Dear investors, analysts, good morning. Welcome to China Merchants Bank 2026 third quarter results announcement. The meeting now begins. I am Xia Yangfang, General Manager of the Office of the Board. CMB, on last Friday, October 30th, announced our third quarter results. Today, we will present our third quarter operating results, take your questions, and listen to your feedback and suggestions. The meeting is being held via audio webcast. Simultaneous interpretation from Chinese to English will be provided. First, please allow me to introduce attendees today. They are Mr. Peng Jiawen, EVP, CFO, and Secretary of the Board of the bank, as well as general managers of the Digital Finance Development Office, Assets and Liabilities Management Department, Financial Accounting Department, General Office of Corporate Finance and Retail Finance, Wealth Management Platform Departments, and Risk Management Department.
We are also joined online by our independent non-executive directors, Mr. Tian Hongqi, Mr. Shi Yongdong, Ms. Li Jian, Mr. Lu Liping, and Mr. Zhang Yong. On behalf of China Merchants Bank, I would like to extend a warm welcome to all of you. I would also like to express our sincere gratitude for your long-term care, support, and investment in China Merchants Bank. The meeting will consist of two sessions. First, Mr. Peng Jiawen will present the highlights of our 2026 third quarter results, which will take about 15 minutes, followed by a Q&A session of approximately 75 minutes. I would now like to give the floor to Mr. Peng for the third quarter results presentation.
Dear investors, analysts, good morning. Last Friday, we have released our third quarter report of 2026. Today, I am joined by general managers of relevant head office departments for this conference.
Taking this opportunity, I would like to first thank you for your continued care and support to China Merchants Bank. I will now use 15 minutes to report to you the bank's operating performance for the first three quarters. As usual, all the figures I mentioned are in accordance with IFRS accounting standards, as in our H-share disclosures. Since the start of the year, in a mixed complex environment, CMB pursued a strategic goal of building a value creation bank and maintained coordinated development. We have shown steady improvement. Key points are as follows. First, our net operating income and net profit grew steadily. ROAA, ROAE, and capital adequacy ratio are maintaining high levels. In the first three quarters, the group's net operating income was CNY 264.676 billion, up 5.37% year-on-year. Net profit attributable to shareholders of the bank, CNY 116.476 billion, up 2.38% year-on-year.
Growth rate of revenue and net profit outpaced the first half. ROAA and ROAE were 1.16% and 13.49%, remaining high in the industry. Capital adequacy ratio rebounded. Under advanced measurement approach, CET1, Tier 1, and capital adequacy ratio of the group were 14.38%, 16.88%, and 18.64% respectively, up 0.22, 0.37, and 0.4 percentage points from year-end 2025, keeping strong capacity in organic capital generation. Cost-to-income ratio, 29.24%, down 0.62 percentage point year-on-year. Second, we continue to strengthen asset and liability management. Deposits and loans are growing steadily. We effectively address insufficient credit demand, especially retail loan demand. We took multiple measures to strengthen asset origination and push liability towards higher quality growth. On the asset side, as of the end of September, the group's total assets was CNY 13.76 trillion, up 5.28% from the end of last year.
Total loans and advances was CNY 7.45 trillion, up 2.69%, of which retail loans were CNY 3.67 trillion, down 1.28%, as consumer and housing demands remain in recovery. The group adhered to sound and prudent principles, proactively refined retail credit strategy. Our corporate loans were CNY 3.56 trillion, up 10.59%. In line with the interest rate trends and asset liability allocation needs, we made reasonable arrangements and scaled financial investments to CNY 4.48 trillion, up 9.19%. On the liability side, total liabilities of the group was CNY 12.37 trillion, up 4.92%. Customer deposits reached CNY 10.26 trillion, up 4.3%, of which demand deposits accounted for 49.75% of the daily average balance, up 0.35 percentage point from the full year 2025, and the proportion of demand deposits stabilizing. Third, net interest income grew well, and the net interest margin led the industry. Our advantage of low funding cost was consolidated.
Since the start of the year, the decline in asset yields have narrowed, and the liability costs have fallen steadily. In the first three quarters, the yield on assets was 2.8%, down 28 basis points year-on-year. With cumulative decline narrowing by four bps from the first half, the cost of liabilities was 1.04%, and the average cost of customer deposit was 0.95%, both down by 27 bps. Driven by this, the NIM for the first three quarters was 1.82%, down five basis points year-on-year, flat versus the first half. In particular, the NIM in the third quarter was 1.82%, remaining flat quarter-on-quarter. Net interest income in the first three quarters was CNY 169.379 billion, up 5.83%, accelerating from the first half. Fourth, non-interest income growth improved, and its share of net operating income remained high.
In the first three quarters, net non-interest income was CNY 95.385 billion, up 4%. Remaining at relatively high level. Net fee and commission income was CNY 58.61 billion, up 4.29%, with a growth rate moderating from the first half, mainly due to capital market volatility. Other net non-interest income was CNY 36.771 billion, representing year-on-year increase of 4.95%, with a growth rate further improving from the first half, mainly due to the increase in the valuation gains of bond investments. Fifth, extensive wealth management business consolidated, with customer base AUM and total asset management scale growing soundly. As at the end of September, retail customers totaled 236 million, up 5.36% from the end of last year. Golden Sunflower and above customers totaled 6.50 million, up 9.63%. Corporate customers totaled 3.97 million, up 9.7%. Retail AUM reached CNY 18.71 trillion, up CNY 1.63 trillion, or 9.52%.
The average daily balance of corporate wealth management products was CNY 665.5 billion, up 26.78% from year 2025. Total asset management scale, CNY 5.18 trillion, up 9.51% from the beginning of the year. Customer base and business scale continue to grow rapidly, underpinning the growth of extensive wealth management businesses. Income from extensive wealth management sustained growth momentum. In the first three quarter, we generated CNY 36.22 billion of income from this regard, up 11.12%. Among this, fee and commission income increased, of wealth management increased by 13.71% year-on-year. Fee income from wealth management products, funds, and trust schemes rose 8.77%, 31.63%, and 32.27%, respectively. Fee income from asset management turned positive, up 0.11%. Custody commission increased by 19.89%. Sixth, we prevented and resolved risk in key areas, with stable asset quality and strong risk compensation capacity.
As at the end of September, the group's NPL ratio, 0.94%, remained flat from year-end 2025. NPL formation was CNY 56.16 billion, up by CNY 8.157 billion year-on-year. NPL formation ratio annualized 1.07%, up by 0.11 percentage points. In terms of risk in key areas, the non-performing loan ratio of the company's loan to the property development industry and the manufacturing sector were 3.89% and 0.39%, respectively, down 0.75 and 0.05 percentage points respectively. Affected by the external environment, retail NPL 1.19%, up by 0.11 percentage points. With overall risk under control, the group adhered to sound and prudent provisioning, made adequate provision. From January to September, the credit cost ratio annualized was 0.72%, up 0.05 percentage point year-on-year. As at the end of September, the group's allowance coverage ratio was 389.39%, down 2.4 percentage points, maintaining a sufficient level of risk buffers.
This is our operating performance in the first three quarters. Looking into Q4 and next year, China's economy will continue to trend better with new drivers and higher quality, yet the external environment remains complex and severe. CMB will further advance value creation bank strategy, keep strategic focus, stay customer-centric, consolidate principal position of retail finance through wealth management, and take asset quality as the foundation, and strengthen technology support. While enhancing our existing strengths, we will keep fostering medium and long-term growth drivers, and will seize opportunities in extensive wealth management, technology finance, cross-border finance, and intelligent banking, shaping CMB's business and income structure into fixed income plus model, and work to achieve greater flexibility in upside and greater resilience in a downside. Thank you.
Thank you, Mr. Peng. We will now proceed to the Q&A session, and please read out the compliance statement and instructions.
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Now, the first question. Now, we will invite Mr. Zhang Shuaishuai from CICC to raise the first question.
Thank you for giving me this opportunity, and congratulations for your third quarter, especially we have seen improvement for the single digit. What I have noticed is that currently we are facing a very complex environment, but if you look at CMB's data, it is improving quarter by quarter. Does that mean that after one or two years adapting to the external environment, that CMB is more accommodated to the current environment and has more strategies? Because currently the market is talking about low interest rate and also divergence of our K-shaped divergence, and also to lower down the growth speed, which all indicates that the overall environment is very complex, higher pressure on banking operating environment.
But if we look at CMB's Q-on-Q data, it is improving, especially like NIM, like your NPL formation, and also your provision loan ratio is all improving. So my question is for the senior management, if you look at the whole year or even take an even longer view, like next year, do you think this improving trend will continue? This is my question.
Thank you for your question, and thank you for your continuous recognition of our performance for the past recent years. Yes, indeed, for the past years, we have been facing a very challenging environment, and indeed, we have taken a lot of measures, and these measures and strategies are taking effect.
And looking into the future, it will continue to be very complex, and I would like to seize this opportunity to share with you some of the achievements that we have made for the past years. At the same time, I will give you some thoughts on what kind of measures that we have taken to tackle with a very complex external environment. Overall speaking, we can say that facing the overall complex environment, we are concentrating on the 15th Five-Year Plan and continue to be more able to be more internationalized, to be more able to provide comprehensive service to our customer, and to be more digitalized so as to provide a better operating results. As I just mentioned about the performance for the first three quarters this year, I think there are several characteristics of our performance.
Firstly, we have seen stable growth of our balance sheet. Just now, I have you some figures from the asset and liability. Assets is also loans is around 5% growth compared to the beginning of the year. Secondly, for the NIM side, we have continued to be leading the market, and year-on-year decrease is narrowing down. You may also notice for the third quarter Q-on-Q sequentially is kind of stable. Third characteristic is that our operating results, our efficiency is improving, NII and also now interest income are all improving, and the growth rate of them are also accelerating compared to the first half of the year, as well as ROAA and ROAE are continue to be the leading the industry. Fourthly, asset quality is stable, NPL 0.94%, same as the first half of the year, and also coverage ratio around 389%.
So our risk mitigation capability is still at a relatively high level. Fifthly, high CAR ratio and also improving. So these are the main features of our performance for the first three quarters, especially under this very hard and challenging external environment, and these are the marginal improvements that we have made. So I think we should think about or reflecting on what have we done in the right way and what other things that we need to further improve. My thoughts are as follows. Firstly, I think that CMB operating philosophy is to keep a balance among efficiency, scale, and also asset quality.
And at the same time, we think to be a value-creating bank is very important for us, follow the natural rule of the banking industry, and also to leveraging on the CMB's own advantage and to stay in customer-centric philosophy, customers' need is at the center, and to deepen our relationship with our customer. This is the strategic, we stood fast to our strategy. Secondly, we seize the current opportunity to expand our advantage, such as in wealth management. Thirdly, I think the core is asset quality and to balance return and also asset quality. Fourthly, to continue to invest in technology. These are the four aspects that we have done right. Secondly, my feeling is that we continue to strengthen our asset and liability management.
As we can see that the overall banking industry is facing quite complex external environment and has posed a very severe challenge to the banking's operation, and CMB has done a lot to strengthen the management on that part and to adapting to the external environmental changing elements. We are striving to improve our capability in terms of asset origination, and especially have a balance, to strike a balance among the amount of the assets we can originate and the pricing that we can charge, as well as the asset quality of the assets. Secondly, liability management is also very important, and how to maintain a sound liability structure and to consolidate our strength in terms of low-cost advantage. Thirdly is to expand our customer base and to maintain a sound and fast AUM growth. This is key for us to encounter this overall challenging environment.
For a long time, the customer growth, customer base is our top priority. We think that as long as we can maintain a stable customer growth, no matter how the external environment changes, we can continue to have a resilience in terms of operating efficiency. I think that the customer growth is a solid base for our resilience. Fourthly, risk management is very key, prudent risk management culture, and anytime that we think that asset quality is our priority. If you look at the three core things that we mentioned for all the long time, asset quality, efficiency, and scale, we prioritize asset quality, and we think this is the key element that will help us to weathering through these challenging times. This is my thoughts on that, on your question. This is also the measures that we can take.
In the future, I think indeed, we are facing, I think, for the overall external economy, indeed, we are facing a challenging environment, but there are also positive factors. More and more positive factors are accumulating for the economy to recover. But definitely, we are seeing challenges, such as low interest environment. Also, in terms of asset quality, there are many volatilities, and also fourthly, volatilities in the capital market. Facing this complex environment, would like to seize the opportunity to share with you some of my views on the trends. Now, I think that different banks are thinking about next year's targets. Currently, the features that I have just mentioned is also the common feature that the whole bank industry is facing.
The first feature is that for the future operation, I think for asset and liability management, quality is more important, but growth rate will lower down. Asset and liability structure are under adjustments. For loan, I think this will loan growth rate, so lowering down the growth rate of the loan side will be a new norm. This is affirmative from the macro side, if you look at the micro side. From the macro monetary policy side, it is also the same tune that will lay higher emphasis on the quality of the loan growth rather on the amount of the loan growth. At the same time, this will help us to have more business opportunities and provide more comprehensive business opportunities to customers. In terms of liability management, I think it is not purely on pure customer deposit growth.
Rather, I think we will more emphasize it on the AUM growth and also more multiple ways of liability origination. Secondly, I think the NIM will continue to face downward pressure. The banking industry, overall speaking, I think will still face pressure for the whole banking industry. For the first three quarter data, we can see the banking NIM are periodically stabilizing, and we have seen that some peers' data, some are even rebounding. Our judgment is that it is kind of a periodical performance, stabilizing. NIM pressure is still on, and it is the NIM pressure, and also what determines NIM is the overall environment, such as there is a lack of effective demand from the loan side, so very fierce competition, so facing rapid downward pressure on the loan yield.
At the same time, in the past, from the loan structure, we have a higher proportion of retail loan in the past, but looking to next year, we are still facing pressure in terms of the loan growth on the retail side. On the other side, from the liability side, we can see that liability cost, the room for that is very limited for the liability cost to further go down. Comprehensive judgment is that we still face downward pressure. Even though we will have some temporary rebound, that is why we need to be more precise in terms of asset and liability management and carry out asset and liability management measures. Our goal is to continue to have a narrowing down of the decrease of the NIM and continue to have the absolute amount of the NIM remaining at the industry leading level.
Thirdly, I think the customer and also our AUM side will continue to have solid growth. As for the banking industry and for CMB, we are emphasizing on customer-centric philosophy, have a deepened relationship with that. Will support the AUM and also the customer growth in the future. Also to consolidate our operation base. In terms of the asset quality, we will continue to have a sound asset quality. I know that you all face on the asset quality, especially for the retail side, but our judgment is that, overall speaking, asset quality is under control, and also we have high risk mitigation level. When we can better control the credit risk, we will also improve, enhance our capability in terms of managing this liquidity risk and other market risk.
These are the four trends, might not be the cover the full trend, but these are the main four aspects of our operating. Judging from these four aspects, I think that for next year, including CMB, I think that investors may have a clue on our performance next year. Definitely, we will follow the 15th Five-Year Plan, continue to consolidate our strength in terms of wealth management and cross-border financing and intelligent bank characteristic, and hopefully that we can have progressive and stable performance next year for your reference. Thank you.
Next question, please.
Next, we will invite Zhu Chenxi from Guotai Haitong Asset Management.
Good morning, senior management. I am Zhu Chenxi from Guotai Haitong Asset Management. My question is about NIM. Actually, previously, Mr. Peng has mentioned about NIM. Still, I want to ask the question about NIM. Actually, we see in the third quarter, the NIM is remaining flat quarter-on-quarter. Under current environment, it is difficult for us to say that the NIM is trending up. But I want to ask that, do we think the NIM is entering a relatively stable interval? Mr. Peng has already introduced a bit about it. Can you provide some more information?
I would like to invite Ms. Li Li from Asset and Liability Department for a more detailed introduction.
Thank you for the question. Yes, actually, everyone is paying close attention to the NIM trend from the first three quarter, 1.82%, and Q3 1.82% flat quarter-on-quarter. For the reason, we are seeing that the liability cost has decreased 2 basis points, and the SSI also down 2 basis points. The two have been offset by each other. As for the reason, for Q3, our demand deposit daily average increased by 0.3 percentage points. Also, we have seen good momentum in client deposit growth. Also, we are seeing we have rotation of low-yield assets. So that also push forward to the downturn of liability cost. On the asset side, the deposit cost decreased by 2 bps quarter-on-quarter, and the decline has been narrow as compared to the past quarter.
The decline has been narrowed, and we are seeing that the decline magnitude is improving as compared to the last quarter. Our retail loan is still facing sluggish growth. This is because the marketing factors, and we are also taking proactive control on retail loan growth. This is exerting some impact on our yield on retail loans. However, on corporate loan side, we are improving in volume as well as our pricing. We have also taken proactive control and management. Through refined management, we improve funding money using efficiency. So, our asset use is the decline of asset use is narrowing, so laying a solid foundation for our NIM. Looking into the future, Mr. Peng has already introduced the main direction. We think the third quarter NIM remaining flat is a good sign, but we cannot say it has already been stabilized.
There are still uncertainties if we look into the future. Overall speaking, we think the magnitude of decline will be better than year-on-year. Firstly, within the current monetary policy, we do not rule out the possibility of LPR cut and RRR cut. Currently, we are seeing a shift of policy benchmark recently, and this will exert some impact on the market rate. The market rate is facing a rate decline, and this is reflected in the constraint on retail loan growth. Also, we are seeing new bond yield is lower than existing bonds, so there will be some pressure on our asset utilization. The benefits from repricing will be narrowed, so we are seeing less room for deposit cost decline. Even though we are facing these challenges, we still have confidence.
In a complex environment, the bank will be tested for our capacity and ability in NIM management. We will take multiple measures to play down the effect. We will value volume growth as well as quality and pricing. On the asset side, we will explore more market opportunities and explore opportunities in structural reform and put emphasis on both volume, quality, and pricing to maintain a stabilized NIM and maintain a good absolute level of NIM in leading the industry. Thank you.
Next question, please.
Next question is from HSBC, Gary. I am Gary from HSBC.
My question is about the loan pricing anchor shifting. What is your view on the PBOC's changing of the policy rate, namely to taking DR001 as the policy rate, and how is it progressing, and what will be the impact on your loan pricing, whether your loan pricing will continue to go down due to that? Thank you.
Thank you. Mr. Pan Gongsheng has announced a package of monetary policies recently. One of them is to reform the policy rate, namely shifting from purely focusing on one rate to a more complex package of loan rate, namely to shifting to DR001 as the main policy rate. Very recently, the PBOC has announced the concrete measures, and it will take an effect from today.
I think that for the prime customer, in the past, we were taking an LPR plus margin approach to decide the prime rate. After the reform, I think we will have a dual policy, dual measures, namely LPR will not exceed the market, but we will continue to improve the LPR mechanism, and at the same time, to take DR001 as the policy rate. So, in the future, I think there will be more complex and more diversified base rate, and I think more big enterprises and corporates, they will take DR001 as the base rate. But for retail customer and smaller customers, they will still take LPR as the base rate for the whole loan pricing. In terms of the loan derivatives, I think they will also shifting more to DR001 as a choice.
From the progress that we have seen is that PBOC will announce following guidance on the loan pricing to guide the institutions to follow on the shifting of the policy rate. I think the diversification of the base rate of loan pricing is a very key milestone for the liberalization of interest rate in China, and CMB is actively engaging in that. In July, we have also launched the first loan that is based on the pricing is based on the DR001. We have over 20 businesses that have been implemented based on DR001. For the interbank market, we also have issued the first floating- rate , which is based on DR001. In the short term, I think that the volatility of DR001 is a little bit higher than Shibor.
Currently, the rate is going down, and since the absolute rate of DR001 is quite low, definitely in the short run, it will pose some downward pressure on the loan pricing. At the same time, we can see PBOC is highly emphasizing the NIM stabilization of the banking, so we will also give the guidance on the base rate to fluctuate around a small range. I think, it is a kind of a progressive action. For bigger customers and larger customers, they will take the DR001. But for smaller customers, they will continue to take the LPR in the short run. Even for larger customers, it will take some time for them to take DR001 when they do the loan pricing. In the short run, the impact will be limited.
In the long mid-run, if DR001 continue to go down and if there is a lack of effective demand, I think that will have some impact on the loan pricing. Namely, the loan pricing will be in line with the market rate, and that will also pose a higher requirements on the bank's capability for interest rate management. So we will continue to strengthen our asset and liability management and also have the match between asset and also liability side, and to continue to proceed with more loans to be priced at with a DR001 as the base, and to expand our business in these areas, such as for our CDs, which is also can be the pricing will be based on DR001.
Also, we have the repricing match between asset and liability, and have more hedge measures to better help us to do the pricing management and interest rate management. Thank you.
Next question, please.
Next, we will invite Xu Ran from Morgan Stanley.
Thank you for the opportunity. My question is about asset quality. We noticed in Q3, special mention loan, SML, increased. What are the main drivers? We are seeing retail loans facing continuous pressure. Can the management introduce by categories the current retail loan risks? From CMB's loans, when will you expect to see the peak of the loan risks?
I will invite Li Chong from Risk Management Department and Mr. Lu from the General Office of Retail Finance to introduce.
Thank you for the question. In the first three quarters, the asset quality is overall stable. As you said, we indeed face some challenges. The NPL rate was 0.94%, which is a leading and very good level. Our SML rate has increased.
Seeing from the structure, we are seeing that the retail sector is the main contributor. We also did some analysis in terms of retail loans and credit card loans. We are seeing that in credit card loans, SML has actually improved as compared with the first half, but worsened compared to the last year. We also broke down the structure. Firstly, we have adopted strict classification criteria. Some loans have been recognized as NPL in other banks. For clients with these signals, we would classify them as SML. If we see the overall trend, we are seeing a stable trend. In corporate loans, we are seeing in real estate sector and retail loans, we will continue our management.
We will invite Mr. Lu to introduce our measures taken.
I will introduce about the retail loans. Industry-wise, we are seeing retail loan risk is on an upward trend.
We are seeing the adjustment in the real estate market, the risk of over-indebtedness, resident income, et cetera. We are seeing an upward trend of retail loan risk. In the short term, we are also facing pressure. CMB's retail loan asset quality indicators, the trend is in line with the overall industry. Firstly, you mentioned about categories. Actually, for microfinance loans, credit card loans, and property and real estate loans, we are seeing the increment of NPL formation is decreasing. As compared with 2025, we are seeing a slowdown in risk accumulation. Actually, the risk accumulation has been curbed and showing marginal stabilizing trend. In the industry, the negotiated installment payment has been putting in effect, and it has affected our classification of assets. We are also seeing overdue rate and amount being decreasing. You have mentioned about SML loan.
The increase is mainly because we have adopted stricter risk warning and stricter classification standard, and adopted proactive risk warning measures. We think the industry is on a risk accumulation upward trend, but for the retail loan side, CMB is having controllable risks, and we are also leading the industry. First, we have advantage in asset structure. We select good regions, good quality clients, and good collaterals, and this takes up over 90% of our overall assets. For our collateral rate, it is at a very safe level. This is a structural advantage of CMB. Secondly, we are adopting forward-looking strategies. For credit card sectors, we promoted transformation. The newly granted loans in the credit card sector are at very healthy risk levels. Consumer loans, small and microfinance loans are all very strict risk control measures. Thirdly, we pay high attention to risk indicators.
We have made adequate provision and timely resolved risks. In the next phase, we will continue to maintain our strategic focus and reasonably arrange our volume growth, and also optimize our risk strategies and increase our efforts in risk warning and collection to make sure the risk is at an overall stable level. Thank you.
Next question, please.
Next question is from Helen from UBS.
Management, my question is about, what is your forward-looking for the next one or two years profit growth? For the first nine months, we have seen a stable growth in terms of operating income, but the net profit growth is continuing to lower down the operating income. Currently, we can see the SOE banks has a profit growth of about a high single-digit growth. So how will CMB balance on the provision and also the release of the profit? How will we see the future profit growth rate?
This question will be answered by our General Manager from our Financial Accounting Department, Mr. Sun.
Thank you for your interest in our operating profiting growth rate. For the first nine months, we have seen progressive, consistent progress for our profit growth.
Especially if you look at PPOP, it is faster than the operating income growth. So it shows that our capability of operating efficiency is improving. But if we look at the profit growth, it is still lower than the operating income growth rate, the main reason is from the provisioning part. So we have been quite prudent in terms of provisioning, and there are two main reasons behind that provisioning. The first one is that we have continuous growth on the assets size, especially for the corporate loan growth. For the first nine months, it is grown, it is around over CNY 319 billion compared to the beginning of the year, and which is higher than the same period of last year. At the same time, we have seen a rising risk in terms of our retail assets, especially for credit card and also other retail loans.
We have seen increasing risk, so which also lead to a higher provision. At the same time, we can see the NPL ratio for our corporate is lower down, but the NPL for retail assets has been up by around 9 bps, and credit card is about up by 19 bps. For the first nine months, the risk of our retail loans is even marginally improving, like for the mortgage amount of the non-performing mortgage loan and also the rate are also decreasing. There are some positive signs, but actually still, two factors are also leading to a higher provisioning. One is the higher growth rate on the corporate side, and secondly, there is a higher risk on the retail side.
But if we look at CMB's overall performance, we have struck a balance among the operating efficiency and also provisioning. As you can see, ROAA, ROAE, and also coverage ratio, they are in a quite balanced manner. Your question is regarding the trend of our profit growth. This is also the same question that are also for us, but there are many factors that will impact the profit growth. We think against the backdrop of recovering economy, and with CMB staying firm to our strategy and also taking effective operating measures, we are confident that we can have a stable operating results. When we look ahead, we think that CMB continuously to have a high-quality growth in terms of profit, and we are endeavored to create a return to our shareholder, which can be shown in the following aspects.
The first one is that operating income growth should be healthy and a balanced growth. Secondly, we will continue to have prudent provisioning policy, and also have a prudent risk culture to have a more prudent asset classification so that the risk could be fully mitigated. Thirdly, we want to maintain a stable and sound shareholder return. So these are the kind of the philosophy when we are thinking how we think about the profit growth. Namely, to balancing about the profit growth, asset and liability growth, as well as the quality of our assets. At the same time, to maintain a relatively high ROAA, ROAE, as well as a relatively high dividend payout, and to have a leading position among our peers.
So this is our main strategy or main thinking about how we look at the growth of the operating income, as well as how we look at the profit growth.
Next question, please.
Next question. Next, we will invite Xiao Feifei from CITIC Securities.
Thank you for the opportunities. My question is about wealth management. This year, CMB's wealth management is growing rapidly. What are the main contributions? As we know, the financial institutions are boosting their wealth management businesses. How do you think about the bank's core competitiveness and the direction of transformation in this regard? What are the new changes in your product structure, product design, and client base management?
I will invite Mr. Lu to answer this question.
Thank you for the question. Actually, CMB's client base structure, AUM structure, and the activity of our clients is all at a high level. One of them you mentioned about the key drivers. I think the wealth management business are light capital businesses.
Non-deposit products take up over 70% of our overall products. Equity-based private fund products and fixed income plus products have shown greater growth momentum, so that our AUM structure is more optimized and more balanced. In the first half, our wealth management income increased rapidly. As comparisons, Q3 has shown us a more moderate growth. Overall speaking, for Q1 to Q3, we are witnessing more resilience in our wealth management income growth. Looking in the future, we might face some pressure in the capital market, but our long-term competitiveness will be strengthened. Industry-wise, we are facing competition in wealth management businesses. For CMB, our long-term growth drivers, for these long-term growth drivers, we are confident based on three reasons. These are also the strategy of our long-term growth. Firstly, and most importantly, our retail client base, which is the growth driver of our overall income growth.
Our client base grew by 5.36%. Golden Sunflower and above customers and private banking customers all maintain very high growth speed. We have emphasized an overall comprehensive services covering deposit, loans, and remittance. More and more customers are choosing CMB and CMB bank cards. Therefore, we are seeing client net fund inflows has reached a new high this year, and AUM also maintain a very high growth speed. Retail client base growth is very important. It is a strategic goal and our strategic strategy of China Merchants Bank. In terms of wealth management, we will focus on the client's sense of fulfillment and gain. Our philosophy of asset allocation, diversified asset allocation, is also a key. This can help us maintain our clients' assets within our system so that we can help our clients achieving great investment returns. We continue to iterate this philosophy and methodology.
To support the client's asset allocation, we will select and customize products and increase our ability in product management. We will follow the capital market cycle to make greater, better product allocation. This is based on our research and investment ability. This is what we did to improve our client's sense of experience and sense of gain. Thirdly, we think that technology support is important. The client-based service has adopted a people plus d igitalization model, the new upgrade of it. We have limited staff, but we can leverage many service channels, leveraging digital technology to have better service to our clients and have deeper deployment of artificial intelligence and explore new models of service to clients. These three are the main key support to China Merchants Bank so that we can maintain the lead in wealth management business across the industry.
Next question, please.
Next question is coming from Goldman Sachs, Mr. Yang Shuo.
Thank you for giving me this opportunity. I am an analyst from Goldman, Yang Shuo. We are seeing there are many, many corporates are going abroad, and there will be definitely, they need relevant financial services. How do you see the CMB, see the chances that have been brought by the globalization of Chinese enterprises, and at the same time, whether that will lead to some related market risk and also currency risk?
This question will be answered by Mr. Li Yunbo from our corporate banking business.
Thank you for your question. Indeed, for these past years, we have seen strong growth in terms of China's export. Since there are many Chinese enterprises going abroad, definitely, they has brought many cross-border business opportunities for CMB.
CMB, we are more leveraging on our overseas presence to deepen our cross-border business between the Mainland China branches and also overseas branches together to have an integration business carried out between our presence overseas and also domestically. I think that our strategy is 1+1+5 . The first one means the head office have overall management, and the second one is our Hong Kong as our main hub of our overseas business. And five means our five business smaller hubs, like in Singapore, Luxembourg, in Sydney, and also in New York, and also in London. I think that our institutions in Hong Kong is very important since we have syndication and also custodian business to create more value for our customer.
By third quarter of 2026, we have seen increasing contribution from our overseas presence, especially from our Hong Kong presence, Hong Kong institutions, which also help us for the overall bank to improve its capability in terms of the overseas financial service. Secondly, we deepen our customer origination and customer operation for cross-border business and to improve our infrastructure, like the clearing and settlement business. Also, we have improved our service capability for aligning our domestic branch and also overseas branch. Fourthly, I think digitalization of our overseas business is also improving. If you look at the total amount of customer that we are servicing and total amount of cross-border business, they are all increasing. At the same time, we are also cooperating with our correspondent bank as well.
These are the ways that we have done to improve our overseas business. The second question you have raised is about the currency and also market risk. We have set up a center of our trading center in the overseas market, and we have provided more integrated currency solutions and market risk solutions for our customer. On behalf of the customer, we are also trading for them. On that, we are seeing amount of the trading business that we carry out on this part is also increasing. This shows that our ability in this part also improving. Thirdly, as a shareholding commercial bank, we continue to nurture our own international talents pool. We step up our efforts in terms of choosing and selecting talents who are more able to work in a more international environment.
In the mid and long term, we are confident that against the backdrop of many Chinese enterprises going abroad, we are able to have a better service for them and also to contribute more to the overall business of CMB. This is my answer to your question. Thank you.
Next question, please.
Next, we will invite [Li Lili] from JP Morgan.
Thank you. My question is regarding AI. You also mentioned AI future trend. In the past year, what are the new trends of AI application for CMB? What scenarios have been deploying AI? How it is represented financially? How do you balance cost, efficiency, safety, and keeping the stability of the talent team?
I will invite Mr. Wei from Digital Finance Development Office to answer this question.
Thank you. Over the past year, we have sensed the change is that after core being launched in the beginning of the year, it is being more practical and more involved in the business process. The collaboration of humans and AI, its model is evolving. First, AI is no longer supporting isolated tasks. It is reshaping our full workflows. Before, it helps our staff find information, organize documents, write reports, et cetera. Currently, it is reshaping our workflows. For some businesses, they might require two people, one to handle, another to review. With AI tools, some simple cases can be handled by one person only.
Secondly, AI is shifting from a supporting tool to human-AI collaboration. Previously, some work relied heavily on manual work. Now we are piloting a new model that expert agents can collaborate with each other and with human to verify outputs. This working model is evolving from human-led AI-assisted to human-AI collaboration. I think in the future, AI's application will be more about human-AI collaboration. We would promote the reshaping of our workflows incorporating AI to give a full play to the AI functions. Secondly, regarding AI application, as we roll out AI across more scenarios, we focus on high-value scenarios.
As of the end of September, we identified over 1,500 work items, and AI financial, and this interpretation to financial gains would take time. We would lift our capacity in key steps. That lifts operational efficiency, which ultimately translates into financial benefits. For example, we have AI assistant called Golden Sunflower RM Assistant. We iterated and upgraded so that it can provide relationship managers with more suggestions for precise, more professional assistance. It will give more sharper professional sales support. As compared to the same period last year, relationship managers' average in-person visit per person increased by 13%, and monthly deal volume increased by 20%, and AUM under management per manager increased by 14%. It is a gradual process. It will ultimately bring to an increase in our revenue. This is about your first question.
Regarding your third question, how do we balance these different factors, cost, efficiency, safety, and staff stability? We would stay committed to our high input in AI and sustain our investment in AI. We have an AI innovation fund to encourage our staff to try to use AI. Gradually, we will control the input and output ratio. In terms of balancing security and development, for banks, AI needs to advance fast and steadily. We will continue to embrace AI, but we emphasize both development and safety so that innovation stays safe, compliant, and controllable. Regarding how do we keep the stability of our employee team, our smart banking initiative is not about cutting headcount. Instead, it aims to upskill our people, uplift our client service standards, and boost operational efficiency. Firstly, banks operate under stringent compliance risk management, so many businesses would need human oversight.
People, we would need our human staff to give the final examination. CMB, our talent demand is expanding, not shrinking. Our client base is growing. Our businesses is also growing steadily, so that we need more capable employees to support this expansion. We also have natural employee reduction each year. We also can use AI to enable these roles to fill these gaps. One of the purpose of intelligent banking is to boost efficiency, to improve our capacity, so that our team can also enjoy a better work-life balance. AI are different from human, and their strengths are on different perspectives. We hope that AI and human can have better collaboration.
Next question is from Mr. Ma Kunpeng from Zhongxin Jiantou.
My question is that we have seen for the past years, there is quite a weak demand on the credit side, especially we haven't seen recovery on the retail side. For the corporate side, we have seen there is some amount of the loan growth on the corporate side, but pricing is quite low. This kind of scenario, how long do you think it will last? What kind of signals will CMB see that will consider to further increase our dividend payout ratio? Thank you.
I will answer this question. I think your question is regarding different elements. One is the dividend payout ratio, and also second one is our way to manage our CAR ratio. I would like to elaborate from the following two aspects. The first one is from the capital management.
I think for CMB's capital management, our goal is to strive to have endogenous growth on our capital, especially in a very consecutive and also consistent way. Namely, not relying on the capital raising from the market, rather than relying on our own profit growth to improve our CAR ratio. These are the internal goal, and for most of the years, we have achieved our goal. In order to achieve this goal, we need to think about. Look at the past, namely the why we have continued to insist on our retail strategy. I think this is the main reason that we can achieve our goal. In terms of the retail business, wealth management doesn't consume capital. In terms of the retail loans, our RWA is quite high.
The question is that under the current circumstances, we are seeing weak demand on the retail side. In order to have a balanced asset allocation or stable operating income growth, we are seeing more growth in terms of the corporate loan growth. This is a kind of a periodical feature. From the corporate loan side, we can see that risk weight is higher. If we only look at the loan side, definitely our capability for endogenous capital growth will be affected by that. It's not an absolute conclusion because the feature is only targeting for the loan part of the corporate banking business. Actually, if we want to continue to achieve our goal of endogenous capital growth, there are many things that we can do.
Firstly, even though the corporate loan pricing is low, we are tapping on the overall business from the corporate side, namely providing more comprehensive service to our corporate customer, rather than only relying on loan side. Secondly, from retail side, we strive to expand or to enlarge our wealth management business and increase our wealth management-related operating income. Thirdly, we are confident by taking all these measures that we can continue to have endogenous capital growth. To have a more precise capital management, such as for RWA growth that will be maintained at a relatively reasonable level, and we will take more efforts to better have a better return on the assets. Namely to use less capital and to have a better return.
At the same time, definitely we'll have some bottom line management of the CAR ratio, namely have some buffer above the regulatory requirement in order to encounter the future uncertainties. This is our view on capital management. Secondly, you raised about the dividend payout ratio. I know that many investors and analysts, you are very concerned about that dividend payout ratio, and we have received your feedback on the dividend payout ratio. I would like to share with my views on that for a very long term, CMB lay high emphasis on the dividend payout ratio, on the return to our shareholders, and we strive to achieve the goal, namely at the same time maintaining a healthy growth and at the same time to maximize the return on our shareholder.
This is the philosophy and also the principle that we have insisted on for a very long time. For the past years, we continue to increase our dividend payout ratio, especially in 2024. We have increased our dividend payout ratio from 33% to around 35%. Currently, as you like the dividend yield and also the dividend payout ratio, it's all relatively high among our peers. In 2025, we kind of conduct the interim dividend payout ratio. You can see these are the measures that we have taken to increase the return to our shareholders, but in a more objective way. I think that dividend and also return is only part of the problem. In the long run, we want to have a long balance among three factors. I call it three R balance.
One is the ROE, the second one is the CAR ratio, the third one is the dividend payout ratio. We want to have a balance on the three ratios. These three factors, but actually there are some conflict of interest among each other. There are some constraints from one to one other. It should be a balance, a check and balance among this. It's quite hard to increase them all at the same time. We see that capital we should meet up with the regulatory requirement, especially capital is the base of the banking operation. To satisfy or to meeting up with the regulatory requirement is the priority.
At the same time, we need to look at the market, especially we think that there will be a lot of uncertainties in the future, and there will be changing of the regulatory requirement as well. We never to- That is why we always have taken a very prudent view on the CAR ratio. Hopefully, our shareholders and investors can understand that. Based on that, we will continue to strive to improve the high-quality return to our shareholder. Why I emphasize high-quality return means that increase the return, increase the high-quality return to shareholder, I think it is quite different. This is also the view I always share with you. When we say high quality, it means that the listed companies should have a relatively high dividend payout ratio or dividend yield. This is one of the feature that can show high quality.
Second one is that the shareholders return and the dividend payout ratio should be quite sustainable and more consistent, avoiding very sharp volatilities. Like per se that we raise it one day and then we reduce it the other day. I think that this will give more concern to the shareholders, investors. We just want you to have a more consistent and expectation for the dividend payout ratio. Thirdly, the shareholders return is more endogenous growth on our capital rather than relying on the fundraising from the capital raising from the market. If we want to increase the capital, we want to rely on the endogenous growth on our capital rather than rely on the market financing. These are the three factors or features that we can show high-quality dividend payout and shareholder return.
These are the principles that we insist on. In the future, I think that we will strive to have a maximizing the shareholders return based on the factors and the preconditions that I have just mentioned. What I can say is that the senior management is highly emphasized on the dividend payout ratio. Thank you.
Next question, please.
Next, we invite Chen Shaoxing from Industrial Securities.
Thank you for the opportunity. I am Chen Shaoxing from Industrial Securities. My questions is about real estate sector. We noticed that the corporate property loan balance has increased in the third quarter. What is your consideration? Do you think the risk situation has changed? In light of some new property-related policies, what are your considerations on the real estate sector? In the end of this year, the China 16-point plan will expire. Is there any continuing policy? What are the marginal impact for the risk in property area?
Thank you for the question. Firstly, you observed that CMB's property loan structure has slight changes, and you also asked about policy change and structural changes. I will answer the question one by one. Firstly, overall speaking, firstly, how do we consider the policy?
Secondly, how will it impact CMB as well as the whole industry? Thirdly, what will we do? Policy-wise, in 2019, especially in 2021, when some risk broke out, the central government has been adopting stable policies. Stability is the overall orientation. Stability is also a new model of property sector development. We proposed stabilization of the supply as well as the demand side. After the new policy on August 28, we are seeing a more prominent feature of stability and more practical policies that is oriented to stability. Previously, the property sector is of high leverage and high loans, et cetera, and currently, it is project-based. The only one principal bank will promote the project, and we promote a complete home sales model so as to guarantee the benefit of residents.
Previously, the policy will emphasize on delivery-guaranteed homes, and the market is also fluctuated at low levels. The sales floor volume, the new construction floor area is witnessing a slight improvement. Project-wise, we are seeing more divergence, and we are seeing an upgrade of businesses. This is for the policy side. Regarding its impact to market entities and banks, for developers, for commercial banks, as for property developers, I think there are more negative sides. Firstly, the process of land procurement will be slowing down, and the investment in this sector will be slowed down also. Second, the liquidity will be impacted. Previously, the risks are mainly because of the mismatch between the duration. Actually, for the developers, there are mainly negative sides, so the divergence of developers will be accelerated.
For home buyers, there are good sides because the new policy adopt a completed home sales, so the delivery will be more guaranteed, and the mortgage loan borrowers' repayment pressure will also be lowered. The liquidity pressure will be decreased for commercial banks, including China Merchants Bank. We think that there are good sides. The principal bank mechanism will increase the bank's value and importance in home sale projects. It provide us with new business development opportunities, new financing opportunities. The extension of loan tenors will play positive effect on our asset quality. As for bad influence, the short-term mortgage loan growth will be somehow slowed down. The competition for the principal bank role will be more fierce, and it propose higher requirements for our end-to-end closed-loop management, because it involves the operation, construction, and the entire process of the project, so that it requires us to be more proactive.
For banks, we see challenges in the short term, but benefits in the long term. Our property loan scale increased a bit. In terms of scale, our property loan scale is stable and with a slight decrease, even though in September there was a slight increase. The property loan is taking up approximately 19%, and our quality and region is stable. Our property loan NPL is improving quarter by quarter, and in September, it is around 4%. In our loan structure, 90% of the loans are granted to Tier 1 and Tier 2 cities. In terms of client structure, they are mostly high-quality state-owned enterprises and top-tier enterprises. In the increment, whereas among the increment, we are seeing a lot of operating property loans and some quality M&A loans. Overall speaking, the asset quality is generally stable.
Looking into the future, CMB will have a clear vision of the new policy, and will always adopt prudent and stable philosophy in promoting our property loan businesses. Thirdly, when we are developing property-related businesses, our goal is not only to increase the volume, but we have to emphasize both corporate loan and retail loans. We would promote comprehensive operation, pay more attention to the risks when we are developing. We take asset quality as the foundation. This is a strategy of us when we are promoting property-related businesses. Thank you.
Next question, please.
Next question is from Guolian Minsheng Securities, Mr. Wang Xianshuang.
Thank you for giving me this opportunity. My question is also for NPL. We have seen from your third quarter report that the leasing and commercial business NPL has increased around CNY 1.3 billion compared to the midterm report. So, what is the reason behind that? Is there any caliber change on the NPL recognition?
Thank you for your questions. You are very sensitive on that. Actually, for leasing and also business service industry, it covers a lot of industries, including some head offices of some corporates, also some supply chain industries as well. So, it covers really quite a wide range.
From the third quarter, we are seeing that we have seen some NPL for rising in this sector, and this is also one of the major reasons that we have seen for our corporate banking business. But this is only a recognition of a risk that we have already recognized or have found out in the past. It is only a recognition of the NPL. As we can see from the proportion of the leasing and also business, commercial business, it comprises only around 8% of the total. If we consider the NPL ratio for the corporate side is only 0.57%, excluding that is the related NPL is only 0.07% is the relatively low level. This reminds us that we will have a more stringent risk management in this regard. So we have seen very prudent risk classification for us.
In the future, we will continue to maintain the stable and prudent risk policy, especially for leasing and commercial business. We will continue to be commercialized and rule-based business. We will emphasize on from a technology perspective, namely two things are very important. One is effective assets, the second one is cash flow of the assets. These are very important when we are assessing the asset quality of that. Also the cash flow can recover the rigid debt and also the interest payment for the customer. So at least it can have a consistent operation of the customer. Secondly, very important is that we will not lower down our criteria for the provinces or the cities that we engage in, and also not reduce our criteria for customer that we are engaging in. So we are very prudent in this regard. Thank you.
Next question, please.
Next, we will invite He Yating from Huatai Securities.
Thank you, management, for the opportunity. Bank analyst He Yating. My question is about corporate banking business. You mentioned that there are sluggish credit demand in the market, and CMB is enlarging corporate bank, corporate loans extension. What are your framework in corporate banking? What are your key industries? What are your key strategies as compared with your peers? What are your competitive advantages if we take into consideration of capital pricing and asset quality?
There was some technical glitch. I assume that you want to ask about corporate banking strategy. I will invite Mr. Li Yunbo to answer the question.
Thank you for the question. We think that it is reasonable that corporate loan is growing. Firstly, in the past, after years of development of a country, China is having advantages in the industry side, and we are seeing strong export, which can be interpreted as a sign of our strong industry. Corporate loans, in retail side, we are seeing sluggish demand, but in the corporate side, we are seeing a growth. In terms of future trend, China's 15th Five-Year Plan and industrial plan, most of the initiatives are focused on corporate banking area. It is reasonable that we grow corporate loan in this phase. Industry-wise, we will follow the country's Six Networks strategy initiative and energy safety and infrastructure, et cetera. We will capture the opportunities in those regards. We also grasp opportunities in the upgrade of traditional industries, for example, equipment renewal and M&As in industries.
Thirdly, we will follow the technology track about technology independence initiatives, and we will focus on those with more mature technology cycles. We will focus on the core companies in industry chains as well as the upstream and downstream industrial clusters to grow our businesses. In terms of region, we would leverage our own resources and adopt different strategies for different branches. We will focus on Pearl River Delta, Yangtze River Delta, West Taiwan Strait, et cetera. We will focus on energy and resource-oriented projects and achieve balanced development of volume, quality, and pricing in terms of corporate loans. In terms of our own advantages, there are several points. First, we have solid customer base. Our corporate customers total nearly 4 million. This will bring ample space for the development of our corporate loans. More importantly, structurally speaking, we have a higher proportion of value customers.
We have a lot of industry customers, and in terms of sci-tech companies, we also have good client base. We are also deepening our service to state-owned enterprises. This is in line with the strategic focus of our development goals, so this has laid a solid foundation. Secondly, we adopted a professionals operation of our client base. We have strategic client divisions that is divided according to industries. We know our clients better, we know industry better, and we know our clients better. We think we are confident in that regard. Thirdly, China Merchants Bank has a good coordination mechanism. Our frontline departments, marketing departments, have been in collaboration with our operation departments. We have good internal communication so that we are having greater efficiency in asset origination.
We adopt one entire bank for one customer mechanism so that we can mobilize all internal bank-wide resources to serve our clients and serve our clients' global operations so that we can provide more coordinated services to them. This also contributed to our service to the key area customers. In Bohai Rim, Yangtze River Delta, Pearl River Delta region, our input of resources is sufficient. We have ramped up our efforts in our operation in key branches and key regions. Overall speaking, we think in the market, the corporate lending will continue a reasonable growth, and CMB will leverage our own feature to continue developing the corporate loan sector and maintain good asset quality management. Thank you.
In the interest of time, we will now take the final question. To ensure the participation rights of individual investors, we have collected questions via email in advance. As most of them overlap with the questions we have addressed earlier, we will select one representative question to give an answer. Please read out the questions we have collected beforehand.
I noticed that the question is as follows. I noticed that for the past year, CMB's asset growth are more concentrated in the financial investment area. Currently, the bond market, the yield is very low, and there's no repricing for the bond yield itself. Against this backdrop of lack of efficient assets, how CMB can balance the asset growth as well as the low asset yield.
This question will be answered by Ms. Li Li.
Thank you for your question. I think that this is a kind of a consideration when we are doing asset allocation. From the liability side, we think that the liability growth is quite good, especially for low-cost liability, customer deposit is growing quite well. For the first three quarters, our daily average growth of our liability from customer deposit is growing quite well.
For the third quarter, our cost ratio for our deposit is only 0.1202%. For customer, it's only below 1%. For CNY, it's only around 0.8%. So it is a relatively low funding cost and has provided a strong support for our asset allocation. Even though the interest rate of our investment side is quite low, but since we have a very low liability cost, it means that we can still have a good margin around it. For the past few years, we can see that there's a slowdown of the retail loan growth, definitely have been a drag to the overall loan growth. In terms of the asset allocation, we need to think about diversified asset allocation, and bond investment is part of that and a very important choice of it.
When we do the asset allocation, we are balancing among the amount, the quality, as well as the pricing. For the interest rate bond or for the treasury bond, even though the rate is quite high, but the credit risk is also high, and there is a tax exemption benefit that we can get. For the RAROC side, it is worthwhile for us to allocate some resources on that. We think that a low interest rate environment will continue for quite a long period. So have a relatively allocation to this bond, I think is inevitable and it is necessary. In the long run, I think very important is to continue to have a liability management and also have a better control of the liability cost. I think the quality is even more important than the amount of the liability growth.
Low-cost deposit growth and liability growth is key. At the same time, we will have a comparison among different asset classes when we are doing asset allocation, namely to support the loan growth and have a high proportion of the asset allocating in loans, and also with a balance of liquidity risk and also market risk, to have a reasonable allocation to our bond allocation. At the same time, we will continue to have a periodical trading of the bond investment, especially when we are thinking about diversifying about the different currency bonds, and to increase the portfolio return. Fourthly, to use the derivatives instruments, when we are doing asset allocation, to have a better management of the interest rate management. Thank you for the question.
In the interest of the time, now is the end of our meeting today. Yeah, for more details, please refer to the third quarterly report published on our official website. If you have further questions, please feel free to contact our IR team of the Office of the Board of the Directors. Thank you very much for your participation for today's meeting. Thank you. Bye-bye.