China Constr Bank H

and media friends. Ladies and gentlemen, good afternoon. I'm very happy to welcome all of you to China Construction Bank's 2025 Interim Results Announcement. Thank you all for your longstanding trust, interest, and support to CCB. Today's briefing has two venues in Beijing and Hong Kong, will be connected by video and also live streamed to shareholders and the public. Attendees in Beijing include President of CCB Mr. Zhang Yi, Vice President Mr. Lei Ming. Attendees in Hong Kong include Vice President Mr. Ji Zhihong, Vice President Mr. Li Jianjia, and Chief Financial Officer Mr. Shengliurong. Also present are non-executive directors, independent directors and supervisors. Heads from head office departments and our Hong Kong entities are also attending. I'm Deputy President Han Jing. CCB's 2025 interim results have been officially released today. The presentation materials also available on our website for your reference. We will begin with the remarks by President Zhang Yi followed by Q&A session. Now, President Zhang, please. Distinguished investors, analysts, and media friends, good afternoon. Welcome all of you to CCB's 2025 Interim Results Announcement. Thank you all for your care, your trust, and support. Over this year, under the socialized spirit upheld by President Xi Jinping, and we have executed the State Council's policy, followed a steady principle, and also we have a very high quality development. For the first half of this year, our operation performance is very good. The key indicators are also very good. We have an operating income of 385 billion, increased by 2.95%. Net fee and commission income is 65 billion, increased by 4%. Net profit provisions, 290 billion, increased by 3.37%. Now I would like to disclose more. details to you. First, we have the three stabilities in assets, liabilities and key indicators and the performance is very steady with some developments. In terms of core assets, its growth is very steady. By the end of June 30th, we have also a release. We have the gross loans to customers of 27.4 trillion increased by 6.2%. The financial investments also stand at 11.77 trillion increased by 10%. Core liabilities also increased by 6%. to 30.47 trillion, and NIM is standing at 1.4%, ROA 0.77%, ROE 10.08%, CAR is at 19.51%. And all the indicators are also leading in the industry in terms of the three optimizations. We have the optimization in assets, liabilities, and income structure. And it takes up 90%. And we also have the resources allocation to key areas. We optimize the asset structure. And we also have the loans and the financial investments of over 88%. And for the optimized liability, the structure is also very good. We have a 43% to the domestic demands. The also optimized income structure and the net fee commission income continue to perform well. It takes up 16.9%. It is also leading in the industry. and we have optimized our investment policy and the non-interest income on the net level also increased by 111% to 34 billion. In terms of controls, we also have very good results in linear controls and the quality has been also optimized. The cost-to-income ratio was 23.72%, outperforming our peers. And in terms of risk control, we have also optimized our structure. NPL ratio is only 1.33%, a decrease of 1 BP from 2024. And we also have very good capital control results. The CAR is 14.34%. The capital utilization efficiency is also leading in the industry. Under the public support, we have a strengthened high-quality financial service. For example, we have... coordinated the five-dimensional and integrated service system. We also have promoted these integrated five-dimensional system, especially with alignment of a customer service business process, and we try to reach new growth engine. In terms of procedures, the product channels, the institution pensions, we also have a five-dimension system. The loans to technology-related industries is standing at 5.15 trillion, increased by 16%. And we have also completed the establishment of filing of nine AIC equity pilot business funds. In terms of green finance, the balance is 5.72 trillion, increased by 14.88%. We have underwritten funds. green and sustainable development bonds of RMB 235.6 billion, utilised financial instruments including green bonds, green leasing, green retrust to support and cultivate the sustainable development. We have diversified our green service and finance. ESG is also maintaining at a global leading level. In terms of inclusive finance, we also optimized and upgraded offline and online system. And we have this CCB Huidonglin ecosystem. The balance of inclusive loans to SMEs is 3.74 trillion, increased by 9.8%. And we also try to improve the business capability of three pillars. We have also maintained a leading level in terms of pension management. The pillar two, AUM of CCB pension management is 654 billion, increased by 15%. 53.96% in terms of annuity customers. In terms of digital finance, we have empowered 274 cumulative scenarios. MAU of the binary stars is standing at 243 million and grow by 14.4%. The loans to core industries of the digital economy is 852.4 billion, grow by 13.44%. We also upheld the core mission of financial services and supported the national development with balanced focus on scale. In terms of infrastructure-related industries, there is a steady growth in low balances. Medium and long-term loans to manufacturing industry reached 1.79 trillion, growth by 10%. We also have aggregated corporate loan growth in major regions, including Beijing, Tianjin, Hebei, Yangtze River Delta, Greater Bay Area, etc. We also have the action plan to support the private enterprises. The loans to private enterprises totaled 6.59 trillion, up by 9.92%. The subscription volumes for government and local government bonds also reached record high. We also have accelerated the implementation of various policies. We also injected financial momentum in the domestic demand and promoting consumption. Over 90 billion RMB in loans have been issued. Personal consumption loans reached 614.2 billion up by 86 billion from end of last year ranking the first in both balance and growth among our peers we also issued 1.26 billion debit cards with the consumption transaction volume reaching 12.12 trillion credit Card loans reached $1 trillion, maintaining a leading position in the industry. In terms of personal housing loans, the number is $400 billion, with a balance of $6 trillion, both figures ranking the first among our peers. Thirdly, we also accelerated the implementation of a comprehensive set of incremental policies, including the supporting mechanism for SMEs with a credit exceeding $2 trillion. We strengthened support for the three major projects serving the urbanization projects. We also increased loans to the stock buybacks. serving over 100 listed companies and their major shareholders. Fourthly, we fully support the high-level opening up, support the internationalization of RMB, and the cross-border RMB settlement is $3 trillion, up by 23%. The CCB London branch, after being the RMB clearance bank, it has reached $148 trillion, the largest RMB, Overseas Clarence Bank. And there is a total asset of institution in the RCEP region exceeding 200 billion. We also realized rapid profit growth of overseas institutions with a worldwide increase of 57%. We maintained a customer-centric approach with a growing improvement on quality and efficiency. First, we enhanced the institutional operation and deepened customer service through delicacy management with the... the integration a unified indicator system of and there is a various financial service needs with urban rural domestic foreign commercial investment banking integration online offline integration and group wide integration we also established the the institutional evaluation, daily operation, and the customer profiling indicator system. We enhanced the multi-dimensional market awareness and provide differentiated customer services. And we also continue to strengthen the customer base. We served 12.26 million corporate customers, up by 590,000. Personal customers is 777 million, up by 5.7 million. The daily average AUM of payroll disbursement increased by 644 billion. Payroll disbursement service is standing at 91 million. We are also awarded the best large-scale retail bank in China from the Asian bankers for five consecutive years. And we have also accelerated our risk control mechanism. We also have the coordinated system of our domestic and overseas branches enhanced the group's integrated risk management and control capability. We also focused on risks in key areas. The NPR ratio is only 1.3% down by 1 BP. Special mentioned loans ratio is 1.81%, also down by 0.08%. Provisional coverage also increased by 5.8% to 239.4%. And we also continued our inclusive finance services and we also controlled some we have overall risk levels for real estate and local government loans controllable. We also continuously improved compliance management and we try to guarantee the stable and safe operation of the cyber systems. This year is also the threshold year for the 14th five-year plan and the 15th five-year plan and we faced with various opportunities and challenges and we have some basic trend which remains the same. We will also stand at the new landscape and based on our principles and policies to cope with the uncertainties from the external environment.

We will focus on the key areas of economic development and providing more financial services to the real economy. We will focus on five priorities. and we will continue to improve on comprehensive financial services at an enterprise level. We will focus on the key projects, especially infrastructure projects, and we will implement the spirit of urban work conference by the central government and seize the structural opportunities and implement the consumption stimulus projects so we can implement the loan project for personal loans and SME loans. We will stay committed to high quality development and we will optimize our operational strategy. On the asset side, we will optimize structure and extend duration. On the liability side, we will focus on foundation and control term and lower cost. On the income side, we will strengthen our basic income and explore new drivers. On the services side, we will enhance customer engagement and product portfolio so we can build market competitiveness. We will prevent risks and build strong risk mitigation mechanism. In risk prevention, we will improve our ability to promote development. We will optimize credit policies and loan granting policies so customers from tech companies can play a better role. And we will focus on real estate inclusive finance and retail finance in risk control. This year marks the 20th anniversary of our IPO. With your support, our shareholders, and with the support of the society, We will focus on our main business and we will stay true to the financial development with Chinese characteristics and we will contribute our financial power to the development of China's modernization and will create more value to our shareholders and stakeholders. Thank you, Mr. Zhang. Now we will take questions. We will now open the questions from Beijing and Hong Kong. They will take questions in turns. To allow more participation, please ask only one question each time, and please introduce yourself and your media affiliation before asking a question. Please begin. We will now take a question from Beijing. Thank you. Ms. Han from CIDIC. In your presentation, I'm very pleased to see some improvement compared with the Q1 results, especially in revenue. Can you please expand on the drivers? And what's your outlook for the profits for this year? And what are the further measures that you can resort to to boost income further? Mr. Zhang will take the question. Thank you, Mr. Ma. we have seen marginal improvement in all the business and profit indicators. Operational income and profit before provision have seen positive growth, 2.95% and 3.37% respectively. ROA, ROE, NIEM, cost-to-income ratio and capital adequacy ratio have been industry leading. We have taken the following measures. Number one, We improve on our capability to balance volume and price. We have seen narrowed decline in NIM and we strengthen high quality financial services. In the first half, interest bearing assets have increased by 7.45% on average daily. That's 1.53 more percentage points than the first quarter. Loan and bond investment have added 2.7 trillion yuan compared with the end of the 2024. That's a record in three years and we focus on key areas in optimizing credit structure. Five among the five priorities and in infrastructure and in loans to manufacturing industries, we have seen fast growth and the growth rate is higher than bank average. And we strengthen our efforts in credit finance and personal finance. And in personal finance, the growth rate is over 5%. And we have taken a more refined approach in pricing management. The name in the first half was 1.4%. And there was only a 1% point down compared with Q1. Demand deposit is 41%. That's industry leading. Secondly, We foster new drivers, increasing the contribution from non-interest income. In the first half, non-interest income is at 99.2 billion RMB, up 25.9%. Non-interest income takes up 25.7% of operating income, 4.68% points compared with last year. On the first half, commission and fees have added 4.02%, especially in wealth management, investment banking, asset management, and transaction bank. On the other hand, we strengthen our market analysis and transaction strategy, leading to higher income in other non-interest income. Thirdly, we have improved our cost management system. In the first half, we have seen a 1.18% increase in operating income, cost to income ratio 23.72%, down 0.43% points, industry leading. Fourthly, we solidified the foundation for risk control. We have seen very Stable asset quality, NPL ratio being 1.33%, down by 1 BP compared with last year. We have seen higher risk mitigation capabilities. Provision ratio is up 5.8 percentage points, reaching 239.4%. Looking at the whole year, we will remain steadfast with a high quality development. We will optimize our asset liability structure and focus on comprehensive financial services. and we will strengthen asset quality control. We will remain a stable profit growth. Thank you, Mr. Zhang. Now we will take another question from Hong Kong. Thank you for the opportunity. From Citibank, I have a question related to NIM. Among the major banks, CCB has very good NIM levels. In Q2, the decline in NIM has narrowed. So from asset and liability perspective, can you please talk about NIM outlook? With several rate cuts, what's the impact on neem and when do we expect the neem to return to a normal level? Mr. Sheng will take the question. Thank you for the question. Mr. Zhang, in his presentation, mentioned that in Q2, our neem was 1.4%. So there was a month-on-month, quarter-on-quarter narrowing. There was a one percentage point decrease. But if you compare that with our peers, this level is still industry leading. From both asset and liability perspective, on the asset, last year, LPR cuts and the LPR deposit rate cuts in May this year, both factors have led to market changes where interest rates remain low. To the industry in general, and to CCB especially, they have some impact on yield on the asset side. There was a 45% decline in the yield rate of asset side. But on the liability side, as Mrs. Zhang puts it, we have strengthened the control of liability asset control, especially on the long-term deposit with long duration and high interest. And last year, in the first half, The interest rate for deposits was down by 32 BP. On top of deposit, we have controlled the liability side with the interest rate down by 34 BP, and we have optimized asset allocation, and we controlled the interbanking assets, and we increased our effort to allow more loans and bond investment. In the first half, loans and financial investments, when it comes to daily balances, their share in interest generating assets have seen a 1.6 percentage point increase. So the higher share of high yield asset has offset the decline in NIM. Your second question, is relating the impact of lower LPR on Neem going forward and the general Neem outlook going forward. Well, in general, both the LPR cut last year and the deposit rate cut in this year have some lingering effect. Given that the pricing of loans have developed faster than deposit rate so there will be further pressure on Neem in decline going forward and our stance is that Given that the central bank is improving monetary policy framework and especially in promoting the transmission mechanism of interest rates. So there are some changes in how they use monetary policy tools in recent years. in guiding the interest cuts on the deposit side on the loan side and supporting the real economy they emphasized the balance between liability at asset side so in the recent years with LPR cuts they have resorted to some mechanisms in guiding the decline of interest rates on the liability side. Last year, on top of guiding the interest rate cut on the deposit side, they have also strengthened the self-disciplinary mechanism of interbank deposit. So last year, since Q4 2024, the interest rate in interbank loans have declined even further. And you may have noticed that since the first half of this year, the central bank has used better monetary policy tools. They have been more prudent, especially using structural monetary policy tools to guide the banking industry to support key economies. For example, in May, the government came up with the refinancing tools worth 500 billion RMB to support services industry and elderly care. And the use of this monetary policy tools has less impact on NIEM. So we believe that when it comes to NIEM trend, we believe the decline of NIM will further narrow and we are confident that through our proactive management our NIM level will be industry leading going forward as usual. Thank you Mr. Shen. Now we will take a question from Beijing. Thank you. From China Media Group, I have a question regarding the directions of loans. You have presented on the business results in the first half. What are the key areas that you lend your loan to? And in the first half, what's your arrangement for infrastructure loans in the first half and in the second half? And two days later, the government will roll out subsidy for interest rates for consumption loans, and are you prepared for that?

Mr. Zhang Yi will answer the question. Thank you, CCTV journalist, for your question. The first is about the loan issuance. For the first half of this year, CCB has executed the guidelines, and we also stick to the market expansion, support the rate economy to transform. and upgrade, so we have had a balanced loan issuance. Actually, the loan issuance increased by 1 trillion. It is faster than the industry average, and we have supported the real economy. In terms of the direction, the corporate loans increased very fast, and actually, the speed is at 1.5 – 8.59% and it is standing at 11 trillion. For the personal loan increase is quite steady and there is also the domestic loan increase. There are several characteristics. First is the consumption loan. is continuing to be solidified including the personal loan, the personal housing loan and the consumption loan continue to keep a leading position in the industry in terms of the total amount and the increment of personal loans it is leading in the industry. The inclusive loans balance reached 1.74 trillion. And for the retail loan, it is also maintaining at a leading level in terms of the percentage. Secondly, we have a very precise direction support, especially on the five key areas. The average speed is faster than the industry average. In terms of technology loan, it is also increased by 16.81%, standing at 5 trillion. And for the strategic and emerging industry loans, it is 3.3 trillion, increased by 18.92% in terms of some green and low carbon transformation loans. It is 5.72 trillion with a speed of 14.88%. In terms of digital core industry, the loans are also standing at 852 billion yuan with a speed of 13%. So for the loans actually the growth rate is developing at industry leading position with very steady growth. Just now you mentioned infrastructure loans. CCB is also born with the mission of construction, we also prosper because of development and construction. So the infrastructure loans is our pillar. Over the years, we have strengthened our capability to strengthen the infrastructure development of the country. And we also stick to the whole cycle loans and the related services. We have also enhanced our financial services to the infrastructure development and the related loan growth is also higher than the industry average. It also increased by 0.23 percentage points on a YYY basis for the second half of this year. With the key national projects execution and the application of some dedicated and earmarked bonds, there will be better results. We also have taken a more powerful KPI policy and optimized some credit loan policy. And we also have the whitelist policy. to be included in our head office. We had the related mechanism to support the infrastructure loans and the results will be more obvious for the second half. Your third question is about the personal consumption loans and the service sector loans. For the personal consumption loan, we attach high importance. We also made our whole bank deployment. We think that the policy issuance will decrease the cost for the people to file loans. There will be a leverage effect for more loans to the consumption area and we should also identify the real needs from the people and try to integrate the loan issuance to the consumption scenarios, try to improve high-quality financial services so that the bonus of these national policies will be released in a better way and the consumption potential will be fully released. So that's all of my answer to your questions. Thank you, Mr. Zhang. Next question will be to Hong Kong. value. The gentleman from the left-hand side on the fifth row. Thank you. I'm from HSBC. I'm Gary. I'm an analyst. We noticed that for the second half, your bond investment also increased from 10 to 11 trillion with a relatively high speed with a fluctuation of bond market. How you make your for bond investment and we also noticed that the Ministry of Finance also had some policies on the stock market stamp. So will that affect your bond investment? Thank you for your question. For the first half, landscape is having two characteristics. First, low interest and then there is some fluctuation on both sides. So we have also combed our thoughts and optimized our policies. First, we actively participate in the real economy, providing various supports. For the financing amount, it is around 8.8 trillion. This amount is higher than last year. try to guarantee the smooth issuance of the local bonds and the national bonds so that the financing demands of the real economy can be better met. So we try to leverage our role as a big commercial bank And the RMB bond investment also increased by 1 trillion as compared with last year. For the incremental, it is mainly flowing to the national bond, local bond, and the corporate bond. The percentage of these three types takes up, it is 92%. And in terms of a green bond investment, it is also increasing by several times. Secondly, our strategy is more proactive. The total bond investment scale is at 11 trillion. It is quite a high level. For such a scale, we have to take a more proactive managing policy. And for the first half, affected by various internal and external factors, The interest rate is also fluctuating. We also put emphasis on the structure of the inventory, try to adjust various structures. The percentage of treasury also increased by one percentage points. the national bond we also seize the opportunity of the markets and try to optimize the structure of the secondary market investment and we have also kept a leading position in the industry in this regard and we also try to improve the capacity of the market maker as a market maker um our country is also the world's second largest bond market. So we try to improve our capacity as a market maker. And we also increased the percentage of the financial assets with a market value. It also increased by six point five percentage points. And we also tried to expand our services of Panda Bond and various other credit bonds. The customer volume also increased by 75%. And we also participated in the multi-level bond market development through various ways. And we try to improve our services, increased the types of the technology related bonds. And the position also increased by 14 billion from our customer side. And in terms of scale, we are also ranking the first in terms of the underwriting volume over 400 billion. We also promoted the facilitation of bond market development, tried to push forward the opening up of the capital market. You also mentioned another issue. Recently, for the newly issued national bonds and local bonds, there is a new policy With the new policy by the Ministry of Finance, the overall bond market is very smooth and steady, and the impact actually is quite neutral for CCB. We think that this policy is quite beneficial for the and our percentage of these types of bonds is 79%. So in the future, this policy will be more beneficial for such premium assets. In the future, we will follow closely the macro policy and these assets development. We will also attach importance to the taxation policy and its impact. and we will continue to make a good role of the market maker and try to improve high-quality transaction services to our clients. Thank you. Thank you, Mr. Ji. Now we will invite the Beijing venue to raise questions. The gentleman from the right-hand side, the fourth row. Thank you, senior management. I'm from Guangdong Development Securities. I'm Li Jun. I want to ask a question about deposits. Can you elaborate on the increase of deposits? What measures you have taken? And with the interest card environment, what kind of measures will you take to stabilise and increase the deposits? Thank you for your questions. I will answer this question. Mark once mentioned deposits is always important for a bank. CCB has always put deposits as the pillar of our bank, especially in recent two years, the interest rate is on the downtrend. So the deposits balance is a benchmark for high-quality bank. For the first half of this year, the deposits of CCB is steady with optimal structure and also with optimal interest rate. Mr. Zhang also introduced. And for the first half, the two deposits volume is also increased by 1.76 trillion with a total amount of 30 trillion. And the interest interest of payment ratio also decreased by 32 BP. increasing ratio is also at the industry leading position. We have several measures. First, we should also emphasize on the expansion of our talent pool. We have to expand more of our customer base. We have always taken this as our basic principle. For the first half, our corporate customers is over 12 million and our personal customers is 377 million. This is the basis of our achievements.

Secondly, we must adapt to market dynamics with more innovative products so we can create a closed loop of all industrial chains. As Mr. John puts it, we need to adapt to market changes, to corporate customers, to personal customers. We need to take an integrated approach through different scenarios and platforms. We must enhance customer engagement so we can connect ecosystems of customers. And vertically, we need to extend our industrial services chain and supply chain. As for clusters of industrial parks, we will make steady progress with marketing services. So through this closed loop, Our product mixes will be integrated into every step of our production process. So the funding of the customers can be kept in this closed loop. So this will lay a good foundation for our low-cost deposit growth. Thirdly, we will leverage on technology and data, especially AI as an enabler. So we can target customers. in customer profiling and marketing this is true in both personal and corporate finance we have customer insights and we can identify right products and services for example as for long-tail customers we will resort to good management in the first half we have added 130 billion RMB of new corporate loans and in retail business through robotic services We have seen renewal of 95% of our existing services. This is not an easy job because we are talking about a trillion level size across the bank without technology, without data. This is impossible. We need to adapt ourselves to the new market reality that's lower deposit interest rate. The customers are going for multi-asset in their asset management. By the end of June this year, the AUM in our personal finance exceeded $22 trillion. And to corporate customers, the total assets amounted to 12.8 trillion. We have added 4.48 million customers in personal wealth management services, and we have seen added value from personal customers of 1.7 trillion. So with steady deposit growth, another indicator that I'd like to share is that we have higher contribution from demand deposits in the first half demand deposits exceeded 30% of 15% year-on-year growth. That means through our innovative management systems we have seen higher share in demand deposit which is a bellwether for good customer relationship and it's also a good sign for a bank's integrated service capabilities going forward CCB will keep a close eye on market dynamics and especially in capital market when people have higher demand for wealth management services we will foresee the trends of the capital market so we will move with this trend and further innovating our services so we can lay a much solid foundation for deposit services. In this way, CCB will improve its capabilities to serve the real economy. And that's what I wanted to say for this question. Now we will take another question from Hong Kong. Thank you management. From Phoenix TV, I have a question related to asset quality. In the first half, the asset quality was stable. Could you please talk about which measures that you have taken and what are the features of asset quality in the first half and what's your outlook for asset quality in the second half? Vice President Mr. Lee will take the question. Thank you. CCB has always committed itself to risk control and we will take a A visionary approach in risk control. By the end of June 2025, NPO ratio was 1.33%, down by 0.01 percentage points. Special mention loans, 1.81 percentage points, down by 0.08 percentage points compared with the same period of last year. We have seen stabilized asset quality. Provision coverage ratio, 239.4%. Up 5.8%, we have maintained very good risk mitigation capability. In key areas, in real estate, aside from meeting the demand for financing from the industry, we have deeply analyzed the dynamics of risks. And we have strengthened monitoring so we can prevent these risks by end of June MPL ratio from real estate industry is down by 0.05 percentage points compared with the end of 2024. In inclusive finance, given the risks in recent years, while we are supporting consumption and support SMEs, we are also enhancing our risk management system. and building a better risk management system so we can embed these risk control tools in our credit policy and process. And we are strengthening different processes from warning to loan collection. So we enhance the management of risks from end to end. We can increase the efficiency of risk control so we can guarantee the stable development of our business with stable and steady measures in risk control. The asset quality of a bank has to do with real economy, but it's also closely linked to its risk control capabilities. On a macro level, in the first half, we have seen very steady economic progress with sound, prudent macroeconomic measures. And in some key areas, The risks have been mitigated steadily. To CCB, we will continue to monitor our credit policies and we will go for differentiated policies and we will enhance our credit policy. We will keep a close eye on key areas and take different measures to mitigate risks and further solidify the foundation of risk management. Going forward, in the second half, we will implement the instructions from the party central committee and the state control on mitigating financial risks, and we will enhance risk control, adjust structure, and strengthen our own risk mitigation capabilities. So going forward, in the predictable future, we can maintain a stable indicators and we have abundant risk mitigation capabilities. Thank you, Mr. Li. And next question will come from Beijing. Thank you, management. From Economic Journal, CCB has the first mover advantage in financial technology or fintech. In digital technology and digital economy, what's the latest progress? And is this work efficient? And what's your next step plan? Mr. Lei will take the question. Thank you. digital transformation, fintech, and serving digital economy. These are the responsibilities of our bank endowed by the Central Committee of CCP and also one of the important drivers behind high quality development. We will implement government instructions and focus on the five priorities solidifying the foundation for digital transformation and support digital services and the digital economy. There are four major areas. Number one, the foundation for digital economy will be strengthened. After the transition to distributed system, we have seen higher system capability and the processing time is reduced by 30% and our integrated transaction handling capability is doubled and we proceed with AI technology and we have thousands, billions of parameters in CCB large language model. In risk management, our smart assistant will provide end-to-end immersive service to customers and our special customer managers can serve more customers from 200 to 600. Our AI assistant can cover different services, financial analysis, assessment. They can complete a financial analysis report in minutes, not hours. And it takes only 40 seconds to generate financial assessment report. And 80% of our personnel are using AI encoding. And 30% of the coding is used in reality. At the same time, we strengthen the governance of enterprise level data. So data safety and security and quality can be managed systematically. In the first half, we have seen an 8% increase in the users of ai services especially in product innovation risk control etc so we have more multiplying effect we use cpu distributed time technologies to increase the computing power by 25 so we can use resources more efficiently and the technologies are greener secondly we have enhanced our digital ecosystem we strengthen our mobile app as the main service platform and we continue to optimize customer experience so we have more new products and when it comes to healthy life we focus on consumption financing and personal financing so we can allow customers to use our financial services in different scenarios. By the end of June, these two platforms combined have served 530 million customers, monthly average customers, active customers reached 243 million, up 44.4%. We have wealth management customers on our mobile banking of 14 million, up 14.75%. And we have strengthened our R&B operation system. By the end of June, The personal wallet and corporate wallet for digital RMB have increased by 9.96% and 10.73%. The accumulated number of consumptions have increased by 16.75%, reaching 522 million, leading the industry. Thirdly, in digital operation, we have made huge progress, especially in personal customers. By the end of June, through different steps of our process from monitoring to customer access. We can serve 62.57 million customers, six times increase in three years. We have customer managers serving 18,000 customers and the AOM online is 10% higher than offline and we are strengthening the operational management system at an enterprise level so we can improve customer experience. We have enabled our customers to finish their services at one goal and leveraging on ICR knowledge spectrum and other new technologies. We can enable the digital technology used in opening foreign currency accounts and other services. Our risk monitoring platforms have supported our subsidiaries to mitigate risks. 98% of our customers have been able to send warnings to the bank before the risks were exposed. Fourthly, our highly efficient services can enable the development of digital economy. By the end of June, the loan to core digital economy sectors have amounted to 852 billion RMB, up by 13.44%. We offer internet companies small and medium-sized companies with different services, for example, payment, invoicing, wealth management, and data. And we will continue to upgrade our supply chain finance so we can create an all-process supply chain. In the first half, in total, we have served the 132,000 customers with a funding support of $688 billion. The financing loan is $782 million.

We will continue to strengthen the digital transformation and promote the low-carbon green finance and digital centre development. We will also try to release the power of the... computation and algorithm, try to promote the systematic development of AI with the systematic application and also the database development at the corporate level. We will also have the whole chain systematic digital transformation Thank you for the opportunity. I'm from the Credit Suisse. I want to ask a question about the fee income. I also noticed that for the first half, your net fee income also has a positive growth of 4%. What is the driving force of this growth? How do you look at the whole year prospect and what are the measures to promote the better performance of a fee income growth? I will invite Mr. Shengliu Rong, our CFO, to answer. Thank you for your question. You are the old friend of CCB. Thank you for your support. So for the first half of this year, we also acted according to the flow of the policy and the market and tried to improve our service capability and try to create more fee income. Just now, Mr. Zhang also said brief to you. For the fee income, we realized 65.2 billion with an increase of 4%. You asked what are the influencing factors. There were three, actually. First, our customer base continues to be enhanced under solidified. The central government encouraged the banks to strengthen the support to the physical economy. So with such Macro policy, we increased our expansion and outreach to the customers and projects. We continue to expand our customer pool. There were some statistics, for example, for the first half, our credit customers exceeded 100 million. For the wealth management and the private bank customers also increased over 20% by growth. Our corporate customers in RMB settlement also exceeded 17 million. The increment is nearly 1 million. We also have a system called Fei Shi Yi Jia. So this is the investment banking service. This is about providing the financial consultancy services to our corporate banks. And in this system, we have over 70,000 customers. So we have realized the fee income increased because of these customer base expansion. Secondly, we also improved our service capability, for example, to the private banking customers through digital operation and the linear management. Our third party payment also contributed over $10 billion yuan in terms of the fee income. And we also increased our coverage of the products. So the whole corporate customer related income is also very steady. We are also leading in the industry. Just now, President Zhang also mentioned for the first half, we also increased our loans to the physical economy, especially for some key projects and key regions. And in the meantime, our loans, the investment banking business, and the engineering consultancy services also increased their income. The third factor is we see the opportunity of the recovery of the capital market for the underwriting fund business. The growth is over 20%. We also have the CTS. No matter from the volume of the customer or the volume of the deposits, they also realized a very good increase. For CTS income, it increased by over 40%. For the insurance business, for the first quarter, the volume increased, but the income has not realized positive growth. And for the second quarter, there is very positive results. We realized both positive growth in terms of the volume and also the customer. And the income increased by nearly 30%. So thanks to these three factors, the fee income increased significantly. very positively and it also contributed to the optimization of our income structure. I will explain in two aspects. First, as we just mentioned by Mr. Zhang, our non-interest income also represents 25% of the whole income. For the fee income, actually, The fee income and commission income represent 16.9%. Actually, Ms. Yin, you are a professional analyst. What does it reflect? I think you can tell that. it shows our light asset percentage is also increasing. Another factor is that we have increased some new function, for example, the wealth management and investment banking. The income of these areas also exceeds the 60% of the whole fee income. For the next step, We will continue to stick to our principle as putting the customer at the center, improve our service. We will try to do two solidification and two improvements. For the solidification, we will solidify our basic or our fundamental capability and policies. We will try to stimulate the internal demand and promote consumption. For the second half, we will increase the business on credit card consumption and also several key and hot areas like travel and tourism consumption. We hope that through these aspects, we will increase the income of credit card business and the related business. For the third party payment, the income is also increasing. And in terms of the products and the settlement system and also the cash management system, we will continue to improve and to optimize in order to elevate the customer experience. consolidate our fundamental capability for the two improvements we will first improve our wealth management capability the other is our corporate financing service for the wealth management we know that there is a high demand so for next step we will continue to improve our Consultancy and investment research capability have a more precise customer profiling, and based on that, we will customize the asset allocation policy to the customers based on their risk appetite. and through that we try to improve the fee income further and for the corporate wealth management we will also put forward some specified resolutions and try to meet their wealth management demands. Another is we will also try to improve our financing service capability to the corporate customers. We know that this year marks the final year of the 14th five-year plan and the starting of the 15th five-year plan. So for the 15th five-year plan, there were also some projects unfolding. President Zhang also mentioned that CCB is born with the mission of construction. So we should emphasize on these businesses. For example, for some incremental projects, we can provide some consultancy, consortium and the investment banking services. These can bring about new income. The other is that for the inventory of the fund, we have a stable cash flow So we can, through these aspects, bring about the new growth of the fee income. Thank you. Thank you. We will have the question from Beijing. The lady from the third row. I'm from Xinhua News Agency. We know that for the high-tech companies and the related companies are also developing rapidly. So what is the measures and policies the CCB has put forward to support these high-tech companies? Thank you for your question. I will answer this question. Just now, the journalist from Caixin also mentioned that the CCB has an advantage on fintech and digital economy. Actually, we also have the preemptive advantage on technology finance. We're ever happy to see that over the years, the high-tech companies and tech companies are booming rapidly. CCB, if you look at our history, I think many investors are very familiar with the CCB, the analysts too. If you look at the history of CCB, we emphasize on innovation. This is in our DNA. For example, in tech finance, the central government has put forward the policy on the innovation of industry. and finance. CCB is also among the first to establish the technology-related department, and we also have the innovation of related products and structures. Especially from this year, our party secretary Also attach high importance, we convened the meeting and we have this systematic action plan for the technology finance. And then the central government convened a meeting and mentioning that the technology innovation and industry innovation should be integrated in a deeper way So we feel that CCB has ceased the focuses. We made some preemptive arrangements already. And for the positioning of our bank, we want to become the top choice. We will start from this position, try to do a good job in serving the technology finance. Our balance also reached 5.15 trillion. The increment also reached... 741 billion. Now the percentage of technology loans is 18.78%, up by 1.7 percentage points. We have over 300,000 technology corporate customers. This is also leading in the whole industry. We also have found the high-tech foundation with a scale of several hundred billion, and we also have 77 technology funds with a scale of over 160 billion, and we also have the whole investment of over 90 billion for the technology companies, equity investment.

In technology companies in our financial services to them, the bank headquarters have identified very clear strategy. And secondly, we have viewed this ecosystem that supports both tech innovation and industrial innovation on top of our prior experience we will extend our services to research institutions and national laboratories namely this fundamental research capabilities and on the other end our services will be extended to to local industrial funds and venture capitalists so we can pull everything together, financial capital, industrial and social capital, so we can form the national task force of patient capital. This is how we can lay a good foundation for supporting tech companies with commercial and investment banking. In this way, we seized the opportunity of RSA and we worked with 18 provinces in collaborative projects and we worked with NDRC, especially their special fund for major FIAs and to serve national strategic industries we can mobilize billions, hundreds of billions of RMB of social capital so we can build this customer ecosystem and secondly we can build this integrated commercial and investment banking product mix that combines technologies and whole life cycle management of the customers with our complete product portfolio we can offer an integrated service package so we can offer equity loans for the tech startups and we can offer collateralized loans for intellectual property if any of them have the demand for technology transfer so we can serve these companies in every phase of their lifetime we have complete product portfolio and the information which is available online and thirdly we will build this ecosystem where we can have real-time interaction with with our customers and the transaction can be carried out real-time as well on our website on our mobile banking app customers can enjoy real-time interaction with the bank and we have special sections on our website for financial services to tech companies so we can accurately identify customers to improve service efficiency in this way we can build this smart brain for technology finance in our bank by the end of June Feizhi Yijia sold over 340,000 customers, registered customers. We have 6,200 projects, and the total funding approved was $370 billion, and the successful matching ratio is 90%. So our tool has withstood the test of time and market. And we created this Huidongni mobile service platform for inclusive finance so we can offer offline and online financial services. And fourthly, CCB has created this huge network that covers five layers with the bank headquarters and outlets. For example, We have identified 405 outlets and banking branches that are specialized in technology, and these outlets can cover all the areas where their tech companies are thriving. Going forward, we will implement the instructions from the Party Central Committee, and we will to our national initiative in building a strong technology powerhouse so we can make our banks do contribution to that great effort not long ago we announced that and we also solicited so We also received feedback from our investors and this press conference is also livestreamed. We have received comments from investors online as well. All your questions have been covered in the Q&A session. Regarding questions related to real estate, we will select one of the questions to answer. The question goes, since the beginning of this year, As the national policies stopped the decline in the property market, regarding your mortgage loans, how did it fare in supporting the real economy in terms of size, growth, and interest rate? And how do you look at the outlook for housing loans for the whole year? Mr. Ji will take the question. Thank you for the question. Since the beginning of the year, the government has rolled out a series of policies to stop a housing price decline. Different cities have different measures, and these measures have paid off. CCB is actively responding to these changes. We strengthen our differentiated approach to regional development, supporting our customers in their demand both as a first time home buyer and for housing update as Mr. Zhang puts it in the first half housing loans have increased remarkably compared with last year we have seen stable outstanding loan amount by the end of June the outstanding loan balance for real estate was 6.15 trillion leading the industry. Speaking of structure, some new changes in the real estate market have created better rooms for improvement. Since this year, second-hand houses have seen higher percentage in total transactions. We took advantage of this opportunity Given that second-hand houses have different types and are distributed more evenly geographically, we have extended our service outlets so we can serve our customers at a higher efficiency to boost the development of second-hand house businesses. In the first half, loans to second-hand house buying was leading the industry 20% year-on-year growth compared with last year. Newly added loans have seen 43.6 billion RMB of newly added loans to second-hand houses. Outstanding bank loan balances to second-hand housing was 1.89 trillion, the first in the industry. We've also been involved in affordable housing. We offer loans to affordable housing as well. In 2024, we issued the first loan to affordable housing in Zhengzhou, and on the heels of that, we issued loans to affordable housing projects in Dalian, Qingdao, Xi'an, Fuzhou and Guangzhou. In these new models, we have explored new service areas. As you mentioned, speaking of interest rates, we have seen lower interest rates in mortgage loans. The first half saw 3.11% Q2 it was 3.08% so we have been playing this role of stabilizing our society and property market with financial services and we took favorable measures to stop the decline of housing prices and Beijing and Shanghai governments have optimized their property policies to boost market expectation. The central urban work conference strengthened the transformation of dilapidated houses and urban villages, and this will lead to more demand for good houses. We will seize the opportunities of these favorable policies so we can extend our financial services, we can help our customers building this close loop of financial services for especially housing loans so we can continue to strengthen our capability in this area. We expect that the performance of housing finance will be better than this year. Thank you, Mr. Ji. Today is Friday. We believe you have a Some other appointments and commitments in the evening, so we will close the Q&A session here. Thank you for your participation. The management had frank, candid, and professional communication on different topics. We hope that our presentation and answers can help you better understand our strategic initiatives, business performance and development of CCB. If you have further questions, please feel free to get in touch with the board office and our PR department. In the end, I wish all the leaders, guests, analysts, and investors, and friends from press, I wish you good health, I wish you good business, and I wish you a wonderful weekend. Thank you. This closes the press conference today.