Thank you Chairman Miao and President Tian. Now, we will enter into the Q&A session. We will now invite questions from investors and analysts and then from the friends of the media. Please state your name and the agency you represent before you raise the question. Please raise one question each time. We will now have the first question. We are entering into the Q&A session. Please press the More button in the mobile end. Please press the participant button on the PC end. Please limit your question to one only as we have a lot of participants in today's conference. Please turn on your camera and microphone before you raise the question and introduce the name and the agency you represent.
Thank you very much for giving me this opportunity. I'm Ju Chenxi from Guotai Asset Management. My question is for the Chairman Miao. I noticed that your vision for CMB has made some changes, namely to become the best value creating bank. In your view, what do you mean by value creating bank? And why do you made the changes to the vision of CMB?
Thank you very much for your question. It's really a good question. Last year, when we were making our 14th Five-Year strategic plan, we have defined our vision for the next five years. Namely, to driven by innovation and also have more characteristics and to become the best value-creating bank. We think that the vision should follow the trend of the times and also the trend of the industry, and also at the same time to strengthen the characteristic of CMB. As you can see in my words in our annual report, I said that the destiny of the country also represents the destiny of a company.
In the 13th Five-Year Plan, in the past, we have made great achievements. This is also the major contribution or background we are benefiting from the times and the opening up of China. We think that we need to follow the trend of the times and also the vision also represents the long-term development trend. As you can see, wealth management is the core competitiveness of the bank and also is the core competitive field of the banks.
Our vision also represents this area that we want to be more strong in. We say that the 3.0 model, the business model, we want to build our new competitiveness and also Malik Curve in this. Mr. Fredmund Malik in Europe has the idea of the Malik Curve, namely the company need to have a strategic vision or choose the right strategic path in very critical times. We think currently it's the right and critical conjunction that CMB need to make the right choice to have the right transformation of its strategy. We think that it's very important for an enterprise to follow the tide of the trend and to adjust its strategy according to the changes of the external conditions. It also needs the company to have determination when you are promoting or proceeding with your strategy.
You need to be very determined in this regard. That is why when we're making new highs, we also need to be highly aware of the challenges around. That is why I think this is the background we are launching the 3.0 business model. The vision represents our value proposition, namely customer-centered and creating value for our customer. The vision says we want to creating the values. This also represents our value proposition. Value actually means values for different counterparties, means value for customers. This is the core one. Secondly, we need to create value for our shareholders. Thirdly, creating value for employees. Fourthly, also creating values for our counterparties and cooperative partners. Fifthly, very importantly, to creating value for the society. This is also why we think the core of this is, or the root, to creating value for customer.
We need to service different kinds of customers to make sure different clients from different asset classes, they can enjoy our custody. Also at the same time, we need to create value for them to make sure the value of their assets will be maintained or even value added, so we can earn more trust from our customer. We think that it's also one of the value we want to create for, and also is the root or the most important one for all the values we want to create. If a bank cannot create value for the customers, then let alone that you can create value for shareholders or even for the employees. We think it's the most important thing or the basic for other values.
Secondly, we need to create value for our shareholders. Why the shareholders want to invest in one bank? Because the bank can create value for the shareholders, so it's very important. Also, at the same time, we also need to create value for the employees. It's also the basis of the value we want to create. We need to provide a healthier and career path that our employees can also develop themselves or grow themselves in the bank. As long as the employees can also enjoy the work and to devote themselves into work, we think that the bank can have a sustainable growth. We think it's the foundation of the value that we can create. Also, we need to create value for our cooperative partners.
When the partners are working with us, we want to also create an ecosystem and also expand our friendship circle. It's also very important to expand the value ecosystem. Last one is to create the value for the society. This year, we also have launched our sustainability report and also described what we have done in terms of inclusive financing and green financing and social responsibility and also charity and also consumer conduct as well as employee conduct and consumer protection.
In terms of our ESG rating, our rating has been upgraded from BBB to A. This also represents where we have made progress in terms of ESG. That is why I say our value represents the trend of the time and also the trend of the industry. We think that we are following the trend of industry, and even we want to lead the trend of the industry. It is really a very good question. Thank you.
Next question, please. Next question is from Mr. Ma Kunpeng from CITIC.
Thank you very much, Ma Kunpeng. Actually, I read the annual speech of Mr. Tian Huiyu that you raised the idea of a service system, including investment banking, commercial banking, private banking, and also technology all together to provide an integrated service to the customer. I think you are prepared not only to compete with your peers, but also in internet platforms. I think when you are promoting with these four areas, are you going to use the four altogether or when facing different customers? Which means that how you can integrate all the services from these four areas? Thank you very much.
As we said, investment banking, commercial banking, private banking, and also technology are integrated service all together for including the four areas. We think that it's a very important thing that when we are describing how we want to do the 3.0 business. In other words, it means it's a integrated solution for customers. For CMB, we think that investment banking, commercial banking, private banking, and also technology are all the advantages of CMB. That is why we use this kind of a description. It's not a new thing. It's just something that describing we want to be customer-centered, and under these circumstances, how we can best perform our characteristic.
Actually, we are going to provide the services to all kinds of customers, such as for the customers in new driving force areas. These kinds of customers not only requiring loans from the bank, or they also need direct financing or even services for the employees or senior management of the companies, such as the pre-IPO financing or incentives for senior management. I think these businesses are highly related to investment banking and private banking business. In order to provide integrated services to customer, we need to do the two following things. The first one, we need to have a deeper know-how for the industry. For the past years, you know that China has enjoyed quite fast growth, and it's quite easy for bank to do a good job, especially for property financing and also for financing for local government vehicles. That is where the bank was strong in.
For the new industries, especially for new startups, we are not very familiar with or we're only familiar with a few companies or a few industries. The employees or relationship managers are not fully prepared in this area. This is something, this is a difficulty or challenge we need to tackle with. Secondly, it is for the internal integration of our internal organization. That is why I would say the culture should be integrated, should be opened up. If you do not open up yourself, you cannot integrate it yourself. That will bring a bad customer experience to the customer, and you cannot touch the pain point of the customer. For the bank internally, it's kind of a silo for different business departments, for different profit centers.
They have their own interests, and they only care about their own performance or own KPI. They are not focusing on customer, rather they only focus on their own KPI. We cannot forge a synergy to provide integrated service to the customer. When you say, it's quite an easy idea to say we want to provide an integrated solution, but actually when you deliver that, you need to have a very sound organization in place. Thirdly is the value proposition, which means that just now, as Mr. Miao said, we need to be customer-centered and creating value customer. It should be everyone in the bank should have this value embedded in his heart, when they are delivering service to the customer, should represent this value proposition. That is how we can achieve this goal. Thank you. Next question, please.
From Gary Lam from HSBC.
As for the property market, due to the policy or also due to the property market and also the implication from the market. For the first quarter or for the first half of the year, how about your fee income projection for 2022? Will the fee income be slower? And as for your loan structure, in the past, around 60% are coming from the retail banking. What is your view on the asset origination side for 2022? And what will be the speed of the asset growth for 2022? Thank you very much.
I think you have raised two questions. The first one, you are interested in how we have what is our performance in first quarter. I think that in the first quarter, we are facing severe challenges from the overall economy. We are facing challenges in terms of the risk side. How can we guarantee or how can we sustain our growth rate? As last year, we are facing challenges. Actually from the start of the year, we think that we are still following our plan and our budget, and we have sustained a stable growth trend for both deposits and loans within our budget or within our plan. Now it's only around not less than three months, so we still need to observe. We are facing challenges. The first one is for the cuts of LPR rate, both in December last year and January this year.
This has posed downward pressure on the asset yield and also on the NIM side. It's quite a pressure and also a challenge for us to maintain our NIM advantage. Secondly, for the deposit side, the competition for deposit is even more fierce, and the cost is a little bit rising up for NIM. This will also pose challenge to the maintenance of NIM. Thirdly, for the fee-based income, as you have seen the very strong volatility in the market, even for the mutual fund, agency sales for the whole market, it's really a great challenge for the new issuance of funds and also. Which means that will pose a challenge or downward pressure on the fee income from the agency sales of funds.
If you take a longer view, we are confident that we can keep our operation stable and to maintain a stable growth for the non-interest income. As you can see from the macro side, the GDP growth rate is expected to be 5.5% and also fiscal policy and monetary policy will have a better play or even stronger. As you can see, the long growth budget for the whole is around CNY 20 trillion for the whole society. If you take CMB, it is only a very small part of the whole macro picture. For the incremental part, we think that we are confident with that.
What we need to be concerned, or we need to be in p ay attention to is for the cost of deposit, namely to pay attention to the growth of the current deposit and to control the cost of the deposit, to make sure the cost will be stable. In terms of loans, we need to pay very much attention to the stable asset quality of the loan and also to continuously optimize the loan structure. In terms of the loan allocation, to insist on the growth of retail loan, such as credit loan, micro loan, and also for the consumer loan. As you can see, last year, we have enjoyed quite sound growth for that. This year's budget, we are continuing to have a strong growth in this area. With the optimization of the loan structure and the stabilization of our deposit cost, we think that we...
By these two ways, we try to maintain our NIM advantage. In terms of the non-interest income, even though the volatility in the market is very strong, it might affect the market in a short term. Last year, the FSA, Financial Stability Association, has also delivered statements to the market to stabilize the market. We think that especially for fee-based income, it's not only the fund sales, but also including the insurance sales. We need to have a better performance in terms of asset allocation, including all kinds of products. Overall speaking, we think that we are confident about the growth trend of this year in 2022. I want to add something. If you look at the macro side, we are facing great pressure in first quarter.
The fourth quarter was the quarter that we are facing the severe challenges for the downturn of the economy in entering the first quarter. Still, we are seeing scattered COVID-19 happening, and some regions have taken quite strict measures this last week. In Shenzhen, it's quite a lockdown, and it really dealt a blow to the consumption. For the macro side, there is ample room for both monetary policy and fiscal policy, for the deficit rate is only 2.8%, so there is room for fiscal policy. If you look at the monetary policy side, now the inflation rate is so low, so I think there is also still room for monetary policy. It's different from Europe or America. We're saying they are facing high, very high inflation.
It's kind of the policy is facing dilemma both for controlling the inflation and to have maintained growth. It's quite different from what we have now in China. Secondly, I think local governments are trying to implement the central government's policies. In the past two years, the fixed-income investment has seen quite a strong momentum. First quarter is quite a difficult quarter for the whole year. For the bank, first quarter will also be quite hard. For the whole year, I'm still confident about achieving for the GDP growth rate about 5.5%. I think the bank can also achieve a reasonable growth for both operating income and also profit.
Next question, please. From Haitong Securities, Lin Jiali.
Chief Banking Analyst Lin Jiali from Haitong. In your annual report about the data for the provision and also your announcement is different. The coverage ratio is different for your results quick announcement in your annual report. We have seen a big increase from that. Why is the change for that? And what is your thinking on why you have made the changes that have resulted in a difference between the coverage ratio for your results announcements and or your annual report.
Thank you for your question. I think I didn't open the microphone. I was just muted. Firstly, as for the quick results announcement, and also for our annual report. For the coverage ratio, we have the same calculation method. And in the second question is about why you have an increase about the provision for loans in your fourth quarter. Last year for the central government's economic conference, and also for the. We think that we are still facing downward pressure for economy, and also we have facing many uncertainties, such as for the conflict in Russia and Ukraine, and also volatilities in the commodity markets, and also the pandemic. And also systemic risks, even in some local regions. We have made some forward-looking provisions in terms of for the loan assets. And also for the provision for other kinds of assets, except for loans.
As you can see, compared to 2020, we think you have seen quite a sharp rise for that. The reasons are the following. The first one is for external environment. Secondly, as you can see, for quite a long term, the provision for other kinds of assets is quite low, at a low level compared to the provision to loans. That is why last year, according to the precautionary manner, we have made a higher provision for that. Thirdly, we think that a risk for small and medium-sized financial institutions is rising. Fourthly, last year was the last year for the transition period of the wealth management subsidiary. We have made provision for one-time arrangement for that. Fifthly, in terms of from the group level, for the operational risk, we also have made some plan for that.
Based on these following reasons, we have made higher provisions for other kinds of assets. We also noticed that last year, fourth quarter, we have seen some writeback of the provisions for other kinds of assets. This is because for the first three quarters, we have made a higher provision for that. In the fourth quarter, considering that the situation is becoming more clear, and that is why we have some writebacks about the provisions for the other kinds of assets in the fourth quarter. As for when we look into 2022, our coverage ratio will be quite stable. Provision to loan ratio may see some downward trend. Thank you.
Next question, please. Next question is from Guosheng Securities, Ma Tingting.
Thank you Senior Management for giving me the opportunity. I am Ma Tingting from Guosheng Securities. I would like to learn about company's real estate exposure. I understand the real estate exposure, but the NPL ratio keeping increase. I would like to learn the reason behind. Is it able to describe to me some details about exposure and the project loans on the exposure? How do you view the risk tendency of real estate exposure? Will it continue to increase? Relevant exposure, when is the top of such exposure?
Thank you for your question. In terms of the real estate exposure for the first thing, let's see the change of the total scale. According to our annual report data, for bank-wise, the total number is CNY 920 billion in CMB. For those the group assume credit risk, the balance was CNY 514 billion, up by CNY 12.7 billion compared with the beginning of this year. For those we do not assume credit risk group level, it has down by CNY 106 billion and totaling around CNY 400 billion. Basically, these are all the balance for the bank. To see generally, we have a ninety billion decrease bank-wise.
To see from the asset quality level, for the on-balance sheet level, corporate real estate loan that we assume credit risk by the end of 2020, the NPL ratio was 1.39%. It is increased compared with the industry's NPL ratio, and it's highly relevant with last year's industry risk level, which is in line with the industry tendency. For those we do not assume a credit risk bank-wise, it consists of two parts. For the first part, WMP, the second part's agency sale. WMP related to real estate amounts to CNY 10.8 billion, accounting for less than 6% of the total WMP scale. The default rate was around 0.2%.
For agency sales of real estate relevant business, CNY 98.8 billion, among which PB's agency sale amounts to CNY 39.9 billion. The major default clients involved are actually China Evergrande Group and China Fortune Land Development. We have maintained active communication with the two parties. According to information provided by them, the current existing asset value of the position we held is actually quite sufficient, and the government has also been involved in the settlement solution. We will pay close attention and maintain active communication with the manager and speed up the risk solution and asset disposal of the cases involved. On the other hand, the agency sale of our corporate retail loan real estate loan related business amounts to around CNY 3 billion.
Specifically speaking, our management towards the real estate industry is mainly in the following six aspects. Firstly, in selected real estate customers, we stick to the head office level and branch office level strategic clients and put them on our selected name list. Below the category, we have also established A, B, C, D level and apply different strategies targeting at different level of clients. Secondly, the methods of guarantee. Around 1.4% of the clients are under credit guarantee. For the other part of it, they are fully guaranteed by actual assets. Thirdly, 80% of our assets are covered by sufficient asset value. Fifthly, the provision ratio provided to the real estate industry remain two times of the bank's average provisional level.
Lastly, our management towards the real estate industry, we adopt a specific management towards individual clients and follow a specific and dynamic monitor towards our own clients. These are how we manage these real estate clients. For the industry, my understanding is that it is still in a risk rising trend, and the risks will be further released. The industry NPL ratio will further increase for CMB, I think. In 2022, real estate industry risk will be similar to the environment, to the market. I believe that together with the measures we adopt, as above mentioned, we can put under control the NPL ratio within a reasonable, acceptable range for the industry. When can we see the risk reaching the top? We should closely follow the firsthand and secondhand markets, sales trend.
This is how we think and our idea, our view towards the real estate market. Now, let's have the first question. Last question. The next question is from Ran Xu, from Morgan Stanley.
Thank you, Senior Management. I have a question for the Wealth Management business. We see more volatile market this year compared with last year. So, I'd like to know what about the outlook for AUM. And I'd like to learn what is our allocation towards assets, especially when providing service to our clients. Will it be a good opportunity for CMB to develop your own wealth management products? And what is your view towards the influence towards the fee and commission income under the complicated circumstances? How do you maintain your own strengths?
I'll first answer part of your question and then, Liang Wang, will take the next half. Well, this is the first year when we initiate the extensive wealth management cyclic chain of value. We have proposed this new opportunity according to the logic and the trend of the market change. I was a little bit worried that people might have larger expectation on us. Wealth management, asset management, and custody, these three aspects has increased by 33%, which also increase our non-interest income, increased by around 40%, which may let people have higher expectation on CMB. I would like to take this opportunity to clarify that our Wealth Management is far from being an actual professional wealth management institute.
On the one hand, in the Chinese market, we do not have enough abundant Wealth Management Products. WMP, insurance, funds products, trust products, and the precious metal products. Basically, these five main types. In these big markets, when we are doing Wealth Management business, we need to further nurture the market and wait for it to grow more mature. It requires the efforts from different players, from different institutes, from different participants. The Chinese market, especially mainland, compared with our foreign peers in the foreign market, I think they are more mature, and they have more abundant product mix. If you look at the product structure, the income structure of our Wealth Management Product, over one-third of them are coming from the fund product. But as you can see from this year's market, it's not very promising.
As we can see from the first quarter, it is not very promising. That will make us not easy as well in all year's development. To some extent, CMB is a sales agency. Our capability, our advantage, it's basically our channel. Our distribution channel is not our investment research or asset allocation. If we cannot increase our capability in research and investment, in allocation, we cannot boast ourselves as a professional, a real asset manager. This is what we need to take as a goal and requires a long way to go, and we will have enough patience to build ourselves an actual asset manager.
Thank you for your question. Just now, President Tian has basically introduced what difficulties we overcome at the beginning of this year. For the next step, what to do? In the last year, the capital market is volatile. Until the second half, although we have made good results, achievements, the wealth management product still accounts for a large proportion of our wealth management business. For this year, as we can see, we have overcome difficulties both in the stock market and the bond market, and therefore WMP's volatility has also brought pressures to our clients. I think basically our clients are acceptable to the current volatility. I believe we will also promote investor education during this period, and that we aim to nurture our client base this year and remain positive, especially for wealth management client base.
In 2021 CMB application, we have 37 million Wealth Management Product that hold position with CMB. It is quite good. It is also a way for us to obtain a low cost of customer acquisition. That is what we will still maintain. This is a strategy we will still maintain. We set a positive budget for the growth of wealth management. Last year is 30%. From the product strategy perspective. In terms of insurance arrangement, we will maintain our high speed. Last year, the growth rate was 40%. This year, we also see very good progress in the insurance products arrangement. In terms of fund products, from the whole industry, I believe same as the industry, there are difficulties.
Based on the category-based approach, I believe that we will still stick to the pro-cycle approach and that, through times, and as we believe in long-term investment value, the results will still be satisfying. Generally, we will stick to a value-based approach and take customer as the center to create value for our clients. In a specific strategy, we will pay special attention to those low volatile monetary funds as their long underlying assets. For the fixed income plus type products, I believe it might be part of the root that caused the volatility in the market. Therefore, in 2022, I believe we will reduce the amount of fixed income plus products and then increase the total amount of low volatile monetary funds in the product asset allocation. Our strategy will also change align with the fluctuation of the capital market. The next question is from CICC, Shuaishuai Zhang.
Thank you, Senior Management. I am CICC, Shuaishuai Zhang calling. I have a personal loan question. I believe that since the beginning of the year, in fact, the capital market has been paying close attention to some topics related to stable growth and stable credit. If it is implemented at the bank level, a very important one might be the issue of loan lending. I would like to ask how the bank, in the industry sector, in the situation where the demand is relatively weak this year, what are the bank's final loan lending tactics and directions, and mainly in what areas?
In addition, in the situation where the countercyclical regulatory funds may be subject to restrictions, how can the bank tap into the lending capability of non-loan? In addition, there is a small question. Because in recent years, there have been some media reports about cooperation with real estate companies. Zhahong has actually had a relatively large number of acquisition loan arrangements in this regard. Can the management tell us about the relevant cooperation model? What role does Zhahong play in it? [crosstalk] That is the question. We have several M&A progress made for the past year. I would like to know the role of CMB in relevant cooperation model.
Thank you for your question. CMB's corporate business transformation, the core of which is to realize our optimization of asset structure and client structure, along with the national economy's optimization. It is a continual process and cannot be achieved within a short leap. Although we see difficulties, I believe it is a tendency, it is a trend. We shall not overestimate or underestimate the long-term or short-term effect brought by this change. I believe it is also a change lying within our own economic structure. We remain to be prudent, professional and reasonable. Strictly select clients, projects and regions within a short term.
We remain our policy, and we can also see risks and dangers, but we also see structural opportunities even with such complicated external environment, such as we will take part in M&A business opportunities. We hope that the market will not overinterpret our business opportunity of M&A. It is the same as the market practice. It is simply because we see the opportunities, we take part in it, and that's all. I believe it is a good way of soft landing for real estate businesses. It is my view on the real estate industry. In terms of our asset structural transformation, it is a gradual process. In 2020, 2021, we have increased our loan granted in green finance and strategic manufacturing industries and et cetera.
The loan growth is faster than that of the overall corporate loan. I believe if there is no significant change in the external environment, we will continue such policy, such arrangement. I believe our practice is based on our own understanding in the industry, and will not invest just for making enough investment. So much for my answer. Now we will have the next question.
Peng Jialin from Sichuan Investment.
Good morning, Senior Management. Good to have this opportunity, and thank you for giving me this opportunity. Thank you for your effort to bringing 70% return to all shareholders. My question is for fintech. For the past year, in terms of fintech, in terms of empowerment, in terms of its operation under the extensive wealth management, fintech has played a big role, an important role. I would like to know the future strategy of your fintech development. I've also learned that you have invested 4.37% of your net revenue into fintech development. I'm quite impressed by this indicator. How do you continue or arrange your budget in terms of fintech in the following two to three years?
The question will be answered by CIO, Mr. Jiang Chaoyang.
Thank you for your question. CMB has always attached great importance to fintech strategy. As President has just mentioned, we will maintain our investment in fintech. Chairman Miao, the Senior Management has all taken fintech as the third pillar of our major work. So the investment has always been guaranteed. For the last year, it's 4.37% of our net operating income. So in the future, we will continue to make such investment in fintech development. The second question is about our achievement.
For the past few years, our investments are mainly in the following three aspects: customer, staff experience, and the organic interaction between the two experience. Surrounding the three priorities, we are making our fintech transformation. It's hard for me to explain how we develop our fintech strategy within just one to two sentence. I'd like to briefly introduce to you about our achievements. Firstly, in terms of customer experience, we have preliminarily achieved customer interaction interface digitalization. For instance, retail banking business. 84.8% of the wealth management product sale is conducted on our application, CMB application. The daily active user of CMB application. We have achieved 17 million of DAU, which has been the mainstream of our customer service channel. For corporate service, 96% of the business, fundamental corporate business has been migrated online.
The second aspect is that products and service innovation that we are facing the customer is placed on digitalization. For instance, last year, we have launched the AI Smart Counselor, providing more convenient, more inclusive wealth management service to our clients. In December, as we launched this service, we have accessed 0.34 million clients just in one month. It is a very good approach to serve our clients. In corporate loan, we also have our flagship products such as Flash Loan series products, which supports clients' immediate financing needs. Corporate financing process has been migrated 60% online that supports the whole process online. In terms of customer experience, we basically have achieved internal work experience. We have migrated the internal work experience online and big data.
AI has become our important approach to increase the working efficiency of our staff. Just now, President Tian has mentioned that we will continue to use AI to replace manpower. Around 600 manpower was replaced through using AI. Another figure is 40%, which is that it helps our clients to use the components to construct the data middle office. 40% of them could make good use of this tool to support their daily work. Cloud + middle office, People + Digitalization has become the mainstay of the Fintech strategy, and the host machine cloud and application cloud migration progress is now 75%. The data and tech middle office has also make good achievements. Over 2,800 components were able to support daily work. Our daily use of these components has achieved 1.6 billion, which equals to 700 manpower.
What mentioned above refers to our tech support, our tool provided to our clients and can assist them in their daily work. This is basically our achievement made in the Fintech strategy.
In order to guarantee the interests of shareholders, we have collected questions before this meeting, and I picked up two representative questions. The first one is about the cash dividend proportion. Will you increase this cash dividend? For these years, actually, for the cash dividend payout ratio, it's always over 30%. For these past two years, it's around 33%. I think in the future, we think we'll continue to stick to the principle. If the payout ratio is too low, it's not good, but it also doesn't mean that the high is better. If the payout ratio is too high, it's not beneficial to the endogenous growth of the capital. Actually, I have just said we haven't raised from the capital market for common shares for nine years.
It doesn't mean that we can't, but it's just we don't want to do so, because currently the valuation PB is around 0.9 in the Chinese market for the Chinese banks. We didn't want to do this financing, which will also dilute the interest of our shareholders, and it will also have a negative impact of our price. I am the Chairman of China Merchants Bank, and also the Chairman of China Merchants Group. We are able to increase the capital of CMB, but different shareholders have different thinking. I think we need to keep the dividend payout ratio at a proper level, which is above 30%.
We think it's a proper level, and it's quite an appropriate range, and it's quite a high level. Also, at the same time, maintain our capability to grow capital from our own profit. We are not resorting to the capital market to raise capital. Also to make sure there is a balance among the larger shareholders, small shareholders, and also the regulators. Thank you.
The second question is for recently, we have seen a drop in the H-share market, and also, we have seen the NAV has a drawdown for the products of the wealth management products. What's the reason behind that? And how do you do the risk management for Wealth Management Products and to build a good reputation?
I will answer this question. Yes, just you said that recently, actually, the NAV of the wealth management products, we have seen some drawdown and even below one. Actually, this is highly related to the volatility of the capital market. Also it's related to the innovation of the products of the wealth management products, because last year, the wealth management bank's wealth management subsidiaries have sped up efforts in terms of our fixed plus equity products. The downturn of the capital market has led to a volatility of the wealth management products, and also is quite the same with us with CMB Wealth Management.
First reason is about the transition about the wealth management, namely, after 2018, the wealth management products need to be NAV-based. Actually, the NAV, net asset value, will be the same as. This will be a new norm. Especially products which are including both fixed income as well as equity, there is some investments into equity for the underlying assets and which means higher volatility for these kinds of products. Actually, our Wealth Management subsidiary is starting and doing more research into that and hope that we can have a better performance for our shareholder, for the investors.
We also need to have more allocation or more products which are more fixed income-based and are in line with the risk appetite of the customer of the bank. Thirdly, we need to improve our capability for research and investment, and also to expand or have a longer duration of the products or even closed-end products with a longer duration. Help the customer to have a yield over a longer term. Fourthly, to reduce volatility, reduce drawdown for our customers, and reduce concern of the customer. Fifthly, we need to step up efforts for customer education. Especially, they need to know that after the transition of the Wealth Management, volatility will be a new norm for these kind of wealth management products.
Also for the products that is already under the NAV below one, we also need to take measures to deal with that. I would also like to share with you the newest progress, updated progress of our Wealth Management subsidiary. Now our AUM is CNY 2.78 trillion, and also among them, around CNY 2.6 trillion are our new products, which accounted for 93.5%, and the rest ones are the old products which investing in assets which have a longer duration or equity products. These will be resolved in a longer run till 2025 according to the regulation.
Secondly, another concern from the market is about the cash management products restructuring. We think that cash management products are very popular in the market. It has quite a stable return and also is very liquid. According to the regulation, if we have the risk reserve enough so as to support this kind of a such a current size of the cash management products. Our risk reserve now is around CNY 5 billion. We think that at the end of the year, it will reach CNY 6 billion. The risk reserve can support our cash management product size totaling around CNY 1 trillion. I think you can assure about the size of our cash management products of the bank. Thank you.
Okay. There are some investors who want to have one more question. I think that will be the last question from investors, 'cause we still have questions coming from the media following the investors. Next question is coming from May Yan from UBS.
Thank you very much for the question. My question about the cost-to-income ratio. For the fourth quarter, the cost-to-income ratio is a little bit up on a sequential basis. So, what will be the trend for the cost-to-income ratio? And another small question about asset quality. Just now, you have mentioned that we are facing downward pressure from the economy, especially from fourth quarter, but as you can see, all the indicators for your asset quality are showing that it is very good.
Even though in north and eastern part of China, even though the economy is performing very bad there, but the indicators or NPL ratio in this region is still dropping. What is the reason behind that? Secondly, for retail and consumption loans for credit card, you have seen a rise in terms of the special mention loan. My reason is, what is your explanation for the very sound indicator for asset quality and the bad performance of the economy?
I will answer the first question. First one, about the cost-to-income ratio just now. Mr. Tian has said that for the past years, the first time our cost-to-income ratio has seen a turning point, has reduced for the first time. This is mainly benefiting from the higher growth from our operating income. Also at the same time, the growth rate of our costs is around 13.4%. It's actually the expense is higher than what we had in 2020, around over CNY 13 billion. From the cost side, it's quite fast. I think the main reason of the drop in the cost-to-income ratio is still benefiting from the higher growth of operating income compared to the expense growth. The growth, higher growth of operating income, first is we have seen a very rapid growth in all businesses. From the cost side, the salary is growing about around 15% last year.
Secondly is from our higher investment into technology. The growth rate is about 11.5%, which is the speed is quite the same as what we have before. Thirdly is from the regulators is requiring more regulatory requirement from the bank. These are the main three reasons why you have seen a higher speed of growth of costs in the fourth quarter of last year. We think that the salary and technology, even though the growth rate is high, but it's necessary for us to maintain a sound talent team and a sound technology basis. I think investors have understanding for that. For other traditional fee, other traditional expenses, we will have precise cost control measures. Overall speaking, for the year, we want to stabilize those cost-to-income ratio expected. I hope that it can decline some bit. Secondly, as for your second question, there might be some reasons for that.
First one is for the continuous optimization of our customer structure. For these years, we stick to our customer structure, namely focusing on strategic customers at head office level and also branch level. We are trying to provide different services to different class of customers. Thirdly, we're improving our know-how into different industries. Fourthly, we have integrated teams for big projects. This is what we have done in terms of customer base. Secondly, for asset structure, over 50% is coming from retail side, and that is not that procyclical, and it's quite resilient when we are facing downside of economy. Thirdly, we have seen a sound growth rate for the assets and which is an average level of the shareholding banks. Fourthly, from technology empowerment for risk management.
In our risk management system, we have approaches or measures that have been taken for us to monitor our risk management, such as for intelligent rating or intelligent early warning, intelligent post-loan measures. When you look at our retail loans last year, we need to take two factors into consideration. The first one is we even have a stricter recognition of the NPL, namely move forward from 90 days overdue to 60 days overdue. Secondly, for the recognition of overdue loans of credit card, the timing of the recognition have been moved forward around averagely for eight days. If we remove these two factors, then not only for retail loans, but also for credit card loans, the special mention loan or the overdue loan ratio is on a downward trend on a year-on-year basis.
I know another concern from your side is about credit card risk. For last year as a whole, the preliminary risk indicators such as overdue rate or M1 to M3 collection rate, and also the rollover rate, M1 to M3, these early indicators, we think that we are already back to the standards or the level of before the pandemic. For credit card risk, it's stabilizing and it's becoming better and better. For the overdue condition of credit card, this is mainly because the reason I said just now, namely the recognition of the timing of the overdue loan. There might be some volatility about the overdue loan ratio about credit card, but it's a seasonal reason. If we look ahead into future, we think that the external risk situation is not turning better, and we're expecting rising risks.
We are going to step up efforts to focus on important regions and important sectors such as real estate and such as local governments, vehicles, and some enterprises that don't have a very sound corporate governance structure or which are highly leveraged. Even the small and micro finance. These are areas we will take even stricter measures in. For the year as a whole, we are confident to have a stable asset quality. Thank you. Now we will have questions from the media. The first one is from Xinhua News Agency.
I'm Wu Xonxu from Xinhua News Agency. My question is for corporate business, corporate banking. Last year, your manufacturing loans were up by 16%, and loans to new emerging industries were also up very much. Just now, you said you will have solid growth for green finance, for manufacturing this year in 2020. What will be the proportion in your whole portfolio? When you are mentioning new strategic areas, what will be the concrete areas? Can you name that? Also you said that you need to improve knowhow about the industries. What will be the detailed? Can you share with us some details on the other measures you are going to take?
These questions were answered by Mr. Li Delin. It's quite a large questions, actually. Actually, this year, we will follow the direction of green finance and also industries in new emerging and strategic areas. Namely, we will do our principle is to service the top players and the players which have best competitiveness. At the same time, we'll build our own capability to service them, and we will follow the three major areas for the high-end manufacturing, green finance, and industries for the major strategic industries. As for just now, your question about what will be the specific areas or industries for new emerging industries. The first one, I think, is the high-end manufacturing.
The second one is for automobile. Biometrics, such as the ICT and also logistics, manufacturing, just named a few. I think it's all in line with the national strategy. Actually, from the regulator's view, it has a requirement for the bank to improve or guidance for the bank to improve green finance, microfinance, and to require the bank to set up efforts in these areas. We think we'll follow the regulatory requirement and to do our asset allocation. Actually, it's true. Last year, we have seen quite a rapid growth in these areas. Definitely this year, we'll also set up our efforts in this regard. It's in line also with the guidance from the regulators. Thank you. Next question, please.
Next question is from Securities Times, Miss Liu Xiaoyou.
Thank you for giving me this question. My question about the asset and liability management. First one, we noticed that your core deposit growth rate is over 18% and which is higher than the total deposit growth. It seems that your advantage is still very strong in this area. Can you sustain this advantage this year? And how can you control the cost rise of deposit? Secondly, for your projects reserved for in pipeline for the mergers in the property market.
First one, about the cost of the deposit. Yes, indeed. Last year, our core deposit growth rate is over 18%. It's quite a high speed, and the quality is very good. Mainly relying on the growth of core deposit and pricing is moving downward. The pricing of our the cost of deposit is down by 14 basis points, and also from customer deposit down by 12 basis points. So, this is a major contributor to the NIM of the bank. Indeed, it's the advantage of CMB, and we are going to stick to this direction of the deposit and to maintain our advantage. Overall speaking, the deposit growth this year will be...
Our budget for deposit growth will be M2 + 2%. Last year, our budget is also the same, but actually we have beat our expectation. The budget will be quite the same following the general principle, namely M2 + 2%. Also, when you look at the structure of deposits, still we will focus on the growth of core deposits, which mainly coming from the settlement accounts, and also costs will be lower. Thirdly, we still need to control the cost of deposit. Even though there is more fierce competition from peers, but still we need to rely on our settlement and clearing products, and relying on expansion of our customer base, relying on better wealth management products, so that we will have more flows at the bank and to have more remaining balances in their accounts.
I remember there is a report about CMB, how CMB can grow their deposit in a healthy way. It's such that major advantage of the bank is not focusing on the deposit itself, rather on products, customers. It's a natural result that we will have a good growth in deposit. We will continue to do so in 2022, to maintain the advantage of our deposit, advantage. Secondly, about the merger loan, M&A loan for property enterprises. I know that there is some reports about the announcement of strategic partnership between CMB and some enterprises. To support these quality enterprises to help to support them, to help some property enterprises which are facing difficulty, so as to maintain a healthy growth of the property market.
We think for this industry, we have taken a different view. Firstly, that this industry is a supporting industry for the whole society. Also for the enterprises, we need to take a very objective view. Some enterprises are healthy and some property enterprises are facing difficulty, so we need to choose the sound ones to work with to help to mitigate the industry risk. Thirdly, we have a different view on mortgage loan and also for developer loan. Mortgage loan is a rigid demand coming from households. We need to support that. At the same time, we need to see that the pandemic is still spreading. Even for the property companies, we also need to see into different projects, based on the actual situation on the ground. Next question, please.
Now it's from Mr. Xingti Zhao from Twenty-First Century. Mr. Xingti Zhao?
I have two questions. The first one, just now is for your stock price. Actually, a big volatility for the stock price in banks, and also, I know the market cap of the or the share price of CMB is encountering big volatility. Are you satisfied or with your share price? Last year you have said was the first year of extensive wealth management, and I think it's a very important logic why you have enjoyed such a high valuation.
Secondly, what's your view on that? Second, we have seen spreading pandemic in the whole country, and what is your view on the momentum of retail loan? Do you have any detailed measures for that? Third, for the off-balance sheet non-standardized assets, what kind of assets are you looking for in this regard? Thank you.
Recently, the market is really quite volatile, many reasons to name. On March 16, the Financial Stability Board, they have made very clear position on the policy direction, especially for the Chinese banks in U.S., such as for and also for property companies. Even before this meeting, I know investors from home and abroad, they have very many misunderstanding for all the policies of. Also for the conflict in Russia and Ukraine. The market doesn't know how to price the assets. Fourth, about the spreading pandemic.
Many local governments have taken measures. I know the market is not very confident about the economic growth this year, especially for investors overseas. They think that the risk of the Chinese assets is higher, and they are blindly choosing to offload, to sell their Chinese assets. Actually, it's very important for the Financial Stability Commission. They have made clear statement about these concerns in the market and responding to the concerns in the market and stabilize the market. I think among the Chinese banks, CMB is a bank that have a higher shareholding from the overseas investors. That is why when the market if it is facing big volatility, you have seen the share price of CMB moving up and down quite sharply.
It's also recovering after 16th March. If you ask me whether the valuation is reasonable, I think it's always reasonable because it's based on the market. In Chinese banks, we are the second largest bank in terms of market cap. I think we are pursuing a high-quality development, but we are not pursuing high market cap. Just now, your second question about whether extensive wealth management has changed the logic of the pricing model of banks. I think bank is always banks. Extensive wealth management is a part of the business bank, but in some term or to some extent, it has changed the pricing model or valuation model of the bank. Just as CMB, that the fee, non-interest income is over 83.8% of the total income. It's taking up a larger share, and it's moving up.
It's growing quite fast, so it means that we will consume less capital. That is why compared to other peers, our PB rate is higher and also PE is also higher compared to peers. I compare our PE and also the top three banks in U.S., JP, Merrill Lynch, Bank of America, and also Wells Fargo. It's quite the same. If our fee-based income, the proportion is continued to rise, then means that our capital demand will be even smaller, which means that we will enjoy even a higher PB. Extensive wealth management, we need to be stronger in this regard. In some term, this really can change the PB valuation of the banks, but it's not a fundamental change. That is why I say we need to deal with the two relations, the light, capital light business and also the capital heavy business.
It means that we need to have better sound quality for high quality business, which means we need to be strong in terms of asset quality. Second one, we need to be big in terms of the light capital business. If we can do a good job in terms of the 3.0 business model, we think that we are able to weather the cycles and have a sustained growth. Secondly, about the Wealth Management asset allocation. I will answer that. Your first question is about during the pandemic situation, what will be the detailed measure for you to grant retail loans? Yes, indeed, as you have seen, the first one is the spreading of the pandemic and also the situation in the property market really has an implication on the retail loans. First one is for mortgage loan.
Last year, we have seen a stable growth, but this year, the growth of our mortgages is quite weak and difficult. It's related to the spread of the pandemic, and it's related to the expectation for the property market. Recently, we are stepping up our efforts in terms of the retail loan extension and to maintain a proper growth. We want to have a more direct contact and sweet contact with customer from online, and also have some better price for our customers so as to maintain the volume or size of the retail loans, and also mortgage loans. As for the micro loans and consumption, we are doing our business according to regulatory requirement. Namely, we are maintaining our strength and efforts in this regard and maintain scale in this regard. Quality is good.
Thirdly, for consumer loan, really the demand is weak, and I think it's highly related to the pandemic spreading. Especially at the beginning of the year for consumer loans, we are focusing on quality customers and have continuous promotion on that. We think that we have achieved good results. The growth is kind of stable. We don't see much reduction in this regard. At the same time for credit card, risk is the top priority for the short run. In mid run, we are adjusting the asset structure. In the long run, we are adjusting the customer structure. This strategy is working and was working for the past two years, and we have seen an optimized customer structure and the asset quality is improving. For some customers, we are providing a rate between 6%-9%.
In terms of the product side, we have more installment payment products, and these have all achieved good results. Even though under this severe pandemic situation and the credit card, the top priority is to control the risk and our strategy for our credit card remains the same. In the short run, we will control the risk. In the mid run, we will optimize the asset structure, and in the long run, to optimize the customer structure. The second question is about the agency sales. Actually, for agency sales of products, we have classified our customers into different groups and adopt different strategies for that. We are kind of reducing the sales of those products, which rely on underlying assets of non-standardized assets. It's dropping sharply. Now we have a low balance for that.
Quality is sound for these kind of products. Now it's only two cases just now as Mr. Zhu said, and we are following that very closely. What is the future direction? Namely, definitely we'll move to the standardized assets such as Wealth Management Products. Now we have a Wealth Management platform. We are not only selling the products from CMB's own Wealth Management subsidiary, but also from other eight wealth management subsidiaries from other banks. It has reached quite a high size, high volume. These all contribute to the growth of the AUM of CMB. Secondly, as for mutual fund and private funds, for the balance of the equity fund for CMB, now we rank number 1 in the market, according to the fund association.
Our customers' experience is still better than other sales channels. We are taking a professional manner and classifying our customers and providing different asset allocation solution to different customer. The drawdown is, I think, controllable and is limited. Thirdly is insurance. Fourthly, as for private funds. We have stepped up our efforts for private equity funds and also equity trusts and trust products which invest in standardized assets and invest in standardized equity assets. Some are investing in the secondary market, and some invest in primary market, all kinds of products. Overall speaking, I think that we are moving towards the standardized assets direction and focusing on the capability of the asset managers and also the appropriation of the customer, namely, to sell the appropriate products to appropriate customer. I think last question from media, please.
From Wu Xiaomeng from Caixin.
I have a question for liability. In February, especially if there is some regulations on the pricing of deposit, and what is your view on that? Secondly, what's your view on the implication from the conflict from Russia and Ukraine on your business?
Firstly, about the liability, for the agreed deposit, actually we are focusing on core deposit, and we control the volume of the high-cost deposit. For us, the volume is not very big. It's only around CNY 200 billion. We are trying to reduce this kind of structure deposit and to reduce the high-cost deposit. Maintain the high proportion of core deposit. We think that it will have very limited impact on CMB's liability. It's not a major way for us to attract deposit. Our focus is still on core deposit. Thank you.
Secondly, for the impact of the conflict in Russia and Ukraine on CMB. Actually, after the conflict outbreak, we have reviewed all of our business, especially the international trade business. As you can see, our exposure to Russia or Ukraine is very, very small or even you can ignore that. I can assure you that please be assured about that. Thank you.
Due to time constraint, now is the end of our annual results announcement. You may reach out to our IR team or to search on our reports online for further information. Thank you very much for taking your time to join our results announcement. Definitely, we will do our best to have a sustainable return on shareholders. Thank you.