Dear investor analysts, good morning. CMB 2020 interim results announcement will now begin. I am Executive Vice President, Secretary of the Board of Directors, Liu Jianjun, also the host of today's conference. Due to the current situation of COVID-19, we are hosting today's event entirely online. Now, I would like to introduce the bank's management who are present today. They are Mr. Tian Huiyu, President and CEO. Mr. Wang Liang, Executive Vice President and CFO. Mr. Wang Jianzhong, Executive Vice President. Ms. Liu Hui, Executive Assistant President. Mr. Jiang Chaoyang, Chief Information Officer. Mr. Zhu Jiangtao, Chief Risk Officer. And our general managers from related departments. Joining us online today are investors and analysts from China and overseas, totaling 363. On behalf of China Merchants Bank, I would like to welcome you all to the event. Thank you for your interest and investment in China Merchants Bank.
In today's announcements, there will be two sessions. Mr. Tian Huiyu will review the financial highlights and the operational performance of the first half of 2020, taking around 30 minutes. The second session will be Q&A to answer your question, taking around one and a half hour. The event will end by 11:30 A.M. There will be simultaneous interpretations in English for both sessions. Now, I would like to pass the floor to President Tian about our 2020 interim results announcement.
Time for us to hand in our paper. Welcome to our interim results announcement. Would like to focus on three aspects for today's presentation. First, performance review, and then operational information, and then outlook and strategy. For the first half, face the impact brought by COVID-19, global economic recession, and all kinds of rising risk and challenges in the first half of this year. We are faced with unprecedented challenges.
CMB adhere to the strategic direction of light- operation bank and One Body with Two Wings position and steadily develop various business in the following six aspects. Firstly, our asset quality was stable. Relatively with the impact of the pandemic, we insist on classifying assets strictly, expose risks with NPL balance of CNY 55.33 billion, increased by CNY 3.05 billion. NPL ratio 1.14%, down by 0.2 percentage point from the end of the previous year. Special mention loan was CNY 48.09 billion, down by CNY 4.5 billion from the end of the previous year. Special mention loan ratio 0.99%, down by 0.18 percentage point from the end of the previous year. With the ratio of NPL to the loans overdue for more than 90 days up by 0.07 percentage point to 1.25% from the end of the previous year.
Allowance coverage ratio was 440.81%, representing an increase of 14.03 percentage point from the end of the previous year. Loan allowance ratio 5.03%, an increase of 0.06 percentage point from the end of the previous year. Steady growth in operating income with slight decline in profits after tax. Net operating income was CNY 148.16 billion, representing a year-on-year increase of 7.1%. Net profit attributable to shareholders of the bank was CNY 49.79 billion, representing a year-on-year decline of 1.63%. ROAA and ROAE were 1.29 and 16.94 respectively. Both declined a bit. We continue to optimize asset and liability structure, improve funding cost management. Q2 interest-bearing liability cost was 1.75%, down by 12 basis points. Partially offset the downward pressure on NIM. 2.5% was our net NIM, net interest margin. Net non-interest income was CNY 57.29 billion, representing a year-on-year increase of 12.49. Net fee and commission income increased by 8.46% year-on-year.
Net non-interest income climbed 25.59% year-on-year. Cost- to- income ratio 28.25%, increased by 0.67 percentage point year-on-year. Sound business scale expansion with sufficient capital position. Total assets were CNY 8.03 trillion, up by 8.29% from the end of the previous year. Total liabilities, CNY 7.39 trillion, up by 8.73%. Growth rate were 1.96 percentage points and 2.01 percentage point higher than that of the same period of the previous year. Gross loans and advances CNY 4.85 trillion, up by 8.04%. Customer deposits CNY 5.44 trillion, up by 12.3% from the end of the previous year, which has recorded the highest first half growth in the last six years. Core Tier 1 capital adequacy ratio, Tier 1 CAR under both advanced approach and weighted approach have declined. Mainly because first, to offset the slowing down retail loan growth amid the outbreak of COVID-19.
We grant more corporate loans under the precondition of risk being manageable. RWAs increase has speeded. Second, the growth in equity was affected by year-on-year decline in net profit. In July, we issue CNY 50 billion perpetual bonds, which replenish our Tier 1 capital position. Overall, we have maintained a sufficient capital position, which is higher than both regulatory requirements and our internal target. Fourthly, we increased investment in technology innovation driven transformation. We invested CNY 3.92 billion in information technology, up by 7.95% year-on-year, representing 2.87% of our net operating income. Bank wide has declared a total of 2,451 fintech innovation projects with 1,733 projects approved, of which 1,098 projects have been launched and put in use, provide a solid support for exploring digital operations. Fifthly, we fulfill social responsibility and support enterprises to combat with the pandemic.
After the outbreak, we donate CNY 200 million to Wuhan Charity Federation immediately. We follow the funding behavior of the enterprise, make breakthrough in the credit mindset, and start from the new perspective of FPA to serve real economy from wealth management funds and also direct equity investment to help enterprises to obtain financial support with lower costs. Balance of non-traditional financing accounted 45.86% of the total. Balance of inclusive corporate small finance loan was CNY 486.92 billion, up by 7.41% year-on-year. Amongst, newly granted loan were CNY 278.92 billion, up by 12.99% year-on-year, higher than that of total loans. Interest rate of such loan was 4.62%, down by 68 basis points year-on-year. We effectively carry out national relief policy, allowing eligible enterprises to defer their repayment of principal and interest, totaling CNY 133.21 billion.
With the alleviation of the pandemic, production and operation of the companies gradually recover and normal repayment has been resumed. As at the end of the June, the balance of loans granted to customers who are still at the current stage was CNY 69.53 billion. We have leading market valuation and enhanced brand reputation in the sixth aspect. As at the end of June, our total market cap rose to CNY 845.1 billion, ranked seventh among global banks and fifth among major listed domestic banks. In addition, we were ranked 17th by Tier 1 capital among top 1,000 world banks by "The Banker" magazine, up by two places from the previous year. We remain ninth among top 500 banking brands. We were awarded the best bank in China again at Euromoney's Award for excellence 2020.
In Institutional Investor's 2020 All-Asia Executive Team Ranking, we won many awards, such as Most Honest Company in Asia Banking Sector. Second part, key operational information. Also six aspects. We are back to the origin and enhance our strength in customer base and funding. We have achieved a retail value customer growth rapidly. Number of retail customer reached 151 million, increase of 4.86 year-on-year. With acceleration of resumption of work and production, our retail customer acquisition has been improved in the second quarter due to our continued digital transformations support. Retail value customer base has growth at a faster pace. Sunflower level and above customer reached 2.92 million, increase of 10.21 percentage points. Number of private banking clients exceed 91,000, representing an increase of 11.74%. Second, corporate value customer base grew to expense. Total number of corporate customer reached 2.18 million, up by 4.03%.
Number of newly acquired corporate depositors was 195,800. Number of institutional customer was 39,100, up by 10.45% as compared with the end of previous year. There were 26,000 customers and the coverage rate of special fundraising accounts for domestic listed company was 37.93%, of which the coverage rate of fundraising special accounts for listed companies on the STAR Board was 45.65%. Thirdly, the expansion of customer base provides strong support for our funding with growing quality of customer deposits and enhanced funding strengths. Balance of corporate deposits reached CNY 3.35 trillion, representing an increase of 13.45% as compared with the end of the previous year, the highest growth in the past six years. Balance of retail deposits reached CNY 1.84 trillion, representing an increase of 9.96% as compared with the end of the previous year. Growth of customer deposit was mainly driven by low-cost deposits.
High-cost structured deposits and CD further declined. Among which, structured deposit balance was CNY 495.14 billion, down by 4.02% compared with the end of the previous year. Balance of demand deposits accounted for 62.69% of total, up by 2.56 percentage points as compared with the end of the previous year. We keep optimizing credit structure and comprehensively solidified asset quality. We promote the growth recovery of retail loans with higher risk-adjusted return. Total retail loan amounted to CNY 2.44 trillion, up by 5.02%, accounting for 54.25% of the total. Influenced by the pandemic, the growth rate has slowed down, but in Q2, we are back to our recovery. Residential mortgage loan, microfinance loan, both maintain stable growth.
Credit card loan were more affected by the pandemic, down by 2.8% as compared with the end of the previous year, but Q2 growth rate is significantly better than Q1, with the loan gap narrowed down substantially compared to the end of the first quarter. Total corporate loans amounted to CNY 1.78 trillion, up by 9.67% as compared with the end of the previous year, with the loan structure optimized. Credit resources were given priority to be allocated to major infrastructure construction projects as well as strategic emerging industries. In order to offset the downward risk pressure and to appropriately extend the strength of loan duration, the balance of the medium and long-term loans to domestic enterprises accounted for 57.52% of the total. The balance of general loans to a strategic customer of head office level amounted to CNY 583.8 billion, an increase of 25.13%, accounting for 32.77% of total.
We uphold a prudent risk strategy, comprehensively adopt various risk control policies, continue to optimize customer structure and asset structure to maintain a stable asset quality. NPL ratio of corporate loan was 1.87%, down by 0.18 percentage point compared with the end of last year. NPL ratio of retail loan was 0.83%, up by 0.1 percentage point as compared with the end of the previous year. NPL ratio of retail loans excluding credit card was 0.45%, down by 0.03 percentage point. Credit card NPL ratio 1.85%, up by 0.5 percentage point. Q1 special mention loan and overdue loan ratio both increased. In Q2, have been significantly improved. By the end of June, special mention loan ratio was 1%, down by 0.28 percentage point. Overdue loan ratio 1.41%, down by 0.25 percentage point. Among which, special mention loan ratio for credit card 3.47.
Overdue ratio 3.5%, down by 0.73 and 0.63 percentage point compared with the end of Q1. The leading indicators have improved significantly. Newly formed NPL was CNY 27.93 billion, representing a year-on-year increase of CNY 4.87 billion. Annualized NPL formation ratio 1.29%, up by 0.09 percentage point year-on-year. Annualized credit cost ratio was 1.66%, a year-on-year increase of 0.16 percentage point. We continue to intensify disposal of NPLs by disposing CNY 25.19 billion NPLs in the first half. We adhere to the positioning of light operation bank with distinctive edge in non-interest income business. Despite the impact of COVID-19, the retail non-interest income business still performed well, benefiting from strong online operation capabilities. Balance of total AUM from retail customers amount to CNY 8.26 trillion, an increase of 10.26%. First half increment required CNY 769.2 billion. PB AUM CNY 2.5 trillion, up by 11.94% compared with the end of last year.
Agency sale of non-monetary mutual funds was CNY 256.7 billion, an increase of 207.03% year-on-year. Active credit card was 96.39 million, representing an increase of 1.14% as compared with the end of the previous year. Credit card transaction volume amount to CNY 2.04 trillion, a decrease of 0.12% year-on-year. Net non-interest income from retail finance amount to CNY 25.8 billion, a slight decrease of 0.06% year-on-year. With steady improvement of our wholesale customer service capability, asset allocation capability and trading capability, wholesale non-interest income business delivered solid growth. We continue to build our core competitiveness of our investment banking business. Value of bonds with bank as the lead underwriter amount to CNY 461.47 billion. We accelerate the transformation and upgrading of our asset management business. CMB Wealth Management's balance amount to CNY 2.38 trillion. Products with compliance with the new asset management rules exceeded CNY 1 trillion, second in the industry.
Our custody business competitiveness further improved. Balance of assets under custody was CNY 14.56 trillion. Also ranked second in the domestic custody industry. Discounted bills transfer to other FI amount to CNY 592.2 billion, ranking second in the market, and a year-on-year growth of 76%. Cross-border finance, the onshore international settlement for corporate customer amount to $ 108.7 billion. Trading volume of derivative transaction service to customer reached $ 195 billion. Net non-interest income from wholesale finance amount to CNY 23.31 billion, year-on-year increase of 30.56%. We stick to connection and openness and accelerate the construction of an ecosystem for partners. We expand public handy service, provident fund service, social security query, non-tax payment service continue to increase. 6.7 million electronic social security cards have been issued in aggregate. We penetrate further into public transportation service, including bus, subway, and also traffic card recharging.
We promote openness and connection, explore ecosystem-based cooperation with new retail, express delivery, and logistics. We open API during the pandemic and quickly connect with applets including WeDoctor, COVID-19 information and online education. We improve corporate services. CBS platform MAU project reached 1,185. The total volume of the aggregate collection business amount to CNY 74.23 billion, up by 21.63%. We promote internal integration by pursuing the One Body with Two Wing strategy. Wealth management, investment banking, asset management, circular value chain has been deepened. Balance of saving deposit, wealth management product, funds, insurance products and other categories maintained rapid growth. Sales of mutual fund boosted the expansion of the custody business. Custody mutual fund scale exceed CNY 1 trillion, and the company ranked first in terms of the scale of newly issued custody mutual fund. Rising effectiveness of retail and wholesale business integration has been demonstrated.
Loan-to-deposit ratio of corporate business was 53.11%, offering strong funding support for the granting of retail loans. We launched a jointly operated B2C payroll service to improve our comprehensive operation capability of corporate and retail clients. New effective retail customer of payroll service as strategic customer of head office level increased by 26% year-on-year. We take MAU as the north star metric and substantially improve our digital capabilities. First, our digital operation capability continued to improve. CMB and CMB Life application's MAU under the impact of the pandemic still remain strong resilience. By the end of June, we have reached 98.92 million users. CMB application's number of users has achieved 129 million. MAU reached 56.07 million. Percentage of digital acquisition of debit card customer was 19.71%. CMB Life application's aggregate number of users has achieved 98 million. MAU, 48 million. Digital acquisition of credit card users has achieved 62.48%.
1,544 of our outlets have opened online store. Percentage of wealth management transaction via CMB application was 78.41%. Percentage of wealth management customer using CMB App was 93.17%. As for CMB Corporate Application, number of client was 1.16 million. MAU was 0.45 million. Second, we have increased our capability in digital risk control, continued to strengthen and expand our intelligent risk control platform, the Libra System. Reduce the ratio of counterfeit and misappropriation by non-card holders to five in 10 million. The accuracy of intelligent rating and pre-warning in our wholesale business was further improved with the accuracy ratio of pre-warnings on the corporate customers with potential risk reaching 75%. We actively promote the application of AI in AML, with the identification risk of high-risk transactions associated with money laundering reaching 95%. Third, we have increased our efficiency in digital operation and service.
The Wind Chime System is connected to 20 internal systems, monitoring 1,268 customer experience indicators, and keep promoting the improvement of customer journey. 76 customer service are replaced by the intelligent customer service provider. Nine high-frequency corporate business have been migrated online and continue to be optimized. The innovation video cloud chain platform was launched and using remote video interaction as new method to approach customers. Fintech were applied to 24 middle and back office scenarios with 11.64 million transactions being replaced. Fourth, the construction of Fintech infrastructure was accelerated. Number of cloud native service was 4,015. The storage capacity of cloud native was 29.18 PB. The number of cloud native containers was 69,000, all having significant increase. We strengthened the application of big data, launched the bank's unified data portal of Zhou Shu, and established BIX and AIX platform to enhance the efficiency of data application.
The application of AI technologies was deepened in the fields of products, marketing, risk control, operation, and investment consulting. Last part, let me briefly share with you our outlook and business strategies for the second half.
Currently, we see four major headwinds pose great challenges to the bank's operation and management. The first one is the COVID recession in the global economy. Currently, we still see the virus spreading overseas, and it's a long way for the world economy to recover. China's economy is not immune to that. So the bank's customer expansion, business growth, and profits is still facing great pressure. Secondly, the uncertainty of the Sino-U.S. relations. Amidst the rising trend of the anti-globalization, we see many sources of global turbulence and risks. As the U.S. presidential election approaches, the trend of Sino-U.S. relations is still full of uncertainties. Thirdly, delayed outbreak of credit risk. The COVID-19 has brought huge shock to the Chinese economy and people's daily life. With the phasing out of the special policies, we see pressures going on for the asset qualities.
Fourthly, the lower interest environment also brought a shock to the financial disintermediation, especially with the lowering of the market rate. That will be a long-term environment, and the dollar financing will take up a larger proportion. So the bank is facing a shock of disintermediation. Facing all these challenges, China's economy is leading the world in terms of the control of the virus as well as work resumption, production resumption. So we think that the fundamentals of the Chinese economy in the long run has not been changed. Firstly, we need to insist on the domestic demand and insist on the dual circulation economic pattern. Now, we are trying very hard to stand on the domestic and the international circulation. What we believe that will inject new power and new vitality to the economic growth and to expand new growth spectrum.
Secondly, the counter-cyclical economic policy will continue to take effects. Chinese economy is expected to continue the momentum of recovery and the proactive fiscal policy to be more rigorous and effective, and prudent monetary policy to focus on flexibility and precision. The integrated effects of fiscal and monetary policies as well as employment policies, will bring more business opportunities for commercial banks. Thirdly, digital transformation is irresistible. It has been inevitable that the image give birth to many new business models. So the trend of digital transformation of online and offline integration has become irresistible. Banks with strong digital capabilities will demonstrate better resilience.
In the face of the risk and challenges, we will remain our strategic determination, adhere to the strategic direction of light operating bank and strategic position of One Body with Two Wings, insist on opening and integration, and also focusing on the customers and technology to accelerate our digital operation. Firstly, we will persist in open up and integrated services. On the one hand, we will insist on connection above with our partners. On the other hand, we will strengthen the internal integration by breaking the boundaries between systems, data, organization, business, and concentrating of servicing our customers and market operations. Secondly, we will be back to the origin and continue to build our customer service system. Especially for the retail banking, we will strengthen the digitalization and create value for the customers.
For corporate banking, we will focus on direct financing and capital markets, and to promote the investment bank and commercial bank integration and better service the real economy. Thirdly, we will continue to improve our overall management system. Namely, we will focus on the substance of the risks and also to take up the long-term view, make a balance for the long-term and short-term targets. Also to consolidate the results we have achieved, and to make up the shortfalls, and to control the conduct risk or the concentration risks, these kind of major areas. Fourthly, we will upgrade our IT infrastructure and promote organizational cultural change. We will accelerate construction of cloud computing capabilities, data middle office, and technology middle office, and also take collaborative office a breakthrough to accelerate digital construction of internal management.
We will continue to improve, promote light- operating culture of openness, integration, equality, inclusiveness, and that will be the common belief of the employees of the bank. Now we go to the Q&A session. Please raise your questions.
Thank you for Mr. Tian for your instruction for the 2020 and also for the outlook and strategies. Now we are going to the Q&A session. Please raise one question one time, each time. Please state your name and organizations you represent before you raise the question. Okay, now we will have the first question. Now is the Q&A session. Please click the More at the bottom and choose Raise Hands. Since we have many participants today, please raise only one question each time. And please state your name and organization before you raise the question. Now, first of all, we have the first question from Shenwan Hongyuan Securities, Mr. Ma Kunpeng.
Good morning. I am Ma Kunpeng. Thank you very much for giving me this opportunity. Congratulations on your performance in such a difficult environment. My question is about the profit. As for the profit in the mid-run, as you already say that we are very confident about your profit and also your risk control because you are very prudent in terms of risk management. But comparing to other commercial banks, the CMB's profit is much better than theirs. This is quite different, especially in terms of the profit growth side. Why your performance, your profit growth is different from other shareholding banks? In the future for the whole year, what is your outlook for the whole year's operating income, as well as for profit? This is my question.
Thank you very much for your kind words.
How do you say it's not good news because we have negative growth rate? Our operating income and profit growth. The relationship between them is based on CMB's real activities, and we think banks are different from each other. In the first half of the year, due to the COVID-19, really, the impact implication is quite obvious. Except from CMB facing all the common challenges faced by all the industries or the common difficulties, we also have our own unique challenges or kind of difficulties, namely the common difficulties, but our own challenges. How do we say the individual challenges or special challenges for CMB? We think it's mainly of the following two aspects. The first one is retail banking. People all know that we are a retail bank, One Body. Retail represents One B ody, and accounted for more than 50% of the total profit contribution.
In these circumstances, our retail banking has been mostly affected, especially in the short run. This I have already shared with you in the annual results announcement. As just now, I walked you through the interim results. Many data has also shown this feature. Such as for our retail assets or the loans for the retail business. Now the growth rate of retail loans is lower than that for corporate loans, which you can compare that to that of last year, and that will pose a difference to our RWA growth. Also the total yield of our assets. Especially when you compare to the past period, that will have a larger impact on CMB than the other banks.
As for asset quality, when you look at for the NPL, the amount of NPLs is more than that of last year for CNY 303 billion, and this is mainly contributed by credit card. As for new formation loans, it mainly also come from retail banking. This is something CMB is unique at, because CMB is mainly a retail bank as One Body. Secondly, for asset and liability structure. When you look at asset liability structure of CMB, you say we have advantages. This is mainly because our funding mainly comes from the customers' deposit. Most of them, namely over 60%, are time deposit. It's good. Demand deposit. But under today's circumstances, this kind of demand deposit, it cannot be reduced any further. Which means it's not easy for us to reduce our funding cost.
That is why we see in the first half of the year, our NIM, the management of the NIM has been challenged. Or we face more challenges in terms of the NIM. In the first half of the year, it's 2.5%. I think it's not a very perfect number. But it's based on the unique business structure of CMB, a unique business asset and liability structure of CMB. In the long run, it's good, but in the short run, if you only take a look at only six months or a quarter, I think that will be a problem. Everything we see is relative, long and relative to the run. You may win from that, but sometimes you may lose from that. Just now you mentioned, as for the relationship between the operating income and profit, why CMB is a little bit negative, 1.63% negative growth.
This is, I would think we take into all kinds of situations and based on our own situation, this is the number. We do not think it is necessary to compare banks with other banks. Banks are differentiated from each other. Thank you for your question. The next one.
The second question we have from Morgan Stanley, Richard Xu.
Thank you very much for giving me this chance to raise the question. My question is about the fee and commission. In the second quarter, we see that the customer base continued to expand, not only for the private banking, but also for AUM. In the second quarter, we see the fee income quarter-on-quarter has slowed down, the growth rate slowed down. So what is the main reason behind?
Looking into the future, do you have any outlook for the fee income in the future or do you have any strategies?
Mr. Wang Liang, please answer the question.
Thank you for your question. In the first half of the year, the fee income has slowed down a little bit in the second quarter because our structure has changed a lot. First one, we see the highlight of the fee income growth is the agency sales of different products because the capital markets was very hot. With the sales of the mutual fund has doubled in the first half of the year, and also the fee income from the wealth management products, you see, and also stronger than that of last year. The growth rate is over 200%. Because last year, in the first half of the year, our wealth management products sales fee was at the bottom.
So in the first half of this year, we see there was a very strong growth, and especially for the transformation to the new products. We have very obvious results this year. Thirdly is the custodian business. This year, the total volume for the custodian also increased a lot, so that we see a great increase over 10% for the fee income from custodian business. So these all have made contribution to the fee income. But when you look at the second quarter ratio for income from this side, the first one is credit card business because in the first quarter, the credit card has been deeply affected by the COVID-19, not only for the transaction volume, but also for the credit card loans. This has been contribution to the shortfall. The second one is the agency sales for the insurance.
Because for the insurance can mostly carry out by offline business. So offline and social distance has made a negative impact on this. This has made up also one of the short run for trust products and also for insurance products. So that is why we see there is only slight decline in the second quarter. Especially facing this kind of difficult environment amid the COVID-19, we think it is quite. Still we have done quite a good job in this. With the economy reopen, we think in the second half of the year, we think we expect a very strong growth of our fee income in the second half of the year. Jesse also mentioned the customer base. For the customer structure base, we see very good signs and also good performance in the first half of the year, especially with high value customers.
For the Sunflower class customers, diamond customers and private customers, we see a strong growth. In the first half of the year, you will see the AUM total volume has over CNY 8 trillion, CNY 8.3 trillion. This means quite the same as the total balance sheet is CNY 8 trillion. Now we have another off-balance sheet asset, AUM is CNY 8 trillion. This all will have a very positive impact on the fee income growth in the second half of the year. This is my answer to your question. Thank you.
Thank you. Next question.
Now we have Gary Lam from HSBC.
Thank you management for offering me the opportunity. Gary Lam from HSBC. My question is on asset quality. We can see quite clearly that follow basis in the second quarter, NPL ratio and special measure declined.
Can we better understand what is the write-off behind for the formation of the new NPL? What probably can we get your insight? The special, namely how do you see the current credit cycle from a retail and from a corporate perspective? Where should we think about the credit cost for second half of 2020 versus first half? Thank you. This is the translation for the question. We noticed that your special mention loan rate and NPL rate has declined in the second quarter. What is the driver behind? Is that more write-offs? Also you have mentioned that as for the changes for asset quality, my question is, what is the period for your NPLs? What is your outlook for the second half of the year?
Thank you. This question will be answered by our new appointed Chief Risk Officer, Mr. Zhu Jiangtao.
Thank you for your question.
Firstly, for the first half of the year and also the second quarter for the asset quality side. From the first half of the year, we think that the asset quality has remained stable. As for the asset structure, for the half of the year for the corporate banking, formation rate for corporate banking has declined compared to the same period of last year. When you look at the changes from the first quarter to second quarter, in the second quarter, we have stepped up our efforts to recognition of the potential risk customers' risks. Which you can see from the indicators, our special mention loan has declined in the second quarter. Special mention loan rate also in our downward corridor.
When you look at the whole year, in the second half of the year for corporate loans, as well as special mention loans, we will continue to work in a very prudent way to set up our efforts in this way to downgrade these kind of loans, potential risk loans. This is for corporate banking for potential risks. Just now, Mr. Tian also mentioned that we think that the deferment or the total loan of the deferred loan is around CNY 69 billion. Around them, CNY 67 billion are from corporate loans, mainly focusing on real estate and transportation. As for transportation, in the first half of the year, because due to the COVID-19 outbreak, the highway cannot take the fees. These two take up around 70% of the total deferred corporate loans. We will mainly focus on these kind of customers and to examine one by one.
Now we see that the risk is still under control. As for the whole year for corporate banking, the formation of the NPLs compared to the same period of last year, that will decline. For special mention loan, it's largely probably will also decline. This is my projections for corporate banking. As for retail banking, for the first half of the year, we think it's also stable from formation ratios and amount. The asset quality for retail banking has risen up around CNY 1 billion, and we think it's stable in the second half of the year. When you look at the indicators, we think it's continue to decline. Also for the deferral to payment policies, the total retail loans, the total balance is only CNY 2.5 billion for the year.
We have in total all around CNY 130 billion in total accumulated amount of deferred payment. For retail banking, now many of them has gone into the normal payment situation, and it's much better than our expectations. We think that for the retail side, risk is also under control. Also the loans only for deferred payments still in the deferred payment situation is only CNY 2.5 billion. The amount is not big. For retail banking, asset within the asset quality is stable. For credit card business in the first half of the year, in the first quarter, we also have many feedbacks and communications with our investors. Namely, we think that in June, the credit card formation might be the peak. In August, that may be the second lower peak. Why we have this judgment?
This is mainly based on our judgment on their deferred payment and also according to the national policies for the credit card assets. We think in May, we have tightened our policies for deferred payment. Currently, the total balance for credit card is only zero. It already has been down to zero now, the total deferred payment. In May, if we have another three-months extend, the second peak will be in August. Next, in the second half of the year, we think the formation rate will still high. If you want to determine the risk, it depends on the two factors. The first one is the household income, the second one is employment rate.
When you look at the credit card business, we think the formation rate will keep in a high range, and there will be some disturbance factors, but we think the peak time has passed. As for the whole year's credit cost, for the first half of the year is 1.66%, up by 0.32 percentage points than the beginning of the year. This is in line with our increase in terms of formation loans. As for the whole year, the credit cost will rise compared to that of last year. Thank you.
Next question.
Now we have from Springs Capital, Shi Xu.
Thank you very much. I'm from Springs Capital. My question, the first one is a short-run question. The other one, it will be a long-run question. Two questions. The first one is for the provisions.
First, we think that the coverage ratio is around 404%, and our deferred tax assets is around CNY 60 billion. Considering 10% of the deferred assets will be calculated into Tier 1, what is your outlook for your coverage ratio in the future? Second one is for the asset management business. Mr. Tian has mentioned that the asset management business will continue to grow in a normal way. We think that the industry, especially for CMB, has recovered in terms of the asset management business since the launch of the new rules. Does that mean the contraction of your asset management business has already bottomed up? What is your future outlook for your wealth management subsidiaries?
Thank you. The first question, as for the coverage ratio, I think it's quite a reasonable range, around 440%, more or less.
Second one, please, we will invite Ms. Liu Hui to answer the question.
Thank you for your question. As for the wealth management business since the launch of the new rules, especially for the future of the wealth management business, you all know the regulators and the PBOC has jointly issued an announcement to extend the transition period to 2021 for the new rules. These new policies is within the expectations of the market because many market participants also has applied for the extension of the transition period, and also there are many reports and suggestions for the extension. So finally, the policy allow to extend the transition period for one year. From the wealth management subsidiary, we support it very positively. We think that this decision, or policy decision, is very positive, and we will work according to our budget and according to our own prospects.
For the first half of the year, the total industry is keeping a stable phase, and relatively fast transformation pace. I look at the first half of the year, the bank's wealth management. The total assets for wealth management for banks last year was CNY 2.34 billion at the end of last year. When you look at the first half of the year, the mutual fund subsidiaries, the total asset volume has exceeded that of the wealth management subsidiary of the banks. This is mainly because for the very rapid growth of the equity product markets. As for the wealth management subsidiary itself, we see the NAV products growth rate is very fast, and the old products have been kept stable and has been reduced.
We think after the new policy for one year extension, the subsidiaries will be more active, more clearly to reduce the existing old products, exceed the old products. Because those principal guarantee products, on the one hand is the If we cannot reduce those kind of products, it doesn't help to develop the new products. With the phase out of the old products, we do believe that the NAV products, especially under the wealth management subsidiaries, will be more rapid and be accelerated. Secondly, as for the scale and also the income of the wealth management side, we think that it's more important to take up, say, whether the NAV new products can take up the role of the old products or the total asset volume.
If that moves smoothly forward, we think that will be quite easy for us to gain the asset volume and also to gain the income. In the first half of the year, the total new products is CNY 1.3 trillion. The growth rate is 59%, it is very fast. And take up 40.58% of the total volume, and 14 basis points up, then percentage points up than the beginning of the year. As for income, we have achieved a CNY 5.6 billion income from wealth management. For the bank's sale site income and also for our branches take up around 36%. For the management fee for the wealth management subsidiaries is around CNY 2 billion. With a stable growth, our income has been stably increased.
Year-on-year increase of I think we have some one-time effect in this number, because in the first of the year, we also mentioned that because in the past, the products has been right in a product pool. Some old products really have pressure on the NAV transformation. Last year, we reduced the fee income to make up the net equity. This is a one-time effect, because that is why this year we see the number growth rate is quite high. When you want to calculate or when you predict the future income, that will be when you look at the asset size, whether they can grow.
Next question.
Next question will come from CICC, Wang Yaopin.
Thank you for giving me this opportunity. Thank you. Thank you for your robust performance. Thank you for your extent of disclosure exceed our expectation for better understanding of the management. My question is about corporate finance. According to my understanding, besides you take a leading position in retail finance, you have also make progress in corporate finance. You have attached great importance in the operation and management of strategy clients, and you see some industry opportunity. On the other hand, I think you have made improvements in the fintech application of corporate business. You are beginning to empower fintech, empower technology, and also co-build a ecosystem. You have also bring up a new concept called FPA.
I would like to know from President Tian, do you have other indicators similar to retail MAU and AUM for corporate banking? What kind of indicators do you attach importance to? What do you think- What kind of indicators can provide for the investors to follow and measure the progress and quality of corporate business? What is your outlook and target for corporate business developing in the short run or even longer period?
Thank you for your question. I think for CMB, most of your importance may be attached to retail. In fact, around five to six years ago, we began to develop corporate business when we are facing four challenges brought to the banking industry. The four challenges: one is the interest rate marketization, disintermediation of funding, internet finance, and also another factor. I think the challenge brought by the four factors are more powerful to us.
In order to cope with these challenges, retail is our lifeline, is our body within the One Body with Two Wings. So One Body with Two Wings is not an independent existence. They are organically combined within each other. For corporate business, its deployment is also a strong support for the One Body, our retail business. So we should pay more attention to the change in the fundamental change. The FPA for the whole society in the future will definitely undergo huge change. That is the ratio of direct and indirect financing. When providing indirect financing, this is one of our strengths. And direct financing, I have to say, it's our weakness. It's not about what can we do, it's about our problem within our system. We need a system-based operation to provide services such as direct financing.
For instance, risk management, we always refer to the three sheet, like traditional credit granting, when we're looking at the customer's financial statement. I think for these old mindsets, these cannot cover the new method of direct financing. So overall, the transformation of corporate finance should be focused more on the difference between indirect and direct financing. How can banks get more engaged in financial intermediation? You should pay more attention and to develop your capability in providing capital market services. This is not a strength that you can acquire within one day. So five to six years ago, we began to develop such capability. FPA is quite a similar concept with social fund aggregate. Actually, within CMB, we have long adapted the concept of FPA. So under current situation, in disclosing FPA, this new concept in the interim results, it is within our consideration.
It is just for the first time we disclose this concept within the interim announcement. We always use this concept to measure the capability, the service quality from our teams providing to our clients. We will use this new concept to make assessment and to measure their performance. So within the FPA, I think that includes indirect and direct financing methods. So it could be said that FPA is a mature practice within CMB. It's not under discussion. It's not just a pilot project. It is already a practice, a mature product within CMB. However, it still takes time. I think with a good start and with a good direction, our corporate business faced with the new challenge brought by the environment will be as excellent as our retail business. I will take the next question.
Next question comes from Judy from Citi.
Thank you for this opportunity.
I am Judy from Citi. My question is about e-currency, digital currency. I would like to know, how would this cause changes to the landscape of payment business? What influence will it bring to CMB? Another question is about the third-party payment business. The fee charged such as WeChat and Alipay are actually quite high from CMB to these internet giants. I would like to know, it is a common practice or you are actually negotiating individually with different clients? Thank you.
The questions will be answered by our new Chief Information Officer, Mr. Jiang Chaoyang.
Digital currency. The question is actually new to CMB also. Through public resources, the digital currency is upon internal tested. We have also talked to relevant departments, but to this issue, we need to observe and pay more attention to the changes.
We are happy to see new changes happening in this market, new projects, new products, and new market participants about the fee charges. Indeed, I think in order to change the landscape, to change the situation, it must be under the influence of more market participants. I am not sure whether your question is about their strategy, their fee charge strategy of Alipay and WeChat. I do not see a very significant declining trend upon the charges by WeChat and Alipay. I think for CMB, we would always want to be an active participant to promote a more active market. For us, we have invested a lot in the payment business and would like to increase our customer service and to improve our performance in such field. We cooperate with the UnionPay. Also our All-in-one Net service are also efforts we made to improve customer experience within the payment business.
So much for my answer. Thank you.
Next question will be from Zhu Chenxi from Guotai Junan AMC. Thank you for your question.
I am Zhu Chenxi from Guotai Junan. Congratulate on CMB's performance under this challenging external environment, giving us confidence. I would like to ask a question about cultural construction. I noticed that you have put up a new idea called break up silos and empower the front line and promote the open and integration of culture and organization. So I would like to know from the management about the backdrop of this mindset and what kind of condition or achievement would you like to achieve.
I myself will take this question. Frankly speaking, breaking up the silo and the simple work style proposal and also empower the front line, it is not common questions concerned by the analysts. I am kind of surprised.
It is not something that analysts would take more attention to. It also means that you have a quite deep understanding upon CMB. CMB's strategy. For each time, I would like to mention and propose it for several times. Our strategy is light operation bank. From the business perspective, light asset, light capital, low growth rate of RWA, and to promote the internal growth of our capital. For the past seven years, I think we did it. But that is not enough. That could be said that we are a light operation bank. We are still faced with the second half of the light operation bank transformation, which featured light culture, light management. Light management refer to the process when an enterprise is getting from small to big. When people are growing older, so is the institute.
No matter in capital market or in China, they are all faced with large enterprise disease. CMB's market cap has ranked seventh in the global market. We should always remind us from preventing to get the big enterprise disease. So the construction of light operation bank is entering into the second half. It is natural for us to bring up light culture and light management. It is a common question we are faced with. So breaking the silo, refer to it is quite easy to understand. Within big enterprises, there are so many silos. I believe it is also happening within your company. For instance, communication is not that smooth within two departments. Sometimes it would be nice, even if they choose to simply cooperate.
In terms of business, I think business silos means that departments cooperate in a not smooth manner, and systems, data cannot be shared within the internal system. When you are a big enterprise with so many silos, you cannot provide good services to your clients. It will greatly influence the experience you provide to your client. That is why we mention the concept of breaking silos within internal departments. This is also an effort we spare a lot to do in order to enhance our light culture and light management. I will take the next question.
The next question comes from Yan Meizhe from UBS.
Dear management, thank you for this opportunity. I have two questions, which is quite similar to the questions raised by other analysts, but I would like to know from my side. The first question is about profit growth.
For first half and Q2, profit has dropped at a higher magnitude compared with its peers. I would like to know from your perspective, what is your outlook over your next half's revenue and profit? Can you maintain at least a positive or neutral growth? As we know from the regulatory information, the banking industry is required to dispose 3.4 trillion non-performing assets. I think it's quite a huge effort. I would like to know from CMB whether it is also a practice required by the regulator. Also, I've heard that for the next year, the effort is also required even higher in disposing non-performing assets. Will it be an external factor influencing our profit and revenue, and how will it influence our ROAE? What do you think of CMB's ROAE in the future two to three years?
On the other hand, my second question is The Supreme People's Court about private lending. The legal protection for the upper limit is 4 times of the LPR, annualized 15.4%. In my understanding, although the legal interpretation might not be applied to financial institutions, I would like to know whether this interpretation will influence CMB's credit card business. At present, how much proportion of interest rates was higher than 15.4% within the credit card loan, and how will it influence your retail business?
The question will be answered by Mr. Wang Liang. I think your question is actually partially answered. Now, I think I will let Mr. Wang Liang to answer.
Thank you for your question. For revenue and profit growth, I think we have already provided comprehensive answer.
For the other question you raised, compared with other peers, I think for the banking industry, the profit growth was -9.4%, and for CMB was -1.6%. We are actually record a better performance compared with our peers, and it is all owing to our differentiated strength in profit growth. During the upward trend of the banking industry development, CMB can maintain a good performance. During the downward trend of economic development, we can maintain a relatively small drop of our profit growth. I think it is our competitive edge. For the next half or for a longer period, what's our outlook over the revenue or profit growth? For my personal understanding, just as you have just mentioned, to conduct fee reduction and benefit to the real economy will continue. This kind of policy will continue to implement and will indeed bring risks to the banking industry.
The risk is going upward. It is also required by the regulators, such as the CNY 3.4 trillion disposal of non-performing assets. These strict requirements is indispensably influencing the bank's operation. NPL ratio, NPL balance, special mention, and other indicators all showing CMB's stable asset quality. In the short run, profit growth is still under pressure. In the long run, I think CMB's overall performance and solid foundation has provided us confidence to maintain our differentiated strength.
This is my additional response to your first question. For the second question of the People's Supreme Court regarding private lending, your question is about whether the new interpretation will influence CMB's credit card business.
As the People's Supreme Court has made it clear that the interpretation applied just to private lending, I don't think as FI, we will be influenced, as our credit card business is a licensed entity. For instance, consumer finance company is also a licensed FI, so they are not within the scope of applying this interpretation. We will also closely follow the change upon these rules and regulations, and to see whether the changes will cast any changes over our operation of credit card business. We will strengthen and deepen our study and research, and try the best effort to eliminate negative influence brought to our credit card business. Thank you for your question.
Next question will come from Xiao Feifei from CITIC Securities.
Thank you, senior management. I would like to know a question from customer base transformation.
As you are faced with challenge posed by direct financing and also internet finance, have you switched your focus over high net worth customers to other customers? What would you conduct transformation over wealth management business and asset management business?
This question will be answered by Mr. Wang Jianzhong. Thank you for your question.
It's quite a big question indeed. In retail business, we have always keep a close focus over the changes or challenges brought by internet finance companies. Two to three years ago, we have already brought up the retail transformation 3.0 mentioned by Mr. Tian. To see from commercial banks' perspective, CMB will benchmark with internet finance company and see where we are different from them. Internet companies are fully operated online. They provide simple products. They are not as good as banks in understanding clients' financial requirements.
In this aspect, I think banks are doing a good job than internet companies. Our understanding towards clients are deeper than them. In the past, our major battlefield is our understanding of clients and also our service and product of complicated financial products. Also, commercial bank has a strength, an interactive strength of combining offline and online. It is a comprehensive strength compared with internet companies. It also benefit us in terms of providing complicated products to our clients. On the other hand, I think we have also admit the strength of long tail clients and their requirements upon simple products such as the agency sales of mutual fund products from internet companies. This figure is increasing. CMB, I think, has a strength in online business operation.
As there are many figures brought up by Mr. Tian just now, 70%-90% of our products are sold online. It is also one of our focus about how to reach the long-tail client base, how to better understand young clients. We have also made early arrangements over these topics. It could be said that in terms of online service experience, CMB has taken an early step and can provide better service experience compared with its peers. I think the experience and service provided by CMB in online will be quite similar to internet companies. It is also CMB's strength to provide lifelong service to our clients, and we will also conduct refined management upon this characteristic.
Next question from Guosheng Securities, Ma Tingting.
Thank you for giving me this opportunity. My question is about We see the economy has reopened. In the second half of the year, what is your plan for provision build-up and also for the disposal of NPLs? Also as the profit of banks are facing pressure, what is your outlook or plan for the dividend payout?
As for dividend payout, it is already stipulated in our AOA, 30%. If we do not change our AOA, we will not change our policies for dividend. I think this is the question you concern most.
The first question will be answered by Mr. Zhu Jiangtao.
Thank you. I will answer your question for the second year's NPL disposal, and also for the provision. In the first half of the year, we have disposed CNY 25.2 billion NPLs, and this is a year-on-year increase. When we look at for the whole year, the whole year's disposal will definitely increase. In the second half of the year, we will maintain the efforts or maintain the speed as the first year. We will not diminish. As for provisions, Mr. Tian has already answered the question. As for provision level for around 440% more or less, around this range, we will maintain quite at this level, at a quite a high level. This is my answer. Thank you.
Next question.
We have Ms. Li Yaming from Guohai Securities.
Thank you. Thank you very much for giving me this opportunity. I am from Guohai Securities, Li Yaming.
This time we see the performance of CMB a bit market expectation, especially in wealth management. My question is about the wealth management in the first half of the year. You have achieved such good results, not only from the AUM for retail banking, but also for private banking. Customer for private banking has also grown, especially made a record high. My question is for this high growth, have you already analyzed what is the driving force behind? Is it because the liquidity in the whole market, or this is allocation of the households, namely moving from the real estate investments to banks' wealth management product? Is there a transition in this area, or is there any special measures the bank has taken to improve our strength and advantages?
I will give you a simple answer, and that will be answer followed by Mr. Wang Jianzhong. Just now, you said for the analysis of the driving factors. The factors you mentioned are for the whole industry. For CMB as a unique or individual bank, we do have the internal analysis, so to speak, that the opportunity is always for the prepared person. After the breakout of the COVID-19, we have the social distance policies, and this has brought us a big opportunity because we are continuing to promote the digitalization of our retail banking. So in this time, we see the sales of the simple products. The digitalization has taken up a great effect.
Now Mr. Wang Jianzhong will supplement my answers.
Thank you for your question. This year, for the first half of the year, CMB's retails wealth management has achieved really good results. Just now, Mr. Tian has pointed out the substance, namely our online service capability has been built up in the years, and the outbreak of the virus has given us a good opportunity to show off. In the first half of the year, the wealth management, we see great momentum. You can see from the two indicators. The first one is AUM. AUM has grown by over 10%, reaching CNY 8.2 trillion. The second indicator is the fee income from wealth management has grown by over 40%. This is a very fast growth rate. In the first half of the year, why we see the momentum is so good? This is mainly because the following reasons.
The most important one that Mr. Tian Huiyu has already pointed out, namely due to the social distance, people can only stay home. Also our relation managers also need to stay home, which means that the digitalization and how you can offer the services online can show the distinctive advantages of CMB, compared to other investment banks or other internet companies, because for products as well, better than internet companies. The second one is the buildup of our middle office. We have made continuous efforts for years in building up our middle office. Because this year we see very good performance in the capital market, and as you can see from the sales of the mutual fund for CMB. The first one, we will design on the difference of our customers. We will design different products for different customers. I cannot leak this to you. It's a commercial secret.
The second one is actually we oppose some very hot ones because under this circumstance, we really do not want to sell much of those hot products. We say that the fund managers need to restrict the AUMs per fund manager can manage. These are all the results can show by the buildup our middle office. Namely, what we are trying to strive is to strive the best value for create the best value for the customers. These values will be transmitted from the mid office to the front office. The front office is not only following on the sale of the products, but rather the creating of the value. The third one is the team buildup. Namely, not only from the head office, but also from branches to sub-branches. This is a team that we have built that very stable.
Fourthly, we say the flywheel effect. We think the market already know that our flywheel effect is not a secret. From the investment banking to asset management to wealth management to custodian, it is a close circulation for all of our products and it is taking effect. Fifthly, I would think we benefited from the capital market because the capital market really performed good, so it gives us a very good opportunity to transform our wealth management products, especially for the NAV transformation. We are leading the market. In the past, we have helped our customers to allocate many of the fixed income products. This year, we see the transformation is quite rapid. See rapid growth of our private banking business. There is a very profound transition in the product structure, namely the reduction of the fixed income.
Rather instead, the equity products and also those insurance products has taken a larger part. So in the investment education and also the NAV product transition, we are leading the market. This is my answer. Thank you.
Next question.
We have from Goldman Sachs, Yang Shuo.
Hi, from Goldman. I am Yang Shuo. My question about fintech. The tech companies has also crossed the boundaries into the banking sectors, and within that CMB has invested a lot in the fintech and the investment has increased recently in recent years. Now your proportion for 1% of the total income to 3%. In the future, what is your plan for the investment in fintech? Second question is for the commercialization of fintech projects. Some companies, sometimes they have outsourced their ITs to other companies.
For CMB, do you have any plan to outsource your fintech companies or you use your IT companies to empower other small enterprises, small banks?
Thank you. Your question will be answered by our Chief Information Officer, Mr. Jiang Chaoyang.
You have two questions. The first one is your investment into fintech. In our AOA, we have already written, that stipulated that the fintech investment should be no less than 3.5% of our total operating income. Our fintech fund takes up around 1.5%. This proportion in the short run, I think, will be quite stable, no less than this level. If there is really a need, that could be above this level, but generally speaking, 3.5% is appropriate level to ensure that at least 3.5% will be invested into fintech. For the first half of the year, the fintech is CNY 3.9 billion.
This has already been mentioned in the PPT introduction, up by 8% compared to that of last year. The growth rate is quite strong. The first question. As for your second question, for the empowerment of other banks using our own fintech technologies, frankly speaking, for fintech, the top problem for us is to meet our own business needs. What we have gone through for what we are doing is to digitalize our own businesses to support our own bank currently, especially for the system build-up and for the IT research. At the same time, for some part of our matured technologies, we could consider, based on the build-up our ecosystems, we are also considering to empower our partners.
I believe in the letter to the shareholders in the annual report that Mr. Tian mentioned the opening up and integration with our partners, namely empower our partners to open up with our partners in the ecosystem and link up with our systems. One of the major way is to empower our customers or empower our partners with digital service capabilities by using our own technologies for other partners. This year, we have upgraded a company to Yinchuan to our direct subsidiary. This means we need to set up our efforts to provide more digital services to the corporate banking customers. The original purpose for us is not to create business value by using fintech technologies, rather to empower our partners or corporate clients to build up more intimate connections between the bank and the partners and to build up a more effective cycle.
We do see good progress in this regard, such as compared to that of last year, our fintech services has been increased by 37%. For this year, we think that the active customers will see significant growth also this year. Secondly, we have seen some interesting scenarios. The first one is the AI customer service. In the first half of the year, actually we have seven partner governments partners, where we use our AI customer services to help them to service around 150,000 their customers. This is an example showing that we are also using our capabilities to helping our partners. It doesn't mean that we are using these technologies to cash out in the capital market. Rather, we use these technologies to build up a better ecosystem with our partners. Thank you. Thank you.
Next question.
Next we will have Zhao Yushu, individual investor.
Hi, I'm Zhao Yushu. My question is about the demand deposit. According to my observation from 2017, for the demand deposit ratio has been increased, namely from 2019, the proportion of our demand deposit has declined from 60%. Does that mean that in the future, whether it's possible for the proportion of our demand deposit in the total deposit to rise again? What is your outlook for that? The second one is for AUM. The growth rate is good, but except from deposit, what is the asset class under this AUM? Or can we say that other assets will squeeze out the deposit? So what is the relationship between deposit and other asset class in the AUM?
Mr. Wang now will answer the question.
Thank you for your question. As for the demand deposit proportion, in the past, we have kept that in a very high level.
This is why we have kept our funding costs low and also keep our NIM high. This is a very major precondition. We pay high emphasis on demand deposit growth. According to our analysis, the highest time for the proportion of demand deposits was in 2014 to 2015, even exceed 70% of the total deposit. Why is that? This is because the wealth management business at that time also help us to attract the demand deposit. At that time, the capital market was at a downturn. Many investors has transferred their funds from capital markets to the banks. Such or buy the bank's wealth management products or to place with the bank. That is why we see a high proportion at that time. Then after that, the total proportion of the demand deposit has begun to decline.
Last year, the proportion in total was around 60%. In the first half of the year, a good sign is that we see the proportion has rise to 62.5%, up by 2.65% than the beginning of the year. We see some rebound. We do have internal analysis for the driving force behind. The first one is benefiting from the loosened monetary policy. That means the liquidity has been loosened in the market, not only for the corporate banking, but also for retail banking. See, both demand deposit growth has risen. This is one reason behind. We see the total demand deposit growth has been over CNY 440 million. This is why we see a higher proportion of demand deposit the first half of the year.
The second reason behind is to build up or growth our wealth management products, which can be shown in our AUM exceeding CNY 8 trillion. So it's kind of a reservoir that all kinds of assets could be included in this reservoir, including the funds, insurance deposits, and all kinds of assets with the customers' different allocation of assets or transformation of different types of assets. Some of them will be shown as demand deposit. The third one is because we pay high emphasis on the expansion of our basic customers, not only from corporate side, but also from retail side. When you look at the base of our customer base, it has been grown for these years. This is all why we have advantage in the demand deposit. From product side, we also have the settlement products in place.
We encourage the customer to use us as a settlement bank or the payroll bank or the fee collection bank, and that will help us to have access to this demand deposit. All these together, we have maintained our advantage of a low cost of deposit and a higher proportion of demand deposit. As for the proportion within 60%, even we have that in the first half of year to 62.5%, we think that nowadays, households are beginning to have more allocation of assets in wealth management. It's impossible or unrealistic for us to have an even higher proportion of the demand deposit. We think that the 60% is already quite a high level. We think that we will continue to make efforts in this regard to keep our liability costs low.
As for your question for the AUM's growth rate, just now, Mr. Wang also has responded to this question. AUM, for years, is one indicator we emphasize most. Because we make efforts in this regard to build up our AUM, and we have seen strong growth in the fee income of our retail banking, and help us to keep a proportion of our demand deposit in a higher level, and building up the AUM, and also help us to have a better connection with our high net worth customers and Sunflower customers and customers above. This is, in one way or another, kind of provide a very positive impact on each other factors. Thank you.
The question just now, your question, I think, is more emphasis on the deposits and other assets. I will add to that.
For CMB, creating value for customers is the most important thing. When you look at the performance indicators that are reflected in AUM, namely, it reflects how we can service our customers and how our customers trust our bank. If we only focus on CMB's own interests, namely, to induce more customers to only place with the bank or to induce customers to place demand deposit, we could not service or create value for our customers. We think it's not good for the customer. We think that the AUM and demand deposit can influence each other or impact each other soundly. It's not we are now trying to striving for demand deposit by only focusing on demand deposit, such as at the end of July, maybe we can have some incentive programs to incentivize our relationship managers to boost up the deposit value.
But at last, it will ruin our reputation or the value of our customer. We think there's a sound relationship between deposit and the AUM. Even there's a problem or a conflict between deposit or AUM, we will choose AUM, namely, how we can say that we could choose to create value for our customer rather than focus on our own indicators. Then we will have another question coming from Guzidi.
Thank you very much for giving me this opportunity. I'm a long-term investor for CMB. My question is, just now you mentioned AUM, namely, AUM have supported the fee growth of our AUM or have a positive relationship with the growth of our fee income. Except from the deposit, when we look at the relationship between other asset types under AUM with the fee-based income, this year, we see a rebound.
May I know what is your strategies or measures to help to increase the fee income coming from AUM growth? Secondly, as for direct financing is taking up a more proportion, I also noticed that CMB, for years before, already focusing on investment banking business. From your report, we don't see a disclosure for the investment banking business. Is it possible for you to give us more disclosure on the corporate banking business?
Sorry, just now, I didn't get your question clearly, so maybe I only get 50% of your question. Maybe I could answer your second question. As for the contribution from investment banking. If there's no disclosure in the annual report, I could not disclose it just now. But if you are interested, you could contact our IR department and have more communications.
As for the contribution from investment banking, I think it's not only reflected in the financial figures, rather it will be a part of our customer service system, especially for the financing structure of the whole market is changing, namely from indirect financing to direct financing. Investment banking will help us to do the direct financing. Otherwise, we'll be disintermediated. Second question will be answered by Mr. Wang.
Just now is a very detailed question. As for the AUM and the relationship between AUM and fee income. As for AUM structure, now we see the whole structure of the AUM. The biggest part is wealth management, namely products from our subsidiary. The second one is deposits. These are the two major parts. When you look at the growth volume, the mutual fund is growing very fast. Insurance, we see stable or down by 0.1%.
Precious metal grow very fast for the first half of the year. When you look at the structure, what will be next? Not to mention the private banking for trust products or the private equity funds also grow fast. So what is next? Just now, Mr. Tian already said that our main purpose, original purpose is to create customer's value or to improve customer's experiences. CMB's wealth management principle is to. What we do is to, we classify our customers and divide them into different groups, and depending on the customer's own situation, we help our customers to allocate their assets. We don't emphasize on sales of products. Give you an example. For example, mutual funds. This year, mutual fund has very rapid growth. One of the reason behind is the capital market.
Secondly, I will give you another secret, is for high-end customers, especially for private banking, we see very rapid growth for the sales of mutual fund. This is also customer centric, because for these years, the mutual fund has provided more better experiences than private equity funds for customers. Secondly, mutual funds could be delivered online. That is why we see a rapid growth for these kind of funds. As for precious metal, we seize the opportunity, and we see very strong growth momentum. As for insurance, if that insurance has not grown very fast, but for those guaranteed products, has grown quite well. So back to the origin, with the condition of creating value for the customer, we help our customers to improve the value of their assets. Our ability for us to help them has also greatly improved.
Namely, our capability to service our customer has been improved. In other words, our connection with our customer has been improved. Based on that, we do expect our. We think it's very, have a sound future for the future income.
Now, the last question. Last question.
Jefferies. From Jefferies, Chen Shujin.
Thank you very much for having the last opportunity. Sorry I could not. Just now we have mentioned the NIM. Mr. Tian say you are not very satisfied with the NIM figure. Could you have any elaborate on that? I think the reason behind, one, is the decline of the corporate yield, and maybe some the market rate, and also the repricing of the loan assets. Secondly, we also see the improvement on the credit card business. So what is your outlook for the NIM?
Also, we see for the liability side, you have made many efforts to issue the CDs or interbank lending to replace those high interest bonds. What is your outlook for liability cost?
Mr. Wang now will answer the question.
Thank you very much for your question. In the first half of the year, as you look at the NIM, is down compared to last year. We think that in the second half of the year, from the asset side, for the loan yield, will continue to decline. The trend is that this is one. One is the background of the policies, namely to benefit the real economy. Secondly, we need to optimize our loan structure, such as to support the manufacturing industries and support medium small enterprises, because they are facing a lot of difficulties, and they need to have access to low fundings.
We see the interest rate for this industry is still low. But good to know that our retail loans is recovering. As for mortgages, it's rebounding rapidly. As for credit card loans, in the second half of the year is still below that of the beginning of the year. But we think that in the third quarter, we're beginning to recover. But the growth rate definitely will be lower than that of last year. The growth of our credit card in the second half of the year will help us to improve our loan yield. But for the whole year, the total growth rate will be less than that of last year. This is from the asset side. From the NIM, will be stable, but might decline a little bit.
From the liability side, we think that we will step up efforts to attract the core deposit and reduce the structural deposit, especially for the first half of the year. Structural deposit has been declined by 4.4% compared to that of last year. In the second half of the year, we'll continue to reduce that, reduce the interest rate, and control the liability cost. By acting in these two ways, we think that in the second half of the year, the NIM will be quite the same of the first half of the year. For the whole year, the NIM for the whole year, as we predicted in the first half of the year, will be less than that of last year, but will be higher than the fourth quarter of last year. Maybe in between. Thank you.
Thank you very much for your participants.
Due to time limit, we now conclude our interim results announcements. If you have any questions, you can go to our website. We have our reports on the website, also you could contact our IR team in our board of our office. Thank you very much for participating our announcements. We will try our best to provide better value for all the investors. Thank you.