules. If the project is under temporary difficulties, we will grant them with grace periods to extend the terms of their repayment. Secondly, we will conduct very strict categorization and strictly follow our principles of categorization. If the development loan has quality issues in our balance sheet, we will reflect them in our quarterly, half year, or other reports. We have always been very strict in our asset classification to make sure that our disclosure can reflect the true condition of our asset quality. Basically, this is our general principle.
We will especially be persistent to our principle under such challenging environment, to actively follow the national policies, to guard our bottom line and make adequate provision. This is to answer your second question. The third question is that for those that we do not assume credit risk, the real estate business that do not assume credit risk, that you observe, we have experienced some increase quarter on quarter. But however, the balance is actually decreased compared with that of the beginning of the year. So I have two viewpoints to share.
F or CMB, the real estate business, whether to assume it or not, since 2020 work, the 2021, CMB has already following a trend of decrease. On-sheet, CNY 299.5 billion, which is less than 5% of our on-sheet balance, on-sheet loan balance. And for the development loan, that is almost less than 3% of our total balance, total loan balance. So the volume is very limited and cannot cast influence to our general asset quality. And for those that does not assume credit risk, I think the volume has decreased from over CNY 400 billion to around CNY 260 billion. That is also a large decrease. Those includes assets from our subsidiaries, including subsidiaries that are not wholly owned by us. These will also include fluctuation in the holdings.
We will continue to strengthen our management over the real estate business. Please rest assured. So as for your, So basically, this is my answer to your question. Thank you.
Next question, please.
Next question is from CICC, Zhang Shuaishuai.
Thank you for giving me this opportunity. I'm analyst from CICC. My question is more about strategy. We all know that, sometimes we know the value of the bank or the, and the market value of the bank shows the future trend of the bank. Currently, we can see that China Merchants Bank is preparing to go through winter and also giving us some confidence. And looking ahead, we think that the economy is still in a more slow recovery road, and it's not meeting up the earlier expectation. Under these circumstances, what CMB is going to do to strengthen its capability to provide, mid and long-term confidence to the market? Thank you.
Thank you for your question.
I think it's a good question, and also giving me a chance to share with you what we can do and what we want to do. So as for our outlook for the economy, as I just said, is a bumpy road and bumpy development and recovery. It's also the same description for the trend of the banking system in China. We are facing difficulties, and also we are facing quite a weak capital market. Banks in China are now thinking about what we should do to deal with this current situation. And actually, for CMB, as we said before, it's quite the same. That's what I want to share with you. In a mid run, I think we need to do a good job in the following areas. The first one is stick to our strategy. This remain unchanged, namely to build the value bank.
This strategy is an upgrade from a strategy of retail and also light banking strategy. This is something that we are going to hold on. For value bank, it has some internal content. It means that we are creating value for different stakeholders, including customers, employees, shareholders, society, and also our counterparties. Second is that we need to have a systemic view of our operation. Means that to creating the volume of our business, and then to create the income, to increase the income of the bank, and also the efficiency and also capital return of the bank. This is a trend, or this is how we create, finally, create value to our shareholder. From income to profit, the decisive factor is risk management. How can we improve the ROE or improve the market cap of the bank?
The key thing is to improve the capital return. So our logic, this is also the same logic when we are doing business nowadays. Thirdly, is balance. Namely, a balance among scale, business scale, and also efficiency, and also risk management, and also a balance among a more balanced development among different business sectors, including retail, including corporate banking, including investment asset management, including wealth management and asset management. And also our Chairman and CEO, Mr. Wang, have said previously many times that to balance the light capital business and also the heavy capital business. And to be stronger in terms of our capability for loans, and also at the same time, to have a bigger market share, and also size of the wealth management and asset management, this kind of light banking, light capital business.
Next, I think very importantly, we need to strengthen our customer base or enlarge our customer base. I think this is the source of our income and everything we can earn from. So this is something we want to make more efforts on, including how we can be more innovative in product design and how we can be more innovative in service. And also such as for corporate banking, we are maintaining our seven major characteristics. Such as for retail customer, including the young customer, the new grads, the customers in universities, university students, and how we can enlarge our customer group, and how to combine our on-site service together with online service. So this is something that we need to strengthen our, the existing advantage in order to abandon, or in order to and also to widen the existing advantage we have.
And also, we have one of our advantage still lies in our mechanism, market mechanism. This is also something we need to stick to. And fourthly, I would think that we can do better in different regions, especially in key regions and also in some key niche markets, such as in Yangtze River Delta and Pearl River Delta. This is an area that we want to do more efforts on. And in specific areas, like, for the more service for more senior people and also for auto finance. These are areas that we can do a better job. And I think that we need to continue to build up our two fortress advantage. One is our fortress asset and liability management. The second one is fortress risk management.
Fortress asset and liability management means a more reasonable asset growth, and also the control and management of asset yield, as well as deposit cost. These are the content that we have for risk, for asset and liability management. And secondly, for risk management is a key for us. We are continue to maintain our prudent culture. I think this is one of the key advantage for bank nowadays, is have a sound asset quality and sound risk management. This is, something that we also want to do more work on. And as you just said, we are preparing for winter, upcoming winter, so we need to build up our new capabilities, like the digitalization capability. We have made a three-year plan, and from top down, we lay high emphasis on that.
Very recently, we hold a kind of training course for the management in the bank. Then we need to reach a consensus among the bank, and to promote the digitalization of the whole bank. Also, cost control is another very important thing, especially when you are encountering difficulty in growing income; then cost control becomes even more critical. But when you are controlling costs, you also need to keep a balance among cost and also business expansion. So these are areas that I think that we need to do more work on to strengthen our core competitiveness.
Next question, please.
The next question comes from UBS, Yan May.
Thank you for giving me this opportunity. I'm Mei from UBS.
My question is about fee income, and when you look at the third quarter report, for the third quarter, single quarter, your year decrease is around 11%. The major support of the fee income in third quarter is bancas surance fee. But we all know there's a new policy that the bancas surance rate will need to be cut down. And I would like to know when it will start, and what will be the impact on your fee income? A second question is that we are seeing recovery in consumption and also in travel. But when I look at the bank card fee of China Merchants Bank, it seems to perform even worse than what you have last year. Why is this so?
And actually, this question will be answered by Ms. Li from our Finance and Accounting Department.
She will give you a broader view of the income, and then also Mr- If we look at the fee income for third quarter, its year-on-year decrease is 7.5%. Actually, the level of decrease is smaller than what we have in the first half. I think it's mainly affected by the market as well as by the policy side. From retail side, it's down by 6%, and it's less than what we have in the first half by around 4 percentage points. The main reason is because we have a weak capital market and also the policy for rate cut for mutual funds. These all have a negative impact on that. For agency sales of wealth management products, due to structural change, it also has some negative impact on the income.
But as you have said, the increase of income from bancas surance have supported or offset the negative income from other side. So this is for retail. And also overall, if you look at the income, if you look at the trend for third quarter, for the wealth management amount, it has stabilized in third quarter and has rebounded a little bit compared to the first quarter. And if you look at the custodian business, the custodian size has reached around CNY 21.2 trillion, and it's up compared to the beginning of the year. But the rate for custodian, for WMP products and also for mutual fund has also come down, which have some negative impact on that. And thirdly, as you have just said, for settlement fee, actually, if you look at the transaction amount of our credit card, is up by around 1%.
Also, if you look at the overseas transaction, it's up by over 60%. The transaction volume is growing, is having a positive growth, but the fee income is down. It's mainly due to some caliber causes, 'cause the online transaction fee of the credit card is recorded on the settlement and transaction fee, but offline, card fee is recorded as a bank settlement fee. So it's recorded in different items. That is why you need to combine these two together to look at the overall one. So the offline credit cards fee is down by 8%, but the online has been up compared to the beginning of the year.
So if you look at the credit card transaction volume, if we combine online and offline together, we think that the overall fee income of credit card have seen a positive growth, and also the fee income of credit card is also having a positive growth. So this is, I think it's only some caliber causes. Thank you. As for insurance, bancas surance fee influence will be answered by Mr. Li from Wealth Management department.
Actually, the new policy for bancas surance definitely will have some impact on bank's fee. But in an objective way, 'cause CMB has a higher market share in equity mutual fund, and also for the periodic payment insurance products. So in the short run, I think the new policy definitely will have a bigger impact on CMB compared to peers.
Facing this challenge, I think that in the short run, not only, not for, not only for each mutual fund, but also for insurance, we still want to seize market opportunities to expand our business size so as to offset the cut on rate. For mutual fund, we need to look at the market condition and also customers' risk appetite. In the short run, we want to satisfy their demand for a stable, more prudent investment, and we need to increase our products, that is, like, fixed income or more stable model, products with a lower volatility. At the same time, we want to strengthen our capability for investment and research to seize the ad hoc risk opportunities to service our customers, such as for high dividend paid funds, or these kind of equity funds, to provide to our customer.
But for insurance, we think that there's a great potential there in the long run. We are continued to expand our sales of mutual funds, especially to increase our efforts for those dividend insurance, and also to enrich or enlarge the scenario that we can reach out to insurance customer and to increase the penetration rate of customers' insurance. And overall, I think that we can do more job in the following two areas. First one is customer. I think customer is the source of income. No matter how big the challenge is, we're going to go back to customer, with customer at the center to create value for our customer. This is our philosophy for wealth management. And customers' number, the base, and also the size of AUM, and also our market share, is that something that we pursue.
And I think finally, this will—these efforts will all be reflected on our fee income. Secondly, during this difficult time, capability building become more important for us. So we are going to build our capability in the four areas. First one is technology. By using technology to improve our ability to provide value for our customers. Secondly is asset allocation, and to speed up the transformation from sell side to buy side. Thirdly, have more diversified product, namely to be—and which can accommodate different kinds of customers' risk appetite. And then seventhly is our capability to provide digital and also offsite, offline service to our customer, to improve the service efficiency and also have more professional service to the customer. And also to accompany our customer, improve this kind of accompany capability. And thirdly is for risk management.
I think this is the basis of how far we can go. We are going to strengthen the criteria on, of the onboarding of new products to make sure the quality of the products we have. Fourthly, to even broaden our open platform. Now we are having cooperation with around 350 institutions. We want to enlarge our cooperation with these third parties to better service our customer. These are the major four capabilities about how we can seize the long-term opportunity. These are also the answer for how we will do wealth management in the future. But in the short run, definitely, we are under pressure.
No matter how external market changes, and no matter how policy changes, as long as we have customer, as long we have AUM, and as long as we can improve our capability to provide value for customer, so as to maintain the stability of our wealth management fee. Thank you.
Next question, please.
The next question is, is from CITIC Securities.
Thank you for giving me this opportunity. I have a question regarding asset quality. I would like to understand your outlook towards the asset quality of the fourth quarter and next year, and, what areas and industries will the bank focus on in terms of changes in asset quality?
The question will be taken by Mr. Xu Mingjie from Risk Management Department.
Thank you for your question. So generally, our asset quality outlook and trend will be as follows. Well, as we can see from the first quarter to the third quarter, I see CMB's asset quality to be stable and trending towards a positive manner. NPL ratio, 0.96% flat, compared with the beginning of the year. The bank's credit assets has accounted for 95% of the group's total, so I will use the bank's caliber to explain to you regarding our asset quality. So firstly, a stable and trending towards the positive manner. This is what we observe in terms of our asset quality, except for our NPL balance, has increased from CNY 54.2 billion to CNY 57 billion.
Our NPL ratio, special mention, low-end balance and ratio, overdue low-end balance and ratio, these indicators have all declined. So generally, we are stable, and we are trending towards a positive manner. To see from some large categories in terms of retail business, residential mortgage loan, it tends to be very stable, as we see from the balance of the such loan has recorded negative growth. The market have concern have issues, concerns regarding impacts brought by the-
... lags development and the delivery of the housing projects, we can see that the overall quality is quite guaranteed. In the third quarter, real estate loan NPL ratio was 0.36%, 0.01 percentage point higher than the beginning of the year. So basically, this represent a slight decrease. Besides, for the housing loan, let's take a look at the small and medium-sized. The consumption loans, these assets have experienced increase, improvement in its asset quality. Let's take a look at their NPL ratio. Small and medium-sized loan has decreased from 0.664% from the beginning of the year to 0.55. And the consumption loan from 1.77% to 1.69%.
Consumer loan 1.06% down 0.08% to 0.97%. These figures have all explained that our retail business loan have shown a recovery momentum. We have just mentioned a point that the new formation of NPL for the first three quarter have recorded both decrease in balance and ratio. The formation balance and ratio was recorded a decrease of CNY 6,674 million, representing a 0.1 percentage point decrease. So for corporate loan, the formation, balance, and ratio have both decreased as well. We also see a quarter-on-quarter decrease in the new formation of real estate loan on the corporate side. For credit card loan, the formation of NPL have also decreased in terms of its balance.
So in the perspective of formation of NPL loan, we see recovery in the asset quality as well. We see very positive signal that in the third quarter, there were both decrease in balance and ratio in the formation of non-performing loan. And to see from the above mentioned perspectives, we predict that in the fourth quarter, our asset quality will still remain stable in a positive trend. In the short run, we expect that the asset quality for CMB next year will remain stable. We consistently follow a fully exposed principle of our credit risk and make adequate and prudential provision, and make sure that our risk compensation capability is sufficient. Our allowance coverage ratio in the third quarter has even increased a bit compared with the beginning of the year, 0.53 percentage point higher.
But in such a market condition, it to some extent showing our strong risk compensation capability. It also showing our confidence as well. Thank you for your question.
We will have the next question.
Next question is from Xu Ran from Morgan Stanley.
Thank you for giving me this opportunity. I have a question regarding the future loan extension and growth rate of the loan extension. As we see that the current macroeconomic uncertainties and the manufacturing industry has shown some overcapacity in this sector. And we also see unreasonable loan pricing in terms of loan extension. So I'd like to understand our direction of granting loan, and will we consider it rational to slow down the loan growth and only focus on loans with reasonable pricing?
Thank you for your question. I will take it.
To answer, in the third quarter, the loan growth rate of our general loan was 0.52%. If you compare to our peers, it's kind of like a moderate growth rate. We are not taking an aggressive methodology in our loan growth, which is quite aligned with the real economy's development. In terms of loan growth, in general, we act according to our philosophy of dynamically balanced development to follow the feature of quality, efficiency, and scale, which we put quality as the essence, efficiency as our orientation. And in terms of loan pricing and how is our viewpoint, just as I introduced earlier, we consider the value creation chain of the full growth, which was also reflected in like, which is also reflected in our operational philosophy.
That is the growth in the volume, revenue, profit, and value to maximize the comprehensive return of our loan. This is what we consider in the loan pricing, but objectively speaking, along with the LPR cuts, along with the shortage of asset investment, and we have to admit that this will lead to the decrease in the bank's loan return, especially when we're emphasizing on benefiting the real economy, it will definitely reflected in the bank's loan extension. So generally, I believe that, what we aim to do is to continue to follow our philosophy and actively combined, and flexibly work with the external environment. What we emphasize is comprehensive service, comprehensive solution. We cannot view simply a loan regarding its pricing. We would like to consider to provide comprehensive solution to our customer to bring more value to the bank. That is what we pursue.
That is why we consider to manage our loan in this perspective.
Thank you, Mr. Peng.
Next question, please.
Next question is coming from Mr. Kun Peng.
I cannot hear you.
Thank you. My question is about deposit and also loan. I read a so-called report that cost of the foreign currency deposit has come up, so I would like to know about RMB cost deposit trend. And just now, Mr. Peng has said about the structural change of deposit, which offset the decline in deposit rate. So I would like to know what measures you have to optimize the deposit structure. Secondly, a broader question is that we are facing quite a easing, monetary easing year, and CMB seems advantage in deposit, seems not to be as strong as in a tightening period. It's also the same that we have in 2018 and 2019.
In this monetary easing period, how CMB will take measures to tackle the difficulty brought by the weakening of your advantage in deposit cost, which can help you to go through different cycles?
I will answer the question. Firstly, about deposit cost trend. In third quarter, the deposit cost, including all CNY and foreign currency, has been up by 1 basis point, because the foreign currency deposit, due to rate hike, has come up. If it's only CNY, deposit cost just has come down. After interim report release, we said that we need to strengthen our deposit cost, and we have done as what we have said, and it seems to be effective for our measures, if you look at the CNY deposit cost. Also, if we, to detail, have a more detailed look at CNY deposit cost. If we look at corporate deposit cost and also retail deposit cost, no matter it's a term deposit or demand deposit, all kinds of deposits are coming down.
But even with a decline in the deposit rate, actually, the level of decline has come rapidly, but the negative impact is of the structural change. Namely, our demand deposit proportion is now around 58%, down from 60%. It's below 60%. So a very important thing for us is how we can better control the deposit cost. And currently, I think deposit cost plays an even more important role than deposit rate. So I think that we have done quite an excellent job for how we control the deposit rate, but we can do more in terms of structural. So when we look at structural thing, the inevitable topic will be demand deposit. So how can we grow, have sustainable growth of demand deposit?
Demand deposit is not a figure or data, it, but it shows the capability of a bank. It's not something that you can set a target, and then you reach a target. The more important thing, whether you are able to grow those deposit. So why CMB has a higher demand deposit rate, especially for retail demand deposit? It's a reflection of our capabilities. I think, can be reflected in the following areas. The first one is we continue to enlarge our customer base. With a larger customer base, we'll bring definitely demand deposit. And second, in our retail strategy, payroll service is a important way that we acquire new customer, and also in, to some extent, will help us to grow demand deposit. And thirdly, AUM is a major strategy that we have.
If we grow AUM, which definitely we can bring demand deposit, if you want to buy a wealth management product, definitely sometimes it will change into demand deposit for a certain period of time. And fourthly, very importantly, is for settlement. No matter it's retail or corporate, settlement is a top priority for us. We have some settlement products and product settlement service, both for retail and for corporate, and also online settlement service. This helps us to grow demand deposit. And all the measures we have is not from deposit side, but is doing something, other job to bring about demand deposit. So that is why I say it's the capability. Demand deposit ratio shows the capability of the bank, and this is why you are seeing CMB have a higher demand deposit ratio and lower demand deposit cost.
For these years, like, customers' investment capability and appetite has changed and has brought some changes to our deposit structure. So next phase, I think that for us, the top priority is the growth of demand deposit. And when we are measuring the performance of our branches, settlement products will become more important for our team, will be on top of our agenda. So this is how we want to answer your question. Firstly, I think structure is an important thing for us to control cost, and we have measures in place. And your second question is how bank can respond to the low interest cycle or monetary easing cycle. I think that low interest will remain for quite a period of time.
And as you said, especially in easing times, our NIMs have a will face more difficulty compared to peers, but in a tightening period, we have a stronger advantage can be reflected. This can be explained by risk, interest rate risk. So how... What is the sensibility of your interest income to risk different interest rate cycle? I remember that many years ago, when interest rates had some changes, CMB's interest income have a bigger volatility, but now the volatility has come down a lot. But even with a lower volatility, you are still seeing negative impact on our advantage for deposit. But actually, we have done a lot to lower down the volatility of our of the interest rate, post risk, post to our asset and liability. So what we want to pursue is to become interest rate neutral.
We don't want to have the gains on interest income, but we want to be neutral in interest rate risk. Secondly, is to continue to enlarge our customer base. Namely, your income and profit actually is coming from different aspects. You not only have interest income, but also you have fee income, and also after income, you still can control the cost side. You need to control the cost side, such as risk management and also operational expenses control. So with all these measures in place, this will help us then comes to the bottom line of profit. And thirdly, I think in a low interest period, we need to provide more comprehensive income to our customer.
Namely, to have more contribution from customer by providing them the fee services, such as for corporate banking, like including settlement business, products like investment banking, such for retail, like wealth management. Namely, how can we better provide wealth management products to gain fee income? So namely, to follow the value bank philosophy and strategy, create value for our customer, employee, and our shareholder, and also the stakeholders. And also finally, we can create a return, have the return for our shareholders.
Thank you.
Next question, please.
Next question will go to Mr. Shi Xu from Danshuiquan. Thank you very much.
Hi, I'm Shi Xu from Danshuiquan. My question is about the provision. In your third quarter report, you said for loans, the provision is quite normal. We think that there's an unwind of CNY 1.7 billion for non-loan assets provision. So why has there been an unwind of this provision? What has changed in the third quarter? And we also would like to know what is your outlook for provision on your credit cost? And is CMB going to increase profit by lowering down provision level? Thank you very much.
This will be answered by Mr. Xu from Risk Management.
Thank you for your question. I know that a lot of you really pay a lot of attention to the figures that we disclose. For provision, third quarter, our provision is CNY 8.6 billion.
Can be divided into provision for loan and non-loan assets. For loans, it's CNY 14.7 billion, but for non-loan assets, it has come down compared to what we have in the second quarter. And there are three reasons. First one is the size of our non-loan assets for, like, interbank assets, and also for our investments in non-standard assets. The size is coming down. This is one reason. And secondly, for individual customer, the reserve we have after we have observed for one and two years, we think that these some of the individual financial institution customers, their asset quality is not as big as we expected before, so it has become normal customer, and that is why there was a rewind. And third thing is, collection of the NPLs last year and the year before.
Some of the assets we have on last ESG investment. In third quarter, there's the collection of the some of them. But in the past, normally, we have very ample provision on that, and once we collect them, then there is a rewind, such as there was a guarantee business in the past, we have cash as a collateral. So in the past, it was, the collateral we are not sure whether the collateral or maybe the cash can be brought back. But now we after the lawsuit, we won the lawsuit, and now we have the collateral back to our bank, then there is a rewind. So these are the three major reasons why we have a rewind of CNY 1.7 billion for the provision for non-loan assets. If we look at from the first two...
From the first nine months, it's also non-loan assets is down year-on-year, but for loan, it's also year-on-year increase. There are mainly three reasons if you look at the figures for the first nine months. And I think that these three reasons will remain, continue to remain so in the future for a period of time. The first one is last year, there was a downturn in the market, especially for public market. We have increased our provision in a large scale, and I think that the risk we have identified before have exposed already. So currently, there's no reason for us to increase our provision. Like, it means that in the past, we have increased provision for proprietary investment last year, but this year we are seeing the risk is more stable, so we're not going to increase that.
Secondly, the size of interbank investment. If the size comes up, they will come up. If the size comes down, you will definitely, provision will come down as well. Thirdly, for some assets now already in the third phase. If we collect them, then it will come down. Now, for the third period, provision level is around 95%. So if we can collect half of these assets which are already categorized in the third period, then which means that half will, provision will be rewound. So your next question is about the trend of credit cost. One thing that we hold true for a very long time, especially in the future, I think we will stick to that. Asset quality is a key to the success of a bank.
We are seeing the interest income is coming down and also fee income is coming down. Key to success is to have a control of, on asset quality. For the first three months, our credit cost is around 0.9%. It's quite a stable level. But if you see our NIM is only around 2.19%, so I think our credit cost is the biggest cost for our bank. So in the future, we want to have a low credit cost in future. Secondly, will you to release the provision to maintain our profit level?
I think it's not something we are going to do, but objectively, if there are business that we have ample provision in the past, as long as we dispose these kind of assets, we collect this kind of nice NPL, then there is a possibility that we can have some - we can collect those ones. This can have some rewind in provisions. But still, it depends on the pace and speed of our disposal of those NPLs. Thank you.
Next question, please.
Next question is from Gary Lam, from HSBC.
Our core Tier One capital adequacy ratio in the third quarter is showing a good trend, outperform some of your state-owned peers. Looking ahead, what strategies will the bank take to maintain at an adequate level so as to further facilitate our RWA to support the growth of our ROE? I'll repeat my first question again. Regarding the expense, expenditure, we actually record a slow growth. And maybe... Are there any possibility to see a negative growth?
As some of the question is missing due to the technical failure, so I would like to understand again that your first question is regarding the expenditure, expense. The second question is about the capital adequacy ratio. I think the first question will be taken by Miss Li Li, and the second question regarding CAR, I will take it later.
I'm sorry that I'm not having a very clear understanding towards your first question, but regarding the expenditure, I have several points to explain. To see from the first three quarters, the administrative expenses remained flat compared with the same period of last year, and experienced a slowdown around 4 percentage points compared with the beginning of the year. Staff expenses remained flat. The reason behind is that for the past two years, we conducted very strict control over costs. We have taken multiple measures to have refined management over the expenses. For this year, we pay close attention to its structure in terms of cost control. We have adopted a principle to apply the appropriate structural management. To see from this year's revenue condition, we are still faced by the pressure of operating.
So generally, there is a 1.74% decrease in the revenue, and therefore, we will act accordingly to control our cost, and hopefully, we can strike a balance in terms of the cost and our revenue. Firstly, we will control the aggregate amount to arrange the total volume of our expenditure. The second aspect is that we will exit some fee items in terms of our traditional expenditures, to increase the expenditure and expense of IT input. For instance, in terms of traditional exiting of a fee items, such as reduce the branch location, the space area, and some of other aspects, we aim to reallocate these expense resources into IT input.
And at the same time, as our total volume have not increased, our Fintech input has increased by 4.5%, which means that we continue to optimize our structure. On the other hand, we increase our efficiency. For large amount of input, we have strengthened our monitor and analysis over these fee items. And generally, we have exerted a very efficient control and optimized the structure of our expense and expenditure.
I will take your second question regarding CAR. I have always taken capital endogenous capability as one of the very important capability of the bank. To see from the bank's CAR, among the listed banks, we can say that we remain at a relatively high level. And as for our CAR target, we have a clear plan, which is also disclosed to the public.
Our target is that under the regulatory requirement, we will require ourselves to be 1 or 2 percentage points higher. To see from our current performance, we have already achieved our goal at a reasonable level. In the future, as for CAR, in order to maintain our endogenous capability of capital, it doesn't mean that the CAR could be higher, the higher the better. For us, for the current situation and for the future, there are some uncertainties. For instance, on one hand, the regulatory requirement could change. They will be updated as the time change. We cannot be sure about that. As for the external environment, they will also bring challenges to the bank's operational environment. These are all certainties that we will be faced with. Therefore, we will also arrange accordingly and be flexible to adapt to the external environment.
I could say that we are already at a quite appropriate level of CAR. And as for what you have mentioned, that can we increase the RWA to increase our ROE? I'm kind of like sharing my personal viewpoint here. I believe that it is not a correlation or a direct relationship between the increase of RWA to the increase of ROE. I think there are not necessarily some positive correlation between them. I believe that, the increase of ROE is depending on the return of, of assets, of the capital. I think for CMB, the level is quite, quite stable at around 10%. The capital return is the key to maintain a good level of ROE. This is my understanding towards their relationship. Thank you for your question.
Thank you for the answer given by President Peng and Mr. Xu.
The next question is from Wang Xinshang from Guangfa Securities.
Thank you, senior management. I am Wang Xinshang from Guangfa Securities. My question is regarding the capital. As we see the new regulations of the capital, there are market concerns. The new regulations is actually casting, showing benefits for retail and other loans, and not showing advantages or strengths to the interbank assets. I would like to understand that as the bank, CMB applied the advanced approach, and you have faced with customers from real economy and retail segments. I would like to understand that, will there be a significant increase of the CAR? And I would like to understand whether you have measured, the increase in terms of the figure. And the second question is that regarding the development for the banks industries, their occupancy of the risk assets may vary.
I would like to understand whether you will also act accordingly to the new regulation, so as to increase the bank's return on ROE or the risk-weighted assets.
I will take this question. Thank you. You have developed a very in-depth understanding towards the new regulation. Previously, we see the draft for comments on the public, and to calculate under the new regulation. There will be factors contribute to both increase and decrease of RWA. Under different approaches, there are gonna be a different difference in terms of the calculating results. And for our peers, we also see items increase and decrease. After calculation for CMB, I think there are both positive and negative factors. We indeed is the only bank that apply the advanced approach, but we also apply the risk, the weighted approach. So actually, we apply the both approach.
As mentioned earlier, I believe that there are both positive and negative factors, but the general condition is stable. Through a period of time's adjustment, we will see disadvantages gradually become advantages. You have mentioned the second question is that there will be some changes in the regulatory requirement. Will there be any changes lead to our management? We need to understand better about the regulatory requirement and let them lead our own management. This is the two set of the bank's capital management. We should take consideration of both the external regulatory requirement and our internal philosophy, and integrate them together to better develop a set of philosophy that suits us the most. Therefore, we, the regulatory requirement will also be reflected in our internal management.
I believe that the direction for us is both we find a way to suit the requirement by the regulator and ourselves.
We will have the next question.
The next question is from Shen Juan, from Huatai Securities.
Dear senior management, can you hear me? Thank you for giving me this opportunity. I have a question for corporate finance. For the past few years, we see domestic economy under pressure. The existing volume in the corporate loan is under fierce competition, and for CMB, I see your corporate loan increment coming mostly around 50% from manufacturing industry. During your development, I would like to understand that what loan extension is within your expectation, and what is your outlook in the next years, corporate loan extension? What is your arrangement? Thank you.
Mr. Hou Weirong, from Corporate Finance Department, will answer your question.
Thank you for your question. Indeed, for the past two years, we have acted according to the national policy's guidance and the direction of national economy transformation. We have enhanced our support to manufacturing, green finance, high-tech finance, in terms of corporate loan expansion. Indeed, as you said, manufacturing loan has accounted for 46% of the total loan increment. On the one hand, it is what we have done, what we have been doing to adapt to the external environment. Real estate loan has been continuously declining in our increment, which leaves us larger room to make loan extension in other fields. And on the other hand, we see larger demand from the... We see smaller demand from the infrastructure side, and, the manufacturing industry still has a larger demand, comparatively speaking.
In terms of strategic emerging industries, in manufacturing industry, they have a strong demand, including financing needs in M&A, et cetera. We also see some new demand emerging from green finance. Many local governments and have paid special attention to develop loans in this field, and there are some certain regional development in terms of the loan structure, including a new demand coming from new areas. So for us, loan extension to the manufacturing industries will firstly, we will follow the principle of risk control, and secondly, we will flexibly adapt to the market demand. That is how we establish our strategy. And what's more, customer from the manufacturing industry has, comparatively speaking, higher comprehensive return in our portfolio. Because their sales and their operation are quite stable, except for those who are exposed to a stronger seasonal factor.
But generally, they are quite stable in their operation, and therefore bringing us stronger opportunities in bank card, settlement, and clearing business. And also deposits and loan interest rates brought by manufacturing industry customers, they are also quite high compared with other customers from other industries. That is your - my answer to your first question. And second question is that you would like to understand further about our strength, ICPTR, and a combination of our investment banking and commercial banking solution is one of our strengths in the sixth of our characteristics. In fact, we have to admit that we are, to some extent, influenced by the external environment. M&A and some other financing demands are not very significant in the market.
We have to say that in bond underwriting, in M&A loan, in corporate wealth management, our market share remain at a top level among our peers. The market share also increases. It's just that our contribution to the total market value is not have still got a gap between what we have expect. We have to give full play of our strengths in developing both investment banking and commercial banking solution to our clients, just as introduced by President Peng, that we originate from serving our clients to develop the customer base and to provide them with our best solution. We require our product managers to work together with our relationship manager to step into the forefront of customer marketing, to discuss further with our clients about the market opportunities and demands with our clients, including mutual fund rates, et cetera.
We have also followed the requirement given by the government to seek more business opportunities within, but we can still see that there are a lot of opportunities to be further released in the following phase. We will continue to strengthen our understanding and analysis of the market strategies and policies to bring us more opportunities. We have also noticed that in some industries, for instance, in new energy, in biomedical industries, et cetera, these are emerging industries that bring us opportunities ahead. This is what we have been doing lately. Looking ahead, as President Peng mentioned, in terms of corporate finance, we aim to establish our seven characteristics in business, including SciTech finance, green finance, manufacturing, inclusive finance, et cetera, including cross-border finance. And also, we will aim to build up our strength in digital finance.
This includes our structural change in the customer base, our discovery of new potential clients, our in-depth understanding of the industry, our product innovation, and the optimization of the product procedure. For instance, in green finance, we have launched the product of green deposit. We have promote some products related to transformed finance. We continue to deepen our understanding and explore customer scenarios that applied with our products. We will make good use of original, of our existing products and scenarios, and combined with our innovative ones, to provide our customers with one comprehensive solution that can let them enjoy one-stop service.
At the same time, internally, we have also cultivate our capability, nurture ourselves in terms of giving full play of our strengths in the philosophy of one entire bank for one client, to leverage our capability of online service solution to enhance the efficiency of customer service. So hence, I think, this is generally my answer to your question. Thank you.
We will have the last question...
next question.
The next question is from Jatou Buzidi.
Thank you for giving me this opportunity. I'm an individual investor. My question is about the local government debt resolve. There's a lot of discussion for that. My question is whether CMB has a... You need to show the bigger responsibility in the resolve of local government debt risk? If so, will it have some material impact on CMB's net interest margin or income?
This will be answered by Mr. Xu.
Thank you for your question. Currently, in order to stabilize the financial markets and the expectation of the risk of local government debt risk. So according to the central government, for certain local government's debt risk, there will be a comprehensive plan to resolve the risk. To mitigate the risk for CMB, we will also follow the government's policy to mitigate the local government debt. And for commercial banks, the central government has also a principle for that, namely, to mitigate the risk in a market-oriented way and to be rule-based, and to. The bank should negotiate with the local governments on its own. So these are the principles set out by the central government, and we will follow these principles.
For the asset quality of our local government-related business balance, we have disclosed that in our interim report and also third quarter report. Actually, our balance for business relating to local government financing vehicles is quite the same as what we have disclosed.
in June. In third quarter, it's quite the same. It's around CNY 245.9 billion. And for loans, it's around CNY 135 billion, up by CNY 2.6 billion compared to the beginning of the year. So the balance is quite stable, so around 2% of our total assets. As for among all this balance, which are relating to specific areas which have a higher burden, I think that the amount is very, very small. As small as that, you can ignore that. So since we have a very little balance relating to the key areas which have a higher liability or debt burden, so I think that this will not have a material impact on our net interest income or income.
Because the proportion of that is too small, that will have actually very little or even no impact on that. Important today is that we need to maintain our strategy for our to optimize our customer structure. For corporate banking, we are more emphasizing manufacturing and green finance and inclusive finance, and also technology finance. For local government finance vehicles, our attitude is, has always been the same. We never swing about that. And we will support the real economy and to take a prudent view or attitude to engage in the risk mitigation of the local government debt risk.
Thank you, Mr. Xu. Yeah, in order to guarantee the interest of individual customers, we have collected their questions via email, and most of the collected questions actually overlap with what we have just discussed.
We will now pick another question which has not been raised before, and our staff will read out the question. Thank you. A question from individual customer, investor, is CMB now have a quite a high, relatively high CAR ratio. Does the management have any plan to increase the dividend payout ratio?
Thank you for the question. I think that even though it's a newly collected question, but it's a old question that have been asked very frequently. I know that all of you are very, pay more attention to the dividend policy. So as if we look at the dividend payout ratio of CMB, now it's, almost at the highest level among peers. We have written in our articles of memorandum, namely, it was no less than 30% of our profit.
So I think we will strive to do our best to increase the dividend payout to our customer. And if we look at the CAR ratio of CMB, even though it's quite high among our peers, but I think it's not something that we do not have any difficulty in the future, 'cause there are uncertainties ahead. Especially, we are facing the new rules on capital and also facing new circumstances and new changes for the risk environment. These are all uncertainties. So I think that we always need to prepare for the worst and to maintain a more adequate CAR ratio. And also, compared to the first class or to the leading financial institutions in the world, we are still lagging behind in terms of the CAR ratio.
So I think the current CAR ratio, even though it's a reasonable level, but it doesn't mean that it's a very high level as if we consider the potential risks. And thirdly, currently, the ROE level of CMB is quite a lucrative one. Instead of paying out the dividend, so if you can place that within the equity in the long run, it will be to continue to deliver a good return to our investors. So I think the dividend payout ratio currently is a reasonable one. But with the increase of CAR ratio and also external circumstances changes, we will definitely study continuously about what will be the proportionate dividend payout ratio level to that. So in the right time, I think that we will do our best to increase return for our investors.
No matter what, we are confident to maintain our dividend payout ratio over 30%. So this is a promise from us.
Thank you, Mr. Peng.
Due to the interest of time, it's the end of our third quarter results. And I would like to say more words. Thank you very much for giving me quite a over an hour to share with you our views. I know that there are a lot of questions raised, but I know it will not resolve all of your concerns. So I really welcome your discussion with that or with our IR team. So I think that in the future, with the contraction of NIM, and I think this trend will continue to be so.
And I think the capital market might continue to be weak, and there's a policy side to cut the fee rate for banks; this definitely will pose risk for banks' income. So financial, if we look at the financial reports, in the short run, we will face difficulties and pressure, but in the long run, we are confident to have a long-term stable comp development. Based on the following reasons. The first one, we think that we are confident that China's economy will remain good in the long run, and now the whole economy is in a transformation period. And a lot of area, there will be new opportunities, and a lot of customers, they are waiting for us to provide a quality service to them.
If we look at the economic and financial data, and the macro data have shown some marginal improvement signs. These are the strength that we draw from, why we say we can have a long-term development. Secondly, as CMB, as a bank, have strength in retail banking, and I think for wealth management, by the end of 2020, the whole financial assets of CMB, of China's household, is around CNY 250 trillion, and in the future, it will reach around CNY 600 trillion. Which means that there is a big market to go, and that's why we think that it will be a prosperous future for CMB. Also, very recently, these days, we have talked to investors. I know there are a lot of suggestion from them, and I would like to share with you.
I think this is also in line of what we are thinking about. One suggestion is that in a difficult time, stable operation is more important for short-term financial data. We hope that CMB can stick on to your strategy. Do not be aggressive in asset expansion, or do not sacrifice asset quality, and to consolidate your long-term competitiveness that is, beloved by the market. So this suggestion is from our investors, and it's also a reminder for us to be reasonable growth in when we are facing tough times. So this is in line of our operation philosophy. We will stick to our strategy and to create value for our stakeholders. Thank you. Thank you very much. So it's now the we'll end.
If you want to know more about our information, you can look at our results announcement, which was disclosed on October 27th, or you can reach out to our IR team. Thank you very much for joining us today, and thank you very much for your trust and for your interest investment in CMB. We will do our best to deliver stable returns to our shareholders and create value for all stakeholders. Thank you.