China Construction Bank Corporation

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.