Agricultural Bank of China Ltd

SSE:601288

Q2-2025 Earnings Call

[Zhiheng Wang, executive]

Good afternoon. Welcome to 2025 mid-annual results conference announcement of ABC, Agricultural Bank of China. It's a great honor to communicate with investors, analysts and media friends, both on-site and online.

First, I would like to extend a warm welcome to all of you for your active participation. And sincere gratitude for your long-term attention and support to the development of ABC.

We have with us Mr. Li Lin, Vice President; Vice President, Mr. Wang; and Vice President, Mr. Wang Wenjin; and Madam Liu Qing, Secretary of the Board of Directors and also joining us are colleagues from online.

I would like to report to you the performance in 3 aspects. Let's first start with operational performance. In the first half of 2025, ABC firmly implemented decisions and arrangements of CPC, Central Committee and State Council adhered to its core responsibilities of serving the 3 rural issues and have maintained solid growth in key indicators.

There are 3 stabilities for the key indicators. One, the financial indicators are on the rise. In the first half of this year, net profit has up by 5.3% year-on-year. And also an operating revenue and income has both signatured at the positive growth. The growth rate has also climbed up by 0.7% and 0.4 percentage points in comparison to quarter 1 of this year.

Second, the asset quality has maintained and developed also further. The NPL ratio was down by 2 bps in comparison to the beginning of this year, special mention, it was down by 1 bp and overdue loan has maintained at a low level, 2.2%. The provision coverage has maintained over RMB 10 billion with a 95% coverage ratio, both the coverage ratio and coverage have been top one in all comparable peers.

The third is our business have developed. The new loans is RMB 129 million, 9.3% growth and the existing number of volume of the loan is over 2% than the comparable peers. Also, we have increasing growth rate of 7.8% of the personal loans, up by 7 bps comparison to last year. The -- both the volume and the growth of the average daily increment of deposit in domestic China have been top one of our comparable peers.

Let me report to you or work in the next half of this year, mostly in our 3 rural areas and risk control has also on the reforms of the products and services. One, we'll stick to the 3 rural projects and improve our service level. The 3 rural issues, agricultural rural areas and the farmers is our priority and cutting-edge advantages. We have adhered to the principle of serving the agriculture areas and farmers. Also, we aim to increase the quality and efficiency of the work in this regard.

In the first half of this year, the credit investment in these areas have standard at high growth for 2 years of consecutive growth and the investment in this regard has increased again on about RMB 900 million that has totaled the overall number of RMB 1 trillion. And also, we provide loans of about RMB 190 million for the inclusive loans for the farmers with a growth rate of 12.9%. In key areas, we supported the food security and safety of China's national strategy and expanded services in this regard for the launch for protection of food has increased by 23.7% year-on-year.

We also supported actively the rural and rural farmers development and expanded our investment in the development of business in rural areas. The loan increase has been 21.8% and 8.5%, a much higher than average growth rate of loans. As to the priority reasons of poverty alleviation, we have consolidated the poverty alleviation results in over 100 countries in the key areas. The balance of the loans for these areas have also grown at a higher speed than the whole bank's average. Also, we've expanded the loan support for the poor farmers and poor counties with an agreement of the new loans. We supported the farmers in Xinjiang province, particularly.

And if we take our loans for Tibetan farmers, the balance was RMB 426 million supporting and covering over 90% of the farmers there. Also this year, we have launched the top 10 products and services for the rural rejuvenation projects. We've expanded the outlets, online banking, mobile banking and a number of other services and products and channels in order to optimize these 3 rural issues services. Especially in the expansion of outlets, we have newly added the outlets in county level areas and township areas. Currently, there has been 56 percentage coverage of those counties in terms of the outlets.

Then we'll move on to the second part on optimization of our services. To serve the real economy is our top priority and to help the Chinese economic development and provide the investment for local economic social development has been on top of our agenda.

In terms of scientific and technological or fintech, we have optimized the scientific and financial support development. We have innovated and created offline products such as the [indiscernible] on credit loans and also issued a commercial loan of over RMB 200 billion.

Also we have signed the MOU with the [ NIA ] pilot cities with over 13 of such securities and bond programs. By the end of June, our loans in science and technological area has improved and grown by 61% year-on-year.

In terms of the green financing, we've also deepened the reform in this regard and incorporated green financing into our modern corporate structure management. We've issued green bond, green securities and also investment in this regard, expanding green leasing, green financial and wealth development projects and a number of other products and services The green financing business has a balance of RMB 572 million.

In terms of our support for micro and small businesses, we have expanded such support for those SME and inclusive services. By the end of June, the balance was RMB 4.24 trillion with the largest coverage of inclusive financing services and products. And also, we are the #1 in terms of the coverage and the strength of providing the inclusive financing services.

In terms of the services for the senior people, we also have expanded the number of the [ e-attention users ] as well as the holders. For our retail pension holders, the business volume has increased over 90% year-on-year. And also in the first half of this year, for the senior users and customers, we provided over 760,000 door-to-door services for those elderly people. By the end of June, the loan in this area is about RMB 61.2 billion, 46% year-on-year.

In terms of digital financing, we've made great efforts in the digital financing development. The loan in this regard was 13.7% year-on-year and the monthly average increment of retail consumers was #1 among our comparable peers.

We also have implemented key policies implementation in areas for financing and investment. And we've issued CNY 115 billion loans for the restoration and renovation of equipment. And also, we provided CNY 530 billion for the white paper list equipment and infrastructure. We also have supported more to the SMEs and private sector. By the end of June, there has been 13.1% of the loan provided to private sector.

And for the consumption and domestic consumption and boosting programs, we have nearly added over CNY 100 billion for the retail credit card services. The third part is that we have a consolidated long-term services for our customers. Customers are the backbone of our business, and we always see the requirements and demands of our customers and consumers as the top priority. It is, therefore, our job and mission to consolidate and enhance our personnel -- enhance our business to the customers. We adhere to the principle of being driven by the reform by digital transformation and by the different requirements and demand of the customers. We've also promoted finance plus -- not finance, service portfolio for the customers.

By the end of June, we have the top one number of clientele with over 880 million individual clients. With corporate clients, we also have improved comprehensive financing services and met their comprehensive requirements in the first half of this year. Our corporate clientele is over 12.9 million clients for corporate business.

The next part is our inherent driving force which is reform and the deepening of such reforms. We've, as always, enhanced our reforms in key areas, making the use of science and technology in transforming the technological renovation with AI plus technological renovation. We have implemented AI in a scale business. In areas of customer services and other scenarios, AI has been widely applied. At the same time, on empowering services and empowering operation, we have also deepened the role of digital transformation in areas such operating performances and a number of the other key scenarios.

We have optimized mobile banking and online and offline services, strengthening our ability to serve the customers. We also have piloted a new customer interface. With that optimization, there has been 20% increase in quality and efficiency. We also have put online the 2.0 version of corporate business -- corporate services, providing even more effective services for corporate clients. As for the smart loan and on-site operation, we have promoted the back-office work and also streamlined the workload for our front workers.

And also, we have laid a solid foundation for the risk control as our basic line. Risk control and management is the top line -- the bottom line for the business development. While we are strengthening the risk management at the all fronts, we've also taken a grasp of financial risks, technological risks as well as market risks in control, so that we can make sure this safety and security of the services in the business.

First of all, we need to be proactive and primitive in risk control and management. We have to modify the product structure, so as to set up a systematic framework for fending off from those risks. And at the same time, we need to accelerate the resettlement and treatment of the nonperforming loans and better improve and optimize the platform of market risk control and management. We also need to improve risk monitoring and keep a close track on the market development and pay close attention to our risk disclosure. It is expected that our risk level is at a controllable area.

We've already actually realized the stress testing of the PBOC and the active daily transaction has been increased by 7.2%. Net profit has already maintained very good momentum. So basically, now I would like to report to you the operating outlook for the second half of this year. I think you are very actually interested in this part. From the macroeconomic condition, the economic development in China has shown great resilience and vitality. And with the macro -- positive macro policies in China, there will be a continuing policy by the central government.

From ABC's situation, thanks to the good momentum macroeconomic, I think the NIM will turn for stable and growth will maintain steady and we'll also keep very good momentum in terms of operating efficiency. So going forward, in the next half, we'll continue to do a good job in pricing and balanced risk management and profitability. While serving the real economy, we hope that we can actually realize stable profit growth and return to the investors.

We will continue to do the volume work. Firstly, we'll continue to focus on the current business development, maintain good momentum in our financials. Secondly, we will continue to support country economy. We will take more measures and with good services to better serve the country economy.

Thirdly, to continue to serve the 5 financial chapters and to seize the opportunity of the economic development and better serve the real economy. Fourth one is to deepen reform and opening up, especially. Fifth, we will continue to focus on the risk management prevention in key areas as to actually maintain the sound momentum of our business development.

So much for my presentation. Now we will enter into the Q&A session. Board Secretary Madam, Liu Qing, please moderate the session.

[Qing Liu, executive]

Thank you, President Wang. Now we're going to enter into the Q&A session. All the representative, please only raise one question. Before raising the question, please identify yourself. So firstly, the question goes to the lady on the first row.

[Unknown Analyst]

I'm from Xinhua News Agency. Just now I heard President Wang's presentation. We noticed that actually currently, we faced with the environment of low interest rate. No NIM. So I think ABC has maintained very good momentum with good operating income and profit growth. So I would like to ask you, looking into the second half, how can ABC better actually balance the pricing, the return and risk management and maintain the sound economic business growth?

[Zhiheng Wang, executive]

Thank you. Thank you for your question. I will continue to answer -- I'll take this question. As you mentioned, in the first half, based on our positioning, we seek to the general term of taking progress, while maintaining stability and to improve operating efficiency. So we actually maintained a steady growth in the first half. And we talked about the data about operating income and et cetera. So you can see from the data that in terms of profitability, the profit growth has been improved. Financials has been actually turning for the better, and we are more resilient in terms of growth.

In terms of business structure, the business revenue have been increased. There has been positive growth in the operating income, both after pre-provisioning. And we can see that we have a very good momentum of fundamental in this aspect. And we have a solid growth foundation.

Looking to the second half, from the macro level, as I mentioned, China's economy has continued to maintain a steady momentum with good resilience and vitality. So in the first half, we can see a package policy initiatives by the central government to support the real economy, and this has been quite effective. And I believe that the effects will continue to take on in the future.

And secondly, for the -- a lot of central conferences and also the progress of work and solvency projects, and also, there are some like personal consumer loan policies, including interest subsidies, all these policies at the micro level, macro level will continue to coordinate with each other and promote our economic growth to turn for the better. And this will also provide very good external environment for ABC's development. And based on ABC's development, I can see that the development for ABC has also maintained a very good foundation here, which gives us more confidence for future challenges.

So I believe that going forward, ABC will continue to maintain our positioning and to actually rise to the challenges and to also rise to these uncertainties with our stabilities. Focusing on revenue growth, profitability and also the asset quality control, we will continue to consolidate the momentum of sound and stable business growth and provide a greater return to the investors and generate greater profits. We'll continue to balance the development and to continue to strengthen the coordination among different aspects.

In terms of scale, we will try to optimize the business growth structure and to further dig the needs for our business development and also to better allocate our investment in government bond and local government bond and to continue to balance the business growth.

In terms of NIM, we'll continue to balance the pricing, especially the granularized pricing and to actually improve the asset growth or return, return on assets. And we'll also continue to increase -- to actually reduce the cost of liabilities.

Secondly, we'll continue to balance the cost and income. So we will continue to strengthen the cost, the control and also follow the government requirements and continue to actually focus on control the fees, especially the flexible fees in order to save the expenses, reduce the expenses. And also we'll continue to improve the efficiency of our business operations as to actually reap more profits with less input.

Thirdly, we will try to ensure sustainable development. Asset quality stability is actually the foundation of our profitability. So we will continue to balance the safety and security with business growth, especially we'll focus on the risk management -- credit risk management in real estate sector and et cetera, so as to control NPL and also to improve our asset quality and lay a solid foundation for profitability. We'll also continue to ensure the collection of NPLs. All in all, we are actually confident about the second half performance. Thank you so much for me.

[Qing Liu, executive]

Thank you, President Wang. Now the next question, please. The friend from the front row.

[Unknown Analyst]

I'm from CCB Merchant Securities. So I would like to congratulate ABC senior management and staff for the achievements we've made in the first half despite the challenging environment. So my question is about NIM. So we see that the NIM decline has been narrowed down. That is to say it has been turning for stability. It has already been like around 3.1%. So I would like to see what's our perspectives for NIM development, especially for the second half? Do you think there will be a turning point for NIM?

[Zhiheng Wang, executive]

Thank you for your question. This question is highly relevant to the previous one, so I will take this question. As you mentioned, for the first half, our NIM was around 1.32%. That's 10 bps lower than that of last year. So from this figure, we can see that the operation of ABC is quite good because we balanced the business development and sustainability of our business development. And from this result, from the asset side, I think we have been balancing the scale and the return. And also, we actually focus on country development and et cetera. You should see that we have ensured the growth in terms of the interest-generating assets, and we've been optimizing the asset structure and increase the ratio of the assets with higher return.

For the first half, for -- on the new loan, the rate has been relatively good, which actually kind of mitigate the NIM downward trend. And we have been following the central government's policies, taking various measures to also better develop their liability business. So on one hand, we follow through the government policies, including the package of policies by the PBOC and other regulators and also the lower down of deposit rate. So we can see that the effects will continue to be unleashed continuously in the future, which is conducive for us.

In the meantime, we continue to actually better realize the reduction of the cost of liability side business. And we've been continuing to lay a solid foundation for our future development. So as I mentioned in my presentation, we'll continue to promote the basic work, including customer base and deposit growth. So you can see that we've been improving our customer segmentation ability and so as to create a very good environment for us to attract low-cost assets. And this has reduced the liability side cost.

So for RMB loans, the interest cost has been reduced. So we've also maintained a very good position among our peers. That is to say to this has been very effective in stabilizing the NIM.

And looking into the second half, we believe that the NIM of ABC will turn in for stability. From asset side, the LPR downward growth -- well, downward development will continue to promote the repricing of existing deposit loans. There will be still pressures, of course, through our efforts and our structural adjustments and also our risk pricing philosophy, we have continued to conduct differentiated loan pricing and differentiated pricing. So this can actually help us to stabilize the NIM.

Liability side, as I mentioned, we are reducing the cost. So with the repricing of deposits and also the reducing of liability side of cost, we believe that the cost will continue to be reduced with the policy by this central government. This will also help us to better improve the NIM. So based on the above indicators and factors, we believe that the NIM will continue to maintain stable marginally. Thank you so much for me.

[Qing Liu, executive]

Thank you, President Wang. The next question, please. The friends from the back row.

[Unknown Analyst]

I'm from the CCTV. So this year, the central government said about promoting consumption and growth. We know that ABC has -- personal loans has exceeded RMB 9 trillion. Can you actually share more details in this aspect? And also under the regulatory requirements, what are the new measures taken by ABC?

[Zhiheng Wang, executive]

So this question goes to Vice President, Lin Li.

[Li Lin, executive]

Thank you for your question. In the recent years, ABC has been sticking to the principle to better support the rural and urban development, focus on expanding consumption and rural rejuvenation and to continuously to extend loans to personals or individuals so as to promote economic growth. But end of June, the personal loans of ABC, that is CNY 3.87 trillion, with a growth of CNY 9.3 trillion and NPL is 1.18%, generally stable. For personal mortgage loans, we have extended over CNY 300 billion and personal operational loans have increased by CNY 420 billion or so.

The incremental loan is over CNY 200 billion. And for the retail loans with a growth rate -- growth, an increase of over RMB 100 billion. For the credit cards, the increase in loan volume is RMB 51.3 billion. So for the operating indicators for the first half for the retail business, we have shown several features. One, we have given the full slate of inclusive financing and 3 rural issues development. We've supported micro businesses and SME, which have been incorporated into our daily operation. At the same time, we also have been deeply involved in the consumption boosting services in innovating on-site and remote operations and other new models.

We've also made full use of the local situations, improve our service level so as to meet the different demands of the SMEs, self-employed shoppers and other consumers. At the same time, we have expanded the country-level business services, we have improved the loans for the shoppers and stores. And we've expanded the services for the farmers in rural areas and covered the expanded coverage of rural areas. For the farmers who have just been alleviated from poverty, we have increased over 60% of the new loans provided to those newly alleviated poverty areas.

And the next part is on the boosting of domestic demand. This is mostly targeted at the national policy and plan of stimulating new demand for the domestic consumption. These are -- there are 3 news in this part of business. We have implemented the overall planning and program on optimization interest rate, credit issuance and a number of other important factors to provide more provision and supply of credit loans. And also, we have increased loan provision for key areas such as tourism and the senior care. We have innovated a number of loan products and also combined the portfolio of different loans.

For the consumption loans, it varies. It would also expand the maturity from 5 years to 7 years. And for the customers with a good intention to pay back, we have provided a variety of payment methods. And also, we've incorporated the individual performances and credibility as the indicators to better satisfy the demand of the consumers and the residents in their participation of such consumption loans.

Recently, the Chinese government has provided a dual subsidy policies for the consumption loans, and we have provided with them a dedicated team in the specific policies and measurement. We've also strengthened the trainings on our staff so that they can provide better services when they are providing the consumption loan services to our -- to the consumers.

And the third is to provide a new vitality in the real estate market recovery. For example, on the renovation of dilapidated houses in the rural areas and also in renovating the backward areas, we have increased our loan provision.

We've also supported the urbanization of the areas and expanded the services in the existing areas and expanded our services for new customers, even the migrant workers from rural areas to cities. In this regard, we have improved the quality and efficiency of a combination of work style, achieving great results.

The fourth feature is that we have expanded and strengthened the coordinated efforts to better meet and adapt ourselves to the economic development cycle. We are steadfast in improving the compliance work and risk control and prevention mindset into market accession as well as customer accession and other business systems.

We also have strengthened a whole lifetime management of our customers. At the same time, we've made full use of digital transformation and empowerment. We have reiterated the digital utilization of the whole bank and established the digital credit systems of the whole bank.

For the personal and individual loans, we have a monthly revision and review of the retail loans in order to optimize the risk prevention and also an early warning of the risk management. And we have done a very good job in terms of the settlement of NPL to make sure the overall quality of asset. In the next stage, we will improve our services and business of retail loans to a higher level of quality. We will strive to do the right things even better. That is the end of my answer. Thank you.

[Qing Liu, executive]

Thank you very much, President Li. Next question, please.

[Unknown Analyst]

The overall asset quality of ABC has stable -- been very stable, and NPL is at a low level. So my question to management is that how do you see real estate market and the local government vehicle, how do you fend off the risks in this area?

[Zhiheng Wang, executive]

Thank you for the question. Also, this question goes to President Lin again.

[Li Lin, executive]

Thank you for the question, and thank you for your interest in risk control work of ABC. We will continue to do better in this regard. Actually, from perspective of risk control, we have adhered to the core principle of risk prevention and strengthened the overall management of systematic risk control ability of the whole bank. We've been very proactive and primitive in risk prevention and control and the ability has improved year-on-year with a stabilized quality of the asset.

As the President has introduced to us the NPL and asset management of the bank by the end of June, the NPL is 1.28%, down by 0.02 percentage points. Special mention, 1.39%, down by 0.01% in comparison of the beginning of this year. The expected -- sorry, the overdue is 1.22%, which is also a low level among our comparable peers. Actually, important indicator for overdue is that our overdue and special -- and NPL has kept a negative gap between them. And the provision has increased to a number of over CNY 1 trillion. We have 99.5% coverage ratio, highest among the peers. And also, we've maintained a good picture in the risk prevention control.

And as to the questions that you are concerned about the key areas, one is in the real estate market. This business has maintained a stable development. We've actively implemented the mechanisms for real estate development financing so as to provide the targeted services for real estate market. And also, we've strengthened the real estate project precision management and promoted the risk control and risk disclosure. By the end of June, the NPL was down by 0.05 percentage points in comparison to the beginning of this year.

And also, we have mitigated the local government loans. One, we have adhered to these policies and measurement and made sure that we have the hidden loans and the existing local government loans will be continuously paid back. And we have adhered to the marketized and rule-by-law policies and support the reasonable requirement for financing and reject firmly any violations or infringement of such irregularities. By the end of June for the inclusive financing services, we have also kept a similar picture of growth in comparison to the peers. The overall risk has been under control.

For the inclusive financing services and loan products, we are among the best of all comparable peers. So objectively speaking, in spite of the pressure on the asset quality, we will continue to adhere to being precautious and being stable, and we will grasp hard the principle of risk management and prevention. We are confident that the asset quality of ABC will be stable and also be among the best of the peers. We will tackle the major problems and contradictions, seek innovations and creation so as to make efforts in 2 areas. One, we will improve the overall system of inclusive financing loan systems. We optimize the credit authentication models and strengthen the cross validation of the credibility of those products.

Second, we will also strengthen the digital risk prevention systems using digital technologies as the tools to strengthen the risk analysis for inclusive financing and other micro loan products.

Third, we will strengthen the work for the settlement of the NPL special mention and overdue. We will have early warning of this overdue and a special mention and strengthen the work for the smart settlement of the NPL in order to improve the quality and efficiency of the bad loan treatment. And also, we will strengthen the focus on the key areas.

In real estate or property market, we have a project-based agenda and approach for different real estate projects. We will comprehensively use the 16 articles of financing work provisions and policies, actively analyze the risks of the real estate market so as to implement those policies and make sure the overall risks can be better mitigated.

In terms of the local government loans, for key provinces or areas, we have a special policies and also product services for those areas and governments. We will optimize the existing loans and lower down the risk exposure.

Also, I'd like to make a special note here. We will stay stick card to the bottom line of no new increment of the NPL. And at the same time, we will also follow the rules of -- rule by law and the rule by the marketization to increase new business in this regard. And as I said, we will be very proactive in restructuring the business as we are implementing the national's policy on supporting the transformation of the conventional industries in solving the contradictions. On the supply side and on the demand side, we will manage earnestly the existing loans. And also for backward capacity and the loans for certain clients, we will have a bigger pressing on them so as to make sure the overall risk level is under control. Thank you.

[Qing Liu, executive]

Thank you, Mr. Lin, for your elaborated answer on asset quality. Now let's welcome questions from online participants.

[Unknown Analyst]

I'm from Bank of America. So I would like to ask a question as to ABC, how can ABC support external economy? We know that ABC has maintained sound development in terms of businesses and there's been increasing vitality. So my question is, how in the first half, while promoting opening up and supporting foreign trade, what has ABC done in this respect and going forward, how can ABC leverage its own advantages to better support the external-oriented economy?

[Zhiheng Wang, executive]

Thank you for your question. So this question goes to Vice President, Wang Wenjin.

[Wenjin Wang, executive]

Thank you for your question. So at the beginning of the year, ABC has been implementing the decision-making by the central government. We have been trying to promote the high-level opening up and stabilize the foreign trade and attract foreign investment. And we've also been trying to support the foreign trade and economy. In the first half, the foreign settlement is around CNY 800-or-so billion, has been increasing and international business growth has been increasing by 39%. So we've making a lot of measures in this aspect.

First one is to better serve the economy to better control the Belt and Road initiative and also the cooperation between China and its surrounding nations and also the inter connection between Hong Kong and Mainland China and also Macau with Mainland China. And for international settlement and financing business, this is around CNY 131.9 billion. And we've also implemented various measures to better promote the interconnection and et cetera. Altogether, there are 15 such measures.

And to innovate the -- a lot of these foreign trade-related loans and also, we've promoted the cross-border settlement and payment. We support the foreign friends in China to actually open account. And also, we have the action plan. For the first year, foreign trade account settlement was around CNY 40 billion or so, and we continue to support foreign trade development.

We focus on mechanics, mining industry and et cetera, to strengthen the international settlement and trade finance. For the first half, we have served 1,800-plus customers to actually settle international business with around the total volume of over CNY 200 billion.

For the first half, the agro-related trade finance was around RMB 5.8 billion, up by 5% or so. The cross-border trade commerce and other international settlement was around CNY 19.2 billion. And we'll continue to provide service for foreign trade to better actually reform the ForEx business. And the customer coverage and et cetera, have already been improving. A lot of payment and payment facilitation business has already been improved, growing by 20.5%. For the MSE in foreign trade, we try to actually establish a risk-sharing mechanism. So for export insurance-related business, it has increased by 70% year-on-year.

We continue to host a lot of these education conferences or seminars for risk management to better serve the economy. Going forward, we'll continue to follow through the national policies on high-level foreign trade and opening up and to strengthen this interconnection between Mainland and overseas market and to better support foreign trade and continuously improve the services for trade facilitation, cross-border trade facilitation. First one, leverage our own advantages will continue to improve the service efficiency and quality, especially in the marginalized areas. We have wide coverage, especially in the rural areas, and we support the B and R initiative and our cooperation with surrounding nations.

Going forward, we'll continue to develop the policies to better support our cooperation with the neighboring countries in trade and finance, and we'll also strengthen the industrial liaison and our services to better serve the foreign trade. And secondly, we will continue to help companies to expand the market, especially with focus on agro-related and green businesses and to better serve customer settlement and financing needs. We'll also continue to better serve the micro and small enterprises, especially their financing needs and optimize the AU service model.

We'll continue to cooperate with the quality third-party payment institution to improve their basic infrastructure. And we'll also continue to play as an important platform. We will utilize the foreign-related letter of guarantee and to better serve our companies to better go global.

Thirdly, we'll continue to conduct innovation and transformation so as to better improve the trade facilitation for our customers. And we'd like to improve the reform quality and efficiency. And we will continue to stabilize the ForEx businesses and to better cover our customers in this area. We'll also continue to promote digitalized transformation to better serve our customers by leveraging technology, and we'll continue to better support the payment facilities of facilitation for foreign friends here in China.

[Qing Liu, executive]

Thank you, President Wang. And the next question goes from on-site, the friends in the middle.

[Unknown Analyst]

I'm from the First Finance. So my question is about retail finance and pension finance. We see in the report, the customer amount has reached around RMB 880 million, so we can see a trend that in China, we have this aging population. So this aging population is actually important customer group. So going forward, what is our thinking in seizing this opportunity to better actually lay out our business?

[Zhiheng Wang, executive]

So this question goes to our Vice President, Lin Li.

[Li Lin, executive]

Thank you for your question. And I'm very happy to take this question. Pension business, health care is actually a topic concerning people's well-being. And we also feel that this is also a very important topic and also a virtue for us to better support the older generation. So for ABC, the personal customer base has been expanded. So currently, the base is 880 million. So for people over 55 years old, that is around 300 million. So we'll continue to serve this customer group. This is also our responsibility.

In terms of operation and management, we, from ABC, are trying to creating the business platform to better serve the aging population. So it is also an important part of the pension finance of the 5 financial priorities of the central government. So we will continue to focus on the 3 aspects.

The first one is to focus on functions that is to optimize the service supply for agent finance. So we'll continue to play a leading role in it to focus on the pension finance to better serve the population with better service and products. Firstly, we'll continue to better serve old care. Especially we have this electronic social security card and we have also attracted a lot of users in this aspect. We maintained a leading position in serving the aging population in this aspect.

Secondly, we'll continue to serve the MSEs, especially the customer number has also ranking the top among our peers, and we'll continue to also better support the rollout of individual pension fund. And for personal pension accounts, the investment products has already also been reaching 200 plus. This is also quite outstanding among our peers. And we'll continue to promote the complex services, including equity, bond and et cetera, so as to better serve our customers.

By the end of June, the pension loans that is around CNY 226 billion, private-owned companies loans account for over 50%. And certainly, we'll continue to build the ecosystem. So we will have the scenario plus -- product plus so as to build an open-ended diversified full-stop or one-stop financial service. We'll also continue to work with the Ministry of Civil Affairs and also other information systems to better cooperate with local government to better actually serve -- or provide service in this aspect. We've also conducted many different services by cooperating with different departments or agencies so that we can better expand the services for the pension-related businesses.

And secondly, we'll continue to improve the efficacy and quality of our pension finance through innovative services, digital empowering, we'll continue to promote high-quality pension services. Firstly, we'll continue to implement the high-level service strategy. So we'll continue to raise people's awareness, take more actions with many different dimensions to better conduct the business. And we will also continue to provide differentiated services to meet the needs of the customers and cover the full cycle of their needs and demands and to build the intelligent pension service.

Secondly, we'll continue to have a more extensive product shelf to better match the needs with our products. And we have realized 6 category, 77 items related financial products. So covering different aspects, financial wealth management, industrial fund, operational loans, retail and et cetera. And we will -- these customers can also get money on a monthly basis. We can ensure -- we can actually provide a portfolio of products for customers to better combine insurance, wealth management and et cetera, to better improve the people's health care service capabilities.

And thirdly, we actually have the big models like AI intelligence development to better upgrade the development. We continue to upgrade our service. We have this intelligent product recommendation and et cetera, so that we can better improve our service in this regard. Thirdly, we'll continue to focus on financial inclusion and also develop our features in this aspect. We will leverage our wide coverage and presence and to better serve the customers. We'll take the initiative to provide more services for our customers so that we can actually provide quality service in this aspect.

The first one is service channels more diversified. So last year, we've realized the renovation of the agro-related outlets. So we specified, optimized 3 types of working measures, altogether 22 such measures targeted at aging or senior clients. We'll continue to improve the service efficiency and quality. And in this process, we'll continue to actually focus on the high-frequency services so as to avoid many difficulties facing by the aging population.

We have calculated that the average efficiency has improved by 49%. The outlets will be the home -- sweet homes for the senior customers. For mobile banking, we've also upgraded the senior services and remote and hospital services, medical services and a number of other financial services.

In the first half of this year, over 4 million people have got access to the one-stop services for online banking. And at the same time, we also have provided the services for the groups of populations, including those senior people with over several times more of such services. And also, we have opened the further outlets and innovated the inclusive financing services for the rural areas and provided mobile services for the senior care services to lower areas and county level and township level areas.

And third, we have provided the services with a touch of warmth. The senior care services have been stipulated at the bank level. We provide 3 heart services, patients and carefulness and a heart of love for the senior people. Of course, we also need to strengthen the convenience, security and safety of those services. In [ BJ ] branch of Zhejiang province, they have won the award of the national top services for senior people. And another example was set in a local branch here in Beijing. We hope to provide our senior people with professional, high-efficient services to them. Thank you. That is the end of my answer.

[Qing Liu, executive]

Thank you very much Mr. Li Lin, for your answers. Next question, please.

[Unknown Analyst]

I'm from [ Magasin Securities ]. I have a question concerning the 3 rural issues, it has been on our major business and the feature of the business. We recently have seen great contributions in this regard. So in the future, how do you plan to do the 3 rural work in order to consolidate your cutting-edge advantage? And also, the services of ABC have expanded over rural and urban areas. So what is your next movement in supporting the national economic social development?

[Zhiheng Wang, executive]

This question goes to Mr. Meng.

[Fanjun Meng, executive]

Thank you for the question. I would like to answer the first question from 3 aspects. ABC is deeply rooted in agriculture, rural and farmers. Therefore, to serve the 3 rural program and initiative is our top agenda. For recent years, we have diversified the structure of customers and provided a holistic system of products and services. The 3 rural initiative is our main business scope. As for this, our balance of 3 rural areas, it accounts for over 40% of the total volume. And the growth rate for this year has been higher than the average growth rate of other sectors loan. And we have strategized the 3 rural affairs and consolidated our development in this regard.

First, the key hydro power projects have been expanded at the country level. The special national bond of extra-long maturity or period and the large-scale investment in rural areas have been developed at the national level. Also, they are demanding -- there are demands for the financing for those large-scale projects.

Second, new energy vehicles and the old for new of the household appliances. These policies have played a solid foundation for our services in serving the new rural areas and even with a new growth point in the business.

Third, the infusion and integrated development of rural and urban areas have made it possible for the flow of capital as well as human resources between rural and urban areas. Different modes have prospered in rural areas, which made it easier for us to provide even more precise financing services and provide us with new track for the business enhancement and development. Therefore, on the topic of rural rejuvenation, we will do our contribution in the building of a country of strong agriculture development.

We'll take even more measures to serve the rural areas better in 4 aspects. One, we will deepen the assistance services for the key areas. We consolidate the results of poverty alleviation and strengthen support for Tibet areas for their financial services and satisfy the capital requirement of those key areas so as to prevent from the -- going back to the poverty.

And second, we'll focus on the development of the rural industry development and the national key projects such as the food safety and security. We'll innovate new products and services, providing the guarantee services for the overall rejuvenation of rural areas.

And third, we will continue to expand the service channels so as to increase our reach among the rural areas. We are now developing over 1,400 outlets in rural level, improving the quality at those outlets. And at the same time, we are launching a special edition and services for the senior people and farmers in rural areas. We provide door-to-door services.

And fourth, with science and technological environment -- empowerment, we aim to improve the 3 rural smart banking services, optimize loan provision and application services for our farmers.

As for the second question, we have attached great importance to the strategy of regional coordination and balanced development. We have strengthened our support for financial provision. At the same time, we've made quite a few achievements in this regard. On the one hand, on the overall and comprehensive positioning of different regions. And in the light of the advantages and the features, we have made regional development programs and a differentiated development initiatives.

We've strengthened the efforts in supporting the Yangtze River Delta areas and deepened the finance plus services on the basis of the hydropower project, we have incorporated green development into our overall business and in developing the Yangtze River Delta economy. At the same time, for the remote areas and ethnical regions, we have also expanded such services to them. Recently, we have issued and provided the action plan for the companies and enterprises in Tibet areas. At the same time, we've improved the synergy of financial services by optimizing the service models and enhancing the initiative, we have better synergize the work front and promoting the integrated development of rural and urban areas in Northeastern part of China and support Chengdu, Chongqing dual cities and the industrial transformation in Eastern part of China. And also facilitate the transportation development of China. That's all for the answer.

[Qing Liu, executive]

Thank you very much, Mr. Meng. Also a question for online participants. Please select a new question from the online participants. I will read the question to you. For private sector and SME who are the pillar of the real economy, the ABC service to them has been the pioneers. In terms of the key indicators, ABC has led the industry, so what is your measures that you have taken to support private sector and SME and the micro business and how to sustain their current development momentum? Okay. This question goes to President Wang.

[Zhiheng Wang, executive]

It's my great pleasure to answer this question. For the first part, this year, ABC implemented the Central Committee and State Council's deployment, taken all responsibility in developing private sector and providing inclusive financing services. We have maintained sound momentum. By the end of June, private sector balance of the loan is CNY 7.39 trillion, and inclusive loan is CNY 4.24 trillion. For micro loan and business -- corporate business, we have over several thousand -- several hundred thousand among the first of our comparable peers. The overall service ability and service quality have taken the lead in the industry.

In order to further improve our financial service quality to SME and micro businesses, we've done the work in the first half of this year in 3 areas. One, we strategized our service to SME and small micro business to a higher level. We've listened very carefully to the important remarks made by President Xi, and we remobilized the resources in the efforts for the micro business and SME. We have established a mechanism for the support of SME and micro business. The support has expanded to science and technology, consumption, foreign trade and other sectors. And we've served over 2.7 million micro businesses with overall volume of loan over RMB 300 million.

In terms of the number of the clients and also the total volume of the loans provided to them, we are among the top of our peers. And at the same time, we have consolidated and strengthened the acceleration for the micro business and small business services and improving the financial services quality. Second, we have made full play of the empowerment of science and technology with AI, big data and other new technologies. We have empowered private sector and SME and micro business in the whole cycle, improving the efficiency and quality and enhancing the experiences.

Third, we've worked on the mechanism. We've given full play to the advantage of ABC's wide coverage and optimizing the financial service system and improving the ability to serve SME and micro businesses.

In terms of the scale of the loans and exemption of net value and worth, we have optimized the service model in order to improve and increase availability and accessibility of the loans.

And for the second -- next question, the overall risk is under control and the overall momentum is very sound and healthy. I think that it can be attributed to 3 adherences. One, adhere to the high-quality development mode. To support SME micro business is the requirement for developing the economy and also the practice of serving the real economy and the people. ABC adheres to the principle of solving problems in the process of development so that we want to solve the problems of lack of accessibility and availability of the loans. Therefore, we would like to take our responsibility of a national bank.

And second, we adhere to the online and offline integration of services. We have iterated risk control models, set up an intense net for the risk management so as to control the risks from the sources. And -- so we continue to innovate the service model and diversify the service channel. We will also improve the fraud risk prevention and control and prevent any possible risks in this aspect. We will also try to prevent the gray business in this aspect.

Third, we'll continue to strengthen the intensive management. We will utilize AI, big data to develop the intelligent service so as to better serve the economy. And also, we will utilize the PAD or tablet utilization in our service offering. And we will also continue to better serve our customers by offering diversified services as to improve customer experiences. So much for me. Thank you.

[Qing Liu, executive]

Thank you, Mr. Wang. I think we have conducted very intensive exchanges. So the last question, please. Friend from the left.

[Unknown Analyst]

I'm from [ Hong Kong Wenhui Newspaper ]. So I have a question on loans. We noticed that for the first half of this year, the loan growth is 7.3%. So I would like to ask the key loan extension will be going to which areas? And also secondly, we've just concluded the central government meeting. So in terms of urban development, will we actually offer loans in these areas to increase loans in these areas?

[Zhiheng Wang, executive]

Thank you for your question. I will take this question. Just now, in our introduction, we mentioned that the loan extension for the first half has been increasing. So apart from the increase, we also have improved the loan structure with targeted extension in certain areas. So in the next half, we'll continue to -- we'll continue such a trend. That is to say, right now, the central government has a lot of policy in place and the effects will gradually unleash and this will lay a solid foundation for our loan extension. We'll follow the macroeconomic policies and market needs. We'll focus on the strategic direction of the national government and extend loans to the key areas and industries as to maintain reasonable growth of our loan business. In the meantime, we'll also continue to maintain a good momentum.

For specific areas, I think I will maintain, in general, the same trend with that of last year. First, we will focus on the main businesses. So in the second half, we'll continue to maintain this sound momentum and to better serve the food industry, the agro businesses, the rural households and also the technology development in the rural area or in the agro-related business. We'll continue to promote the agro-related loans, the country-related loans. Secondly, we'll continue to better serve the rural economy, including promoting the implementation of the 5 financial priorities. And also, we'll continue to implement the national policies of the central government and also to better promote the recovery of the real estate sector and also we'll continue to boost consumption and to better promote the macro economy turning for the better. So this is the second aspect.

Thirdly, and as you mentioned, the Urban City Development Conference was convened, and we are studying this conference with spirit, especially its possible impact on our business development. I think going forward, we'll continue to better balance our business structure and also to accelerate the optimization of our credit strategy, revitalize the credit assets and also focus on the low carbon development. In the meantime, we'll continue to connect with different cities in terms of their city development projects. And we will continue to also support the guarantee housing for the residents.

And in addition, we will also promote the stable growth of personal loans, which includes the personal mortgage loans and also the personal consumption loans, especially the increased subsidy for the personal consumption loans. We'll also focus on the appliance, on the automobiles-related secretary and also the green consumption, digital products-related consumption and also the -- change the old products for new products related financial services and to better improve the consumption loan coverage. I think through our efforts, we hope that we can actually realize reasonable growth of our loan size and quality. Thank you.

[Qing Liu, executive]

Thank you, President Wang. Ladies and gentlemen, thank you so much for joining the interim performance release. And I appreciate all the media friends, the analysts for your support and attention to ABC, and we will also continue to communicate with you. Should you have any questions, please contact our public investor department. So much for today's meeting. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]