To the 2018 CITIC's release of operating result of 2018, first half of this year. Because we have the foreign analyst, we have arranged simultaneous interpretation. Our reports have already been published on our official website, so you can go there and download all of the reports. Present here today, we have CFO and Vice President, Mr. Fang Heying, CRO, Yao Ming, and also we have directors from the Chief Accounting Department, Asset Liability Department, Risk Management Department, Credit Management Department, Compliance Department, Corporation Banking Department, Investment Banking Department, Retail and Investment, Personal Credit Card, Financial Market, Interbanking, Asset Management departments. We also have directors from CITIC aiBank. According to the agenda, first of all, I'm going to tell you about the operating results of the first half of this year. My presentation is divided into three parts.
The first half of the year, we have stabilized our growth, and we have seized the opportunities, and also try to increase the quality of our growth. ROA and ROE have improved. Our net operating income has increased, and NIM has increased as well. Our credit risk has been released, and we have basically reached all of our goals, and we are going to talk about the financial indicators later. First of all, I will talk about the overview of the results of the first half of this year, second, I will talk about implementation of the strategy, and the final part, I will talk about the outlook and policy. First, I will talk about the overview of the results. ROA and ROE have improved, and this has generated a good return to the shareholders.
ROA was 0.92% in the first half of this year, a 0.08 percentage point year-on-year. ROE was 13.96%, up 0.2 percentage point year-on-year. Net profit grew at a faster pace. We have generated CNY 25.72 billion of net profit attributable to the shareholders of the bank. Profit before provision is CNY 88 billion, and that is a very high increase, and this is also representing a 5.53% increase. Net operating income is CNY 81 billion, up 5.85%. Net interest margin picked up remarkably. Net interest margin was 1.89%, and this is up 0.12 percentage point year-on-year. We have changed our structure, and our net interest margin has bottomed out. But I want you to know that the deposits overall has slowed down its growth. In the future, we are going to see more pressure on NIM.
We have focused on our profit, and we try to realize transformation, and the ratio of non-interest income has increased to 38.55%, up three percentage point year-on-year. Asset quality was further enhanced with the credit risk released faster. According to the new policies and regulations, all of the balance of loans overdue for 90 days have been included in our NPL. If you look at NPL ratio is 1.8%, which is 0.12 percentage point higher than last year's. If you look at the balance ratio and ratio of loans overdue for 90 days and above, the loans overdue for 90 days and above, to NPL is 93.92%, lower than last year's 109%. All of this have complied with the new rules and regulations. We have also realized the growth in size to meet our expectation.
Our total asset has realized CNY 5,800 billion, up 2.3% from the end of 2017. We also have seen many growth from the customer loans, especially, if you look at the personal loans, it has increased by 5.2% compared to the end of last year. We have tried to strengthen our efforts to develop institutional customers. We have more corporate customers this year, and we have consolidated our clientele base. We have worked with China Mobile, [Beike Group] and Alibaba. We try to strengthen and centralize the marketing towards strategic customers and deepen comprehensive cooperation with a number of strategic customers. We also try to work with the government in order to enhance the new type of government bank partnership. At the end of June, the bank had 76,800 small and micro businesses loans customer, up 14.98% from the end of last year.
Retail customer base kept growing fast. By the end of June, we have about 80 million individual customers, and we have about 651,000 VIP retail customers till the end of June. That is a 16% growth from the end of last year. We also have accelerated private banking development. The bank had about 30,674 personal banking customers at the end of June. We have also continued to strengthen a collaboration mechanism with corporate and retail banking. Now we have added another 3,000 high-end retail customers. Now I would like to move on to the implementation of strategy. First, we have been pushing forward the differentiated regional development program. The bank implemented the differentiated regional development strategy. Branches were divided into strategic branches, six of them, and we have 16 key regional branches and 16 emerging regional branches with varied development positioning.
Strategic branches and credit cards steadily improved their resource input and output contribution. Strategic branches and credit card contributed 63% of the net operating income in the first half of this year, and 42.3% for strategic branches, and 21.3% for credit cards. So overall, there has been 5.2 percentage points growth year-on-year. At the end of June, strategic branches contributed 53% of the deposits, 1.6 percentage points higher than the end of last year, and 40.5% of the loans, up 1.6 percentage points from the end of last year. Net operating income from operating income was CNY 43 billion, accounting for 53% of the bank's total net operating income. Investment banking showed distinctive characteristics. For the first half of the year, the bank has underwritten CNY 173 billion of financing instruments in the market. We also have completed a number of influential M&A projects.
International payments topped the joint stock banks. Forex purchase and sales in the first half reached $74 billion, and we are placed as the fifth in the domestic bank and the first among the joint stock banks. International forex receipts and payments amounted to $138 billion. Transaction banking strategy gained pace in its implementation. The bank had 406,700 transaction banking customers. The bank had 3,942 effective auto finance dealer partners. If you look at the retail banking, the retail banking has also contributed more to the net operating income. It was CNY 28.13 billion, representing 34% of the bank's total net operating income. Asset under management has expanded to a new high, which make us rank the third by balance and the second by annual increment among joint stock banks.
We also have seen the balance of personal deposits growing to CNY 657 billion, a 23.2% increase since the end of last year. Credit card results also grew rapidly. Credit card transaction amounted to CNY 961 billion, up 45%. Income from credit card business was CNY 23 billion, up 40.5% year-on-year. E-banking also became more competitive, and now we have about 31 million mobile banking customers, 16.2% up from the end of last year. We also have a lot of customers who are going overseas. The total number of overseas finance customers exceeds 5 million, with asset under management balance of CNY 636 billion. We also have Xin Jin Bao grow to CNY 132 billion. The bank stepped up transformation of financial market business and steadily improved its market competitiveness. First, let's take a look at the market making.
Forex market making transaction volumes stood at CNY 0.65 trillion in the first half of this year, which makes us among the top of the few players in the interbank forex market making.
We also have been improving interbank business. If you look at the first half of the year, the CITIC Interbank + platform had 1,011 financial institution subscribers, up 24% of the end of last year. The balance of notes assets was CNY 285.6 billion, and electronic notes business accounted for 99.6% of the total custody business gained a bigger market share. Asset under custody reached CNY 8,560 billion, up 6.27% since of last year. Asset management transformation made solid progress. At the end of June, the balance of wealth management products issued by the bank was CNY 1,291 billion, up 8.4% from the end of last year. The return to customer is CNY 27 billion, up 36% year-on-year.
Net asset value-based products took up a higher percentage in the market. We have also seen better results from the subsidiaries. You can see that the net profit attributable to shareholders of the bank grew by 4.7%. We actually diluted some of the shareholders' shares because of CITIC International as a new operation. You can see that the subsidiaries have realized about CNY 4.7 billion of profit. Also for them, the NPL has decreased by 0.47%. We have finished the delivery of shares in Kazakhstan's Altyn Bank, and this will make contribution to the building of sustainable and willing investment and financing system under the Belt and Road Initiative. CITIC ai Bank developed strength in internet plus finance. Now we have about 3.94 million users in CITIC aiBank.
We continue to set up overseas branches, including in Hong Kong, London, and Sydney, as a part of effort to further implement our internationalization strategy. In the first half of this year, fintech has become a breakthrough point for our further development.
First, we accelerate transformation to open and distributed architecture. The core system decentralization progressed as planned. Three applications development platforms were developed in-house. Data warehouse plus big data platform supported nearly 80 applications. Second, we built the CITIC Brain. The bank built AI application platforms such as data loading, algorithm, model training, and model deployment. The bank made exploration for innovation in applications including intelligent risk control, intelligent operations, et cetera. We promote smart retail marketing. The bank launched the AI marketing platform project and established a system of retail customer labeling and customer value evaluation. Number four, we promote implementation of the mobile finance strategy.
We improved our mobile ecosystem for our finance plus non-finance ecosystem. Mobile banking is upgrading from a transaction tool to an operating platform. AI technologies were applied to display effective demand products to customers in an effort to provide more considerable and heartwarming mobile banking services. Over 8 million users followed the bank's new media accounts for credit card. We feel implementation of the transaction banking strategy. The bank restructured the technological support system for transaction banking and organically integrated customers' products and channels to provide one-stop services to customers. The third part is outlook and policy. New challenges and opportunities in the ongoing transformation of deployment are faced by the bank. First, escalated U.S.-China trade war adds to external uncertainties. In the short run, exports, GDP growth, and exchange rate are affected adversely. Higher financial market volatility poses big uncertainties to banking activities.
In the long run, the industry upgrade might be delayed, the extension to the top end of the industry chain well hindered, and the shift to new engines of economic growth remains a long-term arduous mission. Second, financial de-leveraging will continue to have its impact. Slow energy growth and slowdown in aggregate financing are accompanied by weaker deposit growth. Market price of funds remain high overall. In the market-based interest rate environment, market-based liabilities take up a larger share, and commercial banks feel the pressure in liquidity management, asset allocation, and liability costs. Third, domestic credit risk has entered a new sensitive period. Large corporations show the problems of excessive financing from many lenders and liquidity drought. Bond market defaults occur frequently, which coincides with the peak time of debt maturities. Credit risk is growing in the market. Commercial banks remain under asset quality stress.
Stress and risk mitigation challenges profit growth. Number four, frequent new regulatory policies test bank's professionalism. The new liquidity rules, net asset management rules, and large exposure regulations were issued successively. The market chaos crackdown has gone deeper, conducive to sound banking development back onto the normal track in the short term, while posing a certain pressure on the transformation of banking development in the short run. Commercial banks must be more forward-looking in policy and trend. While faced with challenges, we've also noted many new opportunities in the ongoing transformation of development. We need to seize these opportunities. First, the prudent and neutral monetary policy provides a positive liquidity outlook. The central bank's monetary policy is neutral to ensure reasonable ample liquidity, thereby guiding money supply, credit, and aggregate financing toward moderate growth. Targeted reserve requirement ratio cuts ease banks' liquidity pressure, with further cuts still expected.
Expanded scope of flexible collateral for MLF has stabilized market confidence and driven economic growth.
And more evidence of resilient, steady growth. The fiscal policy is more proactive, with faster spending growth and a further improved structure. Banks are encouraged to increase credit expansion, actively develop inclusive finance, and improve the quality and efficiency of financial services in serving the real economy. Both the issuance and use of local government special bonds have been accelerated. Regulators pay great attention to intensity and pace control. New regulatory policies place more emphasis on intensity and pace to avoid the risk triggered by policy overlap. The new asset management rules allow a longer transitional period. The supplementary rules and detailed regulatory rules for banks' wealth management exposure draft provide a buffer for smooth transition. New liquidity rules relax the standard moderately.
Regulators bring discipline to competition and strengthen money market fund supervision, enhanced supervision of money market fund sales, and advertising restricted T+0 redemption of money market funds have reduced the deposit runoff to money market funds to some degree. On the second half of the year, we will focus on the following areas. We will seize opportunities during expansion and fortify foundation during contraction, uphold strategies focused on key areas, stay true to the founding mission, and pursue innovation-driven, solid development. We will grow deposits to improve customer management. Second, we want to control NPLs and cement asset quality. We will further build systems and mechanisms, implement the customer whitelist and a four-category management, adjust the corporate banking structure and manage risks in a proactive manner.
We will change the credit extension methods for differentiation and diversification, strengthen risk prevention and control in key areas, and strictly control the increase in new NPLs. We will enhance compliance and prevent and mitigate risks. We understand policies accurately, embed regulatory requirements into corporate policies, strengthen policy communication and implementation, and conduct strict inspections on real estate, in-depth governance, and money laundering. We want to pursue innovation to drive future development. We will vigorously promote fintech applications, step up efforts to make innovative breakthroughs in products, and establish cross-border business model. We will set up the Fintech Innovation Fund, an innovation incentive fund, to step up the introduction and cultivation of fintech talent and encourage the application of advances in innovation.
So much for the results of the first half of the year, as well as our plans for the second half of the year. 2018 marks the inception of our new strategy. We owe the achievements to our clients and investors, as well as the trust of the board of directors. We will continue to follow on the strategy and consolidate our business to pursue growth of higher quality to follow through on our three-year plan strategy. So much for my presentation. Thank you.
Now we will have a Q&A session. To enable more people to ask questions, please limit your questions to two for each. And before you ask questions, please first identify yourself, including your name and your affiliation. First caller, please. From Deutsche Bank.
Thank you very much for this opportunity. I have two questions. First, at the strategic level last year, CITIC raised the 2018- 2020 development strategy. Could you shed more light on the implementation of new strategy? Second, at the corporate level, could you sum up the highlights? Second, NIM. In Q2, the NIM maintained momentum growth. Could you share with us your outlook on NIM? Thank you.
Thank you for your question. First question, regarding the implementation of our strategy. Like you said, last year, we formulated the 2018- 2020 three-year strategic plan. At the results release meeting at the beginning of the year, our chairman spent lots of time talking about this strategy. Looking back on the past six months, in the space of the six months in the implementation of the strategy, we did lots of work, and I'd like to report to you on this front.
The overall strategy implementation informed the whole process of our business and operations. The following areas were the highlights and key areas. First, we considered and formulated eight tasks for strategy implementation, including 100 key projects. It's called 8100 program. The eight tasks, plus the 100 projects. At a recent sub-presidents meeting, the presidents of the headquarters and branches received mission statements from our Chairman. The second work, in the first half of the year, we launched our business transition and asset management transition. Our corporate banking had one body and two wings, and this is also an advantaged business. Our corporate banking featured heavy assets. So we emphasized light but strong, which is the direction of our transition. For asset management business, with reference to the new regulation for asset management, we did some adjustments.
Number three, the strategic resources are concentrating in key areas and businesses. We regarded Beijing, Shanghai, Guangzhou, Shenzhen, Xi'an, and Nanjing as key areas. Take credit resources as an example. 135% of the credit resources went to these key areas. Credit disbursement accounted for 42% of the total. Number four. We prioritized customer base development. In terms of KPI and resources allocation, we place unprecedented emphasis on this work. At the same time, from what we have observed, be it headquarters or our branches or sub-branches, especially with the heads and customer managers at sub-branches, they have shifted their focus to the development of the customer base. I will share with you some of the figures later. Number five, we promoted risk management system development and strengthened risk prevention, control, and mitigation, more specifically in three areas.
First, for stock risky loans, including on special mention and NPL, we accelerated disposal. Second, for stock credit, we implemented four-tiered management. Third, for increased credit, we implemented whitelist mechanism. So through these measures, our risk prevention, control, and mitigation have come a long way. Last but not least, our input in technology development has accelerated. First, in terms of financial input. On the back of annual CNY 2.7 billion input in technology, we earmarked 1% of our profit as additional input. Second, we are setting up IT innovation fund of tens of millions of CNY. Number three, we have established innovation lab. Number four, we put forward the idea to step up input in human resources. In the next three years, we will increase 500 places for IT staff, which will be broken down by HR and the Department of Technology. We have implemented the eight IT transition project.
These are the six areas of our main work. Over the course of implementation of the new strategy, from my point of view, we feel that in terms of development layout and measures, CITIC has undergone four major changes. First, our operational strategy has increased its initiatives, targetedness, and perspective. For the overall regulation landscape and interest trends and forecast, we have improved our strength and grasp with increased clarity. Secondly, I think our work has become more systematic. We no longer only look at the single task in a single year, be it technological investment or strategic transformation or our 8100 Project, everything has become more systematic. Thirdly, we not only look at the problems or issues we need to resolve today, we are more forward-looking. Fourthly, we have improved quality.
If you look at the operating quality, the overall increased quality can be seen in several aspects. There are eight highlights last year. This year, we have summarized the highlights as well, I would like to share with our investors. First, I am not going to bore you with numbers because Mr. Lu has already briefed you on all the numbers. First, our profit has realized the best growth in the past five years. Shareholders are getting a higher return. Net profit income has increased, ROE is about 14% and 0.2 percentage points year-on-year growth. If you look at the retail banking and other sectors of the bank, all of these achievements are direct results of our exploitation of the market and our good risk management and cost management.
Also, we have realized growth of asset, but at the same time, we have increased the effectiveness of use of asset. We shrink our balance sheet ahead of the industry. Until the end of last year, we have seen a decline of the size of balance sheet. That is because of interest rate in the market and also new policies and regulations from the regulators. This year, we have managed the liquidity, the stock, and the increments. The stock operating, we try to optimize our businesses. In terms of liquidity management, we try to increase the efficiency of the turnover of the assets. We have optimized the mix of the asset and coordinate among write-offs, newly assets, credits, and other credit assets. Overall, the efficiency of the assets have been increased, which is shown on ROA numbers.
Also, we have seen some of the achievements in our light transformation in the bank. We have given out dividend of CNY 12 billion, but at the same time, if you look at the capital adequacy ratio and also the Tier 1 capital adequacy ratio, it have been improved. If you look at the Tier 1 CAR, it has gone down, but if you look at Tier 1 and the core Tier 1, the number have gone up, also the percentage of the non-interest income has increased. At the same time, we have improved our asset management. I am not going to go into details now. Fourthly, as you probably can see on our balance sheet, NPL balance to NPL ratio and bad loans, they have gone up in terms of the numbers and percentage.
However, from the perspective of the management, we think that the quality of the assets have been improved, the pressure of the bad quality assets have been released. They are released in a very short period of time. We have write-off some of the loans in the first half of this year. The write-off is increased by CNY 11.7 billion compared to last year, this is very good for the overall quality of the assets. Some of the loans are special mention loans, but now they are included into the NPL. Loans past due for over 90 days, you see a 15% decrease compared to the level of last year. To sum up, we think that our NPL number is more accurate, we have a tightened risk control over NPL. The management knows this very well.
We think this is a great improvement. The fifth highlight is that we have consolidated our basic clientele, we are deepening our collaboration with our customers. If you look at our corporate clients, we have increased 47,000 corporate clients, we have also added the personal clients and retail clients and high-end net worth individuals. Mr. Lu has also said that our overseas financing, Xin Jin Bao, and international payment settlement, and the market making in the interbanking market, and auto finance, on all of these areas, CITIC is ranking high in the industry. You can see a lot of progress in our work. We have made a lot of efforts in technological investment, we have seen initial results already.
Our fintech, in terms of artificial intelligence, blockchain, cloud computing, we have established our presence in different technological areas, if you are interested, we can ask our technological expert or director to answer your question. For example, we have upgraded our mobile banking. We have about 4.44 million new mobile users in our bank, this is a 63% increase compared to the same level of last year. Also, we have used data analysis and artificial intelligence to do targeted retail. Many of the targeted retail sales have contributed to the 65% of our newly added businesses in this area. These are the seven highlights of the China CITIC Bank in the first half of 2018. Thank you.
The second question is about NIM. NIM in the first half of 2018 has increased, it has shown an upward trend.
If we look at the overall year of 2018, NIM is 1.89%, so it is up 0.12 percentage points. If you look at the trajectory of NIM of the first half of 2018, we see there is an upward trend, there are several reasons behind the increase of NIM. First of all, we have changed our asset liability structure, especially most of our resources are given to loans, and loans account for 56.6% of the total asset, that is reflected in NIM. Secondly, last year, when we shrink our balance sheet, we try to reduce the percentage of low-quality foreign currency loans. If you look at the first half of this year, the interest rate of the foreign loans has increased by 20 basis points. That also helped with the NIM. The third reason is the market.
If you look at the cost of interbanking loans, you see that the cost has gone down, that also helped the NIM to go up. If you look at 2018, the whole year, we think that even though we have an upward trend, we still have to look at the market rate, also the monetary policy in the market. If there are pressure for NIM in the second half of the year, usually it comes from the increasing cost of deposits. Two, growth has slowed down, so it is difficult to attract deposits in the Chinese society. But in terms of deposits, we still see a lot of great indicators. For example, China has been cleaning up P2P. Now we have more new asset management rules, other rules. All of these changes will have a positive impact on NIM.
Right now, monetary policies are reasonable. We still have ample liquidity in the market. The government has been talking about the release of more credit into the market, we are going to leaning towards individual loans in the future. If you look at the interbanking businesses, we think that the interest will maintain in the second half of the year. If you look at the structured deposits among most of the banks, the total number is about CNY 10 trillion, but the structured deposits have already come down. We think that this will continue to go down. It is also related to our money funds, also asset management products. We think that structured products will continue to go down in the second half of the year. We think that NIM might continue to go up.
Thank you, President Fang. Next question. Xu Ran from Morgan Stanley.
Thank you very much. My name is Xu Ran, I am from Morgan Stanley. First of all, I have two questions. The loans, where would loans go to in the second half of this year? We see a lot of signals encouraging banks to finance some of the projects. So for the second half of this year, where would the credits go to? If you look at the bond interest rate, have gone down, but the investment rate has actually gone up for the bonds. So for the loan interest rate, the investment interest rate, how would they be priced in the second half of 2018? If you look at the retail deposits, retail deposits have grown pretty good. So for the second half of this year, what are some of the strategies we are going to use?
Are we going to copy some of the successful strategy from the first half of the year?
I am going to try to answer your questions first. Thank you, Xu Ran. Xu Ran is a very old friend of ours, thank you very much for attending all of our earnings calls. The first question is about where the credit will go to, how are we going to position our resources. In terms of our assets, we have talked about the four strategies. The first one is to be accountable. In order to respond to some of the national policies, as a joint stock bank, we are going to respond to the new policies rolled out by the government. We will actively promote inclusive finance, also support credit loans in the process of consumption upgrade. So that is the first thing.
Second thing, in terms of corporate businesses, for the whole year, we did not allocate a very big number. It is about CNY 50 billion of growth earmarked for corporate businesses. We are going to focus on several industries. The first one is infrastructure construction. We think there will be opportunities in this sector in the second half of this year. The second is the three high areas. For example, the high technology and the high tech medicine and so on. The third area would be the private companies.
In terms of bond, we will increase our efforts in bond investing, considering the need of liquidity management, as well as the high yield, uncontrollable risk of bond investing, including high investment grade on debt and debt products. In terms of interbank resources allocation based on market landscape, we will focus on ABS and notes.
For bond interest, in the second half of the year, the yield will drop. The lending interest will drop slightly because we need to straighten out the feed-through mechanism of the monetary policy. From monetary to market feed-through, there will be a backlog of six months of lending interest rates will drop, but its impact on NIM will be minimal because the drop in deposit interests will hedge that trend. This is the first point. Second, the increase in deposits. Last year, our deposits saw a big drop, but this year the trend has changed. Overall deposits reached CNY 359 million, an increase of 5.3% by structure. Frankly speaking, structured deposits take a lion's share. Our core deposits or general deposits did not grow enough.
But we can see that among the deposit growth, there is a very good sign, which is to take structural deposit despite a big growth, its share in total deposits was only 10.58%, the lowest among the eight joint stock banks. This is the key in the work. Deposit costs were on the rise to 1.8% for the second half of the year. We feel there are both upward and downward factors. There might be a slight growth or a slight drop. Both are probable subject to market conditions. The same with the deposit. First, corporate deposits. We focused on chain-based marketing to attract to the source of fund, and we have tens of thousands of institutional deposits. Institutional clients are our key competitiveness. Each institutional client is a platform. It is unlike businesses. Of course, big businesses are also like platforms.
We can have lots of derivatives businesses from these platforms. For retail banking, through our retail system and the accumulation of customers, we make great contribution to the increase of retail deposits. In terms of deposits, in the second half of the year, we expect deposits will increase to CNY 280 billion. Of course, we will also rely on debt issuance. And the week after next week, we will start the issuance of CNY 50 billion in debt. Apart from deposits and debts, we will also focus on flow fund operations, including ABS, among others, to contribute to our profits. Thank you, Mr. Xu.
Thank you, Mr. Fang. Thank you, Mr. Xu. The next caller, please.
[inaudible] from [inaudible]. I have two questions. First, regarding asset quality. The NPL rate has lowered from the reports. What is your outlook on the asset quality?
Sorry. The quality of the line was very poor. Could you improve that? Could you repeat your question?
Okay. Is it okay now?
Please continue and be slow.
I have two questions. First, regarding asset quality. From the results, we can see a very attractive tactic of the company is to reduce the NPL rate.
What is your outlook on the second half of the year's asset quality evolution? Could you look at the generation of the NPL and changes in provision policy? Second, the new regulations on asset management. With the new regulations out in the first half of the year, what is the impact on growth management business? Have you done some estimates on the scale and income from this WMP business? Thank you.
Our risk director, Mr. Yao, please. Second question, for Mr. Guofeng, Asset Management Department.
Hello, Mr. Zhang. For your first question, this is a key question and difficult challenge for commercial banks in the past few years. Based on the asset quality figures shared just now, President Fang also read into the implementation of the new strategy for the three years, which also touched upon this topic.
In the first half of the year, asset quality performance saw two rises. First, NPL rate, and second, NPL amount. The ratio and the amount, the two indicators are lagging indicators because there are distressed loans. You may ask about the rising distressed loan ratio of CITIC. In the first half of the year, the executives of the headquarters were very determined in improving the quality of the assets. To consolidate our foundation, we made major adjustments. The reason for doing so include two. First, the overall results of CITIC have been good this year, so we have the capacity to deal with the problem. Second, from the view of our regulators, they are tightening the policy on asset quality. In the first half of the year, we put all the loans that have been due for more than 90 days into the NPL basket.
This is for the first time we lowered the ratio to 93.9%, lower than 100% for the first time. According to the new accounting rules, we tried to expose the underlying NPL issues. We adjusted the CNY 28.2 billion loans in normal category to special mention category. Despite this move, we are lower than the average among eight comparable joint stock banks. If we exclude this factor, we will be ranking number two among the eight peers. In the first half of the year, we were very determined and made vigorous actions. Second, regarding the asset quality of the second half of the year and the generation of NPL and provision policy. First, outlook on the second half of the year. Indeed, the size of assets has reached CNY 6 trillion. It is highly related to the macroeconomic landscape.
In the past years, in terms of the exposure of our asset quality and risk, it is highly related to the macroeconomic situation. It is not down to major issues of our management. Of course, we cannot exclude the fact that we have to make improvements on some small issues, but overall, it is highly correlated with the macro picture. For the second half of the year, from our perspective, it is highly related to national economic transition and aligned with the economic trend. From our view, there will be no problem that we can outperform the market because we did major adjustments in the first half and consolidated the foundation of the asset. Second, judging from the macroeconomic picture, we are at a very complicated time. On the one hand, China's economic transition has entered a deep water zone for a relatively tough period.
Second, it is also compounded by the trade war with the U.S., which brings huge uncertainties, and probably China-U.S. trade war will generate some uncertainties. The impact will be lagging because the trade frictions and trade war between China and the United States only started since June and July, and the real impact will only show in about six months time. So for asset quality in the second half of the year, we won't be too pessimistic because we've had a very good foundation. On the other hand, we mustn't be blindly optimistic given the overshadowed large picture. So for CITIC and our asset quality in the second half of the year, I think it will be stable and controllable at a macro level.
As for NPL generation, from our figures, we can see that the generation rate of NPL in the past few years has been running stable. Starting from 2014, with intense response, it was 1.03. This year is 1.19. Despite the major adjustments, our generation rate still dropped by 0.26 percentage points as compared to the beginning of the year. So at least we will remain stable and avoid the big ups and downs. Second, we will also step up NPL disposal and treatment. In the first half of the year, our disposal efforts were very vigorous due to two reasons. First, we allocated big resources onto underwriting. Second, collection had been very effective in the first half of the year, and lots of the aged debts were collected. Some of the underwritten NPLs were also recovered with a level higher than the past.
The disposal of the NPLs will also contribute to the NPL profile for the second half of the year. Speaking of the allowances or the provision, in the first half of this year, provision has gone down by 18%. If you look at the 18% and break it down, the main reason behind this decline is that loans past due for over 90 days now have been moved to NPL. From the perspective of the regulator, they are very clear.
They want all the banks to put the loans past due for over 90 days to NPL. At the same time, regulators understand that different banks have different capability to absorb the kind of changes, so they provided a grace period. For China CITIC Bank, we have completed this move or this change before the month of June, and that is why provision has gone down in the first half of this year. So even numerator have already changed, and that is why you see a change in the ratio.
This change is very obvious and reasonable. If you look at the quality of our changes, I think we can reach our overall target for this year in terms of provision. If you look at operating revenue and our profit, we estimate a very stable growth. So we do not think there will be a very big change in the asset quality. Supervision will remain stable for the second half of this year. It would not be a big change compared to the first half of this year in terms of provision. So that is my answer. Thank you very much.
I am going to answer the second question. In the first half of this year, because of the market environment and changes in policy, our wealth management product balance is stable. Even though our monthly amount has come down, the daily balance has increased.
Our balance till the end of June is CNY 895 billion, which is a CNY 57 billion decrease or decline compared to last year. Our number is still much better than our peers, because for our peers, they have seen even a bigger decline in the WMP products. If you look at the daily average and WMP, the number has actually gone up. Because of the new policies and the market environment of this year, we have generated income from WMP, CNY 600 million. Why there is a decline. First of all, the cost of WMP has gone up in the first half of this year, especially from the beginning of the year to April and May. The cost is about 4.9%, and that is a 55 basis points increase compared to last year. We have to pass this down to the customers.
We still managed to generate CNY 27 billion profit for our customers. Also we have realized a loss because we have to sell some of the management products on our balance sheet, and that is why there is a decline. Thirdly, because of the tax changes and also the new policies in asset management, it also impacted on our WMP product. We are going to follow the rules, and we want to be professional and also increase our brand, so that we can better price our products and better enhance our relationship with the customers. Our sales team, risk management team, and development team will work in sync to make sure that everything is compliant with the new rules and regulations. At the same time, we want to use the WMP business to improve the overall quality of our business. Thank you very much for the question.
Next question. From Huatai Securities.
Thank you very much for the opportunity. My name is Shujin Chen from Huatai Securities. I have two questions. The first one is about the growth of the asset size. Last year you shrunk.
I would like to stop you here. Can you please change the quality of the sound and also slow down a little bit?
Is it better?
I apologize. We still cannot hear you.
Is this better?
Yes.
The question is, as last year you completed the shrinking of the balance sheet, now we see a positive growth of the assets. We want to know the overall asset growth. The second question is about the dividend. If you look at the tier-one capital adequacy ratio, because of the dividend, we see that actually it has come down a little bit. Now you have the convertible debt that has already been approved, and we want to know when it will be issued. The second one is the second-tier capital debt issuance. After you issue the debt, what will be the capital adequacy ratio for you? You have mentioned before that you will maintain a relatively high dividend sharing percentage. Are you going to maintain the 35% like before?
I am going to answer the question. First of all, the asset growth for the first half is 2.3%, but now we have moved to a more light operation.
If you look at the overall risk asset, that number has been controlled in the first half of this year, and that has been increased less than CNY 100 billion. In order to guarantee liquidity, we think that the overall size of assets will continue to grow. The overall growth this year would be around 4%-8%, and that is the range we have set for this year. We need to give out dividend. Dividend ratio is 30%, but still our Tier 1 capital adequacy ratio has maintained its level, and that is because we have a lot of organic growth in our bank. In order to continue meeting our targets, to guarantee our CAR, and to guarantee our payout ratio, we think that we can meet our goal. Besides our organic growth, we are also having arrangements to supply capital from outside sources.
For example, you have talked about the subordinated debt issuance, and we have already got the approval from PBOC, and we probably will issue in early September after the CNY 50 billion issuance. Adequacy ratio will be 12.3%. That is according to our current estimation. Convertible debt, we have got the approval from CBRC, and now we are waiting for CSRC's approval. CSRC has asked us many questions, and we have provided with the answers. Now we are still waiting for another discussion about our issuance. That is the end of my answer.
Thank you.
Next question, please. [inaudible] Lei from JPMorgan.
Thank you very much for the opportunity. The question is about the personal loans. In recent years, personal loan is a focus of the bank, but because of the development of fintech and the clearing of the fintech businesses and the changes in the policy, do you think there are risks in personal loans? Do you earmark some provisions or allowances to offset some of the risks in this sector?
Hello, Madam Lei. I am from Personal Credit Department. I am going to try to answer the question and tell you what happened in the first half of this year. Individual credit has been growing very steadily in the past few years. Now, its balance is about CNY 944 billion, and there is a 7.81% increase in the first half of this year. The pricing is 6.21, and that is 0.19 percentage point increase compared to last year.
If you look at NPL, starting from last year, you see NPL in individual or personal credit has gone down. According to the macro policies in China, we try to focus on three areas this year. The first one is the mortgage products, traditional mortgage products. This year, we still ranked at the second in terms of mortgage in the market. For personal operating loans, the total balance is CNY 184 billion. This is also a very good result. Individual operating loans, the NPL has gone down by 0.2 percentage point compared to the beginning of this year. We have leveraged the advantages of China CITIC Bank. The third area that we have been focusing on is consumption loans. Consumption loan this year, we have been focusing on micro consumption loans and auto financing.
Till the end of June, auto loans in the first half of this year have been given out to 20,000 individuals, and we think that in 2018, the auto loan balance will grow by 30%.
Thank you.
Thank you, Madam Lei from JPMorgan. Next question. From Bank of China International. Madam Li Shanshan.
Thank you very much for the question. I have two questions. The first one is the return on investment has increased. One of the reason is because you have made a lot of transformations and you have done some ABS. Can you tell us more about what would happen? The second one is the CITIC ai Bank. Now the asset of the bank has increased to CNY 20 billion. Can you talk about your collaboration or business model with the CITIC ai Bank? Can you talk about the outlook of this bank in the second half of this year?
First question. Head of Financial Department. In our non-interest income, the first half of the year, apart from fee, more than CNY 3 billion came from asset transfers. This was largely down to credit card assets transfer. With the new rules in place, new categories have been added to fair value accounting. In the second half of the year, related business, with the shift from amortized accounting to fair value accounting, we will step up efforts which will result more income in terms of assets transfer. In the second half of the year, there will be some contraction. There will be changes in the income. So much for my answer.
Of the analyst.
I am Ma Haiqing from CITIC aiBank. Starting from its inception on October 18 last year, it's been doing very well. We want to develop inclusive finance to serve individuals and micro businesses, including the self-employed businesses and heads of micro businesses, including individuals and businesses in Tier 3 and Tier 4 cities. Our assets have reached CNY 21.3 billion, with more than 3 million customers, with CNY 18 billion loan book. In the second half of the year, we will maintain good development speed. It is estimated that by the end of the year, we're likely to reach a balance of CNY 26 billion to CNY 28 billion. Of course, in this process, we will control risks to maintain good quality of assets.
Thank you, Bank of China International. Next caller, please. From [inaudible] Securities.
An Sheng from Securities. I want to ask about capital quality. We have done big adjustments on the destinations of loans. CITIC is reducing loans to manufacturing, et cetera. When will you complete the NPL digestion in the corporate sector? How soon will you finish the disposal of NPL in corporate sector? Second, we think in terms of market, CMB as well as other banks are doing good job in credit banks.
Could you repeat your second question? It's not very clear.
Second question. In recent years, CITIC credit card business has been growing very fast. It is one of the best performers in credit card business. Could you elaborate on the role of credit card business in terms of profit? In the first half, it was more than CNY 20 billion, with a big growth. Do you think the credit card business will continue to grow in such a good way in the second half of the year?
First question, Mr. [inaudible] from Risk Management Department. Second question, Madam Li from Financial and Accounting Department.
Thank you very much for raising the question regarding asset quality. President Fang and Director Yao spoke a lot on this topic. Now, a couple of things to add. First, in recent years, due to our structural adjustments, asset quality has been greatly consolidated and improved. It is reflected in the following figures. First, we give priority support to personal loans, plus credit cards worth more than CNY 100 million. Starting from 2015, in the past three and a half years, our new clients in corporate banking strictly follow our new rules. For three high-tech industries and three new industries, we increased more than CNY 80 million in corporate lending.
In our total assets balance, it's over CNY 2 trillion. Our corporate loan book has reached more than CNY 1 trillion. In terms of industrial structure, our nagging problem is low-end equipment manufacturing and processing manufacturing. Private sector accounts for a big share, apart from wholesaling and reselling. In the past few years, we have been shrinking the share of these businesses. This year, we took a very important measure to classify the stock loan book into four categories. We did very careful analysis and labeled them to see which will be supported, which will be cut, and which will be contracted. Our delinquent loans from the earlier of this year, as of the end of June, it's tens of billions of CNY. Delinquent loans are a key factor behind the NPL generation. Now we have kept good control on delinquent loans.
In the first half of the year, the NPL generation was rise in private sector, especially by region in Shandong and the Bohai Rim, and Northeast China and Western China, such as Inner Mongolia. Big private businesses have suffered huge shocks. In the new NPLs, over CNY 100 million were added to the corporate loan book NPLs. A very good arrangement made in the first half of the year was that recently the CSRC issued a new notice. The state policy has been adjusted, which will give more allowances to private sector, especially the champion businesses in the private sector. According to our assessment, the NPL trend of the private sector will be tamed. The asset quality, we have very good expectations for the asset quality of the whole year. Second question.
Thank you very much for the second question. In recent years, credit card center has been growing very fast. Among our peers, we have achieved very good results, especially in the past three years, our core credit card business increased by threefold over three years. Since the first half of the year, the credit card business has generated CNY 23.38 billion, an increase of 40% year-on-year. Net operating income was CNY 14 billion, up by 30%. Intermediary business net income, CNY 14 billion, up by 40%. You asked about the share of credit card business revenues in retail banking. From our one-half figures, it accounted for 91.9%. According to our overall arrangement for the next three years, the credit card center, of course, the financial department can contribute their figures. I can cite some actual figures.
Let me take over. If we look at the pre-tax profits, retail accounts for 43%, and breakdown credit cards account for 60% of the retail. These are the figures for the next step. We have room for further growth. We expect an increase of 3 to 4 percentage points of credit card business in our retail business.
Thank you, Mr. Fang. In the interest of time, our last caller, please. Everbright Shareholding.
Good morning. Can you hear me?
Yes, please.
Two questions. What is your consideration for real estate loan or mortgage in the second half of the year? What is your outlook on the changes in the real estate sector? Second, given the downward trend in consumption, what is your expectation for the growth of consumption loans? What is your outlook on credit growth for the whole year? Thank you.
First question, our Risk Director, Mr. Yao, please. Second question, could you repeat your second question? Could you speak louder?
Second question, given the downward consumption trend, what is your expectation for the growth in consumption loans and your outlook on the quality of assets in this area?
Let me answer the first question regarding the property. For all the banks and the regulators, the media pay high attention to this sector. CITIC's property sector, as of the end of June, our total volume is about CNY 310 billion in total loan book. As compared to the beginning of the year, it was a drop of CNY 25.6 billion. We can see that first, in the first half of the year, in terms of the aggregate of mortgage, we imposed control to maintain stability. Second, its share in our total loan book is below 10%. Among our peers, this is an average level.
Third, mortgage loans have made contributions to our earnings in past few years. First, the yield of mortgage loans are within the mid to high range of our corporate business. Second, in terms of asset quality control, we are doing a good job in mortgage loans. The NPL ratio is much lower than other businesses. It is only 0.5%-0.6%. Underwriting is very low for mortgage loans. There are very few cases of underwriting or write-offs. It is a great support for our business. We should also see that at the state level, there is concern of the impact of rising property prices, which has become a burden on the households. At the regulators level, they don't want to see the runaway housing prices increase. The regulators are very clear, housing is not for flipping, it is for living.
Compared to past years, we see more regulations of the property market. If you look at the policies from the government, the policies to regulate the real estate market has continued for more than two years. If you look into the past, most of the policy will only continue for several months to one year, which is the maximum. But now you see the government is very determined to regulate the real estate market, and this is unprecedented. If you look at this overall trend, we believe, one, as a commercial bank, we need to be in sync with the new policies from the government. Secondly, we know that the development of the property market has entered into a new era. It is now in an inflection point. There will be more transformation.
From the perspective of our company, we need to maintain overall stability of loans to the real estate market. We try to follow several principles. First, we work with the mainstream real estate developers. Secondly, we try to put a cap on the total number. Thirdly, we try to meet the inelastic demand from the market, because we know some of the developers, they need to build residential buildings. But for commercial buildings, we do not work with the developers too much, or the percentage is very, very low in our total loan mix. In terms of the real estate management, in recent two years, we have done a closed management. We have used many different ways to guarantee the completion of the project, and the serving of the loans are guaranteed. On the other hand, we also have made some regional strategies in terms of real estate.
For example, the northeast region, western part of China and some of the remote areas, including third, fourth tier cities that has a too hot real estate market, we have imposed very tight control over these regional markets. For first tier cities, second tier cities that have actual demand, we provide the loans. We look at different regions and apply different strategies. Another thing is, we are also thinking in the second half of 2018, on the basis of the first half of this year, we will try to maintain a zero growth. We want to maintain the current level. This is about our real estate loans. Even if there are fluctuations in the real estate market, we still have the capability, pretty strong capability to withstand the changes in the market.
Rest assured there will not be issues in real estate loans. Mr. Wang Bing will talk about the consumption loans.
Hello. You have asked about the outlook of the consumption loans, and also the estimation of the NPL. Till the end of June, the balance of the consumption loan is about CNY 277 billion, which is ranking high among our peers. If you look at the newly added loans, the weighted average number is 6.94%, which is the increase compared to last year. If you look at their condo or real estate-backed loans, the percentage is pretty high. We think that risk can be managed. Starting from the second half of last year to this year, we have seen cleaning up of P2P in the market. All of these changes in the market did not really reflect on the changes of our NPL.
So for the real estate-backed consumption loans, we are going to continue our work. We also will promote the extending of micro loans. First of all, we are the leader in the industry to provide products that are linked to your social welfare and personal tax information. Secondly, we provide scenario-based loans, consumption loans. For example, we are making preparations to get into the home deco industry. So this will be a good supplement to our overall loan mix.
I would like to thank all our investors and analysts for tuning in. Thank you very much for giving us this opportunity to share information with you. If you have any further questions, please contact our IR team. Thank you very much for your participation. This is the end of today's earnings call. Thank you.