Dear investors, analysts, and media friends, good morning. Welcome to Ping An Bank's 2024 interim results announcement. I'm the Board Secretary, Zhou Qiang. Shenzhen has been raining for the past couple of days, causing many flight delays. Today, we have so many guests here. We greatly appreciate that. We have been focusing on their flights last night, though with a lot of delays, but they have made the efforts to join us here. Like before, we have on-site conference and also teleconference and the live streams on Ping An Pocket Bank and Panorama Network. Also, we have simultaneous interpretation for overseas investors. So to all those supporting us here and online, we extend our sincere thanks. In the first half, the banking sector has outperformed the industry, attracting increased attention from the capital markets.
Behind that is the result of multiple factors, including policies, fundamentals, capital flows, market preferences, and overall expectations. Some of these factors have had subtle influences, while others have brought about more significant changes, varying in degree and sometimes even direction, had profound impacts on the quantity, pricing, and quality of banking operations. So every bank today needs to maintain a steady course, adjust its direction as needed. Last August, Ping An Bank's new management team formally met with you here for the first time. It's been exactly a year since then. Therefore, today's announcement is not only a report on the first half results, but also an opportunity to exchange ideas with you regarding the bank's upcoming transformation and development strategies. Next, please allow me to introduce the Ping An Bank's executives attending today's conference. They are Mr. Ji Guangheng, Party Secretary and President of the bank.
Vice President and CFO, Mr. Xiang Youzhi. Vice President, Mr. Yang Zhixun. Assistant President, Mr. Zhang Zhaohui. Assistant President and CRO, Mr. Wu Leiming. We also joined by our independent directors and heads of key business departments from headquarters. Now, I would like to invite Mr. Ji Guangheng, Party Secretary and President, to deliver his opening remarks. Mr. Ji, please.
Dear investors, analysts, and media friends, good morning. Welcome to Ping An Bank 2024 interim results announcement. It's a pleasure to meet with you all once again. In the first half, macroeconomy continued its recovery trend. Banking sector maintained overall stability. However, the uncertainties in our operating environment are still on the rise. The July 10-13th meeting of the Political Bureau of the CPC Central Committee pointed out that adverse impacts from changes in the external environment are increasing.
Domestic effective demand remains insufficient, and economic performance is showing divergence. There are growing pains in the transition between old and new economic drivers. The recently held third plenary session of the twentieth CPC Central Committee also set the direction for further comprehensive deepening of reforms and advancing Chinese-style modernization. So while the domestic economy operated within a reasonable range in the first half, continuing its upward trend, the banking sector is facing pressure on revenue and profits, rapidly narrowing interest margins and rising capital replenishment needs. JSB, Joint Stock Banks, in particular, are squeezed between state-owned banks and city commercial banks, facing even greater operational challenges. So in face of the complex and changing environment and competitive landscape, Ping An Bank has thoroughly understood important directives of the CPC Central Committee.
We have comprehensively implemented the goal of accelerating the building of strong financial nation, actively carrying out the various tasks, including Eight Persistences, Five Dos and Don'ts, six systems, six strengths, and Five Major Articles. We adhere to our strategic guidance, and in the first half, our retail has stabilized. Corporate has continued to improve and further solidified the foundation for sustained. So today, I will mainly report on three matters of concern to you all. First is about the results in the first half, second, progress on our strategic reforms, and third is the directions. Talk about the first. First, for the first half, overall, performance has met our expectations. We have operating income RMB 77 billion, down 13% year-on-year, and we achieved a net profit of RMB 26 billion, up 2% year-on-year.
Second, total assets reached RMB 5.75 trillion, an increase of 3%. Credit was mainly directed towards manufacturing, inclusive agriculture-related sectors, technology, finance, and green finance, effectively supporting the development of the real economy and solidly implemented the Five Major Articles. Third, overall asset quality remained stable with good risk compensation capacity. NPL ratio was 1.07%, with a provision coverage ratio of 264%. Fourthly, by implementing refined management, our Core Tier 1 increased by 0.11 percentage points to 9.33%, laying a good foundation for the interim dividends. Although banking sector will continue to face significant pressure in the second half, but Ping An Bank will maintain firm belief, continue to deepen reforms, and vigorously create a distinctive retail brand, promoting coordinated development of corporate and interbank business.
Secondly, Ping An Bank's strategic reforms have spread market attention. For the current progress, this round of reforms has met our initial expectations. We have achieved notable results in maintaining strategic focus, strengthening collaboration between head office and branches. First, we have maintained our strategic position as a retail bank. Under the strategic guidance of strengthening retail, refining corporate, and specializing interbank business, we have further addressed deep-seated management issues, improved on our retail customer segmentation, product offerings, channel strategies, and risk models. We have studied the direction of corporate asset allocation, the collaborative model between corporate and retail. For the perspective of bank-wide asset and liability management, we have enhanced cross-departmental and cross-line business linkages. Secondly, we have flexibly responded to external environment changes by proactively adjusting our customer structure and improving business quality.
We shifted our retail business from a high-risk, high-cost, high-retail model towards a medium model. Through active management, we achieved improvements in retail customer quality, and internal management data indicates that key indicators, such as the net increase trend in retail loan balance and NPL formation, are showing signs of stabilization and improvement. Thirdly, we continue to foster a collaborative culture from within individual business lines to cross-line cooperation, and from headquarter-branch coordination to front, middle, and back-office integration. There has been a notable noticeable improvement in team willingness to cooperate. Fourthly, we have continuously enhanced our organizational capacities and team quality. The new structure at the head office is operating smoothly, and branch structure adjustment and catering rotations are progressing in an orderly manner. Our talent pipeline and reserve have been more robust, and job rotation organizing has been strengthened.
Fifthly, we are injecting vitality into our strategic transformation by leveraging advanced technology. We're exploring new models of technology-driven financial services, upgrading digital system tools, and implementing intelligent branch construction. Ping An Bank, in down the road, will continue to strengthen its exploration of cutting-edge technologies. Second part of my report is about future business direct, direction. Though both internal and external environment are full of challenges, the market never lacks opportunities. We will adhere to a customer-centric approach and continuously seek business opportunities, take time for careful planning and reflection, and pursue sustainable and high-quality growth. Firstly, we will strengthen political guidance and practice finance for the benefit of the people. We will treat the study and implementation of the spirit of the third plenary session of the twentieth CPC Committee as a major task for the current and coming periods.
We'll profoundly grasp the political nature and people-oriented essence of financial work, effectively implement the five major articles, and provide high-quality financial products and services for national key strategies, crucial areas, and weak links. We'll balance functionality and profitability, effectively enhance the fairness, convenience, and accessibility of financial services, and actively engage in building a strong financial nation. We'll treat risk prevention and control as the eternal theme of the financial work, and establish a correct view of performance based on improving our corporate governance-
level and just solidifying our risk defense capability will enhance the foresight in identifying risks and effectiveness in risk disposal. And secondly, we'll promote high-quality development across business lines. In retail, we will maintain strategic focus and resolutely implement detailed plans and measures to strengthen retail, target customer group needs, and implement tiered management in rich products, and enhance our proprietary channel development, and provide higher quality services to our customers. Second, on corporate business, on one hand, we'll focus on the five major articles, both consolidating our advantages in traditional areas to support industrial transformation and upgrading, and paying attention to the cultivation and development of new quality productive forces. And on the other hand, we're proactively deploying asset allocation strategies, strengthen macroeconomic market judgment, dynamically optimize asset portfolio structure and direction, duration, stabilize interest rate spreads, and enhance comprehensive returns.
In the banking business and global markets, based on professional endowments, we're re-enrich investment strategies, better seize market opportunities, and fully leverage our differentiated advantages in market making and trading. In resource support, we'll further improve the efficiency of resource allocation and strengthen refined operation of the balance sheet, achieve smart operation, and derive performance from management. We're further strengthening the comprehensive capability and our team and talent pipeline through mechanisms such as job rotations and composite training. Third, we will innovate across, according to the real situation, as reform is an ongoing journey. Ping An Bank achieved some success in the first half, though, with overall operating performance meeting expectations, but still we are facing a lot of challenges and the pressures.
For example, for retail, the loan balance has been going down and NIM is narrowing, and we have facing a lot of new questions and the issues in the market. All the solutions needed to be identified and adjusted in the reform. We have to keep an eye on the policy changes and the market landscape and the dynamics. Collecting the feedbacks from the reforms perspective, continue to adjust our strategy, taking the performance-oriented management and continue to improve our management and operations. We are also going to continue to work as a team to further enhance our collaborative culture, truly implement the customer-centric operational philosophy, and continue to consolidate our soft power of competition. Last but not least, I also would like to report to you on the dividend policies. We would like to share the development dividend with our shareholders to thank for our shareholders.
Well, for this year, actually, our capital adequacy ratio performed pretty well. We're going to evaluate the relationship between business development, shareholder paybacks, and we will try our best to maintain a rational dividend ratio for this year. In the remaining days of this year, we and my team are going to spare no efforts in our operational management, driving performance improvement to create more value for our shareholders. We also ask for your continued reminders, supervision, care, and support for Ping An Bank. Thank you very much.
Thank you very much. Thanks for President Ji. President Ji actually shared with us three points that everyone's been concerned about regarding H1 performance, progress of the reform, and the outlook of H2 of this year. President Ji mentioned, even if the external environment is pretty challenging, but the market is always full of opportunities.
We need to keep a super mind, continue to analyze the changes in the market to help to identify the ways forward, where at the same time, there will always be new changes and new challenges. We need to identify and be adaptive to the market landscape to issue new quality development. So all the work's being in order progress now, and we're also going to continue to talk to our shareholders in the market and all the related parties. We will surely remind you and keep you in the loop. So we welcome all the friends to continue to support Ping An Bank for its future development. Ladies and gentlemen, coming next, let's welcome Mr. Xiang Youzhi, the VP and CFO of Ping An Bank, to walk us through the 2024 interim result for...
Dear investors, ladies and gentlemen, my friends from the media, good morning. Coming next, please allow me to report to you regarding H1 performance of Ping An Bank. I have five points to share with you. Let's first take a look at the overall operations, where in H1 of this year, I have five points to share with you. First of all, our business size continued to grow, and at the same time, our total assets size has been increased by 3%, where for loans, it actually show a relatively small increase. Our corporate loans improved by 11.4%, where for the retail loans, due to the market reason, along with our adjusted structures of the retail loans, the retail loans being reduced by 7.9%.
Liabilities be increased by 3.1%, and especially the total deposit being increased by 4.8%. Corporate deposit grew by 3.7%. Retail loans, retail deposit grew by 6.9%. Secondly, we do good job in five major business. Vigorously support the real economy. In H1 of this year, in the Technology Finance, Green Finance, Inclusive Finance, and the Pension Finance, and the Digital Finance, we achieved a great progress. We continue to support the real economy and also support the rural revitalization, where you can say that in H1 of this year, the mid and the long-term loans to the manufacturing industry are growing by 50.9%, and also 90.7% for the industry.
We continue to increase the funds support to the rural revitalization, and we also continue to support the real economy growth. My third point, and you can also see that, the net profit maintained a very steady growth, where for the revenue, because of the market reason and our proactive adjustment of the asset structure, it was down by 30%, but net profit still maintained a positive growth due to the following reason. First of all, we will be able to continue to further take the cost initiative. The cost being reduced by 9.9%, saving RMB 2.3 billion, where you can also see non-interest income also see an 8% growth.
Impairment loss and, actually make us the provision saving by RMB 9 million, where at the same time, you can also see actually, the general provisions being reduced a lot, because in H1 of this year, and we're not seeing too much growth for the credit loans. As professionals, you know that the provision will be surely go down naturally, and at the same time, our ROE and ROA been keeping a very good number. And you can see our provision coverage ratio still maintain 264%. ROE and ROA were all performing very well. The fourth part is regarding the asset quality. In H1 of this year, NPL ratio was 1.07%, close to the number of the beginning of this year. Provision coverage ratio, 264%, slight increase compared with Q1.
Default generation rate, 1.69%. You can see the NPL formation rate also continue to go down. Generally speaking, we keep very good overdue ratio and the loan deviation ratio. My fifth point, after so many years, we continue to have refined management of the capitals. Our capital adequacy ratios being well maintained, and especially in H1 of this year, the core Tier 1 CAR was 9.33%, still be up by 1%. Why we have a decrease in Q2 is because of the dividend to the shareholders. But generally speaking, we still maintain a positive growth for the core Tier 1 capital. For the capital adequacy ratio, it was down by 0.67% due to one reason.
You can see that in Q4 of this year, and, we actually have, the Tier 2 capitals that has been redeemed, which has been continued to be issued in, July. And in Q3 of this year, this number will go up, because on ninth of July, we have successfully renewed the RMB 30 billion Tier 2 capital bond. So in Q3, you're going to see the CAR continue to go up. Let's talk about the retail business. For the retail business on liability and the wealth management, we'll still be able to continue to secure a positive growth. For the retail deposit, the balance increased by 0.9%. Daily average deposit grew by 12.8%. Deposit cost percent, down by four basis points compared with the same period of last year.
So you can see that we continue to talk to our shareholders and investors. For deposit controlled payroll and wholesale business, we still maintain very good growth. Why did it grow by 7%? Well, regarding AUM and the customer, in H1 of this year, retail AUM was RMB 4.12 trillion, up by 2.2%. Whereas for the AUM fee income, it was RMB 2.2 billion, and there might be some market factors. For example, the agency, WPPM income, where customer base still be very consolidated. The wealth customer was 1.42 million, up by 3.4%. PB customer grew by 3.7%. Well, let's talk about the assets. I mean, from the loan perspective, starting from H2 of last year, we were being proactively adjusting the structures of the retail loans.
Our focus is to improve the quality of the new loans. In H1 of this year, you can see that, the personal loan balance was RMB 1.821 billion, and mortgage loan accounted for 60.6%, up by 1.8 basis points.... where at the same time, the mortgage and the home equity is being growing, where credit card and receivables continue to be decreased due to the market reason, where at the same time, we proactively adjusted the retail loan structure. My third point, we see that regarding the retail business, we continue to consolidate foundations to two platforms, including the digitalization and integrated finance platform. For digital platform, we do have a lot of content we'd like to share with you.
Number of the registered user for Ping An Pocket Bank continue to grow, and we also establish a personal pension zone and continue to support the online service for the individuals. Where for integrated finance platform, the contribution proportion of integrated finance continued to grow, especially you see that the net increase of the wealth management customer and the retail net increase in AUM continued to grow. Let's also take a look at the corporate and the interbank. H1 of this year, the corporate business grow very stable, performed very well. First of all, in supporting the real economy in the loan, in H1 of this year, the corporate loan balance grew by 11.4%. Corporate deposit balance grew by 3.7% compared with the beginning of this year.
And you can also see that actually now, the interest paying rate of the deposit was 2.12%, improved by six basis points. Where for the corporate business, the corporate business, we are actually continue to have the three refinance: refine the industry, the customers, and the product. From the industry perspective, for this year, we have four major industries: infrastructures, automotive, public utilities, and the property market. They all maintain very steady growth in H1 of this year. Regarding the loans, the total loans be given to the four above industries being more than RMB 200 billion, grow by 42.1% on year-over-year basis. We also have three new emerging industries being covered, including new energy, new manufacturing, and a new lifestyle industry.
The total loans being given close to RMB 106.1 billion, grew by 47.1%. Whereas at the same time, regarding refining the customers, we continue to grow our customer base. In H1 of this year, the corporate customer balance was around 803,000, grew by 6.7%. Regarding the product, the corporate business co-product are emphasizing on the payment, settlement, new management, supply chain finance, cross-border finance, and investment bank. Those are all featured product of Ping An Bank. We continue to improve our product portfolio. In H1 of this year, business growth was taking very a positive look. Whereas regarding the interbanking business, we continue to leverage interbanking business to serve the capital market, the financial market, our interbanking peers, and the real economy.
We are going to be more focused on the investment business and the customer business. Besides that, in order to well serve the customer and for interbanking business, we continue to improve the capacity for investment transactions and sales. Regarding investment transaction, the total bond trading in this year, in H1, has already reached RMB 3.5 billion, grow by 0.6%. Regarding customer service, the key was on taking on the market makings, agency sales, and also the risk management for the enterprises to serve our interbanking customers. You can see that in H1 of this year, the four part also mentioned very good growth. Market making has already reached RMB 1.67 trillion, grow by 9.2%. Agency sales grew by 43.8%, where for the hiring business, our customer base also grew by more than 12.8%.
Well, let's also now take a look at the asset quality. Asset quality, indeed, is a bottom line of the banks, also a great concern of the market. In H1 of this year, overall speaking, asset quality is being well managed. NPL ratio, 0.7%, corporate NPL ratio, 0.66%, retail NPL ratio, 1.42%. Where for the collected NPL, it was around RMB 16.3 billion, 'cause we did a very step-up efforts regarding the cash collection, and we have less receivables need to be collected. So you can see in H1 of this year, the write-off of loans was around RMB 30.5 billion, down by RMB 2 billion compared with the same period of last year.
Well, you guys focus a lot on real estate risk control, so we have discussed very detailed data for your reference. In corporate real estate, I think overall risk is controllable, including loan balance and also distribution. And next page, digital transformation. We have been propelling digital transformation for all those years. Digital operation, digital management, and digital management. After all those years of work with digital transformation, we can provide much convenient various services to our customers, and a lot of progress have been made on this front. So in digital operations, we can better reduce NPL formation and identify risks in NPLs. In digital management, we are using AI robots to reduce costs and increase efficiency. And eventually, we want to reach the goal of increasing efficiency and quality. And the ROI, after all, performed quite well.
The highest in 2018, CIR was around 30%, but now it's around 27%. I think it is at a comfortable level in the industry. Next page, key tasks. In second half, we will surrounding the seven perspectives. First, supports the real economy and promotes the quality and efficiency of financial services. And second, we're strengthening risk management and control in both proactive and divisive way. To focus on key areas, key products, and to reduce NPLs in those areas. And third, we will refine our asset and liability management to be improve quality. To improve quality with a stable performance, to increase our profits to the best degree. And fourthly, we upgrade two business segments in retail, consider this two platform foundations and provide three development guarantees. So to drive sustainable and continuous development in retail.
Fifthly, we're strengthening corporate focus on five finances and being industry-specific, customer-oriented, and product-driven. Sixth, we specialize in interbanking industry, strengthening investment transactions and customer business, and enhance three major capabilities. And the last one, to implement the transformation requirements of increasing growth and efficiency, and improving quality and efficiency, and reduce costs, and increasing efficiency. So, this is end to my report. Thank you all for listening.
Thank you, Mr. Xiang. Your report provided a comprehensive review of our first half performance and outlined our key strategies for the second half. You've analyzed crucial data, explained underlying logic, and actively addressed the hot topics of market interest. And you've also further elaborated on and interpreted on the key initiatives mentioned by Mr. Ji. Next, let's move to today's Q&A session.
First, I'd like to invite our management team to take their seats. Welcome. Okay, next, let's start the Q&A session. A lot of guests here made their way far and come here with a lot of effort. So today, our interactions with... Our first part we'll give to investors and analysts, and the second part goes to media friends. To have more questions, so please ask only one question at a time, so that more chances will be leaving to other guests here. And your name, please. Okay, let's start. First question, let's welcome Mr. Chiu from Zheshang Securities.
Thank you. I'm the head for the research center of Zheshang Securities. My question goes to Mr. Ji. We noticed that it has been more than one year since Mr. Ji come on board.
We have seen a lot of strategies, reforms, since you come here. So from your perspective, can you elaborate, what you have made, for the past year? What you have, reached, what kind of goals, for the future?
Yeah, thank you. This is a rather broad question. So it's kind of like a, report for the work I've, done for the past year. This year is fast and, quite hard, actually. Within this year, I think a lot of work since last August, that's, my first report, and, this year we have a report in March, and, every month we have frequent, communications with the markets. So from my perspective, one year is quite short, especially with the sharp changes in external environment.
So for every bank, without 3 or even 5 years, it's very hard, not easy to operate a bank well. So what kind of major results I've seen from the past year? First is the organizational change, and second, for the team structure, and thirdly, the synergy between headquarters and branches. And fourthly is the efficiency has been improved in the organizational structure and the job rotations for the categories. So results, you've asked. From all those, I mentioned for the change adjustment implementation after last board meetings, now it's within 6 months, I think major implementations or initiatives have been completed in the headquarters level. We have reduced the number of departments and streamlined the organization. So I think the job has been done in the headquarters.
I think now we can see some initial results, but still more need time to testify. And recently, I think the management team has been focused more on operation, because previously, like I mentioned, the first half was mainly on the adjustments in the organization structure. But now, like I say, the job has been completed. So from financial results, you can see that last year, I reported that the major pressure came from retail, and the retail, the main challenges was in risks, because we didn't have a proprietary channel. But a lot of changes have been made and improvements have been made. You can see the high-risk loan balance reduced by RMB 150 million. It's a quite profound impact on retail business. We stopped doing high-risk business anymore.
But actually, when we review, we think we started just in the right time, too late, because the environment is changing so quickly. The process is painful. We have met a lot of pressures because the revenues dropped very sharply. So there are some voices saying that whether we should resume some of the high-risk businesses. But we have withstood the pressure. It's really painful. It's not like you want to do it, you can achieve it. So we've been talked, we've been discussed with, for example, an auto loan department colleague.
I was saying, "Okay, if you start, like, still doing the business nowadays, it would be very painful because you see competition from, large banks and city commercial banks, but the efficient demand from the market is not that robust." During this period, it will be very difficult for banks to acquire premium assets. Previously, we were focused more like, high-risk customers or high-risk, products, so it's quite a pressure, big pressure for us to transform to nowadays. Basically, I can say we've done the first phase. Our AUM growth speed did not like before, but still we are among the highest. For loans, retail loans, it dropped quite sharply in the high-risk loan balance, but recent two months, I can say we basically stabilized the trend.
NPL formation in the retail has dropped a lot. Our cornerstone loans, like mortgage and payroll business, those foundation more like fundamental businesses. I think now you can describe is transformed from very big pressure to now medium pressure. Another point I want to mention is corporate business, because retail is undergoing this sharp adjustment, so corporate during this time has showed its, you know, strength. Very important role during this period. For example, if you look at loans and deposits in the corporate side, among joint stock banks, I think is still among the top. And asset quality during this sharp growth, quick growth, I still maintain a quite stable performance. Interbank and global business in the market this year, first half, have delivered very good performance.
To make more time for retail to resume is vigor. Give us more time to customer structure and asset structure and risks policies, and to drive future profit growth. This will be a great opportunity. For example, if our retail loans dropped quite quickly, our corporate loans during this time will face changes in pricing. Because for doing business, we have made some sacrifices in pricing. If corporate loans can regrow again, we can see a turning point in the loan growth in corporate, and we can see a turning point in the NPL formation in corporate. I think corporate will have a second stage growth. In asset allocation in corporate, previously, we weren't doing a lot in that, but during the rates decreasing cycle in the Fed, and now you can expecting that to come.
We have to do the asset allocation in the corporate side. During this process, if retail can take a breath and-
Good. If the retail business take a break, the same as a corporate business. The second one is a corporate deposit. In the past, you can see that the guarantee ratio is relatively high. But for this year, we continue to adjust the corporate deposit structure. At Ping An Bank, actually, for RMB deposit, interest rate is actually 1.8%. I mean, the interest paying cost. It was 1.79%, which is a huge impact or changes for the corporate business. So generally speaking, for the past one year, you see that the so-called very redundant organization is already gone. We now have a very united headquarters to support the different branches and outlets. We don't have the information silo at all. All the departments been working as a synergy.
This is a great change I identified from my team, where at the same time, we have different business lines, including retail, plus corporate, plus bonds business, with great asset allocations being made. I do believe this has been achieved through the reform, structural improvement, and cultural enhancement. But still, in the near future, we are going to face pressure. The first pressure is because of ever-decreasing revenue. For sure, the revenue decrease being narrowed down. In Q1 of this year, it used to be 40%, now it was 30%. We do hope the revenue decrease for the full year could be narrowed down to less than 10%. The next year, we're going to have a great room for further rebounds. This is about the revenue, where at the same time, you can also keep an eye on NIM. NIM's being reduced.
to this month, the NIM is being stabilized. The NIM for a single month is around 1.89%, and we have every confidence in the near future to stabilize NIM at around 1.9%. If we can stabilize the NIM at 1.9%, we're going to be the best performer among all the joint stock banks. We have a model bank that is CMB, and their interest paying cost is around much lower than ours, by 60 pips. For CMB, they're a company with very well-balanced business, where in the near future, I think what we're trying to do is indeed continue to reduce interest payment cost. Our interest payment cost for the USD is being slowed down, quite sluggish, where I can also say that for retail RMB, still, we do have some very different regional strategies.
So you can say that RMB-based retail business, our interest payment rate still be the highest one among all the joint stock banks. We have to do good asset allocation in the near future, where for the corporate business, our business was doing well. So as I was reporting to you, I think even if the revenue is being stabilized, but because it used to see dramatic decrease, we have to narrow down the decrease further. And my second point for NIM, it used to be dropped very quickly, but now it's being stabilized. One more point. I think our branches and outlets, they continue to improve the productivity, and it takes time for us to restore the productivity activities of the branches. Each branch shows very different development and trajectory. It takes time for the branches to be further empowered. The most important thing is regarding the executives.
We are indeed keeping an eye on the key regions, key branches, and to nurture our executives internally. It takes time for us to find the right solution. These are indeed what we saw from the mid-sized branch in the relatively lagging behind region. And then my final concern is regarding compliance. You see, we have a big fine ticket for this year. It was because of the inspections in 2019, and the inspections will be continued in the near future. No matter when the fine ticket is being identified, we needed to continue to improve our compliance culture awareness, better refine our interpretation of the policies and regulations, always keep one step ahead of the industry, and have the decisive mind to implement the compliance strategies. And, if you have time, I would like to invite you to my office to tell you more.
For the past one year, me and my team has been working very hard. Every day, we're facing a lot of uncertainties. We have to maintain growth while resolving the remaining problems. But I think for my team, we have a very good prioritized tasks, going to say, very good achievements. I think at the very beginning of this year, I have already reported to many of you, I already informed you 2024 and 2025 going to be two challenging years, especially 2024. I hope by 2025, the retail issues would be well resolved. Other business will keep up growing. I hope in 2026, we are going to go back to the normal track with a normalized growth. Where in 2024 and 2025, maybe the revenue may not look that ideal, but I think we still would like to maintain the profit.
What we can do on that? We need to continue to reduce the risks. For example, our revenue is being reduced by 10%, but our loan loss being narrowed down greatly, and we should also do very good... Say that our branches, the property management is being further refined. For example, we do have the so-called small office, better service. Me, kept visiting different branches. The on-site business of those branches all went down a lot. For some less efficient branches or even the government provide me some incentives-based office buildings, I don't go there. We just want to leverage the spent activity. I do believe that now we are in the most important stage for cost saving, where in the near future, we will be able to grow the revenue and productivity further.
We're going to use around two years of taking Ping An Bank back to, well-looking fundamentals. Well, I think maybe your question be the key concern of many investors, but as I always share with you, reform cannot be done overnight. We will just keep an eye on the market dynamics, the regulation changes, along with our own, work to continue to stabilize our business.
Thank you.
Thank you.
Thanks for President Ji. Coming next, let's welcome the next analyst. Xuan from, Morgan Stanley, please.
Thank you. Thanks for giving me the chance. I'm Xuan from Morgan Stanley. I have a question regarding your retail business. For your retail business, indeed, there are some good achievements being done from transformation. Risks and the cost are all being diluted, but, you also pay a high cost as the revenue continue to go down.
For those high-risk credit loans, how much still needed to be taken care of? When it's going to be ended? Look into the future, what would be your strategy? Especially for the mid-term business, how are you going to compete with other banks regarding profitability? For your wealth management, it was growing, but being slowed down compared with what we saw last few years. Look into the future, what would be the key strategies for the wealth management retail business? You say that for retail banks, indeed, you provide a service, so the cost won't be diminished overnight. What would be your consideration, and what's the strategy?
Thank you. I think I may start by basically answering your question. I will ask my colleagues to give more information later. I always share with you, retail is our focus.
Continue to make the retail business bigger is going to be retained. If Ping An Bank be a wholesale bank, we lost our future, we will never get the recognition from the market. We will never have a good valuation. But as I already shared with you, for the past, our corporate business was developing very weak. It was in the recovery growth stage, where if the economy present us many uncertainties, the wholesale business would always be a good way to help you to riding through the business circle. I think many of you know that much better than me. For the high-risk business, that is credit loans to Ping An Bank. For credit loan, and, what we used to face was Xin Yi Dai.
The balance of the Xin Yi Dai, I mean, the, unresolved credit loans, Xin Yi Dai, the number has already been reduced from RMB 150 billion to around RMB 40 billion. But some of the high-quality credit loans in the near future may also see further changes. But overall speaking, I think our high-risk business, the absolute value was already going down. May in 2025, is going to hit the bottom. That is our internal data. But in H2 of 2025, if the high-risk business still not hitting the bottom end, if our new business started to cause more trouble, then there are going to be a failure of my management team.... So to me, I think the high-risk business need to be well managed. The historical high-risk business could be buffered by taking proactive management. For example, like channel.
Even if you have the same channel, the same agent, if you have strengthened the management over the agent, and also started to actually continue to well manage the cost payment, even if it's the same channel, the same agent, they provide you very different service. This is how we're going to do regarding strengthening the management of the channel. We're talking about the collections, we are also going to well manage it. Later, I will ask Mr. Zhang to give more information on that. Generally speaking, for the middle-risk business, and what we're doing now is on the loans. You mentioned about wealth management, that is what we call the AUM business. The growth's been slowed down, but for the wealth management, indeed, yield of middle business, input-output ratio would be quite limited. It takes time. We have, limited...
We have investment, but we need to guarantee growth of the profit and revenue. Balance between wealth management and loans need time to take a balance. For CMB, they well manage their wealth management business. They also have a very strong loan business. So for CMB, they have a very well-balanced business regarding the local currency, foreign currency, corporate, retail business, front desk, back desk, domestic business, and international business. For CMB, their channel is even much stronger than some of the state-owned banks. So I think for the wealth management business, we're not going to do aggressive investment now. We may wait further. Last week, we organized a special meeting for the wealth management business. I emphasized again and again, that is high net worth population. We do good job on private wealth management.
For my, top and bottom customer and the long-tail customer, this is what we're going to cover for the wealth management. This is indeed what you mentioned about high-risk business, wealth management business, and how we're going to keep a balance between the cost and the revenue. You also asked about the medium-risk business. You know that, no matter it's high risk or medium risk or low business, it's always a so-called relative concept. For some of the medium-risk business, may in the near future, it continue to go down. The criteria continue to change in the market, and there is a model to see whether the business is high risk or low risk. So generally speaking, when you started to target a customer, acquire the customer, it takes many risk policies in between.
We need the product, internal risk management model, along with FTP management, along with many measures being available. So I believe this is a market that every bank would like to keep an eye on, but, who's going to stand out in this market? It truly depends on your overall competency. It cannot have been done overnight. So you can see that for the medium-risk customer, acquisition, investment, and the customer captures or the stickiness improvement are still the work need to be done by our internal strategy committee. We have a Mr. Zhang Zhaohui, Mr. Wu Leiming, and also our colleagues from retail business, inclusive finance. We are going to keep an eye on the private small SME owners. I will ask Mr. Zhang Zhaohui to give you more information on that.
Thank you very much. Thanks for President Ji.
Thanks for the question. I think your question covers a few highlights of our retail business. President Ji has already mentioned many information in a very systematic way, but I have a few points to share with you. First point, the one that you care the most, is for the product strategies of this transformation. In the long side, for the medium risk, product, what's the pre-position? And second is for the wealth side, why it slowed down? Okay, two, talking to these two questions, I will give you answer. First, for our retail transformation, like Mr. Ji has very clear, clearly explained, this strategy, we will focus on it unswiftly. And the main target is on the loan side, and the main breakthroughs is to increase the percentage of...
To reduce the medium- to high-risk customers or products. And after, let me give an addition. So, apart from the reduced for high-risk customers, but also the building of proprietary channels and also the control, internal risk control. So this one, I want to add up. In order to build this kind of model, we are making efforts in three perspectives to synergize advantages from the group and the bank. So first one is the proprietary channel building. In the past, we relied more on the agency channels, and that's from the MGM model with the group. So gradually, we strengthen the control on the agency channel and to strengthen our own channels. So that's the one part. For data, data-driven risk control. I mentioned risk cost high spectrum.
So this one is to give targeted analysis on different customers in different risk spectrum. We have accumulated a lot of experience, and this will be and support for future customer operation. And third is tiered customer management. A lot of models we will gradually implement, and some have been implemented in the bank's operation today. So this is about the key task we are going to make and have been doing in the loan side and customer operation. And with the management business for the metrics you've talked about, actually, this year, we have made very detailed analysis on the wealth business. Because loan side, like we mentioned, it was dropping quite a lot. To some degree, it will impact the growth both management.
But fairly, I think wealth business have delivered a quite satisfactory result. In the first half, our deposit cost was at a quite high level, but it started to decrease bit by bit, and we have made different reforms in wealth business to... I think it's started from May, that we see the deposit cost decreasing quite a lot. In July, I think the month alone, we were at 2.15% for deposit cost, and this decreasing trend is continuing. We believe we can control it within 2.1% within the next several months. And with the growth speed in the wealth of AUM and deposits, we have changed our previous model in AUM growth because, you know, previously, we were doing the three-high model: high pricing, high risks, and high cost.
So we are not using that model anymore, because high cost in the deposit side brings high yields in the loan side to attract customers in a quick way. But this model, in today's environment, is facing a lot of challenges, because if you pricing your assets very high, it will be very hard to control the risks. And previously, our products, most, the majority was equity related. But with today's market, we have made some adjustments and improvements on the product mix. We will focus more on stable return like products or medium risk to products.
A lot of reforms have been made in the internal management, management, and we are teaching our frontline customer managers to do their math well, to understand what kind of business model is to the great benefits to their KPI or to their overall package. So I believe going forward, you will see the results bit by bit to show up. We are now adopting a productivity-focused basic law for the retail business. I think at the end of this year or beginning of next year, we will see the results of decreasing the deposit cost. So that's my answer. Thank you.
Thank you, Mr. Zhang. Retail bank is the core strategy for Ping An Bank. It's an ongoing process. Please stay tuned for our reform. So next question goes to Mrs. Shen from Huatai Securities.
My question is around dividends. We noticed that you increased your payout ratio quite quickly, and you mentioned about the interim dividend payout for... It's the very first bank. So what's your considerations behind that, and how will you take this percentage, 20%? And how will you balance your dividend payouts and also your capital ratios?
Yeah, I understand everyone focus or curious about dividends. The market is paying great attention and especially investors. Since I came on board the last year, I reported that we delivered very low payout in previous years, so we will try our best to give back more to our shareholders and investors. Well, our capital ratios now is standing at a rather comfortable level, that's the prerequisite. And secondly, the willingness from the management is abundant.
We are willing to pay more, and also this is encouraged by the regulators. Last year, we announced a 30% payout ratio, raising from the previous 12%, very big increase. For the very first time, we are doing the interim payout, the dividend payout. You mentioned about we are the very first bank in the market. So you're asking whether it's sustainable and also an underlying question is whether you can increase this ratio even higher? Firstly, I think in the capital parts, I think we are rather stabilized. Second, in the profit growth, I think basically we can maintain a stable growth. It will not see a big fluctuation.
And third, we have the willingness, and fourth, is that your expectation will be a propelling force and also the encouragement from the regulators. So with all these factors taken into account, I think the 18% of dividend payout ratio, I think, is a kind gesture to you. And next year, we will meet again, so I will not give you a specific number, but what I can say is that we hear your voices and also encouragement from regulators, and we are willing to do this thing to repay, to give more back to whoever support us. I was in charge of investment in Ping An Group, so I know, I understand that high payout, high yield assets is of great attractiveness to investors. If you have more to add up, let's Mr.
Xiang, please give us some more. I think the overall direction is that you understand that capital position in the previous time was at a low level, and after we resolved this hardship, now capital ratio is at a comfortable level. After rebalancing the business growth with the capital ratios, we think is rather comfortable for us to do this payout ratio. We have asked the market about what would they care the most, and dividend payouts is one of the greatest attention from the market. We mentioned the 18%, it doesn't mean that the year-end, we will have the same payout ratio. I think it's more of a attitude we want to deliver to the market. We will work even more harder to create more payouts.
This is what we want to say.
Our next question goes to Katherine at J.P. Morgan.
My question is about real estate. Could you shed some light, the asset quality in real estate sector, and can you elaborate more, among your real estate, loans? One part is developer loans, and the other is M&A, and, commercial property loans. What's the asset quality trend look like in both sectors? And new information part, when will you foresee the peak? And, for the, some program, projects, for the, like, government-related, projects, what's your participation in that? And I think banks have some changes in terms of, how they're doing the real estate sector, and you have been focusing on selecting the more like a boutique developer, developers.
So going forward, are you still going to focus on this sector, and, what's the changes, in this regard? Thank you.
Okay, 4 questions. First, asset quality overall. Second, asset quality in different segments. Third, new information, when will you see the peak? And fourth, what's your participation in the government-related projects?... and whether are you still focusing on those smaller developers, those boutique ones? Okay. First, overall asset quality. Our volume or our total, loan size is less than RMB 300 billion. It's now around RMB 280 billion. And comparing to the beginning of the year, our loan balance, actually, stayed quite stable, and NPLs, stable as well. So for the environment in the property sector, you can see the sales was decreasing and, the firms' linkages for those developments is were quite, like stressful.
We have been disclosing our real estate related metrics every quarter, so you can have a quite clear or thorough understanding, the asset quality in our real estate. And your second question regarding developer loans and, commercial property loans. For developer loans, we have around RMB 80 billion loans.
In the past, we attached great importance to project region and the risk of the project itself, where for the after-loan management, we have a very stringent management, including the cash flow control. So overall speaking, our asset quality performance looks pretty good. But, overall speaking, the sales indeed actually pressured the asset quality. The cash collections being not well done, which will indeed pressure the asset quality. It is still controllable, but if the project cannot yet be sold, and which will actually continue to consume the cash flows, which will generate further pressure. But because of the national policy support, along with the White List from the government, the sales also be promoted. We are also an active player in this process. So even if we are pressured now, but everything's been normal. And the second one is about the operational loans.
Altogether, RMB 170 billion. If you go for the shopping malls and the office buildings to work around, you'll find out occupancy rate and the rental fees are still be heavily impacted. You can say that, the repayment mainly depends on the rent. Even if we can actually help to see the interest payment, but indeed, the cash flow still be heavily impacted. It's still going to pressure our business in the near future. These are the two points or the two parts that we can see from the data, where in the near future, we do need the market to be further stabilized and continue to improve. That can actually help to further improve the assets quality. It is still within a normal range, and generally speaking, we are still going to perform better than market average.
Well, let's also talk about the development loans, and we're still on the tier two cities, including the mortgage. We have to well control where the region might be, 'cause overly speaking, for the central government, they attaches great importance to the property market with many policies being issued. The pressure are mainly coming from the demand side. So in this process, we have to keep an eye on the property market to see how it's been evolved. But we have two things: RMB 250 million around, development loans, RMB 80 million, RMB 170 billion for the operational loans, only in tier one or tier two cities. And we have a very limited exposure compared with other banks in both sectors.
People used to worry about urban investment government platforms, but last year, I told my team, "Disclose the information to everyone." In other words, you are going to keep yourselves transparent. Always let the market know the truth. You know that the other day when we was preparing for today's meeting, I tell my team, "Be frank to the market. Be transparent. Otherwise, you won't be professional." Because you-- if you tell the number to the market, I tell you the total number was RMB 250 billion, RMB 170 billion for the operational loans, RMB 80 billion for the property market. That's what we have, and that's what we see. And you can also see, talking about the NPL formation trend, for sure, we have the pressure.
Sometimes the number will go up, we are going to be pressured, but overly speaking, it's been well controlled. The third point, you will ask about our attitude. Property market is always be our focus, and I do believe a property market, because of the political reason and the social reason, we will continue to support the property market for its future development. The government also have coordination mechanism along with the white list. Our white list investment always make us stay ahead of other banks. We were also going to take care of the reasonable needs for different property developers. So we have a very clear attitude. We're going to support the property market. Because of our project management logic, we are going to still stick to our risk management control philosophy. No big changes will be identified.
We're still going to support the property market, to be frank. We need the developers to acquire the products, having the need for financing, then we will be able to grow our business. We're going to keep an eye on the government policy changes, along with the market intelligence, and then to provide the financing support for the developers. This is our key focus. This also has a very good driving effect over our retail business, especially for mortgage. We're going to investment in this regard.
Thank you very much. NPL formation ratio, very low for Ping An Bank. If there's one project and have some risks, NPL formation ratio will rebalance, but generally speaking, it's still within our control. Ladies and gentlemen, let's welcome the next analyst. Madam Xiao from CICC.
Thank you. I have a question regarding corporate loans.
You can see that for this year, I think the credit loan demand continued to be weakened, but it seems that for Ping An Bank, your corporate loan investment is pretty considerable. So what are those areas you provided the corporate loans for? Do you have any specific strategies that you can share with us? The market landscape is changing all the time, and how you're going to keep an eye on the industry? What would be your consideration there? Thank you.
Thank you for keeping an eye on our corporate business. Let me just be brave in responding to your question. For Ping An Bank, we always respond to the national strategy proactively, doing our best five business, continue to invest in the real economy with the loans. In H1 of this year, our total loan balance was around RMB 50,000.
It was growing by 11.4%. So generally speaking, we're still leading the way forward. And I have already mentioned about the strategic clients. And also, at the same time, the manufacturing industry, wholesale, and retail. So you can see that the total investment in these three sectors accounted for 70% of the total investment. Regarding the customer base, we attach this great importance to the customer base. Starting from strategic customers to the SMEs, we do have the customer stratification system, especially for this year. Customer with loans, the numbers being improved by 50.5%, which continue to consolidate the quality of the customer base for the loans. Well, regarding the product, we also have our advantage.
In supply chain finance, cross-border, we have great advantage, where at the same time, we also intensify our efforts for the mid- and long-term loans. Mid- and long-term loans, the interest rate would be relatively high. And the government also ask for the equipment trade-in loans and the M&A loans. We not only be able to grow our loan size, but also be able to optimize the structure. This is a very important work being done by us. For the growth, there are a few reason. First of all, as President Ji mentioned, we have the recovery growth. For the corporate business, the asset quality has been pretty good. We have a well-established risk control system, especially after a few years' development. The asset acquisition capacity has been growing, where for this year, the retail business also saw periodical adjustment.
The corporate resource is being distributed more for the corporate clients. So we will actually be able to leverage very efficient synergies between the headquarters and branches to grow the business further. My second point, that is our customer-centric approach. We attach this great importance for customer operation. After the institutional reform, we have a strategic customer division, which will help us to provide professional and important to those customer. We provide solution to the customer, keep a very close relationship with the customer, where for our branches, they have the regional features. They're going to keep an eye on the local high-quality customers in the local region. So where headquarters and branches work together, we will be able to grow the loan size very well.
Especially, I have already mentioned to you, and we continue to grow the customer with loans by 50.5% from beginning to now. Beginning of this year to now, we also see reform dividends. Now, the productivity and the work efficiency has been further improved. More resources being given to the branches, more branches being empowered. The proactive working efficiency of the branches being fully demonstrated. In the past, we have the retail business, now we also cover the corporate business. Through the reform, the branches, they are now being more active. The productivities will surely go up further. We are just at the starting now. We are going to do better to further improve the assets quality for the corporate business. Let me also talk about what are going to happen in the near future.
We have every confidence we're going to stabilize the growth because the trend already benefit us. My second point, for asset management, this is actually, I organized multiple meetings in discussing how can we have a good asset management and asset plan in advance, having a proactive way of doing that, because this is a very important way for interest generation. First of all, for the asset management, we start with customer interest and pro- industry and, product. From the industrial specific ways, we stabilize the fundamentals. For example, in the wholesale, in the retail market, or even in the infrastructures, in transportation, we stabilize fundamentals. Secondly, for the manufacturing industry, we double our efforts there because we are still needed to continue to step up our efforts with other peers.
In the manufacturing industry, we have our advantage in manufacturing industry because we have very strong industrial research and survey. We do see differentiated advantage of being a bank in manufacturing industry. The third part, regarding product, we have the cross-border finance product, supply chain finance, M&A, and the crop loans. We're going to intensify and further improve the product portfolio to support the customer. We're also going to work with the headquarter branches to consolidate our service to the key customer, where we also would like to work with real estate companies, scientific innovation companies on the inclusive finance to further take care of our strategic customers. If possible, in 2024, we also would like to cover SMEs, because the income is relatively high. In that way, we're still very confident for our future assets management.
It's going to see a very stable growth, continue to consolidate our customer base and even our asset. I believe corporate business is going to make a positive contribution to the whole bank.
Thank you. Thanks, Mr. Yang.
Yes, indeed. With the existing economic circle, corporate business is indeed a very important hedging business for us because its risk being well managed. It'll also be taken as a very good accompaniment to our retail business. In H2 of this year, we're going to have a balanced growth of the corporate business. Let's welcome the final analyst.
Please, welcome May from UBS.
Thank you for giving me this opportunity, and, Mr. Ji and all management who have give us very, clear and, transparent answers. My question is regarding on NIM, because, Mr. Ji, you mentioned, that once you narrow the decrease of, revenues, NIM, starting from last, third quarter, it was 2.3%, but now it's less than 2%, still in the downward track. So I want to ask your view on short-term and long-term NIM trend. You've mentioned about your strategy in retail and corporate, but in retail, actually, your loans are still decreasing and that the NIM is quite, quite big. The spread is quite big. One is 3% point something, and, the other is 5% point .
So how should we offset? And LPR, the impact is still here, though not much, but it's a continuous impact. So do you have the confidence that you can stabilize the NIM, and does the confidence from the decrease in the deposit side, or the other ways? And longer term speaking, what's your take on the existing mortgage rate? Do you see the chances of decreasing that rate? And the next question is about the investment yields, because the central bank is trying to support the market, but still yields are going down. So all those are pressure points. So longer term speaking, what kind of level do you think the NIM will be at, 1.5, 1.3, or even 1.2? Thank you.
This is really a hard question, broad question. I think for questions about the macro environments, perhaps central bank will be the one to answer them. So I'm going to only talk about our bank.
... NIM indeed is like a guidance for banks', profit. Banking, banks in China, apart from net interest income, also they have non-interest income and also trading income, and some of the fees, like consultative fees or arrangement fees, now you can't charge them anymore. So I think, 60%-70% of the income of every bank, it was, from, the interest income. So I think this is applicable to all Chinese banks. So let's talk about liability cost first. One is, it is going down naturally, OMO, LPR, they are going downward. If Fed decrease in a quicker manner, I think the cuts in interest rates or, the RRR will be possible, and this is, a natural decrease. And secondly is for our own factor, whether we can decrease even quicker for the deposit cost.
This is where you can show your capability. The width is quite big on us, but in corporate, we have a quite big chunk from foreign currency. It will be very hard to control it if it's in retail side, but most or the majority for us is on the corporate side. So we will price our deposits, based on, the loans. Like Mr. Yang mentioned, our accounts with loan balance increase quite quickly, but still, it's, the percentage is quite low. Right now, we only have 6,000-7,000 of such accounts. For corporates, we have RMB 2 trillion loans and RMB 1 trillion deposits, and retail is vice versa. So corporate resumed, it's more like a recovery-like growth.
So this quarter, when we compare to other banks, we're not, like, their NIM spreading, because, for their, deposit side, they have this, manual compensation for the interest, but now they can't do that anymore. For us, previous years, we, we can basically say we don't do that. So comparing to other banks, especially for the recent two months, our deposit cost was not dropping that fast like other banks, because we didn't do the compensation before. But the term deposits, this trend is still here for every bank. This year, we talk about for the large ticket size CD and for structured deposits. I'm overseeing that to, control the cost strictly, but we have to maintain a stable LDR as well.
And when the central bank decreased the interest rate for the RMB-denominated part, actually, it's quite beneficial for us. But for payrolls or other more fundamental business, it needs time, and mortgages, perhaps with a very thin spread, but it can generate long-term deposits, low-cost deposits. So this quarter, what we can maintain a stable NIM is because our retail deposit grew quite well. So you will be impacted like 10-12 basis point. So longer term speaking, our focus will be increasing the proportion risk loans to maintain risks at the same time. And the corporate loan, the NIM, we will focus on price as well, because now we are more focusing on the quantity, the volume side. But going forward, we will look at the spread. I will not only aim for CMB.
It's quite far target for us, actually. We will look at other banks as well to compare us among all those joint stock banks, to have a medium-range deposit cost and have a rather among the peers yields. But this, we excluded CMB. If we take CMB out, actually, you can do the calculation again. So longer term speaking, in the recent 2 years, I think it would be quite a good job to maintain 1.8, 1.9.... It's already quite good result. But if you talk about 3-5 years, it will be very hard to answer your question. Our goal, like I said to my colleagues here, is that we need to maintain higher than average NIM level. Today, it will be much easier for us.
Last year till this year, you can see, NIM for the banking sector decreased in a very sharp way. Perhaps people are comparing us with the Japanese market, but, it's not comparable. When they are facing the negative interest rate, it actually is quite a big room for arbitrage. For example, they take money from Japan and to deposit it in Hong Kong or U.S. It's a very free market. Perhaps it's U.S. face more constraints here, but, I mean, no matter what, longer term speaking, interest rates will be facing a downward trend, and NIM will be stabilized within a reasonable range. Because it's a safety line for banks as well. Without a healthy NIM, it will be detrimental to banking sector.
Profit is a very important way for banks to implement, replenish its capital. So when we retire, I'm not even sure, what kind of level, for the NIM. So for bigger question or more macro question, I think a central bank will be the better one to answer. But for us, I think the NIM is at a stable level.
Thank you, Mr. Ji. I think NIM is not only a result for banks' operation, but also a very important strategy that we need to focus on. And we mentioned that for the manual, compensation in the, deposit rate, the impact is more like a one-time thing. Going forward, we'll work to maintain NIM at a relatively comfortable level. So, let's bring to the end to the investor, session.
Next, going to the media, media QA session.
Good morning. This is from Xinhua Network. My question goes to Mr. Ji. The CPC Central Committee mentioned that to propel, to do good to the financial work and the five major articles. So what, concrete work you have done in, leveraging your advantage to support the real economy?
Okay, it's a quite big shift from, the micro NIM to a more macro topic. Yeah, I think the CPC Central Committee has mentioned a great topic. They mentioned about to strengthen the country with finance. So one thing is Chinese-style modernization, and second is the great revitalization. And, all the political bureau meetings mentioned about some concrete requirements. Well, the question you mentioned, I haven't analyzed it about, like, very detailed data.
But I mean, there are two very specific mentioning about the financial work. So I was asking my colleagues and the bank employees to implement the spirit of the CPC Central Committee. In the previous, all kinds of economic meetings and political meetings raised requirements on anti-corruption and also strengthening financial strengths. I also mentioned to my colleagues that under this new landscape or context, what's the requirement from the higher top? So to strengthen party leadership and the people-oriented financial work or Chinese-style modernization, and also to better play our advantages to support the real economy, is the must do for us. We will do whatever we can to implement that. So with our own advantages,
We're going to intensify resources, allocation, and business support, continue to right the five articles right. First of all, we're going to uphold the party leadership, continue to give the full potential of the support and the leading roles of the CPPCC, and also continue to complete government's key decision-making and policies regarding the financial work nationwide. This not only help us to well serve in the five major articles, but also support the new high quality productivity growth. So you can see that for financial institutions like us, the party committees to the business support and to our weekly party meeting, review meeting, those are the fundamentals and those are the routines.
We have to always bear in our mind our working philosophy, ideas, operational direction, and the philosophy need to be well in line with what is being proposed and required by the party committee and also the central government to these, financial organizations. And secondly, we also continue to deepen the strategic leadership, continue to revise development plan, integrating technology, finance, green finance, and inclusive finance, pension finance, and digital finance into our future strategies and work. The five articles are going to work together to continue to play the trump card. Thirdly, we give full play to the resources advantage, fully leverage Ping An Group as our shareholding holder, leveraging their channel, product, and brand, continue to give full play of the medical and healthcare business, and also accumulate our digital transformation long-term work, and, to steadily improve the inclusive finance.
More importantly, we should also continue to provide fundamental service to the local residents. More importantly, we're going to have the innovation-driven development, leveraging our great advantage located in Shenzhen, providing comprehensive digital operation, providing one-stop financial service, and continue to innovate on the business model and also operational model, continue to improve the customer service. So those are the five actions in the five major strategies. We have a very well-refined way. And you can see that, those are the five articles. It's not only from the party committee and the central government, and we also have our internal identification. We have to leverage the concrete actions, and they're going to provide you more specifics. But for sure, in this process, there might be other banks who would also do right job and a good job. Just want you to support us further.
Yes, the five articles are still the key of our work. It's also been orientation and the policy requirement for us to do. What we're going to do is to refine our floor plan, taking actions to implement the five articles. Next, friends from the media.
Hello, my name is Liu Xiaoyou, coming from Securities Times. I have a question regarding your asset structure. Ping An Bank continued to steadily downsize a high risk asset ratio, which will actually sacrifice the risk returns. Zhang Zhaohui also mentioned about you are going to elevate the medium risk asset ratio. What is those so-called assets, medium risk assets? What's the specific product? What would be your strategy? Thank you.
Thanks. Yes, indeed. For the future, this is indeed what we're going to do. Let's talk about product innovation first.
There are two stages we have to keep an eye on. Stage one, we leverage the high risk and high return product and the customers being stratified. If there's any good solution, we're going to reserve them. So periodically, you may see there are some product with ever-decreasing sales. For Xin Yi Dai, in the peak season, the sales is actually more than RMB 150 billion, but now it's been reduced to RMB 40 billion. We also have credit card and also other product. Those are the product we adjust the high-risk customers. As what you proposed in this process, this indeed will help us continue to advance the work. You can see by the beginning of this year, we already started this work, where for some of the corner store customers, we are working on it already. For example, our loans, product.
And you see that in H1 of this year, even if the retail loan's been declining, but still, for our corner store customers, the product themselves continue to go up. For stage two, what we're trying to do is to keep breakthrough on the medium-risk customers, especially on the product itself. Now, we have two customer categories that we're going to keep an eye on. First of all, for corporate and the retail business, the company has great advantage on supply chain application. So that's the reason we build up our New Era Loans, targeting food, clothing, housing, and transportation.... It's not only cover the retail and the customer. For the business end, the inclusive finance also going to benefit it.
This is scenario one, where for scenario two, and you can also see that, after operating the business, there are so many need. So in the existing, what we're trying to do is that for some temporary transitional product, and we are going to see, for example, like individuals, how they're going to continue to take care of the needs for some transitional need. This is indeed how we're going to support them. Well, for those customer, I mean, for the two target customers groups, those are also the one we're going to continue to advance the product. What would be the advantage of those product? For Ping An Bank, in digitalization or in the risk data, we have very good experience. Well, regarding the data-driven development, in the past, Ping An Bank did many investment with lessons and works being improved. So that's a reason.
We also continue to further refine our risk model. We continue to complete and refurbish the risk model. Thirdly, we're also going to keep count of the customer value and business value, identify the customers through accurate data, taking care of the customer needs to generate a comprehensive income. So what is a comprehensive service income? When we used to provide service for the high-risk population, our comprehensive income are coming from the loan income. There used to be some peak time. The pricing is more than 80% for those high-risk customers. And, there are comprehensive returns. I mean, their deposit and the settlement funds would be less. So in the near future, when we are operating the customers, we keep an eye on the comprehensive returns or the income, not only the loan income, but also the deposit yield.
So its settlement funds would be deposited with Ping An Bank. In that way, it can help us to further improve the product and the operation. That can help us to... We're going to do more work. You see that, what we're doing now is to, first of all, rely on our channel advantage, as I have already shared with you. For some of the so-called agency customer acquisition model, it's being optimized and be well managed. We downsize that. Well, more importantly, in our self-channels and integrated channel, we're going to leverage the great advantage to continue to advance the product. That can also help Ping An Bank to build our great business advantage, where we also have synergetic business to further improve the management. Regarding the business pace, in this year, we're going to release two new product to the customer stratification.
We're going to do the pilot project and promote it nationwide. That's all for my response to your question. Ladies and gentlemen, now we're going to allow two questions from the friends from the media due to time reason. Hello? I come from Jiemian News. I have a question regarding the business, repellent. There are many media coverage regarding Ping An Bank, which actually, further, hurt your reputation. How are you going to well manage that in order to make sure you have a still very good business reputation? Yes, indeed. In H1 of this year, there are so many media coverage about us. Ping An Bank, we are indeed in the process of reform and, transformation. We are easily to be captured by the media, so that's a reason we were being greatly reported by the media. I have a few points to share with you.
First of all, we have to keep examining and reflect what kind of improvement need to be done. For example, in Shanghai, our centralized management of the workplace, initially speaking, we don't have any plan for team downsizing and salary reduction. But due to history reason, our BU managers and our management line managers are located in Shanghai. Our management team are actually located in Shenzhen. Staff are working in Shanghai. You know that, no matter from the management efficiency and communication, there used to be many issues for the cross-city management. We do that because we really want to strengthen management, reduce risks, and improve efficiency. We do provide the workplace adjustment, plan, but, with less communications being made, which actually generate many of the media coverage.
So for us, I think this still needed to be further improved by us. Secondly, we feel every social media coverage is just like getting a cold. After getting the cold, you summarize, you accumulate your experience. Every one cold increase your immunity, otherwise, you're going to be physically hurt. But I think more importantly, you have to show good attitude, be sincere, having the words from the bottom of your heart, be humble to all the voices from the market. Always be more proactive, more systematic in well managing the media coverage, rather than be too passive. My third point: I think the best way of managing the media coverage is to make sure the event itself that may trigger public opinions do not occur at all.
So we still need to speed up the reform and transformation, emphasize on compliant management and operation to mitigate the public opinion from the source perspective. I have to tell you, we are a public company. We have 400,000 shareholders and more than 100 million customers. As such a listed company, sometimes everything we done will be magnified by the social media. We believe shareholder and the media are very good ways to help us to supervise our business and actions. I'd like to thanks everyone and the friends from the media for supporting and understanding us. We need to well solidify our work, protecting our brand, just like we cherish and care for our eyes. Also, maintain the financial stability and build the market confidence.
Thank you very much. I'd like to welcome one final question from the friends from the media.
Good morning. I'm from 21st Century News. My question goes to Mr. Xiang. We noticed that your operational expenses decreased quite a lot. So my question is, what kind of jobs you have done in decreasing costs and in improve efficiency?
Yeah, I'm in charge of the finance and financial planning. So for banks, I think one important work is to planning well in expenses. During good times, it's important, and during challenging times, it's especially important. So we have doubling efforts to reduce costs and increase efficiency. So two manners we have been doing. On one hand, we focus on the macro side, and on the other hand, we focus on detailed work as well.
Even though for floor area or for the utility bills, for the green plants in the office building, for printing, everywhere, we're trying to save. In bigger items like the IT input or... We would think about how to improve the efficiency to avoid repetitive development, to make the work more granular. Another important aspect is to improve ROI with the IT and technology. From Ping An Group, they focus on the digital work, like I mentioned, digital operation, digital management, and the digital improvement. So we have been implementing those initiatives within the bank as well to reduce manual work. This is a very important part. Another thing I want to mention is how to manage the bank's work in a digital way.
For example, for the data, financial data, how to make it more accurate and faster, how to interlink different systems as well. And for digital operations, to make our work more efficient, more convenient. So, like in the presentation slides, these three have been explained in very detail, and also under the bigger context of Five Major Articles, we will do the work even more granular. So since 2018, In the six years after till now, I think we have delivered quite good results. So it's from two perspectives. One is traditional, and the second is for digital empowerment. Thank you.
Thank you, Mr. Xiang. Reducing cost and improving efficiency is intertwined. Both sides are important. It's not like a one-side thing. Due to time constraint, we will bring to an end to today's conference. We cherish the discussion and the feedback from the market, so whatever questions you have, welcome to contact us with IR or PR, and welcome all kind of feedbacks and suggestions, and we will work to deliver you a better pay with the better results. Thank you. Welcome, and goodbye. Meet you the next time. Bye-bye.