China Construction Bank Corporation

We're very pleased to welcome you all to CCB's 2021 Interim Results Announcement. And thank you very much for your continued interest and trust and support for CCB. Because of the need for normalized pandemic prevention and control, we are conducting this meeting by telephone as well as webcast. The attendees of this conference, we have Mr. Wang Jiang, president of CCB, Mr. Ji Zhihong, vice president, Mr. Wang Hao, Ms. Zhang Ning, vice president, Mr. Chen Yuanguo, chief risk officer, and Mr. Zhang Ying, chief financial officer. I'm Hu Changliang, board secretary. The bank's 2021 interim results were officially announced to the public last Friday evening. And the presentation materials related to the results were also released on the company's official website in advance today for your reference. Before we move on to the Q&A session, I would like to invite President Wang Jiang to briefly introduce to you the operating results of our bank for the first half of the year. Please welcome Mr. Wang. Good afternoon, investors, analysts, and friends from the media. Good afternoon. First of all, I would like to extend a warm welcome to all of you on behalf of my colleagues at CCB. And I would like to express my sincere gratitude to our customers and friends from all walks of life for their long-standing concern and support for the development of Construction Bank. In the face of the complex business environment and fierce market competition, in the first half of this year, CCB recently implemented the decision and deployment of the State Council as well as the Central Party Committee. And based on the new development stage, implemented the new development concept, built a new development pattern, deeply practiced the new financial actions, and continued to promote the three major strategies, deepened digital management, strengthened comprehensive risk control, and strongly supported the new development pattern of domestic and international dual circulation and high-quality economic and social development. At the same time, we have also achieved good business performance and improved our business development and market competitiveness. By end of June, the China Construction Bank total assets of 29.8 trillion RMB and increase of 6% over the beginning of the year will have achieved a net profit of 154.1 billion RMB and increase of 10.9%. In the first half of this year, CCB has achieved a net profit of .1% and a net profit of 11.5%. In the second half of this year, CCB has achieved a net profit of 16.5%. The first half of this year, CCB has achieved a net profit of 14.1%. And as the social impact continues to expand, we have effectively achieved the organic unity of fulfilling social responsibility and commercial sustainability. The best inclusive finance loan balance at the end of the first half of this year was 1.71 trillion RMB and increase of 280.84 billion RMB from the beginning of the year. CCB Huidong Li certified enterprises exceeded 5.56 million with a credit balance of more than 700 billion RMB, creating a risk control system of full process control and at the enterprise level, maintaining stable asset quality and carrying our inclusive financial services in 14,000 outlets across the bank, realizing the effectiveness of both online and offline services. Second, the financial technology empowerment effect is prominent. As of the above, for our AI-cumulated production and location scenario is applied in more than 500 scenarios. We have used CCB Cloud for more than 400 projects in nine fields to provide support. IoT platform access for millions of various businesses in relying on technology empowerment to enhance the service capabilities, construction bank customers, making sure their insight is sharper and more efficient. In addition, we have more accurate marketing services and more functional risk control. At the same time, the effectiveness of CCB's financial technology to empower society is also continuing to show. The smart service platform has 160 million registered users with a cumulative business processing volume of more than 17 billion and providing overall system solutions for a number of banks and exporting intelligent risk control products to more than 900 small and medium-sized financial institutions. Thirdly, the Housing Leasing Social Impact Fund, CCB, implements the National Policy on Housing Compensation, sufficient for the sound development of real estate development, and continues to increase support for development of policy-oriented rental housing, which has achieved good results. At the moment, CCB's comprehensive service platform for housing leasing has covered 96% of the country's prefecture level as well as above administrative districts, providing transparent transaction services for 37 million individual landlords and tenants. The nationwide CCB housing resident communities reach 323. Housing subsidy operates and manages more than 300,000 housing units, supports more than 140 guaranteed rental housing projects in pilot cities nationwide, helps supply small, low rent housing units, and has a balance of 105.6 billion RMB in loans for public housing leasing, up 22.1 billion RMB in rents. The CCB's R&B from the beginning of the year forced the Penetrating Service for Rural Revitalization, CCB insists on combining the service strategy for rural revitalization with the penetrated services with the center of state-owned banks promoting the opening of screenmaker strategies in the field of agriculture, helping to consolidate and expand the achievements of poverty eradication effectively, connecting with rural revitalization, promoting rural revitalization, and providing a better future for rural residents. The CCB is the first one to have an increase of .2% in high quality and high efficiency of agricultural wine residents in the wine industry in rural areas and affluent and rich farmers' lives. By end of June, the balance of private loans of the bank was 2.31 trillion RMB, an increase of .752% from the beginning of the year. In addition, we have covered nearly 80% of villages nationwide. The spillover effect of green finance has deepened. CCB insists on focusing on the country's 2030-2060 targets, set up the carbon neutral and carbon peak working group, continue to improve the top-level design and organizational structure. We continue to nurture various green industries and cultivate through green credits, green bonds, green leasing, green trust, and other financial tools. By end of June, the bank's green loan balance was 1.57 trillion RMB, up .7% from the beginning of the year, and the loan ratio of the two high-emission industries continues to decline. The normalization of digital operation has been steadily promoted. In response to the trend of development of the digital economy, CCB continued to explore the digital business model and achieve the results of industry workers. In the first half of the year, CCB accelerated the construction of three central decks around building ecology, and expanding users continued to enhance digital operation capabilities, focused on building a complete operational closed group from ecology to finance, created CCB LifeApp, mobile banking, and highlighted our business, and continued to improve online ecological services and operational channels. CCB as the first batch of designated operators of digital RMB, steadily promote the pilot scheme and this expansion of digital RMB in traffic and travel livelihood payments, education and medical care to stimulate the use of retail and other areas, achieve the promotion of digital RMB indicators that is promoted by the PPBOC, and we rank number one in all these indicators. First, a solid contribution to the high-quality development of the real economy, accurate support for key areas of economic development, the total amount of loans increased by 1.32 trillion RMB from the beginning of the year, Beijing, Tianjin, Hubei, Yangtze River, Delta, Greater Bay Area, and these three key regions, the new loans to the public sector accounted for more than half of the business, in addition for manufacturing industry as well as emerging industries, private enterprise loans continue to increase, diversified financing support, bond investment growth, 281.3 billion RMB investment banking business to provide direct financing for enterprises, more than 400 billion RMB increased support for foreign trade customers, the cumulative transaction amount of paid goods over 370 billion RMB cross-border express loan series products have supported nearly 10,000 customers in total. Second, strengthen the financial needs of serving people's good life, build more than 340 special scenarios in the fields of leasing, pension, automotive, community, cross-border, etc. We continue to develop and continue to upgrade the Cloud Studio Plus Enterprise WeChat service system, providing more comprehensive, convenient, and secure financial services for business and individual customers. And we continue to support the reasonable need of residential, household living livelihoods, personal housing loans and consumer credit loan business continue to develop in a healthy fashion. We continue to accelerate the construction of a mega wealth system, focusing on transformation and upgrading of wealth management and private banking, including the CCB and agricultural wealth platform and helping customers preserve and increase the value of their assets through a full range of wealth management funds, insurance, trusts, etc. By end of June, the bank's personal customer financial assets have exceeded 14 trillion, but the full implantation of corporate social responsibility and solid promotion of continuous support given to small and micro enterprises and fully supports the normalized pandemic prevention and control as well as flood control and relief, the issuance of preferential interest rate loans for related enterprises, more than 45 billion RMB, and we have donated 20 million RMB to Henan province, which is affected by the flood. For the whole bank, our 14,000 outlets remain open, the workers harbor and continue to expand the scope of convenient life services. CCB University continues to educate our coverage of financial inclusion education to people with a total of 48,000 people receiving the training and 3.87 million people benefiting from this. In the first half of this year, CCB continued to strengthen its risk and internal control, and its asset quality was stable and improving. In addition, we have improved the comprehensive active and modernized risk control system, incorporated environmental and climate change fraud risk and model risk into the comprehensive risk management system, and we continue to optimize risk control as well as enhance the digitalization and intelligence and risk control capabilities. Although the functions of the risk control platform has been highlighted and the promotion of small business loans and personal loans cloud approval has been accelerated, the risk management system and the investment transaction business has been further improved, the risk screening of financial market transaction business has been strengthened, post-investment management of credit bonds has been optimized, and the rectification and transformation of the wealth management business has been carried out in an orderly manner. Second, the initiative to strengthen credit control, non-performing loan expectations to achieve double reduction. In CCB, we have always insisted on the importance of credit risk, and for the first half of this year, the bank's non-performing rate as well as the overdue, they have both reduced and with 82 billion negative price scissors of both NPL and overdue, and maintaining the best level in the industry, asset qualities continue to improve. The current global pandemic continues to evolve, and the momentum of the world economic recovery is uneven. Although China's economy has continued to recover steadily so far this year, uncertainties in the economic operation are still prominent. In the next step, CCB will continue to adhere to the general keynote of seeking progress in a stable mission, practice the new financial concept, promote the three strategies in depth, continue to promote the normalization of digital operation, increase the construction of a mega health management system, focus on improving the group's comprehensive financial services capabilities, actively fulfill its social responsibility, and continue to achieve its own high-quality development in serving the development of the economy and society, and giving back to the majority of the investor. Finally, I would like to thank the shareholders and analysts and media friends from all walks of life for their concern and support. Thank you very much.

Thank you, Mr. Wang. Now we will start the Q&A session. To allow more investors and friends from the media to ask the questions, we suggest that each participant ask only one question, and before you ask a question, please identify yourself and your media affiliation. Ladies and gentlemen, we will now start the Q&A session. To ask a question, please press star 1.

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