Industrial and Commercial Bank of China Limited (IDCBY) 2021 Annual Results - Call Transcript

Industrial and Commercial Bank of China Limited (OTCPK:IDCBY) 2021 Annual Results Conference Call March 30, 2022 6:00 AM ET

Company Participants

Liao Lin - President

Zhang Wenwu - VP

Zhang Wenwu - VP

Guan Xueqing - Board Secretary

Lu Yongzhen - Directors

Feng Weidong - Non-Executive Directors

Cao Liqun - Non-Executive Directors

Chen Yifang - Non-Executive Directors

Dong Yang - Non-Executive Directors

Tony Neoh - Non-Executive Directors

Yang Siu Shun - Non-Executive Directors

Shen Si - Non-Executive Directors

Nout Wellink - Non-Executive Directors

Fred Hu - Non-Executive Directors

Conference Call Participants

Unidentified Company Representative

Friends from the media, investors, analysts, good afternoon. Thank you for attending this result release. Due to the impact of the pandemic, this release is carried out with the online stream and a telephone conference. Before that we have collected questions from the investors and meanwhile, you can also leave messages at our platform, and we'll choose the questions to respond.

In this conference, we have Mr. Liao Lin, President; Mr. Zhang Wenwu, Vice President; Mr. Zhang Wenwu, Vice President and Mr. Guan Xueqing, Board Secretary. We also have the presence of Directors, Mr. Lu Yongzhen; Mr. Feng Weidong; Ms. Cao Liqun; Ms. Chen Yifang; Mr. Dong Yang; and also Mr. Tony Neoh; Mr. YANG Siu Shun; Mr. Shen Si; Mr. Nout Wellink; and Mr. Fred Hu.

We will ask Ms. Guan to first give us introduction.

Guan Xueqing

Last year, faced with a more complex and voluntary external environment, ICBC conscientiously implemented the decisions and arrangements of the CPC Central Committee and the State Council. We insisted on the 48-character guideline, we served the real economy and promoted the - bringing out strength to make up weaknesses by laying a solid foundation we have delivered and outstanding answer sheet.

First we strengthened our value creation capabilities, strong optimal big are the features the foundation for strong was solidified, our capital adequacy ratio was 18.02 point by 1.14 percentage points up forming other global banks. We issued AT1 - equivalent of RMB140 billion and T2 capital bond RMB90 billion. We -- The RWA growth is lower than the loan growth by 3.2 percentage points. The provision balance increased by over RMB72 billion.

We ranked top among the Top 2000 banks for Forbes and Top 1000 banks for the bank - the banker magazine for consecutively nine years. Second, the quality of being optimal increase ROE was 12.15% ROA, 1.02%, NIM was 2.11% outperforming other banks. The shrink outperformed other banks. The non-interest income reached RMB170 billion up by 11 points of which net fee commissioning income was RMB133 billion outperforming other banks.

The advantage of being big solidified further assets capital deposit loans continue to rank first. The total assets exceeded RMB35 trillion operating income more than RMB800 billion. PBOP up by was RMB600 billion net profits, was up by 10.2% ranking first. We continue to create return for shareholders, our aggregate cash dividend totaled over RMB1 trillion. This year, we plan to distribute RMB2.933 for 10-share with tax which will be deliberated on the Annual General Meeting.

According to this dividend arrangements and the share price by the end of 2021, the dividend yield for A and H share were 6.33% and 8.15%, respectively. Our capitalization by the end of the last year totaled more than RMB200 billion ranking first among Chinese banks.

Second, we improve our service for the real economy. For last year, we integrate ourselves into the new developments landscape. We prioritize our main businesses and we coordinate total volume increment quality, pace price of the investment and financing. We improve the adaptability, competitiveness and inclusiveness the total volume of increased - investments and financing increased domestic RMB loans increased by RMB2.12 trillion up by more than RMB200 billion for bonds up by more than RMB700 billion up by 9.5%.

The balance ranked first for project loans is up by several RMB100 billion by RMB4.46 billion y-o-y. We increase our support for key regions with upgraded structure. We serve the manufacturing. We give into full play our advantage in this regard. Last year, our loans for manufacturing recorded over RMB2 trillion up by RMB220 billion for strategic new loans, balance recorded more than RMB1 trillion.

For green finance, the credit was RMB2.48 trillion based on the features of small micro enterprises. We provide full Lifecycle Services, the inclusive finance increments, reached more than RMB300 billion up by 52.5%. The coverage was also improved, agricultural related loans balance reached RMB2.66 trillion, the customer base was solidified by the end of last year. The customers deposit balance reached RMB26 trillion, the daily increment was RMB1.81 trillion, the volume ranked first around the world.

The personal customers total number recorded over RMB700 million, the domestic branches AUM for personal customers was RMB17 trillion. We are the first to have more than RMB100 million in terms of MAU for personal mobile banking. Our corporate finance advantage was also enhanced. Also customer service was more effective by GBC integration. We increased our service quality for customers.

For key scenarios building, we accelerate the pace. We expanded 1.2 trillion government customers for fee end customer increased by 520,000. Thirdly, our risk management is increasingly effective. We plan ahead see the bank from the small recovering time drawing inferences our asset quality increased steadily. We perfect the comprehensive risk management system.

We manage four books comprehensively, one for domestic and overseas investors one for off balance sheet and on balance, one for commercial and investment banking and other business and one for online offline business. Our principle is to manage people, money and firewalls and also active prevention, smart control and comprehensive management. We strive to build a comprehensive risk management system.

We enhance our asset management strengths to improve our operation capability in risk cap assets. So as to achieve a stable social market risks. The asset quality, improved risk management is more effective - NPL ratio both declined NPL balance was more than RMB200 billion down by RMB5.49 million, NPL ratio 1.42% down by 16 BP over to ratio down by 21 BP see those difference was negative more than negative RMB38 billion.

Provision coverage ratio was also were led by strategy and driven by technology. We look to the 45-year plan and implement our strategies build our digitalization. We promote our strategies. We bring our four business advantages. In corporate finance our balance of deposits was over RMB13 trillion we then came first. The institutional and T2 Banks was RMB8.8 trillion ranking first for settlement.

The fee based income was RMB11.3 trillion ranking first, for transaction finance then net profit for financial markets business are recorded over RMB100 billion. The assets management totaled RMB4.9 trillion. The key strategies are proceeded stably for number one personal bank, personal deposits, loans, increment, both increased by over RMB800 billion. For key regions competitiveness improvement strategies, the increments accounted for 74% of the total for the coordinated development of rural and urban area.

The coverage was improved also we promote the ICBC building ECOS was awarded by PBOC's special from eco, digital eco digital assets, technology, infrastructure and gene from the five dimensional patterns. We improve the customer experience and operation value. Last year, we invested RMB26 billion in this regard accounting for 3.02% of the total up by 8%. Also we are here to ESG development.

We have green finance committee in the management we have yielded fruitful results. We contribute to the society's development. In the rural in the poverty alleviation regions, the loans exceeded more than RMB100 billion. Our ratings in ESG from the international institutions are improved.

This year ICBC will firmly commit itself to the path of financial developments with Chinese characteristics continue to create long value - long-term value returns and write a new chapter in building a world-class modern financial enterprise with Chinese characteristics. Thank you.

Unidentified Company Representative

Thank you for the presentation of Mr. Guan. Now let's come to the Q&A session. In order that more friends and investors could have opportunities, I suggest that each one has only one question and tell us your institution and your name before asking question. Now the first question please.

Question-and-Answer Session

Operator

First [indiscernible].

Unidentified Analyst

Thank you. Under the impact of the pandemic and that the economy is going downward. It is bounded, that the business and the mentality of the bank will be at the impact. Would you please introduce the gross high growth of ICBC and these highlights? And what's the situation in terms of card fees and share profits with real economy? And what's your plan and measures for this year?

Liao Lin

Response from Mr. Liao Lin President. Since on behalf of Mr. Chen Siqing our Chairman, let me express my gratitude for the support of friends from the media investors and analysts. I also thank the friends from different from [indiscernible] agency for your questions, actually you have is they are several questions. The first is about the 2021 high quality growth and the highlights of our business operation.

Last year, we know that it’s a very important year. And it's also for ICBC to implement its new three-year - strategic development plan. We carry out the government policies and stick to the keynote of seeking progress while maintaining stability. And we coordinate economic control and the growth so that our new plan could have a very good start. And so the growth of the economy and I believe that we handed out very impressive answer sheet of ICBC.

From the just disclosed indicators of ICBC, I could say that we have the following features or highlights. First, the strong foundation is further solidified CAR has exceeded 18% it's among the best in the major banks globally NPR ratio 1.42% up by 16 basis points. The coverage ratio raised to about 200% for the first time in the past seven years and the excellent quality is further improved.

The profitability is improved ROA/ROE are both better than the previous year. And our NIM is at 2.11%, devaluation is relatively good 10.2%. In 2021, our asset capital deposit and loan maintained the first step globally and the capitalization and the total dividend payout is the first among domestic peers. We also shows the feature of specialization. For example, personal banking business, we have more than 0.7 billion customers and personal loans at RMB8 trillion.

And deposit at - personal deposit at RMB12.5 trillion. AUM is about RMB17 trillion all leading among peers. In terms of corporate business, our loans to the manufacturing sector exceeded RMB2 trillion. Green finance loans reached RMB2.48 trillion and inclusive finance, the loans exceeded RMB1 trillion. And the growth speed is more than - 50%. We also have the strong support to the strategic industries.

So we have this new feature of a specialization and we have this new drive. And we expect to a very bright future. The last year's performance shows that we have struck a balance among value creation market position, risk control and capital constraint. And we showcased ICBC's feature of stability and resilience. And it is our opinion that our good performance comes from the following three aspects.

First improve the quality and effects for serving the real economy. And we have reached the growth in terms of growth in quality and improvement in quantity. Among the complicated external environment, we carry out this major task of the finance work and serve the real economy while realizing our own high growth. For example in last year, we have - the increase of RMB loans is a RMB2.1 trillion and results in the increase of interest income by 6.4%.

Second, the new-three year plan is implemented and our transformation is bringing up more profits. We have implemented our layout for our base and our new strategies such as the number one personal banking business has reached very good breakthroughs. For example, the non-interest income features by the fees under commissions reached RMB170 billion up by 11%.

Three, our ability of management is improved and that the cost control is more pertinent. We have this innate stresses, innate value and through the quickening of digital transformation, we will further cut costs and to bring up more effects. And we also collected - the collected assets from the return of assets. And you also asked about the measures for this year. I think the key word is stability, progress and reform

For stability, we prioritize - our priority and help realize the stability targets for the macro economies. We want to reach more results and a reform and implement. We will try to accelerate the building as a first-class modern financial institution. And for the performance of this year, we are quite confident mainly from the -- for the following three reasons. First, the economic outlook of China is the brightest backdrop for ICBC's performance. The external environment is increasingly complex, but from the data from the previous two years, we have seen the warmth in the economy of China. The stable growth of economy will lay a solid foundation for the stable development of finance.

We will stick to our major tasks and maintain -- to make sure that the credit investment and bond investment is growing steadily. And while having maintaining the macro-economic stability, we have this high-quality growth of ourselves. And also, we have this annual strategic development plan that is also our strength.

We'll implement the strategic layout to carry out the major strategy tasks and carry out the GDC foundational projects and further optimize, and try to become stronger, and certainly, the deepening of reform and of innovation, that is the deepest potential for ICBC's growth.

This year, we'll make three breakthroughs. One is to deepening the building of customer service and sales system, to build a very sound customer ecology. Second, optimize the enterprise risk management system so that risk control is more effective and forward looking. Three, we'll have this digital transformation to build new models and form more growth points and more drives for further growth.

So the first part is about the backdrop. The second part is our -- can be said to our immune system, and third is our drive. And about the question about the cut of this and share profits with the real economy, we carry out our work last year. First, we have this reduction and this cut and this moratorium. First, the new -- the average interest rate for corporate loans, new corporate loans and the new inclusive loans dropped by 15 and 18 bps respectively.

Second, free service items have increased from 109 to 149. And we take the -- proactively exempted the fees for the SMEs with operation difficulties. And we continue to have the moratorium of principles and interests to help lessen the financial burden for our customers.

We realize that we need to pay attention to the current profits from customers, but we also need to pay more attention to the long-term comprehensive value for us. Cut fees and share profits with the real economy is a native requirement for fulfilling the social responsibility. It is also a sure path for a bank to seek to the -- to have this commercial stability. And in the future, we're tied to over difficulties with our customers and help the financing cost to be stable and have some decrease.

Next question please.

Operator

The next question is from [Joshua Shuai] of CICC.

Unidentified Analyst

Thank you for the opportunity to raise questions. Congratulations to the management to deliver such an outstanding financial results which is the best among the past decade. So ICBC is both strong and big. Last year is the first year for President Liao to be the President of ICBC, that bring out preference to make up for weaknesses and lagging, laying a solid foundation. Such strategy was impressive. Is there any new breakthrough and what strategic values have been created?

Liao Lin

Thank you for your continuous attention for ICBC's strategies' implementation. The strategy should be raised today, because they are the main pillars for our new plan. Last year is the first year, but the strategy has achieved great results, supporting our high quality development for the implementation.

There is a specific chapter in the annual reports. You can refer to that. I would like to make a brief introduction for brain out sprints. We continue to solidify institutional, corporate settlement and transaction finance in our advantage. These corporate finance is our traditional strength we should give into full play. Last year they served the new development landscape and served the new -- the real economy's demand, and they have played a leading role. For example, in institutional finance, the deposit balance ranked first for corporate banking. RMB loans balance recorded over RMB 10 trillion for the first time.

In making up weaknesses, we continue to integrate the holistic implementation and key breakthroughs. The number on personal bank, preferred bank for ForEx business, key regions competitiveness, improvement and urban and rural coordination developments, are the key strategies. We bring out our strengths and make up for weaknesses, and cultivate our new advantages.

For example, in number one personal bank, many indicators have recorded new high. For example, the agency customer exceeded 100 million with the agency fund, reaching over 5 trillion for personal loans, and PLN and RMP ratio both declined. In urban and rural coordinated, planned strategy we solidified the achievements in poverty alleviation and rural rejuvenation. We innovated the special financial service system in urban rejuvenation, with the long chain of ICBC Xingnongtong. Our agriculture related loans reached 2.66 trillion, up by 17.9%, higher than the average growth of RMB loans in laying a solid foundation.

Our priorities are FinTech and Financial Innovation. In FinTech, we have two milestones last year. We are proud of that. First, our ECOS achieved the only special award by PBOC's first FinTech development awards. Second, our data management capabilities have received the certificate of the highest grade by ministry of industries in infotech. We are the only ones who receive the award. We're happy to see that in financial innovation, we prioritize our main tasks, manufacturing, tech innovation and green finance are our priorities.

The volume function and features are our -- our are concerns. In laying a solid foundation, we solidified risk management and customer base. We adopted a pruned management approach to people, money, defense lines and bottom lines. Active prevention, smart control and comprehensive management are the paths for online-offline and the four books we adopted the approach to tighten the safety valve in customer based on GBC integration, we expand customer base and deposits growth.

Last year, we have new corporate customers totaling 1.04 million for customer, personal customers increased by 23 million. The foundation for high quality development was further enhanced. These are the major breakthroughs. This year we will continue to lay out their strategy, so that the big elephant can dance, ICBC can continue to support the development of the economy. Thank you.

Liao Lin

More questions please, 21st Century Economic News.

Unidentified Analyst

Thank you for this opportunity. I'd like to have a question that it is pointed in the Central Economic Conference that the Chinese economy is at three pressures that is demand contract impacted supply and weakened expectations. And it is required that the finance sector further improve the service to the real economy was the plan for, what is the credit for ICBC for last year and what's your new arrangements for this year?

Zhang Wenwu

About personally speaking, first, I'll say something about the credit investment. We carry out the requirements by the government and we arrange the investment and financing amount pace and structure and strengthen our support to the real economy, we have the following three features first, we have stable growth for credit in the past year is the growth is about RMB2.9 trillion. And the growth and the increase and increment are both among the top in terms of our peers and we also have a new bond investment by more than RMB760 billion and our range for investment is more balanced.

And last year we emphasize on the average gross and maintain the pace and effect of the credit, for the past year the feature is that the -- the feature is that the first part of the demand is high and the second is lower and we adjusted our range for the investment and also support for this year. So the investment direction is we have the key features to support the key areas and the development.

And another gross is that our green finance and green loans. The scale is a RMB2.48 trillion, in terms of technology innovation, the key is the part goes to the new technology and loans to the strategic new industries has exceeded RMB1 trillion and for the enterprises featuring our specialized sectors, our credit support has extended to 15,000 customers in terms of inclusive finance we have this digital inclusive finance and Supply Chain Finance. And the loan to inclusive of SMEs exceeded increased by 88%.

That's the basic growth in the past several years. You asked about our mentality for credit business this year. It is, since last year we have the central economic conference and we have already have two sessions this year and we will carry out the government policies and we'll follow the arrangement of the government and ICBC will put more emphasis on supporting the stability of growth and will use the strength in a forward-looking coordinated and powerful manner. So, that the new quality will have appropriate growth and structure will have proper adjustment to continue to share profits with the real economy and to play a more important role in supporting and maintaining the macro economy.

First in working in the forward-looking manner, we will have the mentality that we'll have more increase as compared to the same period last year and around the cross cycle and counter cycle adjustments will relatively have early investments in accredited business and will have coordinated work, we will have this link between credit investment and bond investment, so that fiscal and monetary policies that could work together better. Second, regional coordination will support the key strategic areas, coordinated the key areas and the low growth areas.

So that regions could be developed in a more coordinated and balanced manner. So we have more pertinent work that is to pertinently serving the government's policy and strengthen our support to manufacturing industry, innovation, green growth and inclusive finance and supported the Belt and Road Initiative and use digital manners to better serve the SMEs and new rural area operating players and serve the demand for the new citizens of the cities, so that our financial services have wider coverage and have a wide, better accessibility to make our own contribution. Thank you for your questions.

Operator

The next question is from [indiscernible] of Morgan Stanley.

Unidentified Analyst

In capital markets and in the financial markets, we are highly concerned with wealth management because it's a key point for life capital transition in the growth of fee based income. Some banks have performed well in this regard without performing net profits, for ICBC what's your concern for wealth management? Thank you.

Liao Lin

Vice President, Mr. Zhang Wenwu will answer the question.

Zhang Wenwu

Thank you for your question. As you have said ICBC is a traditional bank featuring corporate finance. If you look at ICBC's balance sheet, ICBC is also a large bank for wealth management. I'll give you a couple of data first last year as a business domestic branches AUM totaled RMB17 trillion, generating profits for customers of RMB250 billion through agency wealth management business, we reported non-interest income of RMB24.5 billion of which the wealth management customers totaled 21 million, AUM 3.9 trillion, private banking customers totaled 199,000 with AUM of 2.3 trillion with subsidiaries overseas institutions.

Our group wide personal customers AUM reached 18.6 trillion. The data can show ICBC's leading position in wealth management. It also shows our features in wealth management first. We fully use our expertise and diversification advantage and provide for customers with opportunities to share reform and development fruits. Second, we fully use our online and digital advantages to enable more customers to share the professional services of wealth management, so as to achieve our principle of bringing people a better life, this is our wealth management goal.

For our considerations in the future in wealth management, our priorities are as follows. First, system building. We will build customer classification layer and group based management system to meet differentiated demand from the customers we built online and offline service system. So that one point in with full channel response. We built open products shell system, so as to select the best wealth management products for customers. Also, we will build wealth management brand to facilitate the progress of common prosperity.

Second, ecosphere building based on customer demand, and the best practice in the sector, we cooperate with partners. We accelerate the building of online wealth community, customer investors, agency institutions and asset managers can integrate a new platforms. Thirdly, expertise building, we will strengthen our investments and research teams and capabilities. For investors we provide professional analysis and wise and we will strive to build a team so as to provide one-to-one asset diagnosis and wealth management plan services for customers.

Fourth, digital building. We have been and will continue to improve our decision platform with smart brings. For the broadest base of customers, we will launch differentiated service plans. For proper customers we provide proper products in proper ways. So as to target we meet their demands and increase the digital and smart level of wealth management services.

Fifth, inclusiveness our wealth management businesses focus on both middle, high-end customers and also the broadest base of customers. We are lowering the threshold of wealth management services to meet more people's need in this regard. Sixth, stable stability ICBC will continue our principle of being stable in asset allocation, investors adaptability, and pro investment management. We will better the guarantee of customers safety of wealth. So our wealth management deserve your confidence. Thank you.

Liao Lin

Next question, please.

Operator

Mark [indiscernible] from China Securities.

Unidentified Analyst

I want to ask a question about the asset quality. And I can see that the asset quality is getting better. However, in the real estate sector, the NPL has do increase. I can see that what's your opinion from the management level? And what's your judgments about the trend for asset quality in 2022?

Liao Lin

Yes, this is a very frank question. And it's also a good question. I ask Mr. Zhang Wenwu our Vice President to answer the question.

Zhang Wenwu

Thank you. We coordinate growth and security. We have this risk management pass of proactive prevention and smart control and comprehensive management to maintain that the risks are controlled in stable manner and the asset quality is getting better. The NPL ratio of the group is 1.42% down by 16 basis points. And the overdue loan is 1.23% or the 21 basis points lower and the CAS GAAP is minus.

Yes, and I think the asset quality is getting better. We have this following points says that we optimize the de-structure for investment and financing structure. We focus on the major infrastructure building the strategic emerging industries and the upgrading of traditional industries. We keep optimizing the asset quality.

Secondly, for the key loan areas, the asset quality is relatively good and the asset portfolio is optimized structurally by the end of 2021. The sectors such as the transportation resources, which are have higher proportion in terms of corporate loans, their NPL ratio out below 1.1%. This plays a very important role for as the ballistic stone for the stability of the asset quality of the bank.

And the personal loans NPL ratio is only 0.49% or 7 bps lower than the beginning. And mortgage loan and mortgage NPL is only 2.25%. And for the personal loans sector, asset quality is also at a relatively good level. And we have this normal method and innovative method to control the risks for the risk loss, we have this pre-warning and pre-identification and/or else we have mechanisms to have the joint risk prevention. So that risk control is carried out in a more detailed way.

And in collection sector, we enhanced our efforts to dispose of NPLs. And internet one we have disposed of NPL by the amount of RMB190 billion. And the -- we also collected written off loans and we have this increase of 1.23% in terms of collected return of loans. And we also solidify the de-quality our provisional coverage ratio has reached 205% that is 26.16 bps higher than the beginning. And to also optimize that the thresholds control of new loans. And for the loans, we have this whole process management including the disposal, the written off et cetera.

And you mentioned about the NPLs in the real estate sector. In 2021, we indeed have temporal increase of NPL ratio in terms of real estate, mainly because of the deterioration of the major risky borrowers, but actually the real estate loans in ICBC is only taking up a very low proportion that is lower than 4%. So the risk loan is mainly under control and it will not cause a big impact on the asset quality of the bank. And we also have a very prudent standard for identifying NPLs and we have fully and truly reflected the NPL status in the real estate sector.

And our provisions could fully cover the loss and risks. So all in all, overall asset quality in 2021 is healthy and under control. And please have faith in the quality of our assets. And in terms of the forecast for 2022 and I think in this year, we'll have a more complicated economic environment. Industries and the customers might have difficulty operating due to the pandemic and economic cycle. And we have both traditional and non-traditional risks. And we will be faced with a structural pressure and challenge in terms of asset quality. ICBC will from the standpoint of serving the real economy balance, business operation and risk control, so that we could support our high quality growth with high quality risk control, so that the asset quality could be stable and well under control.

First, we'll continue to improve the operation quality of our credits business, strengthen our support for major projects, SMEs, green finance and Rural Rejuvenation, and so that our surveys could be more adapted to the real economy. Second, will strengthen the pertinent risk, risk control in key areas, for example, in the rural sector and in the high energy consumption and high pollution industries and will strengthen the asset quality campaign in key areas, so that the whole asset quality could be improved, third will have innovation, give full play to the heart power of technology for ICBC.

We'll use our systems and the smart solutions and Blockchain technologies to use digital smart risk control to improve the group risk control level. And we'll build the experts team of credits business and improve the professionalism of our practitioners to provide intelligent support for the high quality of credit growth. And we believe that ICBC will support the real economy and realize our own healthy development and I expect the asset quality will be maintained and under control. Thank you.

Operator

The next question is from [indiscernible] of Times.

Unidentified Analyst

The question concerns inclusive finance, the pandemic has rendered some micro and small business stranded, what are ICBC measures, are they sustainable? The government's working reports of this year does not set requirements of growth in this regard. What's your plan and also what are your key measures to promote rural area financial services? Thank you.

Liao Lin

The Vice President Mr. Zhang Wenwu will answer this question.

Zhang Wenwu

Serving MSEs is our responsibility and it is also our strategic choice, which is very important and support our sustainable development. Based on the government's arrangements and the demand, we continue to build ourselves as an icon of bank in this regard. First in increment, we increased our finance supply, we support the transmission of macro policies last year, the inclusive finance growth was over 52%, customer growth was over 34%, outperforming other banks.

Our coverage for MSEs further improved infrastructure, we achieved precision irrigation approach, we created special production lines, the proportions are both improved. In service, we improve our comprehensive service. First, we improve online and offline Integration Service. banking, online and mobile banking are our webs.

So as to improve the effectiveness of our inclusive finance services. On the other hand, we also see the features of the demand in this regard, we provided full Lifecycle Services. We held more than 150,000 times of ICBC inclusive finance campaigns with full range of financial services, we launched global matchmaking platforms, receiving 50,000 enterprises to help them find more opportunities overseas forcing operation, our advantage was technology and risk management with good quality this year ICBC will continue our strengths in this regard to increase the coverage targeting this and continue with first we will continue coverage and reduce risk for these enterprises.

Second, we will create in FinTech and green low carbon finance, fourth coordinates development and risk management, active prevention, smart control and procedural risk, close management to improve the volume and quality. In Rural Rejuvenation, we will continue enhanced, we launched ICBC single application to improve our financial service to provide more were provided, we participated in related activity agriculture operation players have seen their balance of loans over RMB120 billion up by 32%.

We also promote the social capital to support rural areas and ICBC will continue our support for Rural Development building and governance. We also supply and serve last year, we steadily pushed for the operation and handed out the results pressured by ability and progress, our overseas institutions operation results has seen improvement and the profit to increase by 13%, our Panama branch has officially opened for business and our network is further optimized.

The risk management is also the NPL ratio is within 1%. Second, we also have finance provided financing in our attributing China, Europe and Union and among the affected to substitute global brand and we serve the import export and more than 50 serving reached agreements of cooperation for more than 3,000. And we also have gained the certificate for pilot bank for the bond connect and overseas wealth management connect and implemented our first batch of innovative businesses.

And as you say that in the process of [indiscernible] we have the pandemic and the issue about the geo portion. And well preventing the risks will continue to serve these view circulation and the high level opening up of the country. And we'll carry out our work in the following parts -- in the following aspects. First prioritize stability and prevent risks will optimize our network services system and adjust and optimize our strategies in house the beauty of long-term mechanism for compliance and risk control and coordinate development and security will pay close attention. The coordination of a domestic and international institutions will have this online beauty of trade and we'll continue to support the new business model. Import and export enterprises especially the SMEs. We'll also focus on key and then share the bonuses will expand international cooperation and explore a feasible financing models.

We will also focus on the key areas. And this is the opportunity of the true way opening up of financial markets and the internationalization of RMB and will assist the opportunity of the RCET taking effect and expand the settlements and the finances scale.

Unidentified Analyst

We have one question. Last year, ICBC credit grew relatively fast. What about ICBC capital replenishment was any plan for this year. We will need to that requirement in due course will live on just dividend proportion this year.

Liao Lin

[Indiscernible] bank shall steadily improve was 18.02% by 114 bps YOY. Our internal capital replenishment is the foundation and the external capital instruments are the supplements. We also strengthen our WA management and credit asset based securitization. Last year our retained earnings serve the real economy and value creation as furthering efficiency and effectiveness.

We will continue to balance develop and make our capital adequacy very short ratio still have some gap with the requirement in due course. Internal capital replenishment and also we are the largest company with a large 4.5 billion and a percent quite attractive to investors. And also our implicit values are growing our net asset per share has grown mission quality and properly balance creates more returns. Thank you.

Zhang Wenwu

From Mr. Zhang Wenwu to answer the question, so we have achieved a lot of results this is growth is quite fast for ICBC. We'll have existing a business and increasing business and on sheet and off sheet assets we have as much as 10. And secondly the cybersecurity situation is more challenging and we have new advantages. In the long run ICBC always have this policy that we'll have this indigenous development we always have our own R&D.

Last year, we have this leading cloud computing and distributed technology structure basement and we now have the largest the strongest and of ICBC. And we also have this ecosystem combining the technology data and service. We have this big data platform that is innovative, reliable and effective and easy expandable and we are the first among the peers to build an enterprise level data made office.

Last year, we also reached the one the DCMM highest certificate and this is the - we are the only and first to achieve this certificate. Ecosystem perspective I would like to make some supplements in terms of the digital administration system. We have this one plus and digital system. We have this one web for all administration service platform and have several - there's several vertical areas for administrative areas.

And we have a corporation was as many as 28 provinces and carried out more than 300 [indiscernible]. With this one window for all application acceptance, we have covered 31 provinces and provided inclusive and convenient services for many villages and around the demand for our customers in the rural areas. We also have our own applications and in terms of channels building we are among the first to have this - no contact service of clouds ICBC.

So that the efficient at cutting edge laps and holded the things hack innovation competitions for five consecutive years to stimulate more innate drive for innovation. And then next phase as proposed by the 14th five-year plan that we'll have we will quick in the digital requirement and build digital China ICBC will see this - smart digits the controllable hardcore to surmise our digital. We will strengthen the.

My question concerns net interest margin. We have noticed your annual results NIM is, a little bit lower than that of last year for 2021. At ICBC the financial results are still robust so, what's driving last year's NIM has two features. First, the decrease is the best one in recent three years and second compared with other banks globally last year's NIM trends is more stable for the asset side and liability side pressing of interest rates.

As the interest generating assets reduced a little bit then question. The liabilities costs also decreased. The daily deposit's has seen the expansion of scenarios which offsets the costs of the liabilities. We keep putting [indiscernible] and improve our capabilities to establish ecosystem so as to stabilize the costs of liabilities - to keep for us and it's also reasonable for and stabilize the volume and structure in pace.

China bank ended the transitional period for wealth management to regulate don't worry we ask the question so one-by-one about the existing wealth management businesses. With regardless of the regulators ICBC on the one hand, resolve the risks. And on the other hand managed to divert in the - housing manner and we have managed to accomplish the remediation at the transition periods.

First is this profit as for how to enhance the risk control. In 2021, is the last a year for this transitional period of new regulation our wealth management. ICBC carry out the requirement by government, we carried out the remediation task to see tiny windows stressing the price management and the mid-office risk management.

Second, we stressing the penetrations surveillance and pre-warning to pay attention to the quality of the underlying assets to effectively control the exposure. Such - we enhanced the wealth management of - while bringing this asset to the balance sheet. As for we also enhance the collection and disposal based on the market and the legal rules, we – is, the existing risks and consolidated for the assets, some of the net value of products of some of the banks is reduced.

It's mainly result of the adjustment on the capital market. The main reason is the international environment and the braking events but ICBC always prioritize the protection of the interests of our investors. The wealth management products are mainly the fixed income products. We pay attention to the accumulation of the 60 basis and give full play to the fixed income assets. Balance risk and return and so as to improve the stability of the net value products. And we give proper disclosure to our customers and to protect the rights of our customers. Thank you.

Operator

Now let's can get another question. You can share and what are your key indexes steps was raised to the 2030 as a six day carbon peaking and the carbon neutrality targets?

And since this question is asked in the English language, would you please wait a moment for the Chinese translation.

[Foreign Language]

They rollover RMB2.48 trillion the total volume and increment let the sector our green bond and underwriting also ranked - also led the sector. First, we are here to systematic principles. In 2007, we included green crediting to our development strategy. We promote green credit building after the years of practice. We improved our governance first, the green finance as the internalized thing to our development, pre-sub poll.

Second, we strengthen our policy supports by establishing mechanisms of green finance. Green finance is included in financial services and operation management. We take a proactive approach to adjust credit structure in key regions. We see them as active. We have launched the environmental risk stress test. We innovate the ESG rating and index through search, with tools and - with quantitative tools.

We led the drafting of disclosure guidelines published by PBOC since IPO for 14 consecutive years we published ESG report, and also published special reports on green bond and green finance - helped to the draft of green finance investment index included in the achievements list of the Belt and Road summit. Also last year, our improvement in upgrading work in terms of indexes, were published in CIEE.

We also actively participated in global governance in this regard. We are the only Chinese drafting institution and signing institution for United Nations PRB, strengthen the innovation of services for green financial products. Thirdly, we improve environmental social risk prevention. We adopt classified managements for investment and financing.

Fourth, orderly promote carbon peak and carbon neutrality from asset side and operation side. We continue to promote the low carbon transition. Fifth, we continue to enhance the green finance brand and make forward [technical difficulty] constraints that - since the listing ICBC's price is very good. But for the several years, the price of the shares is always lower than the net asset.

And since 2018, ROE is getting lower, also a measure to improve - to increase the PB and how to manage the capitalization. Do you have passage for stock repurchase?

Liao Lin

Thank you for the question, indeed. With the impact of the May - the real economy and improve its own high-quality growth. We have also improved our ability to create value and serve the economy. So it is fair to say that the, fundamentals of ICBC is good, and the return is also stable. For the past several years, we enhanced the Investor Relations management.

We hold the annual - we'll have results announcement, and we have the one-to-one and one-to-many investors meetings, precision quality to realize that ROE, net profit mean, asset quality could be stable and show progress so that - and we'll improve our profitability, strategic value and risk management ability.

Second, we'll enhance information disclosures so the bank is more transparent. We'll use the results announcement and Investor Relations management to answer - address the [technical difficulty] ICBC's innate value [technical difficulty] first in question. I think the [technical difficulty] to announce - have information that needs to be disclosed [technical difficulty]. And also thank friends from the media, investors.