China Construction Bank Corporation

Distinguished investors, analysts, media friends, ladies and gentlemen, good afternoon. Welcome all of you to China Construction Bank's 2025 annual results announcement. Thank you very much for your trust, care and support to CCB over the years. This announcement has two venues in Beijing and Hong Kong. We were connected by video. We will also broadcast to the shareholders and public through the online platform. Present in Beijing include President of CCB, Mr. Zhang Yi, Mr. Li Jianjiang, Vice President. Those in Hong Kong venue include Mr. Ji Zhihong, VP, Mr. Lei Ming, VP, and CFO, Mr. Sun Liurong. Those present also include the non-executive directors, independent director representatives, the heads of departments of head office and Hong Kong institutions, etc. I'm VP Tang Shuo. The 2025 annual results of CCB is already made public today. The PowerPoint is also released on our official website for your reference and reading. The announcement will begin by the speech made by President Zhang. Then we will have the Q&A session. Now, Mr. Zhang, please. Distinguished investors, analysts, media friends, good afternoon. We welcome all of you to CCB's 2025 Annual Results Announcement. 2025 is the concluding year of the 14th Five-Year Plan and also the 20th anniversary of CCB's IPO. In the past 20 years, we have been developing with the National Development, the Capital Market, and we use reform to generate new growth, providing stable and long-term values for our shareholders and also the public here on behalf of CCB. To all the shareholders, to our clients, and to the general public, we would like to thank you all for your support and trust. Today we have reviewed and approved the 2025 annual results and made public. Now I would like to report to you the financial performance, development, and future outlook. In 2025, we stick to Mr. Xi's philosophy, and we have implemented all the principles in the central government meetings and we have also coordinated and promoted the quality development and quantitative development of our overall development and we have achieved steady developments. The core indicators have all recorded near growth. In terms of asset structure, it continues to optimize. The five priorities, manufacturing and infrastructure, loan disbursement, has also recorded more than average growth. And we have also recorded a net profit. Increase of 1.04% at $339 billion and the operating income is also increased by 1.69% OAA Profit before provision also increased by 1.7% YOY All the indicators have a steady growth. NIM is 1.34%, ROA 0.79%, ROE 10.04%, capital adequacy ratio 19.69%, cost-to-income ratio 29.44%, net interest-net income ratio is 22.69%. They are all leading in the market. In terms of risk control, it is steady. and the NPO ratio is only 1.31% and we continue to enhance our capacity. The proficient coverage ratio is 233.15%. So based on the quality and quantity development, Capital is also, asset is also recording, is also recording growth steadily. Our total assets increased to 45.63 trillion by 12%. Growth loans to customers also increased by 7.47% to 27.77 trillion. Financial investments also increased by 12.9%, 20% to 12.9%. The liabilities also increased to 41.65 trillion by 12%. The debt deposits also increased by 7%. Our loan continues to support the real economy and we are also serving the public and the society, support the economy to go smoothly. Based on the annual results, in 2025, we have dispatched a total dividend of 106 million. And we will also have interim dividend for first half of 1.858 RMB per 10 shares. The final dividend for the whole year is 2 RMB yuan per 10 shares. And we continue to enhance our capital capacity over the year. We stick to the inherent high quality development and we have done the following things. First, we focus on core responsibilities and the primary business to empower the real economy. We have advanced the five priorities with skill and quality. We have the technology, digital, green and inclusive and pension finance. So technology finance, the loans are over 5 trillion, and we have underwriting of SciTech Innovation bonds amounted to 72 billion. In terms of green finance, we issued 6 trillion, up by 20.54%. Green bonds, leasing, investment, and funds continue to boom. The MSCI ISG rating maintained at AAA level. In terms of inclusive finance, the loan customers reached 3.69 million, The finance loan balance reached 3.83 trillion. Agricultural-related loans balance reached 3.71 trillion. In terms of pension finance, we actively expanded the application scenarios. There is a solid growth in enterprise and personal pension business. The Pillar 2 management also grew by 15%. Digital finance also accelerated. Mobile banking and CCB lifestyle app. Users reached 546 million. We developed the home living and auto living service platforms. We also provided a lot of digital economy, loans to core business and digital economy. It also grew by 18.7% to $891 billion. We have multiple channel expansion of credit resources, facilitating the domestic and international dual circulation. We actively supported efforts to boost consumption, stabilize the market, and expand investment. The personal consumption loans grew. 29.41%. Balance is at 6.72 trillion in terms of loan balance to private economy, up by 12%. And the loan balance to manufacturing sector reached 3.52 trillion. Digital supply chain financing provided 1.32 trillion. We also support balanced regional development such as Beijing, Tianjin, Hebei, Yangtze River Delta, Greater Bay Area and Chengdu, Chongqing area. The loans and deposits also outpace the bank-wide average. We also continue to strengthen financial service for key areas. We continue to coordinate the cross-border loans and investment and also the The loan balance to the project cross-border M&A and also the loan balance to Belt and Road partner countries also reached $55 billion. We also uphold people-centric finance and enhanced group-wide integrated service. We try to accelerate the transition from a product-driven approach to client-centric mindset. We advanced commercial and banking investment banking integration. Underwriting of non-financial corporate bonds increased by 85%. M&A loan balance increased by 24%. New equity investment scale is 20% higher than over the period. We also advanced corporate and retail banking integration. We deepen the ecosystem-based operation of payroll disbursement and social security card service, continue to upgrade and promote the Xin Xiaotong Payroll Service, advanced development of social security card ecosystem, so that we can connect the corporate and retail banking. We also advanced domestic and foreign currency operation integration, The international business loan balance is 1.5 trillion yuan. Cross-border RMB settlement reached 6.5 trillion. We advanced group-wide integration. The overseas institutions recorded net profit of 12 billion. The integrated operation subsidiaries recorded net profit of 9.45 billion, up by 31% and 7% YOY respectively. We also explored ecosystem plus industry and supply chain plus industry and business clusters service model. We developed 12 enterprise-level models across ecosystem, supported by integrated service throughout the customer journey. And we continue to enhance our customer base. And we also have 785 customers. We also recorded double-digit growth. And for the personal CTS customers exceeded 100 billion, assets under custody is 27 trillion. And thirdly, we adopted a systematic risk approach and strengthened risk and compliance management. With solid foundation for comprehensive risk management, improved three lines of defense risk, governance, We optimized the integrated financing management systems and enhanced comprehensive risk panorama. We also strengthened the penetrative risk management across overseas institutions and subsidiaries. We also tried to accelerate the upgrading of risk control. We also try to look at the management of emerging risks including model risks, data risks, fraud risks, and new product risks. We also try to optimize risk-related processes. The NPR ratio is only 1.31%, decreased by 0.03 percentage points. The SML ratio also stands at 1.77%, also decreased on a worldwide basis from the last year. We also strengthened development foundations and continued to upgrade operation and management systems. We promoted the development of operation data and technology. We promoted AI's application in business system. We also emphasize various risks in terms of the model risks data and fraud risks. We also continue to enhance internal control, strengthen employee conduct management, case prevention control, anti-money laundering, etc. We further enhance the consumer rights protection framework. So the foundation is more solid. Fourthly, we strengthen development foundation and continue to upgrade the operation and management system, promote the integrated development of operation data and technology, and we also enhance the foundation. We have a transformation from a centralized core business system to distributed model. The cloud computing scale increased by 12%. We also have the AI plus technology and framework.

Large more scale model technology has been applied up to 398 application scenarios within the group. We enhance enterprise level large scale operations in many key areas such as tech development, building a more comprehensive cloud system, including an omnichannel optimization mechanism to provide customers with one-stop services which enhance the efficiency of key operations to enrich an online processing scenario and enhance the automated capabilities of our centralized operations to better serve corporations and the public. In the future, we're going to continue to work in line with the 15th five-year plan to find our proper positioning to continue to promote further upgrade and development, continuing to support a new qualitative and high-quality development. In terms of business layout, financing method, customer structure, room for development, and server model, these five aspects, we're going to consolidate and expand traditional strengths and tap into the potential for high-quality development. In 2026, we're going to do four major things. We will continue to serve the national strategy. We are going to do the five priorities on finance business. We are going to anchor ourselves as a leading financial institution of China to continue to enhance our professionalism and comprehensiveness and the integration of our business to strengthen our sustainable business model. To continue to support domestic demand, to follow up on consumption stimulus policies to offer consumer financial services to have a comprehensive solution covering credit payments, merchant services, and value-added offerings to continue to unleash the growth potential of consumer financing to seize opportunities to further expand effective investment to fully expand financial services for infrastructure projects across land, sea, air, digital, roads, network, bridges, and waterways to continue to strengthen our unique advantages here and to accelerate key project progress. We focus on key areas such as ultra-long-term special government bonds, local government special bonds, and new policy-based financial instruments to support the binary star and the two focuses to support regional projects Thank you very much. We are going to continue and commit to advancing high-quality development. Customer operation is all about maintaining a strong focus on enhancing service capabilities. Our asset business focuses both on scale, pricing, and risk to maintain a balance among the three. Our liability business, we're going to maintain a dynamic alignment across scale, pricing, and quantity. We're going to consolidate our base. And our intermediate business is about maintaining category-specific policies across intelligence, technology, equity, and debt financing to enhance our value creation capabilities. Cost management, we will maintain an alignment between cost reduction and efficiency enhancements to dynamically support our growth of our business and to maintain high efficiency. We're going to continue to commit to upgrading our integrated service model. Depending on our customer needs as they change, we're going to continue to invest in investment in commercial bank integration, Domestic and Foreign Currency Integration, Group Buy Integration, and Corporate and Retail Banking Integration across institutions, across sectors, and across markets. We will upgrade and refine the service models across ecosystems, industrial and supply chains, and industrial and business clusters. Deliver personalized services tailored to individual customers across the entire lifecycle. We are going to optimize our services, achieving a tailor-made service depending on the customer you are. We further deepen integration under the binary SaaS model. We will have a more dim-depth product matrix and accompaniment purposes to rejuvenate the financial system. We're going to commit to safeguard the bottom line of risk control. We are going to remember the key of risk management and continue to advance a comprehensive, proactive, intelligent and agile risk control system to improve the working mechanism of the three lines of defense to further strengthen the joint risk management between bank and subsidiaries and enhance the look-through management of overseas institutions. We are going to further adopt a more dynamic loan control mechanism. We are going to roll out inclusive loans and continue to assess regional risks. We are going to hold fast to the bottom line of risk control in order to assess risk in advance and increase our resolution capabilities. We are going to enhance enterprise-wide anti-fraud capabilities as well. We are going to continue to build a better consumer protection system to promote the deep integration of the entire business process. In 2026, we are going to continue with the political and fundamental nature of our business. We are going to continue to keep our eye on risk on the business development to continue to serve the development of our nation to prevent financial risk and enhance our international competitiveness. We will have higher commitment, more pragmatic measures to play the role that we should play in the development of our nation's history, to show our value, to work with all partners, to open up a new chapter of high-quality development. Thank you, everyone. Thank you, thank you President Zhang. Now we go into Q&A. So this event will have questions alternatively from both the Beijing and Hong Kong venues so that everybody gets a chance to ask questions. We hope that everybody could limit yourself to one question so that everybody gets a chance to ask a question and please introduce yourself before you pose your question. Our first question comes from the Beijing venue. May I invite the lady on the left on the third row, please. Hello, I am from CCTV, Wu Zhe Yue. So in 2025, you have achieved a stable and fantastic results. Congratulations. In terms of profit growth, we see that there is a positive recovery trend as well. May I ask... What's the core drivers behind this good performance in 2025? And what's the outlook for our operations in 2026? May I invite our president to answer that question? Thank you. Thank you, Madam Wu, for that question. In 2025, the CCB's business has continued its steady progress. I should say that the high-quality development has achieved certain results. Our steady foundations are getting better and better. Our total assets have surpassed $54 trillion, Our net profit is 339 plus billion, 1.04% growth. Our profit attributable has grown by 0.99% as well. Our operational revenue has also grown by 1.69% and 1.7% respectively, profit before provision. These are the key metrics. In terms of the trend, Ever since Q2, our operational income has continued to grow. Our annual profit growth continues to be healthy. The development quality continues to grow and improve. A lot of our assets have been optimized and improved in quality. Amongst our loan-to-key sectors, under the five priorities that continue to go up, our ROA, ROE, our NIM, our capital adequacy ratio, our cost-to-income ratio, and non-interest net income ratio, all are very balanced. We continue to lead the pack amongst our peers. Our income structure continues to be more diverse. 22.69% non-interest net income ratio, which is a year-on-year increase of 3.65%. Our subsidiary contribution from overseas continue to increase. These two entities has gone up by 0.98% in terms of their net profit. I would say I attribute our success to the following five reasons. Firstly, we are able to stabilize the basic NIM structure and the decline has continued to narrow. In terms of quantity, We have a 9.38%, which is a 1.38 acceleration. Primarily because our core asset growth has been faster, the average liability balance net is at 89.13, which is a year-on-year increase of 0.66% in terms of price. Thank you very much. Investment into mid to long term quality efforts and among non-discount loans for one year plus loans of duration has increased by 0.8%. We continue to consolidate our traditional advantages in this space. Personal consumption loans, personal business loans have achieved double digit growth for three consecutive years. We continue to accelerate settlement of low-cost financing. Domestic loans is 24.34% by proportion, which is still a very good level compared with our peers. Secondly, we offer more in-depth comprehensive services. Non-interest income continues to grow. We continue to create value through service to achieve a win-win situation with our clients. 5.13% growth in the non-interest income front. So we consolidate our traditional interest-based income, but on the other hand, we continue to improve our services, capabilities, wealth management, asset management, and the revenue from all these areas continue to grow steadily, amongst which our wealth management products growth has been faster, more than 25% growth. For funds which we sell and for wealth management is more than 90% growth year-on-year. This is all like higher growth compared with our administrative fees, which is a net growth. We continue to assess the market to improve our investment strategy. Equity-based investments and relevant income revenue has grown by more than 40%. Thirdly, we continue to manage our costs. Fee controls has been working. Our cost ratio is 92.44%, which is a 14 basis point improvement, continue to be a very healthy level, amongst which our operational fee increased by 1.54%. We are going to increase our input into key businesses, accelerate digital transformations. FinTech is 3.61%, which is 0.26% growth of overall in good. We are going to continue to improve our asset management and risk management. Our asset maintains healthy. NPL is 1.31%, which is a year-on-year decline of 0.33%. Our risk management capability is quite adequate. Our provision coverage ratio is 2-3.15%, which is basically flat year-on-year. We consolidate our customer base, enhancing our overall service capabilities. In terms of quantity, we have expanded our scope of coverage for our clients. For corporate clients, 12 million plus, which is an increase of 1.05 million different clients. Our different unit clients have also increased by more than 10%, which is both 9% growth year-on-year, which is 1% faster growth compared with last year. Personal customers have surpassed 785 billion customers. Our number of wealth management clients and private banking clients have both achieved more than 10% growth. Our CTS customers, the total assets under custody have increased to more than 27 billion, which is a high 20-something percent digital growth. Our product coverage, our client activity are all looking good. and CTS, our personal customers have achieved double-digit growth. 2025 is the starting year of the next five-year plan period. We're going to continue to work with the government to build a better life for our people, our nation. We are confident and capable that we can achieve long-term sustainable and resilient business performance. We're going to continue to leverage our traditional strengths in liability management business and to in-depth find more service value propositions amongst our clients. We would have an effective growth of our quality development and a reasonable amount of quantitative development. Thanks to our traditional base, we are able to continue to work on our five key priorities. We want to be one of the leading banks in fintech. The several consumption stimuli policies to optimize the product supply out there in the market, to enhance our international competitiveness, to approve of our quality loans. We are going to develop our service capabilities to better integrate the rural city areas development to continue to build both corporate and Commercial Bank, Domestic and Foreign Integration and Room for Development in our Customer Development. We are going to empower our business development through finance. In terms of asset liability, we enhance our liabilities greatly to enhance our core loan business Thank you very much. to increase pricing management mechanism to restrict the low-yield assets to further stabilize our overall business.

So that the new momentum can be created. We will also optimize our services and increase their quality. And we will also enhance our stability management. It continues to enhance linear management based on the solid development. We should explore more room for linear management so that the cost effectiveness will be improved. Thirdly, we will have to have a preemptive management and get more quality risk control assisted by AI, improve the comprehensive, proactive and intelligent management system so that we can more actively respond to the risks. We have to stick to the three guiding lines, also enhance the... Management of the MPL. Thank you. That's all. Thank you, Mr. Zhang. Now I'd like to invite questions from Hong Kong. The lady on the left, the third row. Thank you for the opportunity. I'm from JP Morgan. I'm Li Li Li. My question is about loan. We see that in 2025, it has the very steady growth to about 7%. Just as spoken, this is the opening year of the 15th five-year plan. So what is the new arrangement compared with 2024 in terms of regional dispatchment and the sectors? How different would it be? I would like to invite Mr. Zhang to answer the questions. Thank you, Ms. Li, for your question. Your first question is about the loan disbursement sectors. In 2025, CCB stick to the real economy service, and we also stick to the strategy of quantity and pricing balance. We also continue to expand our customers and markets. and we are also at the pipeline of the key projects. The loan growth is steady and enjoy high quality. In terms of quantity, we enhanced our capacity to support the real economy. We have two highs and two advancements. The two highs include the growth of 7.47% The second high is the domestic loan is 8% in terms of growth. It is also higher than the CCB average. It also supported the real economy. What are the two advancements? First, in terms of the residential loan and the retail consumption loan, The disbursements are also leading in the industry. In terms of the retail consumption and also the advancement of some structural arrangements, we continue to support the mandatory needs for residential improvement of So in terms of residential finance and retail finance, we maintain our competitiveness compared with our peers. We continue to improve the quality, and we have two elevations in the key areas and key regions. The loans percentage continues to increase. In 2025, CCB also has five priorities. and all the key area and five priorities have recorded double digit growth. In terms of technology loan, it also exceeded 5 trillion and increased by 89% supporting the High-tech company and also the print finance also increased by 6 trillion and the inclusive finance also stands at 3.69 million. We continue to expand our customer base in terms of pension finance and digital finance. It reached 53 and is up by 15% and 18% respectively. We also continue to enhance the manufacturing infrastructure, so the loans to these key sectors have also recorded double-digit growth. And in some key regions like Beijing, Tianjin, Hebei, Yangtze River, and the GBA, Chengdu, Chongqing also has maintained very steady growth. It's also higher than the average. The Retail finance continued to show its competitiveness. The domestic loans also exceeded 9 trillion, and it also takes up 32% of the total loans. Compared with our peers, we also maintain a leading role. This is a solid support for our steady development. In terms of the total arrangement for 2026, this is the opening year of the 15th five-year plan. So we will try to guarantee a steady growth. In terms of structure, it will be driven by the domestic need. Also, we need to nurture the new quality development. The macro policy is more proactive, and we will support the industry upgrading the internal needs Thank you very much. Thank you very much. And in terms of the rhythm, we will also get a little bit more energetic and we will have two anchorings. First to the corporate loans, we will support the modern industrial clusters and systems, realize the New quality development, support the emerging and strategic sectors, especially the high technology sectors, and we will also continue to dig out the investment needs. Centering around the five priorities and manufacturing and key infrastructures, we will also echo the objectives of 109 items in the 15th five-year plan in terms of the local government's dedicated loans and some new emerging markets loans. We will also provide our support so that we can support the industry transformation. And we will also support the domestic demand consumption and its growth. We will also execute some dedicated projects and make full use of the physical policy, support the EV, automobile, the electronic devices and digital devices, consumption and travel, tourism, catering and the hospitality services so that the client's experience will be elevated. We will also guarantee the demands of the service industry and for the property markets, we will also be prudent, support the commercial residential buildings, support the social welfare system reform, and enhance our competitiveness in the real estate sector loans. Through these measures, we will also Our efforts, we will continue to maintain our edge in terms of the retail consumption loans. Thank you.