Industrial and Business Financial institution of China Restricted (OTCPK:IDCBY) Q2 2024 Earnings Convention Name August 30, 2024 6:30 AM ET
Firm Members
Wang Liancheng – Company Technique and Investor Relations Division
Duan Hongtao – Senior Govt Vice President and Board Secretary
Liao Lin – President
Zhang Shouchuan – Senior Govt Vice President
Jingwu Wang – Senior Govt Vice President
Weiwu Zhang – Senior Govt Vice President
Convention Name Members
Junliang Chen – Guosen Securities
Richard Xu – Morgan Stanley
Jia Wei Lam – HSBC
Wang Liancheng
Pricey traders and analysts, good afternoon. I am Wang Liancheng from Company Technique and IR Division of ICBC. Welcome to ICBC’s 2024 Interim Outcomes Announcement. This convention is broadcast on-line. We’re additionally completely satisfied to have a number of the traders and analysts with us in individual.
I might prefer to introduce to you the senior administration members becoming a member of in the present day. President, Mr. Liao Lin, Senior Govt Vice President, Mr. Jingwu Wang; SEVP, Mr. Weiwu Zhang; SEVP, Mr. Duan Hongtao; SEVP, Mr. Zhang Shouchuan; our administrators, Herbert Walter and Murray Horn participated on this assembly in individual. Our administrators, Lu Yongzhen, Feng Weidong, Chen Yifang, Dong Yang, and Shen Si take part on-line. We even have normal managers from departments and subsidiaries right here with us.
Subsequent, I am going to give the ground to SEVP and Board Secretary, Mr. Duan Hongtao to transient you on ICBC’s interim outcomes and the primary options.
Duan Hongtao
Pricey traders and analysts, good night. Within the first-half of 2024, with complicated exterior surroundings, we pursued progress whereas guaranteeing stability superior the 5 transformations of clever danger management, trendy structure, digital driver, diversified construction and ecological basis and promoted its personal high-quality improvement with serving financial restoration.
Our major efficiency indicators maintained steady and working outcomes grew steadily with improved high quality. It is demonstrated in following three features, first sustaining steady operation and demonstrating working and improvement resilience, core efficiency indicators had been steady. The market-leading place by the tip of half yr, complete belongings had been greater than RMB47 trillion persevering with to guide the world.
Loans to prospects recorded practically RMB28 trillion, up by RMB1.8 trillion over the tip of final yr attributable to prospects was greater than RMB34 trillion, up by over RMB580 billion. Sound efficiency. Working revenue was RMB402 billion, and web revenue, RMB171.3 billion, sustaining the main degree amongst home banks.
ROA and ROE had been 0.75% and 9.53%, respectively, remaining at an affordable degree. NIM was 1.43%. Price-to-income ratio was 24.79% sustaining steady basis for operation. Capital adequacy ratio was 19.16%, sustaining the forefront amongst main banks around the globe.
NPL ratio was 1.35%. Allowance to NPLs was 218.43%. In 2023, the dividend totaled RMB109.2 billion, persevering with to have the best money dividend amongst A share listed firms. Based mostly on the common share worth of half one yr, dividend yields for every share are 5.79% and seven.97%, respectively. This yr, we actively promote interim dividend, planning to pay RMB51.1 billion within the subsequent January. In order to offer steady and sustainable returns for shareholders.
Second, belongings and liabilities rising steadily and the standard and effectivity of providers for the actual financial system improved. In half one yr, belongings grew steadily. The steadiness of loans to prospects elevated by 6.7% over the tip of final yr, and the steadiness of bond investments elevated by 9.8%.
Deposits noticed strong development, of which private deposits elevated by 5.8%. The deposit deviation was improved, was the bottom within the corresponding interval within the final 5 years, constantly optimizing the credit score construction and taking strong steps to spice up 5 priorities.
Company loans elevated by RMB1.37 trillion, which had been extra focused. The financial institution exercise accelerated the transformation of the actual retail enterprise by elevating the proportion of retail inclusive loans, private enterprise loans and private consumption loans, maintained excessive development. We really served the 5 priorities.
Loans to strategic rising industries steadiness was RMB3.1 trillion, up by 15%. Loans to website and enterprises RMB2.1 trillion, up by 19%. Inexperienced credit score was over RMB6 trillion, up by 14%. Inclusive loans, over RMB2.7 trillion, up by 22%. Pensions underneath administration RMB4.5 trillion, up by 8%. Loans to core industries of the digital financial system totaled RMB911.1 billion, up by 16%.
Third, deepening operation transformation and innovation and enhancing drivers of high-quality improvement. For half one yr, we accelerated reform and improved the transformation framework deepened the transformation contents and upgraded the transformation measures and work to comprehend the efficient enchancment in high quality, Hebei enterprise has continued to strengthen.
Company banking. Company loans totaled RMB17.5 trillion. Company prospects numbered 12.85 million. Mortgage to manufacturing exceeded RMB4 trillion, all main friends. Private banking. Private AUM totaled RMB21.8 trillion. The variety of personal banking prospects, the full quantity and increment of AUM, the variety of private pension accounts opened and the full quantity of contributions to all led the trade. Institutional banking, institutional deposits was RMB8.4 trillion main the trade.
We acquired a double excellence ranking the analysis of centralized cost brokers organized by the Ministry of Finance for the sixth consecutive yr. Market enterprise, AUM exceeded RMB30 trillion. Home belongings underneath pricey recorded CNY 24.5 trillion. We led the trade in bond investments, underwriting, overseas change buying and selling on behalf of shoppers market making, making new progress within the improvement of the ICBC.
ICBC continued to enhance three exterior and three inside platforms, strengthen the 2 supporting techniques of enterprise and knowledge, speed up the digitalization and intellectualization by serving prospects and empowering our personal staff. For the exterior platforms, MAUs of cell banking exceeded RMB230 million. MAUs of ICBCE life had been over RMB17.4 million buying and selling quantity of open banking over RMB200 trillion, enhancing buyer expertise.
Persevering with to optimize the shopper ecosystem and implementing GBC previous tasks in depth, we accelerated the mixing of 4 chains: Fund, customer support and worth chains, strengthening the shopper base. Private prospects totaled nearly 750 million, up by 9 million over the tip of final yr. Cell banking prospects totaled over 460 million, up by 12 million, main the trade.
Asset high quality, sustaining steady and the standard and effectivity of enterprise danger administration enhanced, ICBC continued to boost enterprise-wide danger administration system and mega danger coordination and improved danger gives and mechanism, speed up danger management intellectualization, all dangers are controllable, asset high quality steady.
By the tip of June, group-wide NPL ratio was 1.35%, down by 1B over the start of this yr. Credit score price was 0.7%, sustaining a sound degree. Dangers in key areas had been successfully addressed. Actual property NPL ratio continued to say no supporting native governments in stopping and resolving debt dangers primarily based on regulation and market guidelines. For small and medium-sized banks, we offer technical {and professional} assist. Dynamically integrating the ESG idea into operation improvement. We additional strengthened the ESG governance construction, continued to construct a three-in-one ESG info disclosure system. ICBC’s MSCI ranking was AA, main home friends.
Waiting for the second-half of 2024, ICBC will stay dedicated to the trail of monetary improvement with Chinese language traits, concentrate on advancing 5 transformations and attempt to attain a dynamic steadiness of worth creation, market place, danger management and capital constraints. The financial institution will embark on the brand new journey for ICBC after its fortieth anniversary with achievements in high-quality improvement and ship steady and sustained returns to shareholders from house and overseas.
Wang Liancheng
Thanks to Mr. Duan. Now could be the Q&A session. Please state your title and group earlier than asking the query. The primary query from this facet.
Query-and-Reply Session
Q – Unidentified Analyst
Thanks for the chance to boost the primary query. I am from UBS. I want to ask you a query concerning the revenue and web revenue. Within the first half of the yr, we now have seen your entire banking sector nonetheless faces stress of revenue and web revenue of ICBC has additionally decreased by 2%. So what measures have you ever taken — will you’re taking to stabilize working revenue and earnings within the second-half of the yr?
Liao Lin
Thanks to your query. Within the first-half of 2024, ICBC achieved a web revenue of RMB171.3 billion, a year-on-year lower of two%, as you talked about in your query. That is in step with the supply development of the home banking trade, as a result of we now have giant sum. However we predict this deviation continues to be inside our expectation. And likewise the interim dividend payout can be a great demonstration of accountable listed firm for ICBC and which can be our purpose to pay sustainable return to our traders.
The primary-half of the yr, the decline of our web revenue is very related with the macro rate of interest surroundings and in addition on the present stage. And that is additionally a scenario at present going through your entire sector. So for the entire yr, though we nonetheless have stress when it comes to working revenue and web curiosity margin, we now have seen some constructive modifications, and you’ll present robust assist for stabilizing annual web revenue.
First, deposit rate of interest declined in contrast with the start of this yr, and the soundness in deposit development important improved, benefiting from audible reductions in deposit benchmark rate of interest. The deposit price now within the first half is 1.84%, down by 5 bps in comparison with final yr.
And by the tip of July, we lowered our deposit benchmark to five to twenty bps, so which is able to additional drive our decline when it comes to our deposit prices within the first half of — within the second-half of this yr. So within the first-half, we now have seen very high-quality deposit development. The deviation of our deposit is 2.2%, the bottom in practically 5 years. On the identical time, we now have additionally optimized the deposit construction and the legal responsibility with decrease price has elevated proportion.
Secondly, our asset construction continues to optimize. Within the low rate of interest surroundings, we now have constantly strengthened adjustment of the asset construction and centered on top quality improvement of the — to serve the uncommon financial system. Efforts we made to stabilize the yr margin. Within the first-half of the yr, the loans and bond investments, which have larger yields elevated by 0.7 share factors and 1.1 share factors, respectively.
Within the first half of the yr, yield on interest-bearing belongings decreased by 5 bps, a smaller decline than within the first quarter. Furtherly, extra diversified revenue supply is regular enchancment in working revenue contribution. Based mostly on the primary contraction, we now have realized a web charge revenue of RMB67.4 billion, with the full quantity remaining the best within the trade domestically.
So with the common above talked about, the compression of our web curiosity margin has been slowed. This may reveal the resilience of ICBC. And amongst our charge revenue, our revenue from the funding banking syndicate. Sports activities ForEx commerce and the RMB company settlement has witnessed an excellent development and we now have additionally seized the developments to comprehend different noninterest revenue, which totaled RMB20.6 billion, elevated by 12%.
So we now have made achievement on this regard within the first-half of the yr, and we’ll proceed to take action within the second-half. Fourthly, the steady asset high quality steady enhancement of danger resistance functionality. By the tip of June, the NPL ratio of ICBC was 1.35%, 0.01 share factors decrease than Q1 finish final yr. And the supply protection ratio is 218.4%, up by 4.5 share factors.
Whole provision steadiness was RMB954.2 billion, elevated by RMB70 billion. And the mortgage impairment provision is RMB819.9 billion, elevated by RMB63.5 billion. In order you’ll be able to see, the mortgage provision ratio is up and all these index can present ICBC has performed our due half when it comes to the main function to offer assist to the actual financial system.
Within the second-half of the yr, we’ll proceed to deepen construction transformation, successfully forestall the management danger, strengthen asset liabilities, promote working revenue and push ahead reforms by actively adapting to the rate of interest in kind with — strived to serve the high-quality improvement of the actual financial system and in addition create long-term steady worth returns for shareholders.
Firstly, implement a number of measures to stabilize the curiosity margin and attempt to slender the decline within the web curiosity revenue. On the asset facet, we proceed to take proactive steps to excel within the 5 key monetary areas supporting the event of latest high quality productiveness, strengthen the credit score provide capability to the important thing methods, key areas and weak hyperlinks, whereas sustaining our main benefits in manufacturing, rising trade, inexperienced finance and personal enterprises accelerated the rise within the proportion of return, inclusive loans on the legal responsibility facet and to shut the funding loop continues to advertise the GBC Plus foundational tasks centered on the supply and the circulation of funds, attempt to extend the retention of low-cost settlement funds, centered on key eventualities of strengthen the competitors for present funds and that embed period administration into your entire deposit administration course of, promote a wholesome interplay between financial savings and AUM, in the end lowered the proportion of high-cost liabilities and guarantee a steady, but gradual lower within the deposit price.
Secondly, accelerated transformation monetary providers, improved new infrastructure providers resembling clearing, settlement, cost and price, deeply delving into the expansion potential of the 4 new enterprise areas, funding banking, asset administration, wealth administration and monetary buying and selling. Utilizing the worth ecosystem chain of funding banking, asset administration, wealth administration, monetary buying and selling to invigorate the standard steadiness sheet and supply more practical assist for income development.
In company enterprise, the mix of business and funding banking merchandise to create a complete service ecosystem, promote income development in funding banking, syndication custody and bond underwriting via buyer sharing and enterprise synergy. In fundamental providers continues to enhance the development cost settlement and consumption eventualities and promote income development in bank cards, third-party funds and RMB settlement merchandise.
In Wealth Administration, enrich the product portfolio primarily based on market rotations to fulfill prospects’ drivers’ wants for monetary asset, participation and appreciation, additional stimulating the expansion potential enterprise like fund distribution, wealth administration distribution and treasured metals.
Thirdly, asset high quality. We are going to proceed to boost our danger management and in addition seized the chance of some constructive indicators we now have seen to higher management the price. On one hand, we’ll proceed to boost our danger management and to make sure the general asset high quality, steady momentum. And on the second, we additionally proceed to boost our deserve therapy and disposal of non-performing loans, in order to create a extra coordinated new steadiness between revenue and expenditure. Thanks.
Wang Liancheng
The following query.
Junliang Chen
Thanks for the chance. I am Junliang from Guosen Securities. My query issues the expansion. Lately, we now have noticed that banks appear to face mortgage development decline, lower from scale, combine and pricing transient us with the half one yr scenario? And likewise, regulators have modified their wording about scale. So do you propose to cut back your mortgage development plan for full-year?
Wang Liancheng
I am going to invite Mr. Zhang Shouchuan to reply the query.
Zhang Shouchuan
For half one yr scenario, we observe the macro insurance policies, coordinate tempo power, focus of funding and financing, accelerated rejuvenation of excellent fund and promote the transformation and upgrading of mortgage combine. In serving the actual financial system in its restoration, we now have performed the function of main drive in Encore.
First, scale an impressive, each the friends, the home RMB loans steadiness was over RMB26 trillion, up by RMB1.74 trillion attaining a steady development on the excessive base. Second, mortgage development was extra focused. The home branches company loans was up by RMB1.4 trillion, of which the medium- and long-term proportion was 72%, up by 3 share factors year-on-year.
We elevated our assist for five priorities, to majors, to new manufacturing, meals, vitality, sources safety. The rising — strategic rising industries loans steadiness was over RMB3 trillion, manufacturing over RMB4 trillion, inexperienced loans over RMB6 trillion. Specialised in new loans, inclusive finance, agricultural loans had been each grew over — by over 10%. We observe the insurance policies of our actual property market, high-quality developments and assist financing coordination mechanism for city actual property markets, assist the steady and wholesome developments of the property market.
Third, the momentum continued to select up. We actively sensify the folks’s consumption want. The home non-mortgage loans was over by RMB300 billion year-on-year development. The — we adapt to the financial transformation upgrading, the relending of the loans to rejuvenate the excellent loans was over RMB2 trillion, growing the effectiveness of fund allocation.
Fourth, the tempo of development was balanced. The every day common of increments of RMB loans was over RMB2.1 trillion, up by 9%. We crossed the yr and quarter and achieved steady development. For the second half of the yr, the Chinese language financial system operates stably and making progress, proceed the restoration. So the strong financial coverage is concentrated on steering industrial banks to maintain an affordable development and balanced development of loans.
So for the way forward for the Chinese language financial system and for our personal high-quality improvement, we’re totally assured. Within the second-half of the yr, we’ll proceed to implement macro insurance policies and promote the steady and affordable development of loans and in response to market modifications, we’ll steer the objectives of mortgage development, preserve our aggressive web edge, enhance {our capability} of serving the actual financial system and proceed the main place.
First, we’ll proceed to concentrate on serving the most important methods and high-quality prospects. We are going to use the group’s complete monetary benefit to assist the most important methods, fields and weak hyperlinks when enhancing the inspiration, we’ll create new development factors. We are going to do good in guaranteeing timing supply and the assured housing to assist the brand new mode of actual property markets. We are going to moderately improve our assist for medium- and long-term loans to the most important tasks.
Second, we’ll proceed to offer larger high quality and extra diversified retail finance providers. We are going to proceed our assist for private consumption, private enterprise loans and bank card and different retail and inclusive loans, and improve their proportion within the mortgage combine. We are going to modify the mortgage combine about mortgage loans within the second-hand homes.
Third, we’ll proceed to optimize the combination of the credit score sources. For the high-quality belongings, we’ll proceed to strengthen our NPL disposal and coordinate the event amongst areas and improve the coordination between mortgage development and financial improvement of the areas. Thanks.
Wang Liancheng
Thanks. At the moment, we are also joined by many analysts and traders on-line. So subsequent query from on-line.
Richard Xu
Thanks for the chance to boost the query. I am Richard from Morgan Stanley. My query consists concerning the asset high quality. Seen to view of the macroeconomic, the supply belongings high quality of ICBC maintained a steady degree. Trying ahead, we nonetheless face stress of additional slowdown of the macroeconomic. So what’s your view in your present asset high quality degree? And what key areas do you assume it wants additional focus and a spotlight? And all of us pay a whole lot of consideration to the chance in the actual property sector. So what’s your view on this regard?
Wang Liancheng
Thanks. I am going to invite Mr. Wang Jingwu to reply this query.
Jingwu Wang
Thanks to your query concerning the asset high quality. Within the first-half of 2024, ICBC strike a steadiness between top quality improvement and high-level safety. We concentrate on the primary themes of danger prevention, compliance enhancement and improvement promotion. We’ve tightly managed the credit score danger throughout your entire scope and cycle. Dangers in key areas have been resolved in an orderly method and the standard of credit score belongings has remained steady and controllable.
As of the tip of June 2024, as enterprise NPL ratio stood at 1.35%, a lower of 1 foundation level from the tip of the earlier yr. From a enterprise section perspective, the asset high quality within the company sector has continued to enhance. The general NPL ratio for home department company loans was 1.63%, down by 14 bps in comparison with the tip of final yr. The NPL ratio for all main industries have additionally seen very lower of decline for the reason that starting of the yr with notable reductions of 40 bps within the manufacturing and wholesale and retail trade.
Whereas the NPL ratio within the retail section has elevated as a result of slowdown of financial development and revenue family, however the general asset high quality stays at a comparatively good degree. In accordance with early prevention precept, we’re taking a number of measures to boost good danger management, restoration mechanism and disposal of NPLs.
When it comes to the chance in the actual property sector, we now have lengthy adhered to a prudent and cautious enterprise philosophy following the 3-in-1 asset choice standards that think about area, buyer and venture. We concentrate on constructing a diversified and balanced actual property funding and financing construction, moderately controlling the proportion of actual property within the complete mortgage portfolio and strictly managing the proportion of loans to particular person actual property firm.
In response to the brand new traits and conditions which have emerged in the actual property sector lately. ICBC has adopted a complete strategy specializing in growing, stopping, mitigating and managing dangers by optimizing new funding and serving to to ascertain new improvement fashions for the industrial actual property sector successfully managing present belongings growing efforts to order and clear dangers related to high-risk enterprises and tasks.
As of the tip of June, the steadiness of company loans, improvement loans — home improvement loans, the steadiness is RMB852.1 billion solely accounting to three% of the full loans and NPL ratio of the developer loans down — was down by 2 bps over — as stability of our developer loans was fairly steady. Moreover, adequate provisions have been made for danger loans to completely cowl potential losses and dangers.
Trying forward, within the second half of this yr, we’ll proceed to stick to the purpose of steady improvement, strengthen the safety improvement line and act as a stabilizing drive in sustaining monetary stability and leveraging larger degree danger administration to assist high-quality improvement.
We are going to improve administration empowerment, continues to strengthen the bank-wide danger management system, optimize coverage assist, precisely handle key space mortgage placements and improved asset allocation capabilities. Moreover over deepened digital and clever empowerment constantly superior building of an enterprise-level clever danger management platform makes use of early warning capabilities for sensible software attaining forward-looking and exact danger administration.
Wang Liancheng
The following query is from on-line.
Jia Wei Lam
Thanks for the chance to boost questions. I am Jia Wei Lam from HSBC. I’ve a query relating to capital and dividend. We’ve observed that ICBC has comparatively excessive capital adequacy ratio. Do you’ve got any capital plans sooner or later? Now the sector is going through the NIM compression stress, how do you steadiness the connection with — between capital adequacy, asset development and dividend stability and the way do you create sustainable returns for shareholders?
Wang Liancheng
I am going to invite as SEVP, Mr. Duan Hongtao, to reply the query.
Duan Hongtao
At current, ICBC’s capital is nicely managed. The capital plan is already carried out. Within the first-half of the yr, our precept is inside, exterior and balanced we actively promote industrial banks, capital administration pointers, implementation. We use retained earnings as the primary channel to replenish capital. We optimize capital administration and elevated capital effectivity. On the finish of second quarter, ICBC’s energy was 19.16%, CET1 and Tier 1 capital adequacy ratio had been 13.84% and 15.25%, respectively, sustaining an affordable and strong vary. In serving the actual financial system, strengthening danger resilience, we lay a strong basis.
First, we improve inside capital accumulation. Our revenue for the primary half of the yr was RMB171.3 billion. Deducted dividend and fairness instruments curiosity, we now have retained earnings of RMB56.6 billion. We’ve been sustaining a sturdy profitability. We offer good returns for shareholders and traders and in addition obtain self-replenishment of capital.
Second, we already implement exterior capital replenishment. In first half of the yr, ICBC’s CNY 370 billion capital instruments issuance plan was permitted by the regulator. We glance into the asset improvement and market rate of interest improvement development. We already accomplished RMB50 billion perpetual bond and RMB50 billion Tier 2 capital bond issuance by the tip of August. We implement maturity alternative of the excellent instruments. So the entire curiosity cost price was lowered by 26 bp.
Third, we actively carried out new guidelines necessities. This yr, we now have seen the going down of capital pointers in capital allocation, capital measurement and danger restraint. There are new guidelines, so we prioritize the capital extension to key areas, the RWA development was decrease than that of complete belongings, saving capital occupation attaining steady transition between outdated and new guidelines.
Fourth, we actively participated in TLAC instruments innovation. In first half of the yr, guided by regulators and shareholders, we carried out the issuance of RMB40 billion TLAC noncapital instruments, the primary in home markets receiving excessive recognition from the market. As G-SIB, we now have been a mannequin for the friends and offered a brand new and high-quality funding targets for the market. You additionally raised questions on web curiosity margin stress. The NIM change was modified, was influenced by macro economies and industries surroundings modifications of NIM for ICBC is just like different friends.
In contrast with the final phrases knowledge, we now have seen some marginal enhancements. We pay excessive consideration to NIM administration in low rate of interest surroundings. We adjusted asset and liabilities allocation, optimize giant belongings allocation and stabilized web curiosity margin. First, we optimize mortgage combine and make focused pricing. Within the first-half of the yr, the brand new RMB loans rate of interest was elevated by 4 bps in contrast with fourth quarter final yr. The rate of interest change was just like the sector.
Second, the deposit curiosity cost ratio was lowered. There are a number of constructive curiosity components on this regard. In first-half of the yr, the brand new deposits rate of interest was lowered by 29 bp than final yr, an impressive degree among the many friends. Sooner or later, we’ll coordinate belongings and liabilities, promote 4 transformations and promote web curiosity margin to take care of in a comparatively affordable vary.
Lately, we’re actively implementing interim dividend, contemplating that our capital was ample, interim dividend wouldn’t deliver outstanding stress to our capital adequacy ratio. With the dividend payout ratio unchanged, we moderately elevated the frequency of dividend is sweet for smoothening the capital adequacy ratios change.
Sooner or later, we’ll proceed to coordinate the affordable development of amount, refined administration of pricing, efficient enchancment of high quality and focused management of dangers and to assemble a triangular of effectivity among the many capital belongings and fund in order to create a clear and wholesome steadiness sheet and a balanced and coordinated and sustainable revenue sheet and improve our sustainable improvement functionality. Thanks.
Wang Liancheng
We’ve printed an inventory of the questions from traders. And all these questions could also be centered on dividend payout and Mr. Duan answered this query. So final query, please.
Unidentified Analyst
I am from Citi. I want to ask a query concerning the monetary advertising funding. Within the presentation, firstly of this yr, we now have seen ICBC’s bond funding has realized a outstanding revenue. So may you present extra particulars of ICBC’s bond funding efficiency? And what are your future plans for increasing the bond enterprise?
Wang Liancheng
I want to invite Mr. Zhang, Weiwu, to reply this query.
Weiwu Zhang
Thanks to your query. On the finish of June 2024, as bond funding steadiness had elevated by 9.8% in comparison with the tip of final yr, with the steadiness of RMB bond funding rising by 10.4%, whereas sustaining a powerful concentrate on authorities bond investments and guaranteeing a market-leading scale in key classes resembling native authorities bonds, ICBC has optimized the construction of credit score bond funding across the 5 key monetary areas.
From January to June, the expansion price of latest RMB company bond funding in key areas resembling superior manufacturing, technological innovation and inexperienced environmental safety exceeded 60% year-on-year. Moreover, ICBC has actively offered citation and market-making providers to each home and overseas traders, striving to boost the exercise and the liquidity of the home interbank bond market.
On the finish of June, the bond buying and selling quantity between us and abroad institutional traders elevated by 35% year-on-year, in step with the expansion price of our financial institution’s bond market-making quantity. Lately, the Central Financial institution has made some new motion. And likewise, we now have seen some new modifications within the demand and the availability of bonds. So trying forward, ICBC our bond enterprise primarily based on the ideas of adequate power, regular tempo, optimized construction and a sustainable pricing, striving to attain a steadiness between performance and profitability to make larger contribution to serve the actual financial system and top quality improvement of the financial institution.
So firstly, to offer complete assist for the actual financial system, we’ll proceed to optimize account and portfolio constructions, strategically allocating funding sorts, maturities and currencies to steadiness liquidity, safety and profitability. Efforts can be made to boost the income contribution of bond funding and buying and selling, aiming for high-quality deployment. When it comes to assist for key areas, we’ll deepen our concentrate on the important thing — 5 key monetary areas by growing investments within the main methods, key sectors, necessary areas and weak hyperlinks.
Secondly, we’ll present our market-making duties. We are going to proceed to be dedicated to our function as a market maker, serving to to make sure the environment friendly operation of the home bond market. We are going to comprehensively enhance market-making service ranges, strengthen market analysis evaluation and judgment capables’ and intention to extend buying and selling enterprise revenue, whereas sustaining market liquidity.
Efforts can be made to develop the vary of counterparties and prolong the service attain. Constructing on present abroad buying and selling counterparties, we’ll proceed to develop relationships with overseas sovereign and nonbank institutional shoppers. At identical time, the financial institution will work carefully with monetary infrastructure regulation, regulatory our bodies to optimize bond market regulation and preserve good buying and selling order.
Firstly, we will even attempt to — we’ll intention to completely leverage synergies between bond underwriting and funding facilitating interconnected development in these areas. We are going to proceed to combine our buyer enterprise expertise, know-how and model benefits to constantly optimize the ecosystem of bond issuance and the distributors. On one hand, we’ll appropriately decrease the credit score focus of home issuers, whereas supporting extra high-quality issuers resembling overseas middle banks, worldwide improvement establishments and multinational companies to subject bonds domestically, thus serving to to boost the function of RMB as financing foreign money.
Then again, we’ll proceed to refine our bond distribution community, enhanced distribution efforts and capability and obtain differentiated administration of danger urge for food for bond funding and distribution. This can assist the interconnected improvement of the first and the secondary bond market and enhance the market layered bond market system that integers funding financing.
Wang Liancheng
On account of restrict of time, the Q&A session will shut now. Thanks for the questions from our traders and analysts. If in case you have additional questions, be happy to contact our IR staff. Please present assist to ICBC, as at all times, and we will even proceed to attain steady operation of ICBC in order to ship steady returns to ICBC. So that is the tip of the interim outcomes announcement. Thanks, once more.
