Morning. CMB 2022 third quarter results announcement will now begin. I am the CMB securities affairs, the head of the BOD office, Xia Yangfang. Considering the pandemic situation, we will continue to broadcast our communication online. First of all, I'd like to introduce the attendees onsite today. They are Mr. Wang Liang, President and CEO. Mr. Wang Jianzhong, Executive Vice President. Mr. Li Delin, Executive Vice President. Mr. Zhu Jiangtao, Executive Vice President. Mr. Zhong Desheng, Executive Assistant President. On behalf of CMB, I'd like to extend a warm welcome to your participation in today's meeting, and thank you for your long support and interest and investment in CMB. Today's meeting includes two sessions. First of all, we'd like to give the floor to Mr. Wang to briefly introduce CMB's Q3 results in 2022. It takes around 15 minutes.
The second is the Q&A session, takes around one hour. The meeting is provided with simultaneous interpretation from Chinese to English. Now, let's give the floor to President Wang for the introduction of CMB 2022 Q3 results.
Dear investors, analysts, good morning. Last Friday, CMB released their 2022 third quarter report, and today, along with our Senior Management, to meet with all our investors and analysts. I'd like to take this opportunity to thank you for your long support and interest in CMB. I'd like to, along with my colleague, to conduct in-depth and open communication with all of you today. I will take several minutes to introduce our CMB Q3 result and then take your questions. What's worth mentioning is that the below-mentioned statistics are based on the IFRS caliber, also the H-share announcement caliber.
Since this year, under the complicated domestic and external operating environment, CMB continued to uphold the quality, efficiency, and scale, dynamic balance, development philosophy, along our set target of direction and goals to continue to build a 3.0 model and strive our capability in wealth management, risk management, and fintech to promote our operating and management level. To realize the steady growth in our operating performance and consolidate our advantage in our fortress-type balance sheet. For the first three quarters, we are featured by the following six characteristics in our operation. First of all, we remain stable in our profitability and a high level of ROAA and ROAE. Till Q3, we have realized operating net revenue CNY 264.8 billion, up by 5.31% year-on-year.
Net income attributable to the bank shareholder, CNY 106.9 billion, up by 14.21% year-on-year. Realizing net income from the interest income at CNY 162.13 billion, up by 7.63%. Net non-interest income CNY 102.7 billion, 1.85% up year-on-year. ROAA and ROAE attributable to the bank's shareholder were recorded 1.5% and 18.22% respectively, and up by 0.06 and 0.11 percentage points respectively. Under the advanced and weighted approach, our CET1 ratio continued to increase, reaching 12.85% and 11.18% respectively. Secondly, we secure our growth in wealth management business. Non-interest net income has increased steadily even on a high base.
By the end of September, retail AUM CNY 11.96 trillion, up by CNY 1.2 trillion by the end of last year with a growth rate of 11.16%. Asset management business totaled CNY 4.72 trillion, up by 9.26% compared with the beginning of last year. Asset custody business totaled CNY 20.77 trillion, up by 6.72% compared with the end of last year. Under the drastic decrease of the capital market, wealth management business still maintained good growing momentum, showing strong resilience. For the first three quarters, the group has realized non-interest net income CNY 102.7 billion, up by 1.85% year-on-year.
It is a growth secured based on the last year's growth rate of 21.87% and accounted for 38.78% in our net operating revenue. To see from key items, our fee and commission income from wealth management, CNY 25.5 billion, a negative growth of 13.1% year-on-year. Fee income from asset management business CNY 9.4 billion, up by 22.32% year-on-year. Custody business realizing revenue CNY 4.4 billion, up by 6.59% year-on-year. Bank card commission fee income CNY 15.9 billion, up by 6.54% year-on-year. Settlement and clearing fee income CNY 11.5 billion, up by 8.87% year-on-year. Thirdly, our loan scale grow steadily. Consumption and credit card loan has demonstrated fast recovery momentum.
With insufficient credit demand and a shortage of asset origination for the banking industry, we have made active proposal of the loan extension. Total loans and advances, CNY 5.99 trillion, up by CNY 424 billion, a 7.62% growth. The total loans and advances has accounted for 61% of the total assets, 1.353 percentage point higher than the end of last year. Under the bank's caliber, our corporate loans increased by CNY 125 billion with a growth rate of 6.64%. Among which green loans has increased by CNY 56.6 billion compared with the end of last year with a growth rate of 21.45%.
Manufacturing loan up by CNY 67.6 billion compared with the end of last year with a growth rate of 21.12%. Retail loan, CNY 3.16 trillion, up by CNY 175.8 billion compared with the end of last year with a growth rate of 5.89%. Among the retail loan, as we see less increment in the residential mortgage loan and more increment in the SME loan. It actually reflects our stronger support to the real economy, and we have made very proactive grasp of the recovery of the consumption loan after the pandemic. Therefore, our third quarter newly granted loan are mainly invested in the retail business, and we see consumption loan and credit card loan experiencing fast recovery.
They represent an increment of around CNY 50 billion and accounts for 80% of our total increment for the third quarter loan. To some extent, offsets the pressure brought from a fast decrease in the loan yield. Fourthly, we see steady growth in our customer base, and the customer deposits increase in its quantity while remain good quality. By the end of September, we have 2.47 million corporate customer, which is 153,000 more than the end of last year. Retail client amounted to 182 million, up by 5.2% compared with the end of last year. The growth in our customer base have promote actively and strongly in the high quality growth of our deposit.
Total customer deposit, CNY 7.09 trillion, surpassing the 7 trillion threshold, up by 11.71% compared with the end of last year. Among which corporate customer has contributed to around CNY 4.39 trillion, and the deposit from our retail customer has amount to CNY 2.7 trillion, up by 18.08% from the end of last year. We will continue to adhere to take the core deposit as our center and strengthen to attract and accumulate more settlement funds of our customers. At the same time, conduct both quantity and pricing management over high cost deposits. Demand deposit has accounts for 61% of our total deposit remaining at a high level. For the first three quarter, customer deposit cost ratio 1.51%, up by 11 basis points year-on-year.
Among which, for the third quarter, customer deposit cost ratio 1.54%, which is 2 basis points higher quarter-on-quarter. The degree of increase has narrowed from that of the previous quarter. Fifthly, we continue to dynamically adjust our balance sheet and to narrow our degree of decrease for the NIM. For the first three quarters, our NIM was 2.41%, down by 7 basis points year-on-year, mainly influenced by the multiple cuts of LPR, the weak financing need from the real economy, and people's intention to make more fixed-term deposits rather than capital market investments. In order to maintain a stable NIM, in the third quarter, we further enhanced our strategy in portfolio management over our balance sheet.
In the asset side, we extend our customer base, increase our loan extension, maintain the price, and guarantee our quality to make sustainable arrangement of loan extension and enhance our efforts in allocating more bonds and exit those interbank assets with low yield. Our net interest income has upped by 7.63% year-on-year. On the liability side, we promote the growth of low-cost core deposits and manage more on high-cost liabilities. To see from the third quarter, our interest-earning asset yield 3.86%, interest-bearing liability cost ratio 1.61% remaining the same as that of 2022. Third quarter NIM with 2.36% down by one bp compared with that of Q2. The degree of decrease has greatly narrowed compared with that of Q2.
Sixthly, we have categorized strict asset categorization and strengthened the risk prevention and dissolving to control our risk influenced by the risk brought by our real estate clients and brought by the real estate exposure, real retail loan influenced by the pandemic. The company's NPL, special mention, and overdue loan balance and ratio all increased compared with that of last year. By the end of September, our NPL balance totaled CNY 57 billion, up by CNY 6.2 billion compared with that of last year. NPL loan ratio 0.95%, up by 0.04 percentage points compared with that of last year. Special mention loan ratio 1.14%, up by 0.3 percentage points compared with that of last year.
Overdue loan ratio 1.21%, up by 0.19 percentage points compared with the end of last year. The company's NPL-to-loans overdue for 60 days ratio was 1.21%. The annualized NPL formation ratio 1.13%, up by 0.18 percentage points year-on-year, mainly influenced by the new formation of non-performing real estate loan and the recognizing time point adjustment of our credit card loan and the migration of recognizing loans overdue for 60 days and above as NPL. Targeted at current operating environment, the company will continue to adhere to our prudent and stable provision policy. Our provision coverage ratio 455.6%, down by 28.2 percentage points compared with the end of last year.
Loan provision ratio 4.34%, down by 0.08 percentage points compared with the end of last year. Still remaining a high capability of risk compensation. The company's annualized credit cost 0.81%, up by 0.32 percentage points year-on-year, mainly because that we have made forward-looking and prudent provision increase for loans and advances. Looking into the fourth quarter, under the very challenging external economic, financial, and geopolitical environment, repetitive outbreak of the pandemic, the adjustment in the real estate market, the decreasing interest rates, and the fluctuation in the capital market, we are still faced with great pressure. CMB will remain our strategic positioning unremittingly, remain the three unchanged, namely the banking.
The president assumed full responsibility under the leadership of the board, our marketized system, and our stability of the talent team to continue to take customer as our center and create value for our clients, and continue to strengthen our capability construction in work management, fintech, and risk management surrounding the value creation chain of increase in quantity, revenue, efficiency, and value to comprehensively strengthen our management, to prevent and dissolve risk, to build our new competitive edge, and form a new Malik curve, and continue to increase our long-term investment value of CMB. Thank you. That's all for my introduction.
Thank you, President Wang. Now we will enter into the Q&A session. Please follow the instruction given by the operator and please introduce your name and the agency you represent before you raise the question.
Now we'll have the first question. Now please raise your hand to raise your question. Please open your microphone and also your camera and state your name and the institution that you represent. The first question is coming from Huatai Asset Management, Mr. Chu.
Thank you for the management for me to raise the question. It's quite a simple one that my question is under the current external environment and whether CMB will have some thinking about business strategy or business tactics under the new external environment.
Thank you for the question. This year, you are seeing that the financial institutions have already encountered very difficult external environment. Just now, I have give you a brief introduction about what we have achieved this morning, for the first three quarters, why we have achieved such quite a stable growth.
We think that this is mainly because we stick to our retail banking strategy, and retail business is the backbone of CMB's overall business. Under the current external environment, how can CMB develop further and to maintain our advantage and our own special characteristics? Also, how can we provide investors stable return? I know it's a big interest and concern from the market, but it's also the same direction that the management are moving towards too. I think that why we have come to today is because firstly, 20 years ago, we have already very clarified our the direction of our strategy, namely retail banking. I remember that 20 years ago, our ex-CEO, Mr. Ma Weihua, he said, "If you do not do wholesale banking today, you might not be able to be profitable today.
If you do not do retail banking, then you might not be able to be profitable in the future." At that time, the future he means is the now time for us. We think that if we do not do retail today, we cannot be profitable. If we do not do retail in the future, it's also the same, we'll not be profitable in the future. That is why last year the board has reconfirmed that the bank will need to build up itself into a best value-creating bank with extensive business model. We think that it's in line with the traditional advantages that CMB have now, and it's also in line with the trend of the time and the new era. What is the trend now?
Currently, you know, China has become the sixth largest economy in the world, and we have a middle class for around 400 million. Our goal is to have inclusive prosperity. Our goal is in line with the national goal and also in line with customers' demands. This is a conclusion that we made based on our efforts made by the 25 years. We have quite accumulated our experiences, our overall and comprehensive mechanism and also know-how in these areas. That is why I say we definitely need to stick on this path that we have already embarked on. Last year, the chairman of the board has already set out the idea that CMB need to build up three capabilities, namely the capability for wealth management, for fintech, and also for risk management.
The three major capabilities, one of them is for wealth management, decides on how fast we can go. Technology decides on how fast we can go. Risk management decides on how far we can go. The chairman also the requirement from the board and the chairman clarified the future direction of CMB. We think that as long as we can stay on this path and stay true to our original purpose, definitely we think that we are able to provide value, create value for our investor and also create value for our employees, for our shareholders, for the society, and also for our customers.
Thank you. Second question, please. The second question is coming from Mr. Wang Ying from China Merchants Bank. Thank you for giving me this opportunity.
Actually now we see that there's kind of a shortfall for the CMB stock price. Investors are quite concerned about whether CMB will change its market mechanism. So, is Mr. Wang able to share with us your view on the market's concern?
Thank you for the question. Yes, indeed. Recently, the stock price, especially from October, has come down even further and has even broken the P/B, which has been even below one. There are many concerns from investors and also many reports in the media. For the management side, we think we really lay high emphasis on your concern. Investors, analysts, and also media reports, I have already read your reports and have made some thinking on that. I think people are interested in, firstly, whether CMB's market mechanism can continue.
Secondly, they are concerned that in this downturn of the economy, especially, when the real economy is facing difficulty and the national guidance is to ask the financial institutions to support the real economy, will that have some negative impact or will that change CMB's strategy? So how CMB can balance servicing the real economy and CMB's special strategy? Thirdly, I know investors are concerned about CMB's asset management, wealth management, whether CMB will change its strategy in these two business area. Combining your questions, I would like to share what my view as the management with you. I think the market mechanism for CMB will not change. CMB was established in 1987 with only CNY 100 million in capital. Now, our net assets is over CNY 900 billion.
If we calculate on the core Tier 1 ratio, we are 11th among all the banks in the world. We started from Shekou area in Shenzhen, and then we've become the national bank and become an international bank. One of the reasons behind our success is because we have market mechanism. I think it's not. Market mechanism is not a simple slogan. Rather, it has its internal logic. Firstly, it can be reflected that CMB operates on its own, namely the profitability. CMB is responsible for its own profitability. I know it's quite easy to say right now, but at that time, during the very beginning of that period, it was a very challenging time, a challenging resolution at that time when we first started in the 1980s. Definitely, we will insist on that.
Secondly, another reflection about market mechanism is that how we choose our talents, namely our management can be promoted or demoted based on their performance, and their income can be even high or low based on their performance. Performance is a important thing for our staff force. Even for us as a management, we have a three-year term. We are appointed by the board. If you are capable of leading the bank, then you will be continued to appointed by the board. Rather, you will not be chosen by the board. Also for our mid management and all the staff force in the bank, they need to compete for promotion depending on their performance. I still remember at the very beginning, when people started to join CMB at the startup period, they think that it's not a guaranteed job at that beginning.
We place emphasis on the professionalism of our staff force. This is very important, and it's embedded in our gene. Thirdly, we have sound corporate governance structure. At the very beginning, we confirmed namely, the CEO assumes the full responsibility of the bank under the leadership of the board. We also emphasize professionalism. We rely on professional management to lead the bank. All these are based on market mechanism. It can guarantee the development of the bank. I still remember when we first started the credit card business and also private banking business, we also introduced professionals from other first-tier financial institutions abroad to join us in CMB to help to develop the credit card and also private banking business. Even some of them are still staying with CMB today.
As you can see, we already set up sound corporate governance, and it also ensure that CMB can be continued to be market-oriented. Especially, we are listed both in A-share and H-share market, and it also help us to perfect our market mechanism. I have a deep understanding that every conversation with investors or analysts. I know that investors and analysts, you have your advice on our strategy is also a important thing for us. It's a very precious means, precious value for CMB. It means how we can perfect our strategy and to perfect our mechanism. We think that for these past years, we have already formed our own characteristics, and we will continue to do so. Also our Chairman Miao and the board have repeatedly confirmed that they were needed. CMB need to remain three things unchanged.
Firstly, CEO take up full responsibility under the leadership of the board. Secondly, market mechanism will remain unchanged. Thirdly, stable staff force remain unchanged. This is why we are successful in the past, and these are the same reason or same thing that we'll continue to insist on in the future. Definitely, market economy also means, economy which is law-based. Another thing we are sticking to market mechanism means that we need to operate in a compliant way. Means that we need to stick to contract. Based on we are entrusted by our customer, and we need to fulfill our responsibility. Market mechanism doesn't mean high reward to performers, but also at the same time, it has reward, but at the same time, it also has constraint. You need to.
When you are enjoying the advantage of market mechanism, you also need to bear the constraints from the market mechanism, such as I just said. The management can be promoted, also demoted. The income can be high or low based on your performance. There are two sides and also the negative sides that you need to take on. That is why I say we need to stick on the market mechanism and have better use of that to ensure our advantage. Secondly, we are concerned that whether there will be some changes to our strategy. I think that servicing the real economy is not contrary to our strategy. Rather, it's in line with our strategy. As a bank, servicing the real economy is our natural duty. Only with a strong economy can we have a strong finance.
For the past decades, especially after 2009 financial crisis, Chinese banks has become even stronger and stronger. We are one of the four or five of the Chinese banks among the top 10 banks in the world. The main reason behind that is because China has grown into the second-largest economy in the world. Because the economy has grown stronger, that is why finance, especially banks, have become stronger. CMB also benefits from the rapid economic growth after reform and opening up. It's our natural responsibility to do our service, to service the real economy. By serving the real economy, we can further develop. It's undoubtedly true. At the same time, CMB is a bank based on market mechanism. We also have our own special characteristic. We need to stick to the differentiated path.
When we are expanding our balance sheet, we also need to focus on risk pricing. These are the principle that you need to stick to. You can both have a better development of yourself and also to serve the economy. CMB also, we are also thinking ESG is a very important responsibility that we need to take on. That is why we are promoting the green loan and also green assets, green bond, these business areas. We think it's in line with the national strategy and also for extensive wealth management. We are better serving the residents' wealth management demands and in order to achieve the inclusive prosperity. We think all the strategies are very much in line with the national strategy and also with the CMB's own characteristics.
We think that servicing the real economy doesn't contradict CMB's strategy, and we can keep a balance. These are much in line with each other, and we can develop our bank itself and at the same time to do a good bit to the economy and serve the real economy, and to take up our social responsibility. This is for the second concern about a balance between our own development and the business strategy and the national strategy guidance. Thirdly, I know the media reports, some were targeted at Mr. Tian Huiyu's violation of laws. There are some reports on that. I know some investors are quite concerned about that, whether it will have some negative impact on CMB's wealth management business or asset management business. What I can say is that the case for Mr. Tian Huiyu is his individual case.
It has no direct relation to CMB. According to the requirement of the chairman and the board, we need to stabilize our mechanism, stabilize our operation, and stabilize our staff force. That is why you can see we are very stable in all fronts, and which can be also reflected in our operating performance. No staff from CMB has been involved in Mr. Tian Huiyu's case. Every business is moving in the right trajectory, such as, just as I just said, the custodian business have an increase over 20%. Our wealth management business, extensive wealth management business, even though is negatively affected by the capital market, volatile capital market, even though we are facing quite difficult time for sales of mutual fund, but other business are moving ahead quite
in a healthy way and keeping a good momentum. Definitely we'll follow the direction from the board. Our management will stick to our original strategy and to create value for our investors. We value your opinions, advice. That is why I would like to take this opportunity to share with you my views. Thank you.
Thank you, President Wang. Now we'll have the next question. The next question is from Miss Meizhi Yan from UBS.
Thank you, Senior Management, for giving me this opportunity. I am Meizhi Yan from UBS. As you have just mentioned, President Wang, that in risk management, I have a question for asset quality, especially for real estate business. We've noticed that by the end of September, the real estate business has decreased quarter-on-quarter.
I'd like to know that if there is any changes on your development strategy in the real estate business compared with the previous arrangement? We see in the third quarter that the NPL from the real estate business has surpassed 3%. We continue to see some default cases of the developers or unfinished projects in the market, bringing influence to the market condition. I would like to know that from the end of this year and till next year, what do you see the trend of the NPL of real estate business? Where is the peak? The NPL formation ratio, provision ratio and the pace of disposal, what are your arrangement and what are the risk condition of residential mortgage loan and credit card loan and other retail loan in your key areas? Thank you. That is all for my questions.
The question will be answered by Mr. Zhu Jiangtao.
Thank you for your question. As for the real estate risk, I believe it is of many people's interest question. For CMB, our strategy is that we will remain consistent with our previous arrangement with no major change. As for retail real estate NPL, we pay special attention to not only the ratio, but also the special of the formation ratio. The NPL ratio is influenced by many factors such as the scale, such as the collection pace. The collection actually can reflect the trend of changes in the industry. From Q1, the formation ratio is 4.7. Second quarter, CNY 2.7 billion. The third quarter, CNY 3.5 billion. Generally, the gap is narrower and narrower. This is a trend we see.
From my perspective, in Q4 and the next year, we will still continue to see the trend. This is all about the on-balance sheet real estate business risk condition. Regarding off-balance sheet risk by the end of September, wealth management product that is with underlying asset of real estate business is CNY 145 billion, among which non-standardized CNY 66.4 billion mainly focused on state-owned enterprises, so that the risks are under control. Agency sale balance totaled CNY 38.4 billion, among which corporate agency sale CNY 4.1 billion, and most of them are default products. PB agency sales products, CNY 34.1 billion, which is 10% of our peak.
Currently, products that has already been defaulted was amounted CNY 4.9 billion, which is focused on very limited amount of clients, and we have already get sufficient assets pledged. In the further phases, we will continue to strengthen our management in the existing period and conduct active communication to the asset manager, and to urge to perform their capability and their performance of management and protect the consumers' rights. This is the off-sheet asset quality condition in regard of wealth management and agency sales products. As for the general risk and disposal policy we will apply on the real estate business, we will further enhance our efforts. Take multiple measures except for the traditional measures such as collection. We will also take other investment banking way of settlement such as AMC and et c. The disposal of risk assets takes a while.
We understand that it will take a pretty long period of time to get it disposed. As for the provision for real estate business. The provision level of our real estate business is already two times of our general provision level for the corporate banking business. So it has pretty strong resilience. As for another case where you pay much attention to, that is the self-repayment event happening in some projects. By the end of September, we expect the total volume will be CNY 369 million, which is 0.02% of the proportion so that the risk level is controllable. That is so much for my answer.
Thank you. Executive Vice President, Mr. Zhu. Next question, please. Next question is from Xiao Feifei from CITIC Securities.
Thank you, Senior Management. The question for asset liability allocation. As we see that there is a continuous, asset shortage in the banking industry, I would like to know your strategy in asset allocation, category asset allocation for Q4 and next year, especially a growth rate for total loans and total advances and, loans and total assets. I'd like to know whether you will still take retail loan growth as your newly granted loan scale.
Thank you for your question. In this year, we have made our budget according to our deposit growth, capital consumption capability, and our market wallet share, and also, the figure announced by PBOC, and also our asset structure. These factors all together contribute to our budgeting for next year's loan growth. For this year, due to market changes, we have made quite big adjustments. The reason behind is that we don't have sufficient effective credit demand.
General loan growth was CNY 300 billion, and corporate loan CNY 120 billion, and for retail loan CNY 170 billion, and the rest are from the bills and from non-bank FI loan extension. Relying on the increment we see from the corporate loan, which is around CNY 60 billion or so, that has to some extent offset the gap from the retail loan extension. Under such circumstances, we do not see sufficient loan extension and therefore we have made corresponding adjustments in enhancing our efforts to loan investment. Including investment to local government debt, policy bank debt, and also foreign currency bond investments to flexibly arrange our asset allocation and make good use of our use of the capital in Q4.
We will act according to our plan established in the beginning of this year and strive our best to finish our target of loan extension. We will appropriately lower the loan extension to bills and interbank assets and encourage our support to credit card and corporate banking loans, which is also what we've seen for the past for Q3 and Q4. The credit card loan and the retail and the consumption loans are getting back on their feet with good recovery momentum. I believe this momentum will to some extent offset the gap we see from other types of retail loans. We will also encourage the loan extension to SME loan in the following period. We hope that even though we have finished our budgeting target for SME loan and for these types of loans, we will still maintain our support in this area.
For corporate loan, we will still continue to enhance our efforts in extension loans to the corporate banking field, especially for M&A loans and for manufacturing loans. We've seen from the PBOC policy that a lot of new instruments were encouraged to be extended to the advanced manufacturing and green finance and some other fields. This is our overall plan for this year. For next year, on the one hand, we will make a good finish of this year, and we are also getting prepared for a good beginning of next year and make relevant and corresponding plan for loan extension for the next year.
Like last year and previous stages, we will maintain appropriate growth rate according to our RWA allocation capability to maintain our capability of capital endogenous growth. With limited RWA, we will take full consideration of our future investment and loan extension plan to guarantee the growth of our retail loan, the growth of our net interest income, so as to finish our general and final target of revenue growth. Of course, we will act according to our risk management level and will not act too aggressive, too fast, nor will we be too low in our pace of development. We will make very reasonable arrangement of our loan extension plan. We will also take a look at the nationwide loan growth and speed. I believe we will remain a double-digit growth in our loan growth, which is similar to what we have done in the previous years.
That is for the size. In terms of our structure, we will follow our established strategy, encourage our loan extension to retail banking business, SME, retail, consumption, real estate, mortgage loan, etc. But for housing loans, we need to follow closely to the trend of the market and make accordingly our plan. By the end of September, the residential mortgage loan was only increased by CNY 18.8 billion, which is far less than what we are making, the target in our budgeting. Therefore, we need to innovate the way we promote such business and strengthen our effort in promoting the second-hand houses. This is for the loan structure. As for the corporate banking loan extension, we will serve the real economy, SME, green finance, manufacturing loan, and these aspects will be our focus. We will.
Act according to our allocation of our industry understanding and our regional focus. All these conditions will be the considerable factors for our next year's plan.
Thank you, President Wang. We will have the next question.
Next question is coming from HSBC.
Thank you very much for giving me this opportunity. My question is about asset quality. As we see from the third quarter report that the NPL ratio has been kept at a low level, below 1%. Overdue loans and special mention loans are rising. Looking to the fourth quarter and next year, what is your view on your overall asset quality?
This question will be answered by Mr. Zhu.
Thank you for your question. Looking into fourth quarter and next year, I think that the overall asset quality of the bank will remain stable and NPL ratio will be kept at a relatively low level. For corporate banking, for the first quarter, the new NPL formed is coming from the real estate sector and around 70% are coming from that. You see that, as I just said, sequentially, the new NPL formation of real estate is coming down. The other sectors are remaining quite stable. For retail banking, we think that the risk has risen a little bit compared to the beginning of the year. The main reason, one is the COVID impact. The second one is real estate. Thirdly, we ourselves have further increased our standards for how we identify risk.
Our NPL ratio for mortgage is only at 2.9%, and also for overall retail is 0.49%. It's all at a low level. Another area that you might emphasize on is credit card, as we can see that in the third quarter, the early indicators for risk for credit card is performing better than what we have in second quarter and first quarter. We think that for credit card, we'll stick to our policy with a stable and low volatile policy to maintain the risk of credit card at a controllable level. Thank you.
Next question, please. Next question is coming from Mr. Shuo Yang from Goldman Sachs.
Thank you. Thank you for giving me this opportunity. My question is about the NIM. What would be the trend for the second half and for next year? And another thing is about the repricing. How will the repricing affect the NIM next year? And how will you take actions to counter the negative impact coming from repricing. The third question is about what's your view on the decline in your deposit rate, and will that be sustainable next year? What is your view on that? Thank you.
Thank you for your question, sir. About NIM. For the group level, the NIM has been down by 7 basis points on a year-over-year basis for the first three quarters. For third quarter, sequentially, compared to second quarter, it's only down by 1 basis point. The degree of decline has been narrowed sharply.
As you may remember, in second quarter, we have a sequential decline of 14 basis points. Third quarter, we have seen very obvious improvement. Looking into the future, we think the trend of NIM decline is still very obvious. That's been the trend. Our pressure for us to manage the NIM is very large. The main pressure is coming from the asset side, especially there's a lack of effective demand in the market and very fierce competition for quality assets. That is why banks are lowering down the financing cost just to compete for quality assets. That is why for many asset projects, there's some distortion of pricing. Some of the pricing for loans is even lower than the deposit rate. It's a kind of irrational competition in the market. For CMB, we need to take a rational way for competition in the market.
We stick to risk-price pricing capability, and the pricing should cover the risk and other costs. For loans with a very low pricing, we might give up the chances for the competition for those of the loans which may not cover risk. That is why you see from the asset side, we are still facing downward pressure on that. From the liability side, in the third quarter, it's only up by 2 basis points for the liability cost, even though it's still rising. You can see that the pricing for customers' deposits and the rising trend is also slowing down. The reason for the rise of deposit cost is because this year capital markets don't perform well, and many customers, they like the term deposit products or term saving deposits.
In order to satisfy our customers' demand, we need to provide these kind of products to our customer. Another good news for deposit side is, certain banks and also the joint-stock banks in September collectively have decreased our deposit yield by 10 basis points, and this help us to relieve our burden on deposit side and help us to maintain stable NIM. This is the first time that banks collectively to reduce the deposit cost. We think that it's a reflection of the marketization, liberalization of interest rate. That is the rational choice of the banks as well. In September, after we adopted the new deposit rate, definitely it will have positive impact on fourth quarter and also for next year will help us to control the deposit cost.
Overall, we think that the NIM will be still continue under pressure. Another thing you said about is repricing. This year for long-term LPR has been down by 45 basis points. For first home buyers, the pricing can afford is 20 basis points below LPR. This can all be reflected in the first quarter of next year. I noticed that after the release of the third quarter, some banks have showed a symptom of negative growth of operating income. I think that if for the yield of assets and the deposit cost has big growth and a big growth, if we cannot make a balance among that, we might face further pressure of the growth of our operating income.
CMB need to be cool-headed and have a right judgment of the external environment and to make sure that our operations will be stable in next year to minimize the impact coming from the LPR repricing on our operating income. Our goal is to achieve stable growth next year. It's also a very important thing that the management is laying emphasis on. In the first quarter, we are already starting to take approaches to counter the negative impact on the LPR reprice. Thank you.
Next question, please. Next question is from Morgan Stanley, Ran Xu.
Thank you, Senior Management for giving me this opportunity. I'm Ran Xu from Morgan Stanley. I have a question for the fee income. Commission and fee income. We see in the third quarter that regardless of the non-interest income or fee income or commission fee income, the drop is larger than that in the interim report. I would like to know the reason behind. What is your outlook for next year as we are faced with so many uncertainties in the external environment? What is your expectation on the commission fee income growth?
Thank you for your question. For commission and fee income, we have recorded CNY 102.7 billion, up by 1.85% year-on-year. It is a growth secured on the high base of last year's 21% growth. It is a 1.85% growth based on last year's high base. It is not very easy to achieve. The major reason for our drop is because of the agency sales of our fund business. The degree of decline is around over 40% year-on-year. We are faced with the fluctuation and challenge and difficulties brought by the capital market. We have taken multiple measures to dig deeper into business from other aspects.
To offset this negative influence brought by the agency sales of the funds, we have made achievements in agency sales of insurance products and wealth management products in asset management, asset custody, and the bank card settlement commission and fee income. These aspects have all contribute to a stable growth. To offset the negative influence brought by the capital market. This is the overall situation in Q3. To see from the quarter-on-quarter growth, the commission and fee income has slowed down a bit, decreased. Non-interest income in Q3 was CNY 31.3 billion, for the quarter-on-quarter decrease is around 7%. This is mainly because of the capital market fluctuation. We see even more drastic fluctuation in the market. As for the insurance product fee income, we have slowed down a bit in Q3.
For the first half, the insurance product revenue is very good, which has brought us some gap in a decrease. For the next year, we will take various measures to guarantee the growth of non-interest income and commission and fee income. On the one hand, we will make efforts in multiple aspects and will not rely the commission and fee income on single type of product in case of the changes happening in the external environment. For the second aspect, we will continue to enlarge our customer base, enlarge our AUM. The cake, the AUM, will require us to enlarge. Even though with the very unsatisfactory environment, we continue to bring our AUM scale up by CNY 1.2 trillion. As the AUM scale is larger, we believe there are still aspects that can make contribution to the profitability.
Hence, therefore, we will still stick to our strategic direction of extensive wealth management. By leveraging this capability, we can enhance our capability in asset management, asset custody, and in some other business segments. That is what we can depend on in our future growth. We believe the strategy of extensive wealth management can better optimize our structure of revenue. Therefore, we can remain stable. Growth in our revenue, especially, net non-interest revenue. Next question, please.
The next question is from CICC. Thank you.
This question will be answered by Mr. Wang.
Just now, Mr. Wang, President Wang has mentioned the commission and fee income especially in wealth management. It is under pressure. Therefore, your question is quite a good one. CMB's retail banking business, especially in wealth management, our core competitiveness is. What is our core competitiveness?
I'd like to answer your question from the perspective of client base, AUM, and some other aspects. First of all, AUM is the key to your retail banking business. This year, our client base has a good growth. This year, retail clients now total 182 million till Q3, which is a 5.2% growth year-on-year. To see from the growth of our type of customers, we are featured by following four characteristics. First of all, our customers tend to be younger. Golden card-level clients have shown fast growth rate. Among the clients from golden card-level clients, we see young customers' ratio increased from 28% to 33%, representing a fact that we are recognized by our young customers, especially the college students.
The second aspect is that we have seen fast growth in major city clusters such as Yangtze River Delta and some other regions. There are higher proportion of growth from these areas by 20%. The third characteristic is that online wealth management has been a trend. Omnichannel wealth management business has increased to 42 million, which is 11% higher than that of the previous year. Generally speaking, acting according to our structure of retail business, the portfolio itself is quite reasonable. From basic level to gold card level, to golden card level to the above, the structure is now rational and quite qualified. We are satisfied with the results we have achieved in managing our client base.
Although influenced by some external factors such as the pandemic control, our customer acquisition might be a little less than that of last year since we have not completed this year, but the management quality is actually better than that of last year. Especially, we have comprehensively promote the group-based finance. It has generate results. A group-based solution is actually a closed-loop business operation from customer to C and to B. It is integrated with corporate ID and retail finance, and we have seen quite healthy development path in this regard. This is about our customer base. The second aspect is about AUM. We see pretty good growth in our AUM, up by CNY 1.2 trillion compared with that of last year. We also see structural change due to the external factors' influence.
Deposit grew a lot, and the second is banking wealth management products. It is quite normal as there are fluctuations in the capital markets, so investors, our clients, tend to be more risk-hedge driven. Therefore, we will definitely provide relevant arrangement due to our understanding of the timing and provide it to our clients. This is also reflected on our net interest income, so therefore, there will be a drop in our agency sales of fund products. Generally, CMB has constructed a very long-term capability in our wealth management business. First of all, the first aspect is that our values. We have always taken customer-centric, and we create value for our clients. This has been our core value. This is closely related to our staff's understanding, our performance evaluation, our system. Our results have generally been demonstrating.
The second is that our TREE as an allocation philosophy has comprehensively launched. The TREE, T-R-E-E allocation key is to put in our customer segmentation and categorization to better understand your clients and have established an equity-based allocation discipline for our clients. We have a very scientific evaluation to see how much equity product to allocate for what type of assets. Therefore, it is also reflecting our philosophy to take our customer at the center. It is quite advanced in the domestic banking industry, and we have finished system establishment. After implementing this system, CMB will be even more resistant to fluctuation in the capital market, and we can also enhance our competitiveness in the market. For the third aspect, insurance products. In this year, through the arrangement of insurance products, it is not just good performance from the statistics, from our results.
It is also a reflection of the increase in our capability of making allocation. The structure we see within the increment of the insurance products are mainly regular paid insurance products. It is quite a complicated product. We are relying on our system capability, our staff capability, and the product selection capability by which we can deliver such solution to our clients. That is what we say that we are building our stronger and stronger capability in our wealth management business. The increase in our capability in building the insurance products has given us confidence overall. Well, actually, the slowdown in Q3 actually represents that we are doing too well on this year's target. We proactively slow down our pace.
Moreover, we will still follow our overall strategy and follow the direction given by President Wang to continue to strengthen our capability. Fourthly, online capability. It actually reflects our reach to our clients, our increase in our efficiency, and the cut of further costs. By the end of September, the wealth management product clients that holds position has increased by 11% year-on-year, especially for some indicators. Wealth management transaction clients has increased by 3% in their repurchase ratio. The 3 percentage point is very substantial, representing our online operation capability actually increased compared with the previous stages. Our online-based, our digital-based operation capability in the wealth management business actually has been further enhanced. From January to September this year, the agency sales product through the online channel has remained a double-digit growth.
Even though the agency sales of funds business has been quite difficult this year, but the online channel remained a double-digit growth. Therefore, it is another aspect reflecting our capability. The third aspect I'd like to talk about some of the questions you're interested in. First of all, trust-based products. We actually see quite large drop in the products of the trust-based business. We also see the performance in the overseas market. Non-standardized trust scheme products. This era has gone. Just now, Mr. Zhu has mentioned that CMB has exited most of the products and remained a little volume within this product.
Therefore, the exit is also to some extent reflect in our non-interest income, but will remain a very limited proportion of such business. The second aspect is the equity-based product. As the capital markets fluctuate, we also see very natural decline in agency sales of equity funds. In order to cope with this situation, we have take multiple measures, such as to enlarge our customer base and to verify our product selection to our clients. Therefore, you can see we have secure our position in the market. We will wait for further warming of the market. We believe our equity fund-based products will bring better customer experience to our clients.
We believe that it is also another key factor for us to pay attention to when we are facing with the market fluctuation about how we serve our clients. We believe it is also a good timing for us to allocate equity fund-based products to our clients during the lowest point in the market. We have continued to consolidate our capability, and therefore we have full faith in the future. Next question, please.
Next question is from Springs Capital .
Thank you for giving me this opportunity. I have two questions. We see that the net operating income has is up by 14.1%. It's a little bit slowing down compared to the first half, and quite the same as just Mr. Wang has said. Looking into the whole year, what will be your judgment or your view on the whole year's operating income and net profit? Second thing, looking into two and three years with enough capital, what will be your target for net profit and for ROE?
Thank you. Thank you for your question. For the first three quarters, our profit has grown by 14.1%. I think that is in line with our expectation. Negative thing that we are facing is a slowdown of our operating income.
Operating income is now only 5.31%. Comparing with our peers is above the average level, but definitely there is a declining trend, and one of the reason behind is the contraction of NIM and a slowdown of NII, and also, by the low base, growth of the fee income. All these have result in a slowdown of the operating income growth. We think that the operating income under the current situation, namely, we are continue to face the lack of effective real economy, economic demand. Under this negative environment, the pressure for NIM is very large. The trend, the slowdown of the operating income growth is also still there. In terms of the profit, we will strive to keep a stable profitability. The key factor is asset quality.
When we are facing a slowdown in operating income, only with a good asset quality we ensure that there will be no loss or be eroded by risk factors. This is the key to the profitability of the bank. Otherwise, the profitability and operating income will not be able to meet our expectation. I remember in 2018 and 2019, we have single-digit operating income, but we still have double-digit profit growth. The main reason behind that is we have a very good risk management at that time. It's the same cycle again.
What we are trying to do is to strive our best to keep a stable operating income and better manage the risk side and ensure asset quality, and to reduce credit costs and to maintain a stable profitability. This is how we can realize the value chain, namely to increase revenue, to increase profitability. Look into the next two to three years with some forecast like that. I think we need to look at the changes in the macro environment and look at monetary policy side and also financial markets. We need to look at ourselves, how we can control the cost side and how we can price the loans. Also for fee income, how we can grow the fee income. That will be decided by many factors. My judgment is for CMB. I can, I try to be more neutral.
I should not be too optimistic or pessimistic. Frankly speaking, I think that CMB can maintain our ROE at a relatively high level, and can provide the reward or value for the investors. Namely, it will be an object that worth investing in. This is the target or goal that we are working for. We need to take into consideration many factors like profitability, capital constraint, and structural change, credit disbursement, serving the real economy, and risk management. How can CMB maintain stable operations in a down cycle? I think many emphasize on the five areas. It's like the five fingers of your hand. First is transformation. Namely, transformation from traditional banking business model to the new banking model based on extensive wealth management, based on digital operation. Secondly is to be innovative.
Innovation means vigor, vitality, and you can enjoy the benefits from innovation. In the past, we were successful because we were innovative, and now we also need to be so. Thirdly is to maintain the bottom line of our asset quality and to prevent risk. Fourth is to have a stronger staff force, especially for bank change. This should be in line with the future change of the banking system. I think it's the key to the success of the bank. Fifth is management. We need to strengthen management, like cost management, risk management, strategy management. These should be our emphasis on the bank. I think it's like a fist, namely five fingers of your hand. Neither of them should be shorter than each other. Then if you put the five fingers together, it will be a fist.
To make sure that the capability of the bank can be strengthened and further improved, so as the profitability can be returned to the investors. That is why I say these are the five areas we need to emphasize on and to make a strong force to maintain a stable operating income and to give your reward within your expectation. Thank you.
In order to ensure the interest of all the investors, that is why we have broadcast this results conference, and many investors have come in. Not only the participants online, but also we have collected questions through email. I think the questions are quite the same as the question that has been raised just now. Now I would like to pick up another quite more representative question from email. Our colleagues will share the question.
In the third quarter in CMB, in the structure of your credit loss, as you can see that the provision for loan is rising quite fast. The provision for the loan assets is coming down quite a lot. What is the reason behind that? Look into the whole year and next year, what is your view on your coverage ratio, credit cost?
This question will be answered by Mr. Zhu. Thank you for the question.
You may have paid attention to the rise in the provision for loans. This is mainly. First one is because of the risk from assets from the real estate sector. Also COVID has some impact on our retail loan. This is why you have seen more provision on loans. For non-loan assets, it is also affected by two factors.
First one is for interbank assets, namely the reverse repo assets. The total size of that has been down by 90%. Secondly, for the contingent assets, because last year we have made ample provision for that, and this year it has declined a little bit. These are the major reasons behind the decline of the provision for non-loan assets. For the whole year, we think that the coverage ratio by the end of the year will decline a little bit compared to what we have at the beginning of the year. It will continue to be kept at a relatively high level. For credit cost, at the end of September for the company level is around 0.81% by the end of third quarter.
By the end of the year, we think it will be smaller than what we have in third quarter, but will be higher than what we have at the beginning of the year. Thank you. Now, last question, please.
Next question is Miss Ma Tingting from Guosheng Securities.
Thank you for giving me this opportunity. Have any plan to raise capital or raise funds in the capital market?
CMB, we have replenished our capital from the market for over the past 10 years. To keep our indigenous capital growth is our own requirement for ourselves. Currently, we don't have any plan for that. As I mentioned, our goal is to maintain a stable, reasonable profitability. Profit is the factor for our capital replenishment. It's one of our strategy for that. Thank you.
Due to the time constraint, CMB 2022 third quarter results conference has now come to the end. If you want to know more details, you can search for our third quarter report online or to liaise with our IR team. Thank you very much for taking time to attend today's conference, and thank you very much for your support for us. We will continue to do our work and to provide a better return to the investors. Thank you very much. Goodbye.