Agricultural Bank of China, Limited (OTCPK:ACGBY) Q4 2021 Earnings Conference Call March 30, 2022 5:00 AM ET
Company Participants
Han Guoqiang – Secretary of the Board of Directors
Zhang Qingsong – Vice Chairman, Executive Director and President
Zhang Xuguang – Executive Director and Vice President
Lin Li – Executive Director and Vice President
Cui Yong – Vice President
Xu Han – Vice President
Zhang Yi – Vice President
Wang Xinxin – Independent Director
Conference Call Participants
Zhang Shuaishuai – CICC
Wangbao Yuan – UBS
Xu Ran – Morgan Stanley
Wu Yi – Bank of America Merrill Lynch
Han Guoqiang
Ladies and gentlemen, good afternoon. I am Han Guoqiang, Secretary of the Board of Directors of Agricultural Bank of China. Welcome all the friends to attend the 2021 Annual Results Conference of Agricultural Bank of China. According to the latest requirements of epidemic prevention and control in Beijing, this conference is going to be held by telephone access and webcast.
Here, I would like to express my sincere gratitude to all the sectors of society for your long-term concern and support for our bank. Thank you.
Next, I would like to introduce the management representatives who attend today’s meeting. They are Mr. Zhang Qingsong, Vice Chairman, Executive Director and President of Agricultural Bank of China; Mr. Zhang Xuguang, Executive Director and Vice President; Mr. Lin Li, Executive Director and Vice President; Mr. Cui Yong, Vice President; Mr. Xu Han, Vice President; and Mr. Zhang Yi, Vice President. In addition, we also have with us Mr. Wang Xinxin, Independent Director, to attend today’s conference by telephone.
Hello, Mr. Wang.
Wang Xinxin
Hello, Mr. Han. Hello, everybody.
Han Guoqiang
Thank you, Mr. Wang. In 2021, faced with the complicated and ever-changing economic and financial situation at home and abroad, Agricultural Bank of China conscientiously implemented the decision-making management of the CPC Central Committee and the State Council unswervingly took the road of high-quality development actively and effectively served the agricultural rural area and farmer development and provide excellent and strong financial services for people [indiscernible] accelerated the pace of reform and digital transformation in key areas, continuously strengthened risk control and prevention and achieved ideal results in business operation and delivered a brilliant balance sheet to all the investors.
First of all, now let’s have Mr. Zhang Qingsong, President of Bank of China Agricultural, to introduce our operating results in 2021. After that, we will have with us the Q&A session. Thank you so much. Now let’s have with us Mr.
Zhang.
Zhang Qingsong
Thank you, Mr. Han. Ladies and gentlemen, good afternoon. Welcome you to join this 2021 annual results conference of Agricultural Bank of China. Here, on behalf of our bank, I would like to express my sincere gratitude to all the journalists, investors and analysts who have given us care and support for a long time. Thank you so much.
2021, the Agricultural Bank of China conscientiously implemented the decision-making of the CPC Central Committee and State Council to focus on strengthening agricultural rural areas and farmers development and financial services of the real economy, conscientiously deepen the reform and system and mechanism, calmly responded to various risks and challenges in its business operations to new level, number one, to realize high-quality development, simultaneously improve the scale, quality and efficiency. Until the end of 2021, the total assets were RMB 29.1 trillion and the loan is RMB 17.2 trillion with 13.2% of growth. And with the RMB 2 trillion increase, it has reached a record high. Customer deposits reached RMB 21.9 trillion, and up with RMB 1.5 trillion. And among this, we have exceeded more than RMB 1 trillion deposits.
So the net revenue is RMB 7,199 trillion. So the net profit is RMB 241.9 billion. So the weighted average return, ROAE, increased by 22 basis points. And the nonperforming loan is only 1.34%, dropped by 14 bp compared with last year.
The second one is we make every effort to make the leading bank of rural revitalization. And the business manages agricultural, rural areas and farmers are further highlighted. Until the end of 2021, we have newly added RMB 913 billion. It takes about 36% of the loan of this deposit and balance accounts. And we all have reached the new highs in the past decade.
So long key areas of the rural vitalization have a good momentum. The growth rate of food security, rural industries and rural construction loans are reaching 17%, 20.6% and 14.8%, respectively.
Solid results have been achieved in consolidating the achievements in poverty alleviation. So 832 poverty-stricken counties and 160 national key rural revitalization counties were 14.2% and 15% growth and which were all higher than the average loan growth rate of the whole bank.
In addition, financial services in rural areas have achieved remarkable results. The online farmer loans and preferential e-loan has a balance of the growth rate [indiscernible] 54%, serving 3.68 million households of farmers. The third is we continuously improve the efficacy and adaptability of financial services and efficiency.
So focusing on the national regional major strategy, key projects of the 14th 5-year plan and strengthening the comprehensive financial services. In 2021, we increased loans for major projects by more than RMB 600 million. And for the major local projects, increased also significantly. Continues to promote the increments and expansion of inclusive loans, and the balance of inclusive small and micro enterprise loans increased by 38.8%. And the speed of growth has already exceeded 30% for a consecutive 3 years.
We also have 1.9 million [indiscernible] we also have 1.9 million [indiscernible] Three, the balance of manufacturing loans increased also by 18.5%. So for mid-and long-term loan and de high-tech loan are with 39% and 26% growth rate, respectively.
We also improved the financial services for science and technology innovation. The service coverage of little giant enterprises specializing special fees will reach 60%. And the loan balance of strategic emerging industries will exceed RMB 850 billion, actively practice the cost of green development and vigorously implemented the strategy of green finance with the balance of green credit reaching RMB 1.98 trillion, up by 30%.
So the thought is, we adhere to customer first and constantly strengthen people’s livelihood in financial services, continue to expand service technicals to counties and remote areas. In 2021, the relocation outlet of 65% have been distributed to urban/rural fringe and counties and towns, stretching the supply of people’s livelihood to financial services such as housing, education, medical care, health care and old age care. We will promote the aging and barrier-free transformation of financial services.
In 2021, we have altogether visited the special groups with our home visits. It’s about 0.23 million times and provide the customers with inclusive, fast and more sensitive financial services, strengthen the protection of customer rights and interest — set up the customer right and interest protection department and optimize the complaint response mechanism of various channels, further unblock customer complaint channels and quickly respond to customer demand.
Fifth, we strengthened the empowerment of science and technology and achieve landmark application results through digital transformation. Mostly, mobile banking customer exceeds as the #1 in this industry, up by 46.4%, and with the registered user over 1 million. And the end of 2021, the online loan Agricultural Bank of China e-loan has increased by 63.2%. So for this online finance has already exceeded RMB 100 billion. Smart marketing, smart risk control, data center and other projects have steadily advanced with consolidated basis of digital transformation.
So digital transformation, digital risk control, data, middle office projects have all been steadily advanced. Consolidated the basic support of digital transformation of the Agricultural Bank of China, it accelerated the transformation and innovation and further consolidate the foundation of long-term steady development.
Continue to promote expanding households and improving quality with a total number of 878 million households for leading business company has also up by 7.6%. We also accelerate the management of wealth system, constantly enrich the supply products and services such as funds, insurance, wealth management, family trust, the number of private banking customers up by 20.6% compared with the end of last year. The balance of assets is RMB 1.85 trillion.
And the asset of wealth management product reached a record high, reaching RMB 2.07 trillion. Deepening the integration of local currency and foreign currency, group integrated operations, improved the linkage marketing service mechanism for corporate customers and continuously enhanced international and integrated service capabilities.
Seventh, actively respond to risk challenges and keep the risk bottom line. So the new adverse trend is improving, and the incidence of adverse events is 0.69%, dropped by 0.2% compared with — down by 0.27% compared with the end of last year. So the indicators have improved significantly. Both overdue loans and concerned loans have all achieved reduction.
Strictly identified nonperforming loans and the ratio of overdue loans, the nonperforming loans is 75%, which is lower by 7.2% compared with the end of last year. So the risk-offsetting ability continues to be improved. And the provision coverage ratio and the loan-to-fund ratio continued to ramp first in comparable competitors in the industry.
Promote the integrated management and the control of risk to penetrate the management of RMB 10 trillion market business assets to ensure the market risk can be clearly seen and managed completely. Comprehensively deepen the construction of compliance system and strengthen anti-money laundering and sanctions risk management, continuously optimize the IT technology agriculture, strengthen the construction of disaster recovery system and upgrade the network of security and data security defense system.
Eight is to strengthen capital conservation, capital refined management and the lean management have all achieved remarkable results. Rigorously reduced the high capital consumption business. Clean up inefficient and ineffective capital occupancy through multiple channels, an increase up by 11.44% compared with last year. So the year 2022, we will implement the social modern country in a roundabout way led by President Xi Jinping.
And we will also comprehensively implement the steady progress accurately — comprehensively implement the new development concept drive the development, promote, perform, strengthen management and risk control to arrive with our full effort in new capital to high-quality development, promote construction of world-class commercial bank groups to achieve new breakthroughs and create greater value for the country, society and shareholders.
Thank you so much.
Han Guoqiang
Thank you so much, Mr. Zhang. Just now President Zhang gave a comprehensive introduction of the bank’s performance in 2021 from the aspects of serving rural revitalization, serving the real economy, promoting the fast development of green finance, strengthening science and technology empowerment and strengthen customer first and empowering because of science and technology and the industrial restructuring. And he has given a very comprehensive introduction of all the performances and also look forward to the next step. So with very concise introduction and complete conclusion, I believe you definitely have been impressed by his introduction.
Thank you, Mr. Zhang, one more time.
So now we will come to the Q&A session.
Question-and-Answer Session
A – HanGuoqiang
[Operator Instructions] And when you ask questions please, first, share with us who you are with and the organization and your name. So now let’s have the first question. [Operator Instructions] So now we have with us, CICC, Zhang Shuaishuai.
Zhang Shuaishuai
I am analyst from CICC. First of all, I would like to congratulate the bank on this great performance, especially after shouldering a lot of strategic task of China. So 12% of the profitability increase is actually definitely the best of the past few years because the financial data has just been released. So we really want to know the detailed information. And can you help us to share with more, how do you view this 2021 profitability?
And if — for the breakdown of profitability, what are the driving forces of that? And I also believe for the capital markets, there are also a lot of investors really are interested in this reduction of tax ratio and giving the preferential profitability allocation. So — and also please give me a looking forward and predictability of this profitability in 2022?
HanGuoqiang
Thank you so much for Mr. Zhang from CICC for the first question. I would like to have with us Mr. Zhang Qingsong to answer the question.
ZhangQingsong
So thank you so much for the question, Mr. Zhang. So for this question, I would like to talk about 4 aspects of the answer. First is our overall profitability. For 2021, Agricultural Bank of China, we have achieved the steady growth and the steady growth of asset quality.
Comprehensively speaking, it is quite exceptional financial performance.
Year round, the total profitability has exceeded RMB 719.9 billion profitability. For the net profit, so it’s up by 11.8% for the net profit, reaching RMB 214.19 million. So for the CAGR growth is 6.6%. It’s also the record high in the past few years. So this is the overall profitability.
The second aspect I would like to answer, the motivation and driving force of this, so there are 3. First, we continue to strengthen our support of real economy development. For 2021, Agricultural Bank of China, we have this RMB 27.2 trillion every day. It’s up by a significant percentage. So based on this total scale, we also have achieved — we have 57.8 million interest growth.
And the second thing is about this middle key business has seen steady growth. So we have seen this commission income, RMB 8.3 million, up by 7.8% Y-o-Y. So for Agricultural Bank of China, we have this online finance, consumption finance have seen great growth. So the third driving force is other income. Because of this, decline of the market interest rates, we also have achieved quite high growth.
So for this noninterest revenue up by 19.7%, it’s 2.5% higher compared with last year. So this is a lot of like evaluation assets. Because of this preferential external overseas interest influence, so for this noninterest revenue has seen quite high growth. So this is the second part of my answer.
The third, I would like to say that it’s about reduction of taxation. What is the influence of that policy? My direct answer is for this reduction of taxation. So combined with the overall development of Agricultural Bank of China is actually with a complicated one. So finance and real economy are having the complementary relationship.
Now we are under this great pressure of the macro economy.
For part of the company, especially small- and medium-sized companies, individualized companies, they have suffered some difficulties. We are an SOE. We have the responsibility, that we also have the capability to give them offer and help. So looking back into the relationship of previous and the future, this is the market take decision to reach the mutual development. In the past few years, we always have taken this down-to-earth practice to reduce the taxation.
And then for the efficiency and quality of our operations have also been improved. Before 2021, the previous years required by central government to also realise the commercial development of us. So last is about the prediction of profitability in 2022. In 2022 Agricultural Bank of China will comprehensively implement the high-quality development, continue the transformation and strengthen this scale and quality development and also lower cost, control risk and improve efficiency. So comprehensively improve with the financial performance indicators to step up the new highs.
HanGuoqiang
Thank you so much, President, Mr. Zhao. So now let’s have with us the next question. Next question is from Xinhua News Agency, [indiscernible].
Unidentified Analyst
This is [indiscernible] from Xinhua News Agency. My question is about this loan. So since the fourth quarter, so many banks have already stated your attitude about optimizing the structure. And can you talk about this the 2022 the key loan issuance direction. And in the past few months, what are the loan performances?
And what is the overall annual growth target of loan?
HanGuoqiang
Thank you so much for [ Madam Lee ] from Xinhua News agency for this question. We will have with us Mr. Zhang Xuguang, Vice President.
ZhangXuguang
Thank you so much for your question. In 2021, at the end of last year, the overall loan scale is CNY 11.2 trillion, up by RMB 2 trillion and 13.2% compared with that of last year. I would say that it’s reaching a record high.
So there are 6 different characteristics. First is focusing on this main business of bank, strengthen this loan support of rural revitalization. Until the end of last year, we have [ CNY 62.2 trillion ] is more than RMB 900 million increase compared with the average level by 4% higher compared with the industry average. So I would say that for this balance of rural revitalization loan, so for the scale and the increased speed have all reached a record high, up by 36%. So for the key projects, speed and for the increase of the business, we also have reached a steady loan support.
And therefore, carbon peak and carbon neutrality targets, we have rigorously improved this green economy. So compared with last year, it’s up by RMB 42.9 million. And there, for this science and technological innovation loans and manufacturing loans, it’s RMB 1.7 trillion and up by CNY 227 million increase compared with the early days of 2021, up by 18%.
And for small and medium-sized macro business, so compared with the end of last year, so it’s up by 32,700 households compared with the end of 2022 — 2020. So for this noninclusive loans compared with last year, it’s already up by RMB 39 million, up by 38.8% compared with last year. So growth rate is as high as 14%. So 2022, we will still conscientiously implement this decision-making of CPC and all the regulatory requirements of security regulation. And for green management, green economy, small and medium-sized development and rural vitalization, we will support more of those weak FX.
Until the end of February, all the loans have already achieved steady growth. Compared with first days of 2022, it’s up by RMB 269 million. So for the entire year of 2022, we will actually stick to steady growth.
And then with steady growth as the basis, we will strengthen this loan issuance to facilitate this macroeconomic development. So we think the increment of the loan will be higher than last year and the growth rate will be higher than 10%. Thank you.
HanGuoqiang
Thank you so much for Mr. Xuguang. So now let’s have with us the next investor. So the next one is from Hong Kong [indiscernible], so Madam [indiscernible].
Unidentified Analyst
I’m journalist from Hong Kong [indiscernible] Newspaper. So I have noticed that for last year for nonperforming loans have already dropped by 14 bp. And we also have seen this quite good trend. I want to know that for 2021, what are the regions and the industry is having this nonperforming loans? And how do you look forward to this year’s trend?
So what are the regions and the industries that you want to pay attention to? What are the measures that you could improve this overall beneficial and advantageous trend of that?
HanGuoqiang
So thank you so much for this question. So here, we will have with us Mr. Zhang Qingsong to answer this.
ZhangGuoqiang
So for asset quality, this is a very big issue and concern of Agricultural Bank of Agriculture. So it’s already RMB 17.2 trillion for the loan scale for the end of last year. So for the speed and scale have already been accelerated and broadened. So generally speaking, we could some more and more actually big base and more and more Bank of China non-performing loan and our management and our prospects, I would like to give the report.
First of all, we have always paid a lot of attention to risk management, and we have already got this risk management in advance. And we have also seen this very good improvement of the quality. So first of all, for this nonperforming loan, at the end of 2021, it’s 1.43% of this nonperforming. And it has already dropped a big percentage with a total scale of RMB 24.58 million. So compared to speaking Y-o-Y, it is lower by RMB 18.1 billion.
And the newly increased nonperforming loan is 0.9%. Y-o-Y decline is 0.7%. So for this overdue and the concerned loans have all reached the reduction. This is what I say it’s like a prerequisite indicator. Until the end of 2021, the overdue loan, so it’s RMB 184.9 billion.
So the percentage of this overdue is 1.08%, dropped by 0.21% compared with early days of 2021. Concern the loans for the balance, so it’s RMB 283.1 billion, dropped by CNY 51.3 billion. So for the rate is 1.48%, dropped by 0.53% compared to early days of 2021.
So asset quality has been significantly reflected. So until the end of 2021, so the overdue and concerned one is 74.24%, dropped by 7.18% compared with early days of 2021.
So for risk management and predictability, I think our capability has been further strengthened. And for multi-time coverage, it’s 299.73%, up by 33% compared with early days of 2021. So for multi-time, loans is 4.3%, up by 0.13% compared to early days of 2021.
So this is from multi-dimension that I have prescribed this overall quality of our assets. So I have already reported that we have already over CNY 700 billion for our revenue. And the next one is about the multiple loan balance is also over CNY 700 billion. So from what I have said is about is RMB 245.8 million. And combined with this concerned one, it’s less than RMB 500 billion. And for our multi-time balance, it’s over RMB 700 billion. So this is how we could offset any possible risk, and this is the resources of that.
So now I would like to talk about some overseas asset quality prospects. Generally speaking, when faced with very comprehensive environment, so for Agricultural Bank of China’s asset process, we still are very confident. First of all, for the overall stability of Chinese macroeconomy, we are very confident.
Second of all, we are also very confident. About our own risk offsetting and risk management, we are very confident. So here, I would like to give a very comprehensive report. So about the stability of that, we believe China is still in this significant strategy opportunity. So the basic strategy of economic development has not been changed.
Although amid the economic development, we will have transient challenges and difficulties. However, the central government’s overall tone of stability and stable growth, we believe the Chinese macroeconomic portfolio would still have this very stable development.
So for this overall development, there are several aspects that I would like to report. First of all, we would like to implement the strategic direction given by the central government and also having this detailed and differentiated and refine the main management of all this. So from the credit issuance and risk offsetting, risk alleviation and all these assets for the whole process, so this is for the basis of our credit management.
Second of all, we are constantly strengthening this credit risk. So 2021, we have promoted this main creditors responsibility system. We also have promoted this revolution of the evaluation system and structure of audits. We have further consolidated all the different local banks and the loan management for the specific responsibilities and credibility.
The third aspect, Agricultural Bank of China has deepened the digital management transformation. So for this forward and in advanced risk management and implementation of that to establish with the credit management platform to realize this online and off-line integrated management.
So the fourth aspect is we have focused on these key aspects, focusing on this scanning of risk and the prejudgment of the risks for real estate companies, micro and online loans and the local government risk prevention for the possible risk management. We have this name-based management and accelerates the alleviation of them to make sure that we will have this early discovery and early treatment.
The fifth aspect, we continuously promote the utilization optimization of loan structure for different regions. For different regions, significant strategies, provinces and the cities, the increment of loans takes 91.03% of the overall loan. So for 2 high and 1 new industry percentage dropped by 0.93% compared to early days of 2021. So for the speed of loan issuance is lower than the average increases by 7.65% for customer structure.
For internal evaluation of A-plus customer loans taken up as high as 80% of this increment loans.
For the existing ones, it’s approaching 75%. This is what we call about legal person loans.
For Agricultural Bank of China has always paid a lot of attention to individual loans, including the farmers’ loan and the expansion of farmer household loans. So for this individual farmer loan and farmer household loan have also seen steady growth.
So for the existing 5 different aspects, I have already talked about the overall positive prediction. I am very confident to say that. So from these 5 different aspects, I have given the due responsibility and explanation. So this is what I am doing the report, and this is also my commitment. Thank you.
HanGuoqiang
Thank you so much for this very comprehensive explanation. So now let’s have with us, the next one is from Financial Times, [indiscernible].
Unidentified Analyst
This is [indiscernible] from Financial Times. My question is about customer mortgage. So for 2021, how is this mortgage profile? In the first 2 months, have you felt any pressure of that? So how do you control the overall issuance of the mortgage?
So what is the strategy change of the mortgage? And what’s the key direction of this mortgage issuance?
HanGuoqiang
So thank you so much. So here, we would like to have with us, Mr. Lin Li, Vice President.
Lin Li
So thank you so much for this. Paying a lot of attention to individual mortgages, already for 9 consecutive quarters, we have already achieved a very good one. So for 2021, we have RMB 1.1508 trillion for real estate personal housing mortgage. So it’s already up by RMB 50.2 billion. So for this newly issued mortgage rate, it’s 5.46%.
So for the risk rate, it’s about 0.36%, lower by 2 bp compared with last year.
For the first 3 months of 2022, for the accumulated issuance and the newly added ones, it still maintained a quite stable growth. For 2022, we will continue to implement this real estate macro control regulations and to do a conscientious work on the issuance of housing mortgages.
There are 2 key aspects. First is accurately control this conscientious management and the guidance demand to implement differentiated mortgage strategies, to focus on those improvements and rigid demand. So to make sure that when we are totally compliant with the regulations and the rules to realize this monthly, quarterly and systematic, stable issuance, and this is the basis of our business. We have already designated this healthy mortgage for farmers as an exclusive product. So for those farmers and users, having the ability of acquiring real estate and also being compatible with this housing purchase regulations, we will actively serve them and improve their livelihood with our financial services.
HanGuoqiang
Thank you so much for Mr. Lin Li. So let’s have the next question. The next is from UBS, [ Wangbao Yuan ].
Q – Wangbao Yuan
[Wangbao Yuan]. I am from UBS, analyst [ Wangbao Yuan ]. My question is about inclusive finance. I want to know that for 2021 for inclusive finance, what is this increment of that? And whether the profit can cover the cost?
What is the quality of inclusive finance? How do you deal with all the difficulties and challenges and this year’s target of the development?
HanGuoqiang
Thank you so much, [Madam Wang] from UBS. So for this question, we will have with us Vice President Cui Yong to answer this.
CuiYong
Thank you so much for the host. So for this question, I think there are many points. I would like to talk some different 5 aspects to do this introduction. So first of all, I think for 2021, we have given full play to this multi-box. And with this comprehensive online and off-line development, I think we have comprehensively realized this central government and our Board of Directors the year, the target have reached the high-quality development of inclusive finance.
We have our data that I’d like to share with you until the end of last year, so for the quantity scale, it’s already RMB 1.32 trillion with an increased rate of 39% with a total amount of RMB 370 million. For the consecutive 3 years, we have reached over 30% of the increase.
So from customer aspects, it’s already 1.91 million households, up by 0.35 million households, with the service coverage we expanded to a further extent. So the second dimension is for last year, for this inclusive finance for small- and medium-sized one is 4.1% of the loan rate. Interest rate is being stable and being reduced. So from the cost, which we all pay a lot of attention to, actually, we have already been encouraged to have this small-sized loan. And for the preferential inclusive finance, we have also reduced the interest rate.
So for tax businesses, they have also adjusted our taxation and fees to lower the fee. So all these have already effectively supported the sustainable and comprehensive development of this inclusive finance.
We also have actively improved this digital transformation for this operation cost, and the risk cost of inclusive loan has all been reduced. So with this policy support, Agricultural Bank of China is confident to realize this expansion and lower the cost and to improve the quality.
Third aspect from the asset quality, at the end of last year, for this nonperforming rate it’s only 0.73%. It dropped by 0.22% compared with last year. So with our internal evaluation, I think the overall risk is manageable.
So for the fourth dimension is for the preferential micro one is with a small scale and low capability of anti-risk. I would like to say that from the overall demand, so for this overall finance, there’s a few big space for that. There are some data that I would like to share with you. From the end of last year, 2021, for the overall market, I would like to say that we have 150 million households. For individual business owners, it’s about 100 million households.
So for small- and medium-sized legal persons, it’s actually 90% are all small, medium-sized ones. So fourth, this 150 million households that are the main markets, for the entire banking industry, we have given them financial support with those demands. And also having our financial services, it’s about 33 million households. It takes about 20% of the entire market.
So amid this 20%, for our Agricultural Bank of China, we are serving a big amount of customers.
However, we only serve 1.92 million. So you can see that the demand of the customers and for the scale of our service, there’s definitely a huge space for such development.
And for the so many years, our Agriculture Bank of China has still stuck to this small size one. I would say that we only have about roughly 0.6 million per household hood on average.
So for all of these aspects, based on this internal arrangement and the management team policy design, and we are also accelerating this digital transformation. With digital methods, we could realize this inclusive finance to improve the quality, expand the coverage and lower the cost.
And the government is also boosting the overall financing platform. So Agricultural Bank of China will actively improve the support and strengthen the data analysis to comprehensively improve the capability and the risk control confidence.
So the fifth aspect is for the next one, we will still stick to this being stable while controlling the risk management. And we also will have this precise positioning and discovery of all the customers and precisely control the risk of the first class inclusive finance and comprehensively realize that the government will report about this increase of inclusive finance of small- and medium-sized and macro businesses and have this sustainable, high-quality development. Thank you so much for your concern. And I would like to welcome all your concern for all this social-wide inclusive finance.
HanGuoqiang
Thank you so much for Mr. Zhou. And now let’s have with us the next question. Now let’s have with us Xu Ran from Morgan Stanley.
Xu Ran
So we have talked a lot about different things, and I definitely have already heard this very big individual customer from Agricultural Bank of China. I want to know that for mobile bank, what is the construction of that? So for this overall scale and the MAU and what is the status quo for the active users? And any other approaches to further improve the service of mobile bank and the products and the dimensions of that?
HanGuoqiang
Okay. Thank you so much for Mr. Xu from Morgan Stanley. So here, we would like to have with us Mr. Xu Han as the Vice President.
Xu Han
So I would like to answer. For 2021 for this mobile bank construction, until the end of 2021, for our personal mobile bank, it’s already 411 million, up by 55 million. We have this individual mobile bank reaching over 100 million. As I said, this is definitely ramping the top of this entire industry. Compared with last year 2020, it’s up by 49.46 million households.
So it’s up by 13.58%, reaching RMB 86.27 trillion. This is definitely very worthwhile to mention.
In order to realize this result, we have done 3 aspects. First is we strived to have a more excellent working process. Last year, we have this version 7.0 of our mobile bank. We have done 10x of the major upgrading. And for this, speed and the basic structure have been significantly improved.
We have got this cloud assistance and all kinds of natural verbal answers. And we also would identify their demand with these verbal interactions having this deposit checking, payment checking and for this time and efficiency to have realized this ecological system of micro, mini program and applications of mobile bank. So we have focused on this rural area of services. We have this rural revitalization wealth management and the inclusive preferential rural loans and preferential spot just exclusively owned for the rural. So we have already over 6 million users for the rural version of the mobile app.
So for this industry, we have first to launch this one button connected to personal customer service assistance. So for the transferring our money and to solve this language barrier of different minor ethnicity users. Then third is to improve value the creation, to have this digital characterized one, and then to have this analysis of expenditure and income and also have this insurance product and also have this wealth diagnosis and asset diagnosis.
In 2022, we will carry out the continuous improvement and optimization of that. First is optimizing this customer scenario expansion to enrich this scenario and also to come through all those working scenario, leaving scenario to improve this smoothness and convenience of that to be based on with high-quality and easy-to-use, convenient-to-use quality and improve the overall loyalty and satisfaction of the users and have the differentiated, diversified customers and services.
Faced with the rural area and the farmer and the rural region to also face with the silver-haired people and for all those remote areas, minor ethnicity users and also have the Tibetan language and the Mongolia language, multiple language services based with the rural and the urban ones to have this individual exclusive interface of different cities. To have this online, off-line integrated service platform to strengthen these business sites and inclusively owned services and then to have this overall improvement of the coordination and the collaboration of different types.
HanGuoqiang
And now let’s have with us the next question. Now let’s have with Bank of America Merrill Lynch, Wu Yi.
Wu Yi
I would like to ask something about the capital management. So I’m very happy to see for our core management, it has a significant improvement of the fourth quarter. I would like to ask for 2021, for this wealth value increase, rates being fast, what is the reason for that? And what is the arrangement and the plan of that? And therefore, the [indiscernible] requirements, so do you have this asset increment policy and plan?
A – HanGuoqiang
Thank you so much for Madam Wu from Bank of America Merrill Lynch. Now let’s have with us Mr. Zhang Qingsong.
ZhangQingsong
Thank you so much for your question. So from 4 aspects, I would like to deal with the answer. First of all, so Agricultural Bank of China speaks to this asset management confidence and optimize this long-term mechanism of assets and to improve the level of assets, liquidity. And until the end of last year, it’s 17.13% of the whole rates, up by 0.54% compared to the end of 2020. So for 13.46%, up by 0.54% compared to last year.
So for the core operating asset liquidity, it’s 11.44%. Compared with the end of 2022, it’s up by 0.44%. So for this asset abundance, increase is mainly attributed to this overall inborn strength of asset attraction and with the asset conservation strategies implementation and this outbound. So it’s about this innate growth of assets has been improved continuously.
In 2021, we have continuously expanded this strength of serving the real economy. So for this loan business with quite high profitability is up by 3.3% compared with last year, thanks to this financial [indiscernible] RMB 247.2 million, up by CNY 2.53 million, is up by 11.7%. So with this similar dividend issuance, the overall profit is higher than RMB 11 million. It’s a Y-o-Y growth of RMB 1.96 million.
So for the abundance, it’s actually higher by 12 bp. So for this capital conservation strategies have been effectively implemented, the continuous optimization of asset structure until the end of 2021.
So loan asset, individual loan percentage compared to the end of 2020 is up by 0.5%.
For national bond, security bond and the financial company bond, compared with early days of 2021, is up by 1.7%. For national bond is 0 weight. And it’s also very low weight of this security and financial bonds. At the same time, we also have strengthened for this low efficiency or non-efficiency asset. We cleared all these percentages and all this implementation of the policies of expenditure conservation.
So it has increased this 28 bp of this overall core business asset. So the third thing is we have realized this internal individual development. For 2021, Agricultural Bank of China for this [indiscernible] less than the speed of the asset growth. So for this overall percentage taken by that, for this overall one, it’s 61.4%. Compared with early days of 2021, it’s down by 1.5%.
So this is for outbound asset has been [indiscernible]. So we also have issued this perpetual bond because of the market situation. So this is the first point of my report. Second one, we have [ formulated ] this 2022 to 2024 asset plan. So for our asset plan, compared with last session of the plan, it’s up by 0.5%.
That is to say for this new session, for the core operation asset for Tier 1 assets will be no lower than 10%, 11% and 13%, respectively. The last one is about asset abundance and liquidity.
So the third aspect is about for this next step of the target. We have concern that we will continue the optimization of asset management and consolidate this up to standard, standard.
And the second one is about this — having this replenishment of outside support. And then focus on the market, seize the market opportunities to rationally stipulate the policies and implementation of that.
Lastly, about financial replenishment, I would like to do the following conclusion. So Agricultural Bank of China will be based on ourselves, comprehensively improve the asset management confidence and to have this demand and supply balance, this innate cycle and for other kinds of assets based on the market situation to have appropriate and moderate support replenishment.
HanGuoqiang
Thank you so much. So now we will have with us the next question. The next is from Citi, [indiscernible].
Unidentified Analyst
I’m [indiscernible] from Citi. I would like to ask about this interest margin and interest gap. So can you talk about the 2021 this net interest gap? And then for this liability cost and therefore this LPI, so we all have this slight reduce. So how do you talk about this new gap of that because we are in this decline of interest trend?
HanGuoqiang
So now let’s with the Vice President Zhang Yi to answer this.
Zhang Yi
Thank you so much for your question. It’s about this net interest gap. So for the last year, we have reduced this net interest gap. So this is in line with the overall industry trend. So in the past few years, we are seeing this channel of interest being lowered.
So for the expansion of that is this comprehensive and overall trend. Last year, it’s 2.12%, down by 8 bp. So from revenue and profitability, so for liability, and — it’s all down by 5 bp and 3 bp. For the assets, profitability in the downward trend is actually the main reason. So from the asset decline, we will analyze the reasons.
On the one hand, it’s about this interest rate is down by 9 bp. So one is about the Agricultural Bank of China comprehensively strengthened our reduction of fee and lowering this newly issued loan reduction.
And the second one is about 2020 for LPR decline is this release of the cumulated effect. You know that in 2020, LPR being lowered is down by 30 bp. For 5-year LPR, it’s down by 15 bp. Especially first quarter of last year is this fixed pricing of housing markets. These have all reduced our profitability.
It’s actually down by 15 bp. So this is about this interest one. It’s down by 9 bp.
So the next one is about the overall structure optimization. It’s up by 4 bp. So we have already mentioned that for the overall structure optimization and the conservation of the asset, it’s also improving the interest. So we have — having this increasing loan percentage.
And for this high interest rate loans have all been increased in its overall coverage.
So I would like to report it’s mainly about the asset influence.
Second of all, I would like to report for this 2020 prediction of the interest gap. We expect for our banks, gap will still go down. However, for the overall, trend is obviously going stable.
Because since December last year, for 1-year LPR and 5-year LPR have all been down by 15 bp and we would lower the profitability of our asset aspect. However, since June last year for the evolution of deposit incentive, it has significantly stabilized this liability.
So from asset and liability, it will lower the comprehensive financing cost of the companies. We have given it a bigger space. So from asset aspect, we will expect the slight decline of that. We will continue to give profit to the real economy. We expect this newly issued loan and this newly issued investor loan, the interest rate will be lower.
So this is making the decline of loan and investment. However, with the optimization of investment and the overall loan will be still further improved. But to a certain extent, it will lower the pressure of this declined interest rate and it would also stabilize the cost. So for the overall revolution of this deposit incentive would have seen accumulated ones. So when we reprice this deposit, so we will alleviate this rise of the pressure after this 2-year and 3-year deposits. You have already seen that the market-based interest rate is going down as a continuous trend.
So we also have this reduction of the overall cost. You would make us alleviation of this liability pressure to make it very stable.
So this year, we will further strengthen this net interest gap to alleviate the pressure so from 2 aspects. On the one hand, it strengthened this 2-way combination. And with this optimization of the structure to include this overall retailing bank strategy to improve the overall proportion and the optimization of that and also strengthen and accelerate the digitalized operation and to have this low term and the short-term loans and to have this interest risk management and to alleviate the pressure of declining interest rate.
HanGuoqiang
Thank you so much, Mr. Zhang Yi. And now we have with us the next one. The next is from First Finance, [Shu Yanyan].
Unidentified Analyst
So I am the journalist from First of Finance. My question is for 2021 for green finance, what are the key selling points? And what are the approaches for — what is the 2022 target and the specific approaches?
HanGuoqiang
Thank you so much for [Madam Shu] from First Finance. So for this question, we will have with us Mr. Zhang Qingsong to answer this.
ZhangGuoqiang
Thank you so much. So we pay a lot of attention to that. And we constantly promote that and to have this comprehensive optimization and revolution of green finance until the end of last year for the balance is already reaching RMB 1.98 trillion, up by 30.6% First is speaking to the strategy leadership. So for Board of Directors, we have already issued the committee of sustainable development and the green development. So we are the first one to have this working committee of carbon management and the green development.
And we have put this green finance as one of the 3 key strategies.
Second speaks to innovation driven. We have successfully promoted wind power, solar
power, different loan and credit policies of this aforementioned new energies and for green husbandry, green rural industry development and for this beautiful rural loan and rural revitalization loan and low carbon loan, et cetera. We also have a lot of green bond investment businesses.
And third is stick to this risk management, strengthen this social coverage of risk management and this whole process risk and control. So for this now green environment ones and for this high energy consumption to have this limited one and to strengthen the super warning of that.
The fourth is to promote this green finance and this connecting to this Internet. So for 2020, we will carry on this low-carbon sustainable one. So it will include this carbon peak and carbon neutrality to promote the healthy and sustainable development of green finance and to comprehensively implement this strategic allocation of carbon peaking and carbon neutrality and to first focus on this health development to lower the carbon emission and guarantee the food security, energy security to lower the space and pace of this reduction of costs, and the carbon to facilitate the restructuring of green finance, and then continuing the restructuring and optimization of the scale and the financial support to be expanded to guarantee that the speed of green finance loan will be higher than any of the other products. And to have the specified carbon emission and energy reduction, we have already implemented several projects in this aspect.
Next one is actively promote this green financial product revolution and to cover green finance, green bonds, green security and green foundation with a diversified financial portfolio and to strengthen this global and nationwide carbon market. Lastly, to rigidly implement this carbon emission and energy implementation to improve this whole system energy reduction and to construct this green band.
HanGuoqiang
Thank you so much for Mr. [indiscernible]. Now let’s have with us the next question. Next is the 21st Century Business Report — Business Herald, [Li Yan].
Unidentified Analyst
So this is from 21st Century Business Herald. I would like to ask for this real estate loan issuance for 2021. And for this asset quality, has it been influenced by this asset market? And how do you look forward to the risk of that? And any changes of this loan issuance policy?
HanGuoqiang
Thank you so for Mr. Li from 21st of Century. So here, I would like to ask to Mr. Cui Yong to answer this.
Cui Yong
And I would like to answer the question. Thank you so much for Mr. Li, the journalist. And I read your paper every day, so I think it’s quite a challenging question, but I would like to try to answer this. For 2021, we still stick to this not focusing on this investment aspect of this real estate market and then to manage this credit market to strengthen this livelihood guarantee and shared ownership, no guidance and try to satisfy this reasonable residential demand.
For this balance of real estate one and for the 2 concentrated indicators have all been lower than this upper limit. And this is the only one, the real estate concentration level, but the 2 indicators have all met the standard. So until the end of 2021, we have this legal person balance is for CNY 430.3 million. It’s up by 17.7%. So nonperforming one is not too high.
So with this downward development and this risk exposure of certain real estate companies for the nonperforming loans have been finalized. However, the overall risk is controllable. So here, I have some data to share with you. And for this overall bank, nonperforming rate is only 0.64%. For individual loans, it’s better than this legal person development loan.
Why do I see it’s comprehensively controllable? Because for our bank, we have strengthened with entry management of real estate markets, constantly strengthened the source management of loan and credit risks and also strengthened the mortgage vouchery and the asset things and to risk — have the risk management sticking to this different threshold and time point and also go with this different local departments to guarantee the delivery of the houses and delivery of the guarantee of livelihood and have this alleviation of the pressures and offsetting the risks.
So for the overall risk aspect, I would like to say for the overall real estate industries market, it’s still concentrated on a limited amount of large-scale real estate development — developers, especially those with overseas wealth management and overseas trust with this nonbank source big percentage of their financing system. So since fourth quarter of last year, the regulatory departments have already taken multiple measures to lead different commercial banks to satisfy this reasonable financing demand. However, I think the expectation of the oil industry is still being remedied, so for the speed of investment has not been reversed.
So for certain risk-exposed developers and with the attention of their cash flow have not been alleviated, as you expect, that they will still suffer from certain risks to be exposed. So for the loans of all those different large-scale developers, we mostly have collaterals and the risk of loans are still controllable.
So the third aspect is looking into 2022 for Agricultural Bank of China will rigorously implement this central government adjustment of the market, still sticking to this stabilizing of this price of real estate, unit price and to control the risk prevention and control. So first of all, we will center this livelihood guarantee feature of real estate market to rigorously support the construction of lease and purchase and mainly focus on those rigid support and this basic livelihood support projects to guarantee the reasonable development of that. So for the risk concentration, we will make it be compatible with that.
Next one is about going back to the source of listed projects and then to further complete this post loan issuance one and then manage this whole process management. And then based on this merger and acquisition to actively promote the alleviation of the risks to have this comprehensive management and health management. Thank you so much. That’s all that I can talk about from these aforementioned dimensions.
HanGuoqiang
Now let’s have the next question. So now let’s have with us Hong Kong Business Daily, [indiscernible].
Unidentified Analyst
I’m [indiscernible]. So I would like to talk about the rural revitalization results in 2021. And for this, I hope that the management team could also look forward to this. How can we, based on this number one document, to carry on the implementation of rural revitalization work?
HanGuoqiang
Thank you so much from Madam [indiscernible] of Hong Kong Business Daily. So here, we will have with us Mr. Zhang Qingsong to answer that.
ZhangQingsong
So thank you so much for the answer. I think for the focus of our main business for Agricultural Bank of China, very importantly, is about — so you can see that for the early days of our press release, I would like to talk about several data and the business. I wouldn’t talk too much about this because I’ve already talked a lot about the rural revitalization. And here, I would like to talk about several aspects. So you can see that, first of all, we could focus on this rural revitalization key financial services.
Last year, we have issued about this rural industry, food security, designated work plan to have this code chain logistics and agricultural food designated policies until the end of 2020. So for the key aspects, the balance is RMB 113.78 million and up by 17.5% and 20.6% increase. The rural revitalization for rural construction, the balance is RMB 1.28 trillion, up by 14.8%.
The next one is the construction of the consolidation of policy lifting. So Agricultural Bank of China has established 11 different policies, 158 different financial support policies. So we also have guaranteed this property lifted areas credit increase. Until the end of 2021, for the counties of party list one is RMB 1.74 trillion. It’s 1% higher than the average growth rate of the whole bank.
For the key support counties, it’s RMB 21.66 million. So it’s 1.8% higher than the average of the bank-wide loans.
The third is we comprehensively and constantly revolutionize this loan issuance to have this quite complete financial service system. For 2021, for this headquarter and the different regional banks have already got 55 different featured, 3 rural associated products. Until now we have 10 RMB 100 billion level products. And this is the restructuring and the breakthrough of the 3 rural products. So just now we have talked some different aspects to have shown that the digitalization of rural issuance and about this revitalization of that.
So here, I would like to give you one example. So I would like to say that for the end of 2021, it’s already over 40% of the growth, serving 3.3 million households of farmers. You can calculate, on average, so per household, it’s actually about RMB 0.15 million. And I would like to say it’s a very inclusive and preferential one. So how can we do that? We haven’t included that.
And we still have so many different branches. And we have so many different small value loans, and they are very scattered. So we use this combination of online and off-line to use our mobile bank and with our digital risk control to do that. So I would like to say that we have effectively do this farmers loan. And there, this is also a significant increase of first quarter.
So without digital transformation, Agricultural Bank of China hopes to do this rural revitalization bank is very hard. So we would actually be designated and devoted to this focus. And professional rural revitalization support bank, we need to have the digitalization.
So we need to improve the efficiency and quality until the end of 2021 for this county level loan has up by 12.2%, higher by 3.7%. So it’s also higher by 0.1% bank-wide.
So the nonperforming one is 1.42%, dropped by 0.1%, reaching this 5-year low, record low.
So it also has increased our risk alleviation capability. So I would like to say that for county-level business, this is a very good responsibility taken by us to implement a national strategy. It’s also the strategy and competitive edge of Agricultural Bank.
So you can see that it has given a full play to this financial services to have this leading bank of serving this rural one. So first is strengthen the support and consolidate this poverty alleviation results. Second is comprehensively focus on this rural revitalization, food security, industrial development and rural construction. Third, the inherent risk of innovation-driven service of revitalization of rural areas. And the fourth is strengthening technological repowering.
It is to strengthen the mechanism support, so we will give this a preferential arrangement of accounting level loan. And to have these financial resources and company resources, we will strengthen this different channel of county ones. So for this allocation and dispersing of the sites, we’ll be focused more on rural areas. We will strengthen on this rural area talent and lead more cases and staff resources to go to rural revitalization first-line work and to have this enterprise starting. So to serve all those different ones, we already have overall grasp of that.
So for the national resources, have all been supported to this rural areas one. And for this traditional ones, including this online and off-line combination, and to have this 3 different rural-related ones, digital transformation one, and also has — there’s a certain scale effect. It is implementing this mission given by the central government. It has also been this differentiated strategy. And it’s also this different selling point.
So thank you so much for this exclusive and differentiated selling and operating ones.
HanGuoqiang
So because of limited time, so we will just answer 2 last questions. I think I would like to give this opportunity to that. So we would like to choose this top 2 questions, but they have not been covered. So I would like — so the first question is about wealth management. And we have already noticed that in 2021 for this total risk management of rural wealth management.
And what are the influences? So what is the development strategy, so whether Agricultural Bank of China would set this? So for all these, we will ask Mr. Lin Li to answer that.
Li Lin
So thank you so much, and thank you so much for this rural wealth management. I would like to talk from 4 different aspects. First is about 2021. For farmer wealth management, the overall plan, all in all, we have 3 different ones. The first is we have already seen this operative — it’s the overall scale is RMB 2.2 trillion until the end of 2022.
So it’s already over RMB 1.8 trillion. So compared with early days of 2021, it’s over CNY 80 million, and it’s up by 90%. So it all has been cleared for this investment guaranteed products. And for ROE, it’s 12.17% and ROA is also 12%. So for all those indicators, have all ranked the top.
And second is about this core wealth management confidence. So for investment one, so you have already faced with quite comprehensive and complicated one. So it has this fixed interest rate. On the basis of this, it has got this very cautious and public-funded securities and the whole security ones. So from practice, we think for this strategy, it’s still correct.
So for the whole year, farmers wealth management has already reached over CNY 60 billion. So it’s about 3.9% of interest rate. Over 80% of the products have already higher than the comparables in the industry. So for the product issuance, we have constantly — in which the [indiscernible] product one, it has already got this wealth management. And fixed profit and enhanced fixed profit have all the balance layout and have also promoted some preferential rural products, and the scale have all been improved.
So for risk management, we have strengthened this rigorous and stable operation. So it has seen a quite stable performance, and it has all never experienced this last one. So for the newly issued product and for our in-house security have all seen no nonperforming ones, and it has not seen any default.
So third, serving the real economy and it has already got this top level one. So for this overall policy support, with this designated issuance and increments to support this policy development, so for the overall policies, there are 3 aspects. First, to serve this national regional key strategy and the rural revitalization. So for Beijing, [indiscernible] and [indiscernible] for the overall investment scale is already exceeding RMB 600 billion. So we have invested and supported the first-ever bank and financial sectors projects implemented this provincial-level foundation with overall scale reaching RMB 5 billion.
And then, we are actively supporting this county level. So county-level service is already a very good tradition of Agricultural Bank of China. So they have already purchased over CNY 900 billion with the overall over 43%. So you have supported the real economy. And it has already got this weighted profit rate is only 3.61%.
Compared with 2019, it is down by 60 bp. So for this overall profit, it’s already 5.1% compared with 2019, down by 35 bp. This is the first part of my answer.
Second part is it’s about this recent [indiscernible], I would say it’s very important. So we — it’s the financial management transition period being ended. It has already implemented this new net value evaluation measuring system. The characteristics have been shown that it’s about this net value management. And in the whole working process, we have also seen that for this restructuring of this net profit has already been shown in 3 aspects.
So the first aspect is about the wealth management difficulty is being improved. So for this wealth management, you have to stick to this standard of this evaluation of the price. And second, stick to this price change has been rapidly influenced on the net value of this asset management, has already made it more sensitive, especially about stock market and bond market fluctuation. For those product, you could actually have a bigger fluctuation. And then recently, we have seen this safety, liquidity and profitability have been enhanced.
It requires us to speak to this customer first. [Audio Gap] And then, we also have entered this new turning point. So for this financial asset designation, to a certain extent, in the future, for wealth management business, we’ll decide the retailing bank direction. And for the year 2022 for farmers wealth management development strategy is to carry out the supporting of real economy and this inclusive finance to be based on this group. Focusing of serving this whole rural economy and rural wealth management will still strengthen our own support to the real economy.
And like Mr. Zhang repeatedly said, for rural revitalization and elderly care, wealth service will focus on this farmers wealth management to strengthen the knowledge and the capability of that.
Second is to strengthen the investment and management’s confidence to do the 3 aspects work. So first of all, we have already established this overall structure and system management. So to strengthen this long-term mechanism of rural and farmer wealth management and to comprehensively have this multi-market, this coordination confidence to have this liquidity-focused asset safety and the comparable profitability, and to designate our efforts to make good products and to comprehensively make positive development of all the wealth management of all the farmers. And for this aspect, we will focus on the establishment of that so to have a better satisfaction of the detailed and the niche customers of their wealth management demands. So we have altogether over 20,000 bank branches.
So for this scatter than the wide covered sites have offered the possibility to do that. And then it’s over 800 million customers. We also have the early starter advantage. Essentially looking at last year for the individual customers’ deposit has over CNY 1 trillion. And based on our digital transformation for mobile digital bank and the smart robot services, it has already over 187 million users.
So next one, we will strengthen the channel optimization to improve the online and off-line omnichannel integration. Through doing this, we hope to stimulate this existing customers’ demand. To next aspect, we hope to serve the existing potential customers to have this good circle and to expand this farmer wealth management coverage.
So the next question is about establishment with wealth management company. So for the overall headquarter of Agricultural Bank of China has already authorized this to establish this JV of wealth management. We have already started one. So maybe it’s quite good progress in discussion. I think we will fully establish the demand on the sales channels and the customers of our own bank to combine with this overall global management ideology and integrated management system.
So we will also designate ourselves to offer this high-quality wealth management product and to have this ESG and other featured property management company and to have this mutually beneficiary and complementary one. So that’s all I want to say. Thank you.
HanGuoqiang
Thank you so much. So last question is about deposits. So investors asked that — so for this overall trend is how and what is the overall deposit management and talk about the overall trend of that and the whole coverage strategy. So for this, I would like to ask Mr. Zhang Yi, Vice President of that.
A – Zhang Yi
So thank you so much for your concern about the deposit. Deposit is the basis of all the different products and the businesses of that. We definitely pay a lot of attention to the development and the lean management of that. So I would like to give you some data. In 2021, for the overall deposit balance is CNY 1.5 trillion, is 7.5%.
And another data is about the daily increment is CNY 2 trillion. It’s very, very thrilling data. So from customer structure, the overall deposit has already been maintained the top of the industry in a successive manner. And it’s already reaching 8.5% of the increased rate.
The second one is about our deposit account. So until the end of last year, it’s already over CNY 1.73 billion and is up by 55%. Next one is about county-level saving. It’s quite fast growth. As Mr. Zhang mentioned, for county-level deposits, it takes 43% of the overall one. These are the data that I would like to report.
The next one is — so for the overall trend is how. So generally speaking, from June 2021, the revolution of deposit incentive has been revolutionized. And then from the interest rate — and then for the short term, interest has been increased and the long-term one has been reduced.
So the overall purpose is to stabilize the overall liability level. And based on this kind of revolution, Agricultural Bank of China has also taken 2 aspects of the strategy.
First is optimize our own interest rate system. So first, concerned with this upper limit of this long-term and short-term debt and still far higher than all the competitors. So we actively increased this competence and incentive KPI and to lower the overall marginal cost on saving.
And then next one is to take this favorable opportunity of this mid- and long-term saving and then to invite them have the fast growth of that and then to realize. So based on all these aforementioned ones, so we have already got the significant reduce of the fixed-term saving.
So this is for the later half of last year, the trend of that, we have maintained this low trend.
So for this year’s savings and the deposit overall strategy you have asked. Generally speaking, for the overall [indiscernible] and the digital operation of these advantages, we need to continuously improve them. The third is to strengthen this repeated increased interest rates and then to offer individuals and companies to have more compatible and adaptable development, to have this high-quality development of all that.
So we have also asked about the 2022 one. So because as Mr. Xuguang also said, for 2022, for our savings and loans, we need to have this stable growth. And for the deposit, has to increase higher than that. For this voluntary one, so for this 2021 liability, you have asked a very good key question.
So for this active one, compared with the western banks, it’s not low. However, with the multilevel optimization of other banks. So this voluntary coverage scale of these domestic banks will be stably expanded. From a strategic level, we will do that. So most of these and one of the main supplement of that and actively implement that to have this flexibility of the cost and also to realize for this implementation, and we will utilize this reverse cycle and the whole cycle.
So thank you so much.
Han Guoqiang
So thank you so much. So ladies and gentlemen, thank you so much for your 2021 conference. And thank you so much for the analysts and friends from the press and media for your continued support. And thank you so much for the management team for this blended sharing. That’s the end of today.
So if afterwards, you have other questions, feel free to contact the bank’s investment team and the media team. Thank you so much for the friends who participated today. Thank you so much.
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