Q2 2026 China Merchants Bank Co Ltd Earnings Call - Press

August 31, 2026

Speaker #1: Welcome to 2026. Thank you for joining the results presentation. Today, we will cover three areas: firstly, an overall introduction; secondly, detailed information; and thirdly, a business strategy for the next phase.

Xia Yangfang: Welcome to the 2026 interim results presentation. Today, I will cover three areas. Firstly, an overall introduction, secondly, detailed product information, and thirdly, a business strategy for the next phase. In H1, the CMB Group implemented a strategy of building a value creation bank and adhered to the coordinated development of quality, profitability, and scale. Various operation indicators registered steady progress with positive momentum. This was primarily reflected in the four aspects. First, steady progress in operating performance with distinctive strength and profitability. Net operating income, CNY 178.135 billion, up by 4.83% year-on-year. Net profit attributable to shareholders of the bank, CNY 76.45 billion, up by 3.02% year-on-year. ROA and ROE were 1.14% and 13.43% respectively, remaining at industry-leading levels. Net interest income, CNY 112.02 billion, up by 5.6%, affected by LPR repricing in effective credit demand and declining market interest rates.

Speaker #1: In the first half of the year, the group implemented a strategy of building a value creation bank and adhered to the coordinated development of quality, profitability, and scale.

Speaker #1: Various operation indicators registered steady progress with positive momentum. This was primarily reflected in four aspects: first, steady progress in operating performance with distinctive strength in profitability. Net operating income was RMB 178.135 billion, up by 4.83% year on year. Net profit attributable to shareholders of the bank was RMB 76.45 billion, up by 2.02% year on year. ROA and ROE were 1.14% and 13.43%, respectively, remaining at industry-leading levels.

Speaker #1: Net interest income was RMB 112.02 billion, up by 5.6%; affected by LPR repricing, ineffective credit demand, and declining market interest rates. The net interest margin was 1.83%, down 5 basis points year on year.

Xia Yangfang: The net interest margin was 1.83%, down 5 basis points year-on-year, representing a narrower decline. Net non-interest income reached CNY 66.11 billion, up by 3.56% year-on-year. The percentage of net non-interest income was 37.11%, maintaining a leading position in the industry. Net fee and commission income reached CNY 39.86 billion, up by 5.99% year-on-year, of which income from extensive wealth management reached CNY 24.7 billion, rising by 18.44% year-on-year, representing the best level in the past five years. The cost-to-income ratio was 29.7%, down 0.41 percentage points year-on-year. Second, we delivered balanced asset growth in both scale and quality, with continuous improvement in funding costs. Amid ineffective credit demand, we carried out a range of measures to strengthen asset origination and optimize asset allocation. Our total assets amounted to CNY 13.79 trillion, up by 5.47%.

Speaker #1: Representing a narrower decline; net non-interest income reached RMB 66.11 billion, up by 3.56% year-on-year. The percentage of net non-interest income was 37.11%, maintaining the leading position in the industry.

Speaker #1: Net fee and commission income reached 39.86 billion yuan, up by 5.99% year on year, of which income from extensive growth management reached 2.47 billion yuan, rising by 18.44% year on year, representing the best level in the past 5 years.

Speaker #1: The cost-to-income ratio was 29.7%, down 0.41 percentage points year on year. Second, we delivered balanced asset growth in both scale and quality, with continued improvements in funding costs.

Speaker #1: Amid ineffective credit demand, we carried out a range of measures to strengthen asset origination and optimize asset allocation. Our total assets amounted to RMB 13.79 trillion, up by 5.47%.

Speaker #1: Total loans and advances to customers were RMB 4.745 trillion, up by 2.69%, accounting for 54.07% of total assets and remaining stable. Among them, general loans amounted to RMB 7.19 trillion.

Xia Yangfang: Total loans and advances to customer, CNY 7.45 trillion, up by 3.61%, accounting for 54.07% of total assets, remaining stable. Among them, general loans amounted to CNY 7.19 trillion, up by 300. We accelerated the turnover of bill assets, with discounted bills amounting to CNY 265.38 billion, down 17.62%. Investment securities and other financial assets amounted to CNY 4.4 trillion, up by 6.07%, accounting for 31.95% of total assets, a level that the CMB Group considers appropriate. We pursued steady liabilities growth while continuing to optimize deposit structure, further consolidating advantage in low funding cost. Total liabilities, CNY 12.43 trillion, up by 5.45%, of which total deposits from customers exceeded CNY 10 trillion, up by 3.32%. Core deposit balance was CNY 7.79 trillion, up by 9.02% compared with the previous year. It accounted for 82.06% of the average daily balance of total deposits, up by 1.37 percentage points as compared with last year.

Speaker #1: Of Q3, we accelerated the turnover of field assets with discounted bills amounting to ¥265.38 billion, down 17.62%. Investment securities and financial assets amounted to ¥4.4 trillion, up by 6.07%.

Speaker #1: Accounting for 31.95% of total assets—a level that the group considers appropriate—we pursued steady liabilities growth while continuing to optimize deposit structure, with a consolidating advantage in low funding cost.

Speaker #1: Total liabilities were RMB 12.43 trillion, up by 5.45%. Of this, total deposits from customers exceeded RMB 10 trillion, up by 3.32%. The core daily core deposit balance was RMB 7.79 trillion, up by 9.02%.

Speaker #1: Compared with the previous year, it accounted for 82.06% of the average daily balance of total deposits, up by 1.37 percentage points compared with last year.

Speaker #1: The average daily balance of demand deposits accounted for 49.6%, up by 0.2 percentage point compared with the previous year, remaining at an elevated level.

Xia Yangfang: The average daily balance of demand deposits accounted for 49.6%, up by 0.2 percentage points compared with the previous year, remaining at an elevated level. Interbank deposits grew rapidly, serving as an effective supplement to the funding sources, of which demand deposits accounted for 94.54%. The annualized average cost of interest-bearing liabilities was 1.05%, down 30 basis points year-on-year, of which the average cost rate of deposits from customers was 0.97%, down 29 basis points year-on-year. Thirdly, we maintained stable asset quality and strong risk compensation capacity. The NPL balance was CNY 7.35 billion, up by CNY 3.05 billion, and the NPL ratio was 0.94%, remaining at the same level. The annualized NPL formation ratio was 1.06%, up by 0.08 percentage points. The allowance coverage ratio was 385.1%, and the allowance-to-loan ratio was 3.63%, reflecting a high level of risk compensation capacity.

Speaker #1: Interbank deposits grew rapidly, serving as an effective supplement to funding sources, of which demand deposits accounted for 94.54%. The annualized average cost of interest-bearing liabilities was 1.05%, down 30 basis points year on year.

Speaker #1: The average cost rate of deposits from customers was 0.97%, down 29 basis points year on year. Thirdly, we maintained stable asset quality and strong risk compensation capacity.

Speaker #1: The MPL balance was 70.25 billion yuan, up by 2.05 billion, and the MPL ratio was 0.94%, remaining at the same level. The annualized MPL formation ratio was 1.06%, up by 0.08 percentage points.

Speaker #1: The allowance coverage ratio was 385.1%, and the allowance-to-loan-end ratio was 3.63%, reflecting a high level of risk compensation capacity. The annualized credit cost was 0.69%, representing a slight year-on-year increase of 0.02 percentage points.

Xia Yangfang: The annualized credit cost was 0.69%, representing a slight year-on-year increase of 0.02 percentage points. Fourthly, we strengthened capital management with industry-leading capital adequacy levels. Risk-weighted asset under the advanced approach and the weighted approach increased by 5.616% and 5.23% respectively, which is generally in line with asset growth. The CET1 CAR, the Tier 1 CAR, and the CAR under the advanced approach were 14.07%, 16.59%, and 18.33% respectively, down 0.09, up 0.08, and up 0.9 percentage points respectively. As for weighted approach, the numbers were 11.84%, 13.96%, and 15.06% respectively, down 0.08 percentage points, up by 0.6 percentage point, and up by 0.6 percentage point respectively. This is the brief overview of our performance in H1 2026. We will now turn to the company's operational information.

Speaker #1: Fourthly, we strengthened capital management with an industry-leading capital adequacy level. Risk-weighted assets under the advanced approach and the weighted approach increased by 5.616% and 5.23%, respectively.

Speaker #1: Which is generally in line with asset growth. The CET-1 CAR, the Tier 1 CAR, and the CAR under the advanced approach were 14.07%, 16.59%, and 18.33%, respectively.

Speaker #1: Down 0.09 and 0.08 percentage points, and up 0.9 percentage points, respectively. As for the weighted approach, the numbers were 11.84%, 13.96%, and 15.06%, respectively—down 0.08 percentage points, up 0.6 percentage points, and up 0.6 percentage points, respectively.

Speaker #1: This is the brief overview of our performance in the first half of 2026. We will now turn to the company's operational information. In the first half, amid new developments and challenges in the banking industry, the company proactively responded and seized opportunities.

Xia Yangfang: In H1, amid new developments and challenges in the banking industry, the company proactively responded and seized opportunities, taking extensive growth management to a new level. The transformation through the four initiatives delivers notable progress, further strengthening the company's resilience and market competitiveness. This is mainly reflected in the following areas. First, we grew a client base rapidly while scaling up extensive wealth management business. We remain customer-centric, further deepen its segmentation and classification-based customer management, and achieve growth in both size and quality of our client base. Retail customers totaled 231 million, up by 3.13%. Among them, Golden Sunflower and above customers reached 6.41 million, up by 8.02%. The number of private banking customers reached 216,000, up by 8.36%.

Speaker #1: Taking extensive growth management to a new level, the Transformation Through the Core initiative delivers notable progress that has strengthened the company's resilience and market competitiveness.

Speaker #1: This is mainly reflected in the following areas. First, we grew our client base rapidly while scaling up our extensive growth management business. We remained customer-centric, further deepened our segmentation and classification-based customer management, and achieved growth in both the size and quality of our client base.

Speaker #1: Retail customers totaled 231 million, up by 3.13%. Among them, Golden Sunflower and above customers reached 6.41 million, up by 8.02%. The number of private banking customers reached 216,000, up by 8.36%.

Speaker #1: Corporate customers reached 3.86 million, up by 6.56%. Among these, the number of newly acquired corporate customers was 347,900, and the number of decision customers was 78,500, up by 3.7%.

Xia Yangfang: Corporate customers reached 3.86 million, up by 6.56%, among which the number of newly acquired corporate customers was 347.9 thousand and retail personal customer 78.5 thousand, up by 3.7%. The number of corporate customers for reporting transactions reached 1.53 million, representing a year-on-year increase of 14.97%. AUM from retail customers exceeded CNY 18 trillion, up by 7.96% compared with year-end 2025. The half-year increase reached CNY 1.36 trillion, hitting a record high. The average daily balance of corporate wealth management products was CNY 632.61 billion, up by 20.51% compared to 2025. Total asset management amounted to nearly CNY 5 trillion, representing a year-to-date increase of 5.29%. Selling professor and trustees CNY 23.58 trillion, representing a year-to-date increase of 8%, maintaining a leading position in the market. Secondly, we pursued differentiated development with modest emphasis on strength.

Speaker #1: The number of corporate customers for withholding transactions reached 11.53 million, representing a year-on-year increase of 14.97%. AUM from retail customers exceeded RMB 18 trillion, up by 7.96% compared with year-end 2025.

Speaker #1: The half-year increase reached RMB 1.36 trillion, hitting a record high. The average daily balance of corporate wealth management products was RMB 632.61 billion, up by 20.51% compared to 2025.

Speaker #1: Total asset management amounted to nearly RMB 5 trillion, representing a year-to-date increase of 5.29%. The balance of assets under custody was RMB 23.58 trillion, representing a year-to-date increase of 8%, maintaining a leading position in the market.

Speaker #1: Secondly, we pursued differentiated development with more distinctive business strengths. First, we continued to consolidate our leading position in retail finance, and we maintained the main role of the retail finance business, with its net operating income accounting for 54.35% of the total.

Xia Yangfang: First, we continued to consolidate our leading position in retail finance, and we maintain the main role of retail finance business, with its net operating income accounting for 54.35% of the total. We continue to strengthen our professional capabilities in wealth management. The customers holding wealth management products, 66.17 million, up by 4.05%. Customers covered by TREE system reached 12.58 million, up by 6.98%. In response to market trends and evolving customer demand, the growth structure of AUM of retail customers become more diversified. Agency distribution of non-money market retail funds and trust products increased by 82% and 40.48% year-on-year respectively. The balance of retail wealth management products increased by 3.88% compared with prior year-end, and the balance of deposits from retail customers increased by 3.7%. Facing rising risks and weakening demand, we prioritize asset quality in retail loans, resulting in a moderate contraction in scale.

Speaker #1: We continued to strengthen our professional service capabilities in wealth management. The customers holding wealth management products reached 66.17 million, up by 4.05%. Customers covered by three systems reached 12.58 million, up by 6.98%.

Speaker #1: In response to market trends and evolving customer demand, the growth structure of AUM for retail customers has become more diversified. Agency distribution of non-money market mutual funds and trust products increased by 82% and 40.48% year-on-year, respectively.

Speaker #1: The balance of retail wealth management products increased by 3.88% compared with the prior year-end, and the balance of deposits from retail customers increased by 3.7%, despite facing rising risks and weakening demand.

Speaker #1: We prioritized asset quality in retail loans, resulting in a moderate contraction in funding scale. Retail loans totaled 3.61 trillion, down 1.11% compared with the prior year-end.

Xia Yangfang: Retail loans totaled CNY 3.61 trillion, down 1.11% compared with prior year-end. The percentage of retail loans to total loans and advances was 51.04%, down 1.88 percentage points compared with prior year-end. Amid the industry's flexible adjustment, the group appears to a stable and non-volatility operational strategy for its credit card business. Active credit card users totaled 7.43 million, up by 0.46% compared with prior year-end, and the transaction value was CNY 1.91 trillion, down 5.3% year-on-year. While maintaining a leading position in the industry, our market share further increased. We continued to forge differentiated competitive advantages in corporate finance. Total FPA was CNY 7.27 trillion, up by 8.13% year-to-date. We continued to optimize loan structure to further enhance quality and effectiveness of serving the real economy. Total corporate loans CNY 3.2 trillion, up by 9.27%.

Speaker #1: The percentage of retail loans to total loans and advances was 51.04%, down 1.88 percentage points compared with the prior year-end. Amidst the industry's cyclical adjustment, the group appeared to have a stable and non-volatile operational strategy for its credit card business.

Speaker #1: Active credit card users totaled 74.14 million, up by 0.46% compared with the prior year-end, and the transaction value was RMB 1.91 trillion, down 5.43% year-on-year. Meanwhile, we maintained a leading position in the industry, and our market share further increased.

Speaker #1: We continued to forge differentiated competitive advantages in corporate finance. Total FPA was ¥7.24–7.27 trillion, up by 8.13% year-to-date. We continued to optimize loan structure.

Speaker #1: Further enhanced quality and effectiveness of serving the real economy. Total corporate loans: RMB 3.2 trillion, up by 9.27%. Growth of loans in key areas, such as grain loans, manufacturing loans, and agriculture-related loans, is significantly outpacing the overall loan growth.

Xia Yangfang: Growth of loans in key areas such as green loans, manufacturing loans, and agriculture-related loans are significantly outpacing the overall loan growth. The average daily balance of deposits from corporate customers, CNY 5,230 billion, up by 6.1%, of which demand deposits accounted for 50.14%, down by 0.8 percentage point. We continue to enhance professional service capabilities of retirement finance. The number of individual pension accounts opened exceeded 17 million, with the pension funds under custody amounted to CNY 1.7 trillion, up by 9.68% compared with prior year-end. We provided diversified financing services to technology enterprises, serving 378.3 thousand FinTech enterprise customers, including more than 200,000 enterprises listed on FinTech rankings. We continue to upgrade the distinctive brand of enterprise digital intelligence finance. Compared with year-end 2025, the number of customers using Treasury Management Cloud services increased by 13.26%. Those using cloud-based wholesale connections increased by 13.04%.

Speaker #1: Overall, the average daily balance of deposits from corporate customers was RMB 5,230 billion, up by 6.1%. Of this, demand deposits accounted for 50.14%, down by 0.8%.

Speaker #1: We continue to enhance our professional service capabilities in retirement finance. The number of individual pension accounts opened exceeded 17 million, with pension funds under custody amounting to RMB 1.7 trillion, an increase of 9.68% compared with the prior year-end. We provided diversified financing services to technology enterprises.

Speaker #1: Serving 378,300 Side Check enterprise customers, including more than 200,000 enterprises listed on the Side Check rankings. We continue to upgrade the distinctive brand of enterprise digital intelligence finance.

Speaker #1: Compared with year-end 2025, the number of customers using treasury management cloud services increased by 14.26%. Those using cloud-based postal selection increased by 13.44%. We continue to enhance our professional capabilities.

Xia Yangfang: We continue to enhance professional capabilities in investment banking and financial market businesses. FEA contributed by investment banking business increased by 8.64% year-to-date, and the net underwriting amount was CNY 284.16 billion. The M&A financing business value amounted to CNY 165.92 billion, up by 19.84% year-on-year. We have completed multiple deals with significant market influence. Regarding financial market business, the number of wholesale customers involved in financial trading was 78,000, up by 18.38% year-on-year, and their transaction value amounted to $212.72 billion, up by 33.64% year-on-year. Retail customers totaled 191.4 thousand, up by 11.49% year-on-year. Direct through discounting value was CNY 1.73 trillion, up by 26.61%, ranking second in the market. Fourthly, we accelerated the development of branches in key regions to strengthen their market competitiveness.

Speaker #1: Investment banking and financial markets businesses: FPA contributed by the investment banking business increased by 8.64% year-to-date, and the net underwritten bond amount was RMB 284.16 billion.

Speaker #1: And the M&A financing business value amounted to 165.92 billion yuan, up by 19.84% year-on-year. And we have completed multiple deals with significant market influence.

Speaker #1: Regarding the financial market business, the number of wholesale customers involved in 5-4 trading was 78,000, up by 18.38% year-on-year, and their transaction value amounted to $212.72 billion, up by 33.64% year-on-year.

Speaker #1: Bill business customers totaled 191.4 thousand, up by 11.49% year-on-year. Direct-through discounting value was 1.173 trillion yuan, up by 26.61%, ranking 22nd in the market.

Speaker #1: Fourthly, we accelerated the development of branches in key regions to strengthen their market competitiveness. Multiple key indicators, including growth rates of trust retail customer base, retail AUM for deposits, corporate loans, net operating income, and EVA of branches in key regions, were all higher than the average level of all domestic branches.

Xia Yangfang: Multiple key indicators, including growth rates of such retail customer base, retail AUM for deposits, corporate loans, net operating income, and EUA of branches in key regions were all higher than the average level of all domestic branches. The contribution was increasing. The proportion of key region branches in the total of all domestic branches increased regarding retail AUM balance of 0.26 percentage point, corporate loan balance of 0.56%, and average daily core deposit balance of 0.22 percentage points. Thirdly, we steadily advanced comprehensive and international development with value contributions to CMB Group. Total assets of major subsidiaries, CNY 1.05 trillion, up by 10.15% compared with prior year-end. Net operating income accounted for 12.93% of the group's total, up by 0.39 percentage point. Net profit for CMB Wing Lung Bank reached HKD 4.73 billion, up by 55.88%. Total assets, HKD 587.8 billion, up by 11.63%.

Speaker #1: The contribution was increasing. The proportion of key region branches in the total of all domestic branches increased with regard to retail AUM balance by 0.26 percentage point.

Speaker #1: Corporate loan balance grew by 0.56%, and average sales for deposit balance increased by 0.22 percentage points. Thirdly, we steadily advanced comprehensive and international development, with value contribution significantly increased.

Speaker #1: Total assets of major subsidiaries 1.05 trillion yuan of by 10.16. Percent compared with prior year-end. Net operating income accounted for 12.93% of the gross total, of by 0.39 percentage points.

Speaker #1: Net profit for CMB Greenland Bank reached HKD 4.73 billion, up by 55.88%. Total assets were HKD 587.8 billion, up by 11.63%. Net profit of CMB International Capital was HKD 3.07 billion, up by 124.14%.

Xia Yangfang: Net profit of CMB International Capital, HKD 3.07 billion, up by 124.14%. Total overseas asset management business reached HKD 94.37 billion, up by 25.27%. Net profit of CMB Financial Leasing was CNY 1.63 billion, down 42.44% year-on-year. This is mainly because of interest income last year. The leasing business was CNY 70.49 billion, maintaining a leading position. Net profit of CMB Wealth Management, CNY 1.51 billion, up 10.92%. Total wealth management products reached CNY 2.74 trillion, up by 3.79% compared with prior year-end, keeping leading position. Net profit of trust management fund was CNY 802 million. The non-monetary mutual funds under management was CNY 603.15 billion, up by 5.78%. Net profit of CMB Finat was CNY 52 million, down 12.68% year-on-year. Trusted management of insurance funds totaled CNY 279.45 billion, up by 19.78%.

Speaker #1: Total overseas asset management business reached HKD 94.37 billion, up by 25.27%. Net profit of CMB Financial Leasing was RMB 1.63 billion, down 42.44% year-on-year.

Speaker #1: This is mainly because of business fee income last year. And the leasing business was RMB 17.49 billion, maintaining the leading position. Net profit of CMB Wealth Management was RMB 1.51 billion, up 10.92%.

Speaker #1: Total wealth management products reached RMB 2.74 trillion, up 3.79% compared with the prior year-end, maintaining a leading position. Net profit of China Merchants Fund was RMB 802 million.

Speaker #1: The non-monetary mutual funds under management reached RMB 623.15 billion, up by 5.78%. Net profit of CMB Sigma was RMB 62 million, down 12.68% year-on-year.

Speaker #1: Interest-managed insurance bonuses totaled 279.45 billion yuan, up by 19.78%. The total assets of overseas institutions increased by 7.01% compared with the prior year-end, and net operating income rose by 30.5% year-on-year.

Xia Yangfang: The total assets of overseas institutions increased by 7.01% compared with prior year-end, and net operating income rose by 30.5% year-on-year. Each institutions in Hong Kong seized opportunities and expand their operations, achieving faster growth. Net operating income grew by 32.72% year-on-year. Total assets under custody of Global Custody Hong Kong Center hit CNY 1 trillion. CMB International Capital completed 3 Hong Kong RTO sponsorship projects and 24 Hong Kong RTO ongoing projects. Cross-border business grew rapidly. The number of corporate customers in respect of international balance of payments reached 93.7 thousand, and the international balance of payment of corporate customers amounted to $263.66 billion, accounting. Fourth, we comprehensively promoted intelligence development and continuously strengthened technological advantages. Third, we promote AI development and application. We continue to refine our self-developed large model infrastructure. Average daily token usage increased by over 78% compared with 2025.

Speaker #1: These institutions in Hong Kong seized opportunities and expanded operations, achieving fast growth. Net operating income grew by 33.71% year-on-year. Total assets under custody of Global Custody Hong Kong Center exceeded 1 trillion yuan.

Speaker #1: CMB International Capital completed three Hong Kong IPO sponsorship projects and 24 Hong Kong IPO underwriting projects. Cross-border business grew rapidly. The number of corporate customers with respect to international balance of payments reached 93,700, and the international balance of payments of corporate customers amounted to $263.26 billion.

Speaker #1: Accounted both with comprehensively promoted intelligence development and continuously strengthened technology advantages. Third, we promote AI development and application. We continue to refine our self-developed large model infrastructure.

Speaker #1: Average daily token usage increased by over 7 to 8% compared with 2025. A total of 256 domestic domain-specific models were deployed, up by 40%. A total of 1,386 intelligent scenarios were deployed, up by 62% compared with the prior year-end.

Xia Yangfang: 256 domestic domain-specific models were deployed, up by 40%. A total of 1,386 intelligent scenarios were deployed, up by 62% compared with prior year end. Large models applications have delivered tangible quality and efficiency gains. AI contributed 13.88 million equivalent employee working hours in terms of efficiency gains. We also built a bank-wide knowledge management framework that enables large language models to unlock knowledge value across the design. We have increased our client-facing service capacity using AI and increased our capacity of complex business service. We have launched AI Xiao Zhao, an AI agent serving wealth management partners. With newly launched product banking AI tools now deliver one-stop legal service framework for asset allocation, and protection and expression management. We have upgraded our client service system. The AI-powered intelligent personalized service digital human system for institutional scenarios has served customers of 37.66 million times. Internal management intelligence upgrade continued to accelerate.

Speaker #1: Large model applications have delivered tangible quality and efficiency gains. AI has contributed 13.88 million equivalent employee working hours in transfer efficiency gains. We also built a bank-wide knowledge management framework.

Speaker #1: That enables large language models to unlock knowledge value across business lines. We have increased our five-facing service capacity season AI, and increased our capacity for complex business services. We have launched AI South Bank and AI agent serving wealth management partners.

Speaker #1: With newly launched private banking AI tools, we now deliver a one-stop regionalized service framework spanning asset allocation, protection, and succession enhancement. We have upgraded our client service systems.

Speaker #1: The AI-powered intelligent customer service digital human system for institutional scenarios has served customers 37.66 million times. Internal management intelligence upgrade continues to accelerate.

Speaker #1: AI is reshaping the credit process with accelerated deployment across the pre-lending, lending, and post-lending stages. In terms of business management, intelligence tools now span the front, middle, and back offices.

Xia Yangfang: AI is reshaping credit process with accelerated deployment across the pre-lending, lending, and post-lending stages. In terms of business management, intelligence tools now span the front, middle, and back offices. Fifthly, we uphold the bottom line of risk control, and we reinforce advantages in asset quality. In the face of various risks and challenges, we step up efforts to prevent and mitigate risk in key sectors and continuously refine risk management strategies. Overall asset quality remains sound. We adhere to the strategy of stabilizing growth, preventing risk, and optimizing structure, strengthen risk management and control in sectors such as property and manufacturing. With corporate loan asset quality continuing to improve, NPL ratio of corporate loans 0.78%, down 0.11 percentage point. Among them, the NPL ratio of property industry was 4.07%, down 0.31 percentage point. The NPL ratio for manufacturing industry was 0.39%, down 0.04 percentage point.

Speaker #1: Quickly, we upheld the bottom line of risk control and reinforced advantages in asset quality. In the face of various risks and challenges, we made efforts to prevent and mitigate risk in key sectors and continuously refined our risk management strategies.

Speaker #1: Overall asset quality remains sound. We adhere to the strategy of stabilizing growth, preventing risk, and optimizing structure. We have strengthened risk management and control in sectors such as property and manufacturing.

Speaker #1: With corporate loan asset quality continuing to improve, the NPL ratio of corporate loans was 0.78%, down 0.11 percentage points. Among them, the NPL ratio of the property industry was 4.47%.

Speaker #1: Down 0.31 percentage point. The NPL ratio for the manufacturing industry was 0.39%, down 0.04 percentage point. Confronted with rising retail loan risks across the industry, we comprehensively reinforced retail loan risk management and optimized the asset structure.

Xia Yangfang: Confronted with rising retail loan risk across the industry, we comprehensively reinforced retail loan risk management and optimized the asset structure. Retail asset quality remains stable and controllable, maintaining a relatively strong position within the industry. The NPL ratio of retail loans was 1.16%, up by 0.10 percentage point. Among them, residential mortgage loans was 0.48%, down 0.03 percentage point. Credit card loans 1.9%, up by 0.16 percentage point. Retail microfinance loans and consumer loans were 1.34% and 1.39% respectively, up by 0.12 percentage points and up 0.07 percentage points respectively. In the end, I would like to give a brief introduction to the business strategy for the next phase.

Speaker #1: Resell retail asset quality remains stable and controllable. We maintain a relatively strong position within the industry. The NPL ratio of retail loans was 1.16%, up by 0.12 percentage points.

Speaker #1: Among them, residents' mortgage loans were 0.80%, down 0.03 percentage points. Credit card loans were 1.90%, up by 0.16 percentage points. Retail microfinance loans and consumer loans were 1.34% and 1.39%, respectively, up by 0.12 percentage points and up 0.37 percentage points, respectively.

Speaker #1: In the end, I would like to give a brief introduction to the business strategy for the next phase. Looking ahead, we will fully implement China Merchants Bank’s 15th Five-Year Strategic Plan and 10 strategic focuses. We will uphold fundamental principles and break new ground, accelerate capacity building and advanced transformation during the four initiatives, to consolidate existing strengths while building our new advantages, achieving distinction within the economy.

Xia Yangfang: Looking ahead, we will fully implement China Merchants Bank's 15th Five-Year Strategic Plan, maintain strategic focus, uphold fundamental principles, and breaking ground, accelerate capacity building and demand transformation through the four initiatives to consolidate existing strengths while building our new advantages, achieving the synthesis within an economy business model. Firstly, we stay committed to long-termism to build stronger core competitiveness. We will remain customer-centric. We enforce the central role of retail finance through wealth management, uphold asset quality as the foundation, and sustain strong technology support. While maintaining strategic focus, we will adhere to the principle of professionalism and market orientation, continuously innovating in products, services, technologies, and business models. By deepening and fine graining our core businesses and business and revenue structure, we will take on tech earnings plus feature, which is resilient in down cycles and flexible in up cycles.

Speaker #1: Business model: Firstly, we stay committed to long-termism to build stronger core competitiveness. We will remain customer-centric. We enforce the central role of retail finance through wealth management.

Speaker #1: Uphold asset quality as the foundation and sustain strong technology support. While maintaining strategic focus, we will adhere to the principles of professionalism and market orientation.

Speaker #1: We will continue innovating in products, services, technologies, and business models by deepening and refining our core businesses. Our business and revenue structure will adopt a high fixed-earnings plus feature, which is resilient during down cycles and flexible during up cycles.

Speaker #1: Secondly, capture structural opportunities to continuously cultivate new drivers for medium- and long-term growth. In retail finance, we will capitalize on the historic strategic opportunities in wealth management centering on asset allocation to enhance professional wealth management capabilities and improve customers' sense of fulfillment and experience.

Xia Yangfang: Secondly, capture structural opportunities to continuously cultivate new drivers for medium and long-term growth. In retail finance, we will capitalize on the historic strategic opportunities in wealth management, centering on asset allocation to enhance professional wealth management capability and improve customers' sense of fulfillment and experience. Secondly, in corporate banking, we will further strengthen professional operation in different industries. Deepen investigation across a broader range of sectors to refine the one branch, one policy, one industry, one policy strategy in key agent branches to enhance differentiation. Thirdly, we will also seize opportunities arising from new quality product forces, leveraging synergies between CMB and its subsidiaries. We will strive to build technology finance as a distinctive feature of CMB.

Speaker #1: Secondly, in corporate banking, we will further strengthen professional operations in different industries, even investigation across a broader range of sectors, to refine the one branch, one policy, one industry, one policy strategy in key region branches to enhance differentiation.

Speaker #1: Thirdly, we will also seize opportunities arising from new quality productive forces, leveraging synergies between CMB and its subsidiaries to strive to build technology finance as a distinctive feature of CMB.

Speaker #1: Fourthly, we will leverage our local and global presence and establish a development framework comprising the head office, institutions in Hong Kong, and the five regional hubs to build distinctive features in cross-border finance.

Xia Yangfang: Fourthly, we will leverage our local and global presence and establish a development framework comprising the head office, plus institutions in Hong Kong, plus the five regional hubs to build distinctive feature in cross-border finance. Thirdly, we will seize near-term decisive moves to sustain steady progress in operation. We are focused on stabilizing the means, maintaining our advantage in low-cost deposits, and strengthen risk-based pricing on the asset side, and increase our risk mitigation capacity. We will leverage our strength of subsidiaries to better expand NII and optimize revenue structure, keeping revenue broadly stable. We will seize capital market opportunities, further expand wealth management and financial markets businesses to enhance value contribution. Capital management will be strengthened to improve capital returns and reinforce capital resilience. Fourthly, we will accelerate intelligent transformation to further extend tech leadership.

Speaker #1: Thirdly, we will seize near-term decisive moves to sustain steady progress in operation. We'll focus on stabilizing and maintaining our advantage in low-cost deposits, and strengthen risk-based pricing on the asset side.

Speaker #1: And increase our risk compensation capacity. We will leverage our strengths in subsidiaries to better expand NRI and optimize our revenue structure, keeping revenue broadly stable.

Speaker #1: We will seize capital market opportunities, better expense expensive wealth management and financial markets businesses to enhance value contribution. Capital management will be strengthened to improve capital returns and reinforce capital resilience.

Speaker #1: Fourthly, we'll accelerate intelligent transformation to further extend tech leadership. We will sustain technology input and intensify technology empowerment to further promote business growth with technology, seizing the opportunity presented by AI.

Xia Yangfang: We will sustain technology input and intensify technology's empowerment to better promote business growth with technology. Seizing the opportunities presented by AI, we will broaden and deepen AI applications to drive improvements in customers' experience, internal efficiency, and risk management. We will accelerate the building of an AI-powered organization, appreciate the capabilities of workforce, and deepen people's first digital intelligence model, establishing CMB as a benchmark for intelligent transformation in the AI era. Fifthly, we will stay anchored to risk-based approach and reinforce foundation for sustainable development. We will uphold prudent and stable risk culture, operating within the boundaries of our capabilities. We will stay highly vigilant to early signs regarding asset quality, strengthen risk prevention and resolution in key areas including retail, credit, and the property sector, and intensify collection and resolution efforts.

Speaker #1: We will broaden and deepen AI applications to drive improvements in customer experience, internal efficiency, and risk management. We'll accelerate the building of an AI-powered organization, appreciate the capabilities of our workforce, and deepen the people-plus-digital intelligence model.

Speaker #1: Establishing CMB as a benchmark for intelligent transformation in the AI era. Fifthly, we'll stay anchored to a risk-based approach and reinforce the foundation for sustainable development.

Speaker #1: We'll uphold a prudent and stable risk culture, operating within the boundaries of our capabilities. We'll stay highly vigilant to early signs regarding asset quality, strengthening risk prevention and resolution in key areas, including retail risk credit and the property sector.

Speaker #1: And we will intensify collection and resolution efforts, and internal controls will be strengthened with rigorous safeguards against credit risk, market risk, operational risk, and liquidity risk.

Xia Yangfang: Internal control will be strengthened with rigorous safeguards against credit risk, market risk, operational risk, and liquidity risk, providing a solid foundation for high-quality development. We will now open the floor for questions. You are welcome to raise questions. Please follow the instructions of the operator. State your name and the institution you represent. For mobile users, please tap More at the bottom of the interface and select Raise Hand. For PC users, please click Participants and choose Raise Hand. Please ask one question per turn. When invited, please turn on your microphone and camera and state your name and institution you represent. Thank you. We will now take the first question. We will have the first question from Guotai Junan Asset Management. Liu Chenxi.

Speaker #1: Providing a solid foundation for high-quality development. We will now open the floor for questions. You’re welcome to raise questions. Please follow the introduction of the operators.

Speaker #1: Thank you. Please state your name, the industry you are in, and the institution you represent. For mobile users, please tap 'More' at the bottom of the interface and select 'Raise Hand.'

Speaker #1: For PC users, please keep participants visible and choose 'Raise Hand.' Please ask one question per turn when invited. Please turn on your microphone and camera, and state the main institution you represent.

Speaker #1: Thank you. We will now take the first question. We will have the first question from Asset Management. Can you hear me?

Operator: We will have the first question from Guotai Junan Asset Management. Liu Chenxi.

Liu Chenxi: Can you hear me?

Speaker #2: Yes, we can hear you.

Xia Yangfang: Yes, we can hear you.

Operator: Yes, we can hear you.

Speaker #1: Thank you, senior management, for giving me this opportunity to raise the first question. My question is for Mr. — you just assumed the position of President of CMB.

Liu Chenxi: Thank you, senior management, for giving me this opportunity to raise the first question. My question is for Mr. Wang Xiaoqing. You just assumed to be the President of CMB. I have a very simple question for you. For this time, as you assume your new role, what is your actual inner thought? We all know that you have assumed your new role for around H1. You have done a lot of work. I would like to learn from you, what about your mindset, your idea about the future development of CMB's business? We see CMB in Q2, your revenue, your profit all accelerate. Will that trend continue to the H2?

Speaker #1: I have a very simple question for you. At this time, as you assume your new role, what are your actual inner thoughts? We all know that you have assumed your new role for around half a year, and you have done a lot of work.

Speaker #1: So, I would like to learn from you. What is your mindset? What are your ideas about the future development of CMB's business?

Speaker #2: We see CMB in the second quarter—your revenue and your profit both accelerated. Will that trend continue in the second half of the year?

Speaker #1: Thank you for your question. By the end of April, I assume my new role as the president of CMB, and after that, first of all, I feel a strong responsibility, which was reflected in the following aspects.

Xia Yangfang: Thank you for your question. By the end of April, I assumed my new role to be the President of CMB, and after that, first of all, I feel strong responsibility, which was reflected in the following aspects. Well, first of all, CMB has been managing a CNY 13 trillion asset size. It shoulders a very strong responsibility and mission. Second, the bank-wise development is highly relevant to 120,000 CMB staff's life, and how could we inherit the good experience and the results from generations of CMB staff's hard work and stick to high-quality development. Third, the capital market. Our investors have attached great importance and recognition to CMB. How do we live up to their expectation?

Wang Xiaoqing: Thank you for your question. By the end of April, I assumed my new role to be the President of CMB, and after that, first of all, I feel strong responsibility, which was reflected in the following aspects. Well, first of all, CMB has been managing a CNY 13 trillion asset size. It shoulders a very strong responsibility and mission. Second, the bank-wise development is highly relevant to 120,000 CMB staff's life, and how could we inherit the good experience and the results from generations of CMB staff's hard work and stick to high-quality development. Third, the capital market. Our investors have attached great importance and recognition to CMB. How do we live up to their expectation?

Speaker #1: Well, first of all, CMB has been managing RMB 13 trillion in asset size. It shoulders a very strong responsibility and mission. Second, the bank's wise development is highly relevant to the lives of 120,000 CMB staff. How can we inherit the good experience and results from generations upon generations of CMB staff’s hard work and stick to high-quality development?

Speaker #1: And third, the capital market—our investors have attached great importance and recognition to CMB. How do we live up to their expectations? How do we live up to what they expect from us is also a very important issue for us.

Wang Xiaoqing: How do we live up to what they expect from us is also a very important issue for us. I can recall an individual investor from our shareholders meeting that their funds are coming from their everyday lives. So making good investments is what they want. We should guarantee them with good results and deliver to our investors so as to guarantee their return. Of course, from all these three aspects, these are the most important aspects. We also have other dimensions. CMB are faced with important development opportunities. Of course, there are challenges ahead. I have been discussing with many investors in different scenarios. Challenges on one hand are coming from the banking industry. These are the common challenges faced by all banks. For instance, the low interest rate environment.

Speaker #1: I can recall an individual investor from our shareholders meeting mentioning that their funds are coming from their everyday lives. So making good investments is what they want.

Speaker #1: We should guarantee them good results and deliver for our investors, so as to guarantee their return. Of course, from all these three aspects, these are the most important aspects.

Speaker #1: We also have other dimensions. CMB are faced with important development opportunities. And of course there are challenges ahead I have been discussing with many investors in different scenarios challenges on one hand are coming from the banking industry which these are the common challenges faced by all banks for instance the low interest rate environment they have been posed challenges to the bank and also the challenges they brought to the main development and another dimension is that as we economic growth rate actually is moderate and also the both societies financing structure are experiencing changes the demand for the credit demand also shrink shrink this is also the PBOC had mentioned in the forum in Shanghai that the total loan growth demand the loan demand is also in a slow down trend for the second perspective for CMB we have also been quite special in our own loan structure as you all know we are a bank that retail business stays in our major line and wealth management is a very important strength of us.

Wang Xiaoqing: They have been posed challenges to the banks and also the challenges they got through the new development. Another fact I mentioned is that as the economic growth rate actually moderates, and also the whole society financing structure are experiencing changes, the credit demand also shrinks. This is also the People's Bank of China had mentioned in the forum in Shanghai that the total loan growth demand, the loan demand is also in a low downtrend. For the second perspective for CMB, we have also been quite special in our own loan structure. As you all know, we are a bank that retail business stays in our major line, and extensive wealth management is a very important strength of ours. In such a phase where retail credit assets, retail business, facing challenges, I believe this challenge on one hand is coming from the household balance sheet revaluation and deleveraging.

Speaker #1: In such a phase where retail credit assets and the retail business are facing challenges, I believe these challenges, on one hand, are coming from the household balance sheet reevaluation and deliberation. This is a special phase we have. From the second perspective, some of our households are having challenges in their willingness to repay, and also their capability to repay. Thirdly, the joint stock risks, also joint debt risks, are demonstrated in such an environment.

Wang Xiaoqing: This is a phase, a special phase we have. For the second perspective, some of our households, they are having challenges in their willingness to repay and also their capability to repay. Thirdly, the joint stock risk also joint debt risk also demonstrates in such an environment. For CMB, who boast retail business are under pressure, much more pressure compared with our peers. Combined with the low interest rate environment, combined with our over 50% of retail loans among our all loans, and also the rather smaller room of liability cost control compared with our peers, I think all these factors combining together are posing stronger challenge to CMB compared with other banks. But for us, I think on one hand, we need to follow the principle, the pattern of the banking business development.

Speaker #1: So for CMB who boast a retail business are on the pressure much more pressure compared to what with our peers. So combined with the low interest rate environment combined with our over 50% of retail loan among our all loans and also the rather smaller room of liability caused control compared with our peers I think all these factors combining together are posing stronger challenge to CMB compared with other banks.

Speaker #1: But for us I think on the one hand we need to follow the principle the pattern of the banking business development for us. I think that we should always stick to the philosophy the customer centric philosophy to be back to our origin and take customer as our center and secondly we should balance risk return and maintain a good management over the two factors and stick to good asset quality and the from a commercial bank perspective we need to combine with our own strengths our resources what we are good at.

Wang Xiaoqing: For us, I think that we should always stick to the philosophy, the customer-centric philosophy. To be back to our origin and take customer as our center. Secondly, we should balance risk, return, and maintain a good management over the two factors and stick to good asset quality. Third, from a commercial bank perspective, we need to combine with our own strengths, our resources, what we are good at. I want to specially mention the two points. One is that even though we are faced with challenges, how do we leverage our strengths in extensive wealth management business? We can consolidate our characteristics as a retail bank. We cannot give up our own strengths and characteristics just because of the change of external environment. On the contrary, as the market changes, during the process, we should even more.

Speaker #1: I want to specially mention point one: even though we are faced with challenges, how do we leverage our strengths in extensive wealth management business so we can consolidate our characteristics as a retail bank.

Speaker #1: We cannot give up our own strengths and characteristics just because of the change of external environment. On the contrary as the market changes during the process we should even more we should even learn better about the environment and seize the opportunities and continue to foster our capability and grasp the development opportunities among the environment and second perspective is that we have 3.8 million corporate clients and over 230 million retail clients and we are having rather strong space to further dig deeper in these client groups.

Wang Xiaoqing: We should even learn better about the environment and seize the opportunities and continue to foster our capability and grasp the development opportunities among the environment. Second perspective is that we have 3.8 million corporate clients and over 230 million retail clients, and we are having rather strong space to further dig deeper in these client groups. We need to take a customer-centric perspective to understand better about their demand, where is their demand, where is their pain point. For CMB, we can understand better about them and provide corresponding service to these clients to match their needs, no matter if they are retail clients or corporate clients, and to carry out our mission to serve the real economy, and to serve the sense of fulfillment and their investment gain of our customers.

Speaker #1: We need to take a customer-centric perspective to better understand their demand—where is their demand, where are their pain points—and for CMB we can understand better about them and provide corresponding services to these clients to match their needs, no matter if they are retail clients or corporate clients, and to carry out our mission to serve the real economy and to serve the sense of fulfillment and the investment gain of our customers.

Speaker #1: And of course as a commercial bank we should seize the pulse of the of this time to seize the trend of development and to see what we should see to see from current situation and the senior management has discussed the following aspects directions of development.

Wang Xiaoqing: Of course, as a commercial bank, we should seize the pulse of this time to see the trend of development, and to see what we should see. To see from current situation, the senior management has discussed the following aspects, direction of development. These are also what we think that we should grasp and seize to be the characteristic of CMB's future development. The first thing is extensive wealth management business under the low interest rate environment. How do we understand better about customer demand, their demand of preserve and increase their asset value? We also see the change of asset structure of every household of the Chinese residents. For the H1, retail AUM increased by 8% to CNY 18 trillion. We can see that in deposits, insurance, trust gains, and mutual fund products, these are all demands coming from our clients.

Speaker #1: These are also what we think we should grasp and seize as the characteristics of CMB’s future development. The first thing is extensive wealth management business under the low interest rate environment.

Speaker #1: How do we better understand customer demand—their demand to preserve and increase their assets' value? We also see the change in the asset structure of every household of Chinese residents. For the first half, retail AUM increased by 8% to 18 trillion yuan. We can see that in deposits, insurance, trust schemes, and mutual fund products—these are all demands coming from our clients.

Speaker #1: For CMB, we have already accumulated capability recognized by the market, and for the next phase we will further strengthen our capability to take the customer as the center, to increase the sense of fulfillment of our clients and to also improve the experience for our clients. We take these aspects as our target to enhance our capabilities of providing asset allocation to our clients.

Wang Xiaoqing: Well, for CMB, we have already accumulated a capability recognized by the market. For the next phase, we will further strengthen our capability to take customer at the center, to increase the sense of fulfillment of our clients, and to increase also the experience of our clients. We take these aspects as our target to enhance our capabilities of providing asset allocation to our clients, and also provide companion service to our clients as well. This is what I would like to discuss about the first capability. Besides retail, extensive wealth management also includes wealth management to corporate clients. Even though the scale of wealth management service provided to corporate clients is not as big as those we provide to retail clients, it is also growing at a very fast pace.

Speaker #1: And also provide convenient service to our clients as well. This is what I would like to discuss about the first capability. Besides extensive retail wealth management, we also include wealth management for corporate clients. Even though the scale of wealth management service provided to corporate clients is not as big as those we provide to retail clients, it is also growing at a very fast pace.

Speaker #1: For the second perspective, I think we need to seize the opportunities arising from the new era and new environment. That is, to side-check finance.

Wang Xiaoqing: For the second perspective, I think we need to seize the opportunities arising from the new time and new environment. That is SciTech Finance. We think that under the backdrop where the government encourage us to develop technology, and also the capital market are providing stronger support in this process. Of course, financial institutions like us should not miss this great opportunity. It is not just missing the opportunity, it may be a time that you miss. Of course, probably every financial institutions are also practicing and trying to seize this opportunity. How do we further consolidate our capability that is more systematic based on our past cumulative experience? I think on the one hand, we need to deepen our understanding towards industry. For every area in technology, it actually requires us to have strong knowledge, deep understanding in different areas, segments in the technology business.

Speaker #1: We think that, under the backdrop where the government encourages us to develop technology and the capital markets are providing stronger support in this process,

Speaker #1: And of course, financial institutions like us should not miss this great opportunity. It's not just missing an opportunity—it may be a time that we need, and of course probably every financial institution is also practicing and trying to seize this opportunity. How do we further consolidate our capability in a more systematic way, based on our past cumulative experience? I think, on the one hand, we need to deepen our understanding of industry. For every area in technology, it actually requires us to have strong knowledge and deep understanding in different segments of the technology business.

Wang Xiaoqing: How to further cultivate our capability? It is what we need to further dig deeper and cultivate, no matter in the head office or branch level or subsidiary. It is also building based on our professional operation that is industry-based. Only by understanding better about the future of a company could we deepen the development of technology finance. For the second perspective of how do we better promote the development of technology finance, we should give into full play of our full license capability. I understand that for commercial banking business, the high growth and also high volatile characteristics within technology finance, it cannot be satisfied by the traditional credit business model. Because the return coming from loan business is rather certain. So I think that the two aspects within the business are actually mismatched. How do we better satisfy the demand of technology finance?

Speaker #1: How to further cultivate our capability it is what we need to further dig deeper and cultivate no matter in the head office or branch level or subsidiary it is also it is also built it is also building based on our professional operation that is industry based only by understanding better about the future of a company could we deepen the development of technology finance and for the second perspective of how do we better promote the development of technology finance we should give into foreplay of our license our full license capability I understand that for commercial banking business the high growth and also high volatile characteristics within technology finance it cannot be satisfied by the traditional credit business model because the return coming from loan business is rather certain so I think that the two aspects within the business are actually mismatched.

Speaker #1: So how do we better satisfy the demand for technology finance? We need to further leverage our full-license capability and our multi-license capability. That is what we need to think about further for the next phase. We have a "1 + 1 + 8" license structure: one is commercial banking, the other one is our overseas commercial banking, and the other eight are investment banking, investment management, AIC, leasing, etc.

Wang Xiaoqing: We need to further leverage our full license capability, our multi-license capability. That is what we need to think further for the next phase. We have one plus one plus eight license. One is commercial banking, and the other one is our overseas commercial banking. The other eight are investment banking, investment management, AIC, leasing, and et cetera. So for CMB, within these eight licenses areas, they are having a rather good market share and also market influence compared with CMB's commercial banking business within its own area. So I think we should fully leverage what we have been cultivating, what we have been accumulating, and to better serve our nation's big strategy of developing technology. Within this trend, we should seize the opportunity and further development along with this trend. For the third perspective, I would like to mention is about our international development.

Speaker #1: So, for CMB, within these eight licensed areas, they are having a rather good market share and also market influence compared with CMB's commercial banking business within its own area.

Speaker #1: So I think we should only leverage what we have been cultivating, what we have been accumulating, to better serve our nation's big strategy of developing technology. And within this trend, we should seize the opportunity and pursue further development along with this trend.

Speaker #1: And the third perspective I would like to mention is about our international development. Logically speaking, our overseas branches do not have as many outlets as the big state-owned banks.

Wang Xiaoqing: While logically speaking, our overseas branches are not having as many outlets as the big state-owned banks. How do we reflect our own characteristic in international development? Especially, how do we better leverage our Hong Kong institution? I think these two ideas are what we need to think further. The fourth aspect is that in the intelligent era, also bring us new opportunities for banks. It might not be obviously or quickly reflected in our balance sheet, or even at recent phases, they will be reflected as expenses or costs. But for us, we think it is the right thing to do. How do we use a more scientific way to grasp the intelligent technology meant a lot for a commercial bank.

Speaker #1: So, how do we reflect our own characteristics in international development? Especially, how do we better leverage our Hong Kong institutions? I think these two ideas are what we need to consider further. The fourth aspect is that the intellectual, intelligent era also brings us new opportunities for banks. It might not be obviously or quickly reflected in our balance sheet, or even at recent phases they will be reflected as expenses or costs, but for us, we think it's the right thing to do.

Speaker #1: How do we use a more scientific way to grasp the intelligent technology meant a lot for a commercial bank. It could help us to enhance customer experience enhance our internal efficiency and to conduct even more accurate risk management and also to further accumulate our knowledge so this is for the development of technology has always been a very important input within long ago we have been written that no less than 3.5% of our operating income will become the IT input and for the next phase this is written in our articles of association so we will we are having planned for developing our intelligent bank and later on our chief information officer Mr. Joe will give further introduction.

Wang Xiaoqing: It could help us to enhance customer experience, enhance our internal efficiency, and to conduct even more accurate risk management, and also to further accumulate our knowledge. This is for the development of technology has always been a very important input within. Long ago, we have been written that no less than 3.5% of our operating income will become the IT input, and for the next phase. This is written in our articles of association. We are having plans for developing our intelligent bank. Later on, our Chief Information Officer, Mr. Zhou, will give further introduction. Last but not least, we believe it is also an opportunity given by this era. Another mid to long-term momentum is that during the development of Chinese economy, we should better give the full play of our branches in key areas.

Speaker #1: And last but not least we believe it is also an opportunities given by this era and also another need to long-term momentum is that during the development of Chinese economy we should better give the foreplay of our branches in key areas according to the senior management analysis for the first half recently I've just reported the figure of development in of branches in key areas they're having a better growth rate in the average level of the banks all all branches all all branches so we need to stay close to the local industrial policies stay close to industries that are failing to our understanding of risk and our preference and stay close to our clients including corporate and retail clients this is the this is what we need to do to further develop the key branches branches in key areas.

Wang Xiaoqing: According to the senior management analysis for the H1, recently I have just reported the figure of development of branches in key areas. They are having a better growth rate in the average level of the bank's all branches. We need to stay close to the local industrial policy, stay close to industries that are fit into our understanding of risk and our preference, and stay close to our clients, including corporate and retail clients. This is what we need to do to further develop the branches in key areas so that they can contribute more to the bank's operating income and also profit. For the next phase, we need to further foster our characteristics and strength so as to establish CMB's own driver of future development. Your last question is about the growth of the H1. Will that trend be continued?

Speaker #1: So that they can contribute more to the bank’s operating income and also profit. This is what we need to do for the next phase. We need to further foster our characteristics and strengths so as to establish CMB’s own driver of future development.

Speaker #1: Your last question is about the growth in the first half—will that trend be continued? From the senior management level, we will strive, and we will make every effort. This is also what we want to deliver to the market.

Wang Xiaoqing: Well, to see from the senior management level, we will strive, we will make every effort, and this is also what we want to deliver to the market. We aim to strive to maintain a stable and steady progress to deliver such results to our market and make every effort to maintain our good asset quality, to deliver such good growth momentum, to consolidate what we have achieved, to reflect better results to the capital market. Thank you.

Speaker #1: We aim to strive to maintain stable and steady progress to deliver such results to our market and make every effort to maintain our good asset quality, to deliver such good growth momentum, to consolidate what we have achieved, and to reflect better results to the capital market.

Speaker #1: Thank you. Next question, please. Next, we will invite Mark Wenpeng from China Securities.

Xia Yangfang: Next question, please. Next, we would like to invite Ma Kuncung from China Securities. Thank you. I am Ma Kuncung from China Securities. Thank you for President Wang for the introduction. We are clear about the strategic outlook. I want to further ask my question on retail banking business. CMB has the best wealthy retail customer base in China banking industry. In areas such as consumption scenarios, basic account services, wealth management, how will you continue to enhance the exclusivity, uniqueness, and premium experience of products and services to these clients, thereby avoiding simple price wars and marketing wars, so that we can further improve customer loyalties and returns? Is there any indicators or metrics we can track to monitor the progress and effectiveness of these efforts? We would like to invite Ms. Wang Ying to answer this question. Thank you for the question.

Operator: Next question, please. Next, we would like to invite Ma Kuncung from China Securities.

Speaker #3: Thank you.

Ma Kunpeng: Thank you. I am Ma Kuncung from China Securities. Thank you for President Wang for the introduction. We are clear about the strategic outlook. I want to further ask my question on retail banking business. CMB has the best wealthy retail customer base in China banking industry. In areas such as consumption scenarios, basic account services, wealth management, how will you continue to enhance the exclusivity, uniqueness, and premium experience of products and services to these clients, thereby avoiding simple price wars and marketing wars, so that we can further improve customer loyalties and returns? Is there any indicators or metrics we can track to monitor the progress and effectiveness of these efforts?

Speaker #1: I'm Mark Wenpeng from China Securities. Thank you, President Wang, for your introduction. We are clear about the strategic outlook. I want to further ask my question on the retail banking business.

Speaker #1: CMB has the best wealthy retail customer base in the China banking industry. So in areas such as consumption scenarios, basic account services, and wealth management, how will you continue to enhance the exclusivity, uniqueness, and premium experience of products and services for these clients, thereby avoiding simple price wars and marketing wars, so that we can further improve customer loyalty and returns?

Speaker #1: Are there any indicators or metrics we can track to monitor the progress and effectiveness of these efforts? We would like to invite Ms. Wang Ying.

Operator: We would like to invite Ms. Wang Ying to answer this question.

Speaker #1: Thank you for the question. I think this is a very good question. You not only mentioned paying attention to wealth management, but also paying attention to customer consumption scenarios, including bank account services, which are integrated financial services.

Wang Ying: Thank you for the question. I think this is a very good question. You not only mention, pay attention to wealth management, but also pay attention to customer consumption scenarios, including bank account services, which are integrated financial services. This is a direction that CMB is paying efforts to serve the client's basic needs in deposit loans and remittance. Regarding these comprehensive financial services, we do not target only wealthy customers, but the whole customer base of China Merchants Bank deposits has been elaborated to the extensive wealth management. We will start from the client's sense of experience. We select good products and construct a long-term, stable asset allocation system. Regarding loans, which means we will satisfy clients' demand in different financing to provide the needs in households, business, et cetera.

Wang Ying: I think this is a very good question. You not only mention, pay attention to wealth management, but also pay attention to customer consumption scenarios, including bank account services, which are integrated financial services. This is a direction that CMB is paying efforts to serve the client's basic needs in deposit loans and remittance. Regarding these comprehensive financial services, we do not target only wealthy customers, but the whole customer base of China Merchants Bank deposits has been elaborated to the extensive wealth management. We will start from the client's sense of experience. We select good products and construct a long-term, stable asset allocation system. Regarding loans, which means we will satisfy clients' demand in different financing to provide the needs in households, business, et cetera.

Speaker #1: This is a direction that CMB is putting effort into to serve clients’ basic needs in deposits, loans, and remittance. Regarding these comprehensive financial services, we do not target only wealthy customers, but the whole customer base of China Merchants Bank.

Speaker #1: Deposits have been elaborated to the expensive wealth management. We will start from the client’s sense of experience; we select good products and construct a long-term, stable asset allocation system. Regarding loans, this means we will satisfy clients’ demands in different financing to provide for needs in households, business, etc.

Wang Ying: For remittance, we pay high attention and continuously enhance our basic account system construction, and dedicated to a safe, a convenient, and rapid payment system to cover all scenarios, such as elderly caring, social insurance, et cetera. So that client can use one account to manage all kinds of businesses. Make CMB card more. It is very good to use this concept to be more widely promoted. Wealthy customers have more diversified requirements, and most of the clients are entering a phase of material wealth accumulation. So they have diversified from different dimensions. The requirements has been wealth succession and wealth protection, and more advanced needs. Under such kind of complexity, we have to take into consideration more factors and provide more customized services and more differentiated services to these wealthy clients.

Speaker #1: For remittance, we pay high attention and continuously enhance our basic account system construction, and are dedicated to a safe, convenient, and rapid payment system to cover all scenarios, such as elderly care, social insurance, etc.

Speaker #1: So that clients can use one account to manage all kinds of businesses. Making the CMB part more usable is a very good idea, and we should use this concept and promote it more widely.

Speaker #1: Wealthy customers have more diversified requirements in their most of the clients are entering a space of wealth material wealth accumulation so they have diversified from different dimensions their requirements has been well succession and wealth protection and more advanced needs under such kind of complexity we have to take into consideration more factors and provide more customized services and more differentiated services to these wealthy clients we provide one plus and comprehensive and scenario based service solution which is a one on one relationship managers and plus an expert teams for long-term companion to fully respond to the clients expectations on integrated services.

Wang Ying: We provide one plus end comprehensive and scenario-based service solution, which is a one-on-one relationship managers and plus an expert team for long-term companion to fully respond to the client's expectations on integrated services. For product offerings, we would opt for all category product offerings that serves across multiple accounts and multiple currencies, et cetera. Golden Sunflower and above customers growth in the past 3 years has accumulated to 55%, and the CAGR has been 13.26%. Another point is I would like to discuss with you is that we have always pay high attention to the upgrade of retail client service model. Because retail customers is a 100 million volume-based customers, and there are a lot of categories of retail banking businesses, and there are multidimensional services involved in retail banking client services. So how to match clients' requirements and our product offerings, this is a very important question.

Speaker #1: In product offerings, we would opt for all-ground, all-category product offerings that serve across multiple accounts and multiple currencies, etc. Golden Sunflower and above customers’ growth in the past three years has accumulated to 55%, and the CAGR has been 13.26%.

Speaker #1: Another point that I would like to discuss with you is that we have always paid close attention to the upgrade of our retail client service model.

Speaker #1: Because retail customers is a can is a 100 million volume based customers and there are a lot of categories of retail banking businesses and there are multi-dimensional services involved in retail banking client services.

Speaker #1: So, how do we match clients' requirements with our product offerings? This is a very important question. In the past, we used three years to basically complete the human plus digital intelligence new model in retail finance.

Wang Ying: In the past, we used 3 years to basically complete the human plus digital intelligence new model in retail finance, and completed our digital rematching for clients and channels and product offerings. We have three dimensions to support us. First, our customer-centric value and our strong delivery capacity from the head office to branches and to sub-branches, as well as our strong support flow of FinTech. This is a main support. In the next phase, our retail banking service model will deeply involve artificial intelligence, and transform for people plus digital intelligence to people plus AI agents. Regarding metrics, I think there are many indicators to pay attention to. For example, the number of customers holding wealth management products, the allocation customers, and their active users, et cetera.

Speaker #1: And we have completed our digital re-matching for clients, channels, and product offerings. We have three dimensions to support us: first, our customer-centric value, and our strong delivery capacity.

Speaker #1: From the head office to branches and to sub-branches, as well as our strong support of fintech—this is a main support. In the next phase, our retail banking service model will deeply involve artificial intelligence, and transform from 'people plus intelligence' and 'people plus digital intelligence' to 'people plus AI agents.'

Speaker #1: Regarding metrics, I think there are many indicators to pay attention to. For example, the number of customers holding wealth management products, the allocation customers, and we may use active users, etc.

Speaker #1: And our customers covered by the tree system have increased by 55% over the past three years, and the compound annual growth rate has reached 13%.

Wang Ying: The customers covered by our TREE system has increased by 55% for the past 3 years, and the compound annual rate has reached 13%. Our monthly active users has increased by 31% in the past 3 years and 9.36%. 5.14% of the CAGR of the past 5 years. AUM and client base are the most fundamental indicators to look for. Structure, volume of these indicators are also something that we are paying attention to. Our AUM increased by 52.12% over the past 3 years, and retail clients increased by 24.54% for the past 3 years, and the CAGR was 6.72%. Overall speaking, we use integrated service capacity to serve our clients as long as we have our retail customer base, or even though their demand and preference changes across periods. However, for CMB, their trust for CMB and their choice for CMB will not change.

Speaker #1: Our monthly active users has increased by 31% in the past three years and and the of the and 9.36%. And the 5.14% of the CAGR of the past five years so for as for the indicators AUM and client base are the most fundamental indicators to look for.

Speaker #1: Structural volume of these indicators is also something that we pay attention to. Our AUM increased by 52.12% over the past three years, and retail clients increased by 24.54% over the past three years, with the CAGR at 6.72%.

Speaker #1: Overall speaking, we use integrated service capacity to serve our clients. As long as we have our retail customer base, even though their demand and preference may change across periods, their trust in CMB and their choice of CMB will not change.

Speaker #1: Next question, please. Next, we would like to invite Xiuyan from Morgan Stanley. Thank you for giving me the opportunity. I'm Xiuyan from Morgan Stanley. My question goes to Mr. Wang Xiaoqin regarding loan growth.

Xia Yangfang: Next question, please. Next, we will invite Xu Ran from Morgan Stanley. Thank you for giving me the opportunity. I am Xu Ran from Morgan Stanley. My question goes to Mr. Wang Xiaoqing regarding loan growth. We see that loan growth has slowed to below 5% year on year, and at the shareholders' meeting, you mentioned that the loan growth rate around 7% would be appropriate. What is the management's long-term consideration on loan growth? Previously, we think that CMB is a retail-oriented bank, and in retail sector, we see the risks are accumulating. What are your considerations regarding future portfolio allocation? Thank you for the question. Indeed, as you mentioned, and also mentioned in the presentation previously, the bank's total loans and advances reached CNY 7.45 trillion, up by 4.73% year on year. In this process, we see that the difference between corporate loans and retail loans.

Xia Yangfang: Next question, please.

Operator: Next, we will invite Xu Ran from Morgan Stanley.

Xu Ran: Thank you for giving me the opportunity. I am Xu Ran from Morgan Stanley. My question goes to Mr. Wang Xiaoqing regarding loan growth. We see that loan growth has slowed to below 5% year on year, and at the shareholders' meeting, you mentioned that the loan growth rate around 7% would be appropriate. What is the management's long-term consideration on loan growth? Previously, we think that CMB is a retail-oriented bank, and in retail sector, we see the risks are accumulating. What are your considerations regarding future portfolio allocation?

Speaker #1: We see that loan growth has slowed to below 5% year-on-year, and at the shareholders' meeting, you mentioned that a loan growth rate of around 7% would be appropriate.

Speaker #1: What is management's long-term consideration on loan growth? Previously, we thought that CMB is a retail-oriented bank, and in the retail sector we see that risk is accumulating. So, what are your considerations regarding future portfolio allocation?

Speaker #1: Thank you for the question. Indeed, as you mentioned and also mentioned in the presentation previously, the bank’s total loans and advances reached RMB 7.45 trillion, up by 4.73% year on year.

Wang Xiaoqing: Thank you for the question. Indeed, as you mentioned, and also mentioned in the presentation previously, the bank's total loans and advances reached CNY 7.45 trillion, up by 4.73% year on year. In this process, we see that the difference between corporate loans and retail loans.

Speaker #1: In this process, we see the difference between corporate loans and retail loans. Corporate loans increased by 13%, while retail loans increased by 0.05%, excluding corporate cost.

Wang Xiaoqing: The corporate loans increased by 13%, while retail loans increased by 0.05%, excluding corporate cards. We are seeing corporate loans growth is outpacing retail loans. This is broadly in line with the market trend. You just mentioned the number 7%. This is mentioned in a previous investors discussion regarding our expectation, which is 7%. From actual operations, we think that currently is around 55%, so in the next H2, we think that the growth rate would be relatively the same. There are two reasons. Firstly, the external environment. The speed of loan growth is slowing down, and the asset quality is improving. This is our own decision. With insufficient credit demand in the market, especially the retail loans, it is facing periodically high risk. We do not blindly pursue scale expansion.

Speaker #1: So, we are seeing corporate loan growth outpacing retail loans. This is broadly in line with the market trend. You just mentioned the number—7%.

Speaker #1: This was mentioned in a previous investors' discussion regarding our expectation, which is 7%. From actual operation, we think that currently it is around 5.5%. So, in the next half of the year, we think that the growth rate would be relatively the same.

Speaker #1: There are two reasons. Firstly the external environment. The the speed of loan growth is is slowing down which is and the the asset quality is improving.

Speaker #1: This is the choice of our own decisions. With insufficient credit demand in the market, especially in retail loans, we are periodically facing high risks.

Speaker #1: We do not blindly pursue scale expansion. We emphasize the philosophy of balanced development in quality, profitability, and scale. In the recent period, what we discussed with the retail banking business sector is that regarding the retail banking structure and asset quality, we have increased our requirements, and we do not place very high emphasis on scale expansion.

Wang Xiaoqing: We emphasize the philosophy of a balanced development of quality, profitability, and scale. In recent period, what we discussed with the retail banking business sector is that regarding the retail banking structure and asset quality, we have increased our requirements, and we do not pay very high emphasis on scale expansion, so that our team of retail banking have sufficient attention on the asset quality of retail loans. Even though I believe that from many analysis, the Q2 growth is lower than the previous numbers. From the perspective of commercial bank operations, we think that we hope to pay higher attention to the challenges and adopt long-term perspective and conduct proactive management. Secondly, I would like to mention that about the loan-used trade financing and LC negotiating business, the volume is shrinking, and we are implementing proactive management. The overall trend of demand is not changing very fundamentally.

Speaker #1: So that our team of retail banking have sufficient attention on the asset quality of retail loans. Even though I believe that from your from many analysis the Q2 growth is lower than the previous numbers from the from the perspective of commercial bank operation we think that we hope we hope to pay higher attention to the challenges and adopt long-term perspectives and conduct proactive management.

Speaker #1: Secondly I would like to mention that about the low yield still financing and LC negotiating business we are there's a volume is shrinking. And we are implementing proactive management.

Speaker #1: The overall trend of demand is not changing very fundamentally. And we are not seeing very good signs of an improving trend. The overall trend of CMB loan growth will still be maintained.

Wang Xiaoqing: If we are not seeing very good signs of improving trend, the overall trend of CMB loan growth will still maintain. In terms of retail loans, we will continue to consolidate our quality customer base, effective control our risk, and then we can have a good market share. In terms of corporate loans, we focus on key areas, key industries, and key industries featured by thickness, so that we can achieve growth in both volume and quality and increase our quality and effectiveness of serving the real economy. Thank you.

Speaker #1: Retail loans in terms of retail loans we would continue to consolidate our quality customer base effective control our risk and then we can have our grid market share.

Speaker #1: And in terms of corporate loans, we focus on key areas, key industries, and key industries featured by Six Nets, so that we can achieve growth in both volume and quality and increase our quality and effectiveness of serving the real economy.

Speaker #1: Thank you. Next question, please. The next question is from Yangshuo at Goldman Sachs. Thank you for giving me this opportunity. I have a question regarding deposits.

Xia Yangfang: Next question, please. Next question is from Yang Shou from Goldman Sachs. Thank you for giving me this opportunity. I have a question for deposit. Recently we see that some major banks, they are resuming the issuance of a larger denomination personal CD. I would like to learn that whether it has cast any influence to our liability cost, and I would like to understand the repricing of deposit and also the trend of NIM of CMB. The question will be taken by Ms. Xia Yangfang.

Xia Yangfang: Next question, please.

Operator: Next question is from Yang Shou from Goldman Sachs.

Yang Shou: Thank you for giving me this opportunity. I have a question for deposit. Recently we see that some major banks, they are resuming the issuance of a larger denomination personal CD. I would like to learn that whether it has cast any influence to our liability cost, and I would like to understand the repricing of deposit and also the trend of NIM of CMB.

Speaker #1: So recently, we see that some major banks are resuming the issuance of large-denomination personal CDs. I would like to learn whether this has had any influence on our liability cost. I would also like to understand the repricing of deposits and the trend of MMD of CMB.

Speaker #1: The question will be taken by Mr. Peng. Thank you for your question. I think for the issuance of large denomination CDs, we’ll have repurposes.

Operator: The question will be taken by Ms. Xia Yangfang.

Xia Yangfang: Thank you for your question. I think for the issuance of large denomination CD, we will have three purposes. One is based on the maturity management to the duration, to match the duration, and liability to absorb the long duration liability to maintain balance sheet management. Second, liquidity management, I think is also the second purpose. The third purpose is relevant to provide the product and service for our clients' demand of having such kind of long-term deposit product requirement. Based on our understanding, five-year large denomination CDs issuance, the total size is limited and the cost is rather low. Based on our understanding, it will have limited influence on the bank's NIM.

Speaker #1: One is based on the maturity management to the duration to match the duration and liability to absorb the long duration liability to maintain. Balance sheet management and second liquidity management I think is also the second purpose and the third purpose is relevant to provide the product and service for our clients demand of having such kind of long-term deposit product requirement but based on our understanding five year large domination CDs issuance the total size is limited and the cost is rather low so based on our understanding it will have limited influence on the bank's name but for CMB our duration liability duration is appropriate and balanced so in market risk we don't have quite strong requirements on the large denomination CD and we have good liquidity so for temporarily we won't need the issuance of large denomination CD to supplement our liquidity if in the future we need to take such action it will be out of the purpose of providing relevant deposit products required by our clients.

Xia Yangfang: For CMB, our duration, liability duration is appropriate and balanced, so in market risk, we do not have quite strong requirements on the large denomination CD. We have good liquidity, so temporarily, we will not need the issuance of large denomination CD to supplement our liquidity. If in the future we need to take such action, it will be out of the purpose of providing relevant deposit products required by our clients. Of course, we will conduct further analysis and understanding whether or not we have actual demand from our clients and whether the demand should be satisfied by our product supply. So we are also doing such kind of analysis and research. Also for those products that were further released, we need to conduct some rollover product.

Speaker #1: But of course, we will conduct further analysis to understand whether or not we have actual demand from our clients, and whether that demand should be satisfied by our product supply.

Speaker #1: So we are also doing this kind of analysis and research. Also, for those products that were further relieved, we need to conduct some rollover product work. We will also start from the perspective of meme management and also from the perspective of liability management.

Xia Yangfang: We will also start from the perspective of NIM management and also from the perspective of liability management. I think the influence is rather limited.

Speaker #1: I think the influence is rather limited. The next question is from Martin Ping from Guota Haichong Securities. Thank you, senior management. I am Martin Ping from Guota Haichong.

Xia Yangfang: The next question is from Ma Tingting from Bohai Securities. Thank you, CMB management. I am Ma Tingting from Bohai Securities. I have a question about the overall CMB's asset quality. What is your point of view, and what is the major risk that you see, and what kind of coping tactics, measures that you have been taken to these risk areas? The question will be taken by Mr. Xu. He is in charge of risk management. Thank you for your question. For the H1 of this year, we have stuck to our prudent and stable risk management culture and prevent the risk in key areas and increase our level of risk management. Our asset quality remains to be stable and having three characteristics. One is asset quality maintained stable towards a good momentum.

Operator: The next question is from Ma Tingting from Bohai Securities.

Ma Tingting: Thank you, CMB management. I am Ma Tingting from Bohai Securities. I have a question about the overall CMB's asset quality. What is your point of view, and what is the major risk that you see, and what kind of coping tactics, measures that you have been taken to these risk areas?

Speaker #1: I have a question about the overall CMB's asset quality. What's your point of view, and what is the major risk that you see? What kinds of coping tactics or measures have you taken regarding these risk areas?

Speaker #1: The question will be taken by Mr. Xu. He is in charge of risk management. Thank you for your question. For the first half of this year, we have stuck to our prudent and stable risk management culture to prevent risk in key areas and increase our level of risk management.

Operator: The question will be taken by Mr. Xu. He is in charge of risk management.

Xu Mingjie: Thank you for your question. For the H1 of this year, we have stuck to our prudent and stable risk management culture and prevent the risk in key areas and increase our level of risk management. Our asset quality remains to be stable and having three characteristics. One is asset quality maintained stable towards a good momentum.

Speaker #1: Our asset quality remains stable, and has three characteristics. First, asset quality has been maintained at a stable level, with good momentum by the end of June.

Xu Mingjie: By the end of June, our NPL ratio was 0.94%, remained flat from the end of 2025. This is quite a good level. The second is that we stick to a prudent and cultural risk asset classification. Loans overdue for 60 days and 90 days to NPL was 1.23, which was a good level among our peers. Third, we have abundant provision. By the end of June, under the group's calibrate, our adequate coverage ratio was 385%, having a strong compensation level. You have been paying attention to our understanding of risk areas. I would like to make some classification according to different segments. First, I would like to talk about corporate loans. For the H1, our corporate NPL ratio was CNY 27.4 billion. Corporate NPL ratio was 0.78%, down by 0.1 percentage point. Corporate asset quality actually improved for the H1.

Speaker #1: Our NPL ratio was 0.94%, remaining flat from the end of 2025. This is quite a good level. The second point is that we stick to a prudent risk culture and asset classification. Loans overdue for 60 days and 90 days to NPL was 1.23, which was a good level among our peers.

Speaker #1: Third, we have the abundance provision. By the end of June, under the group's calibration, our adequate coverage ratio was 385%. Having a strong compensation level, you have been paying attention to our understanding of risk areas. I would like to make some classification according to different segments.

Speaker #1: First, I would like to talk about corporate loans. For the first half, our corporate MPL was ¥27.4 billion. The corporate MPL ratio was 0.78%, down by 0.1 percentage points. Corporate asset quality actually improved for the first half. The MPL formation ratio of corporate loans was just 0.16%. Looking at it from a longer cycle, CMB’s corporate loan asset quality continues to improve and remains stable, trending in a good direction.

Xu Mingjie: The NPL formation ratio of corporate loans was just 0.16%. Stretching to see from a longer cycle, CMB's corporate loan asset quality continued to improve, remain stable towards a good trend. For the risk areas that we pay attention to, in terms of corporate loans, the future risk will be lying in real estate credit perspective. By the end of 2025, we have CNY 14.5 billion of NPL loan in the real estate area, which represents 4.47% of NPL ratio. Even though these two figures remain at a relatively high level, we are paying a very cautious attitude towards these two figures. For the real estate market, we still see some divergence within the market. For some clients with rather not that good performance and qualification, they are having quite poor asset quality. For this area is what we pay special attention to, that is the corporate real estate.

Speaker #1: For the risk areas that we pay attention to in terms of corporate loans, the future risk will be lying in real estate from a segmented perspective.

Xu Mingjie: We are taking measures as follows. We continue to lower the proportion of corporate loans, corporate real estate loans within total loans. Its proportions was now 9.3%, which was lower than the end of 2025, lower by 0.45 percentage points. We will further optimize the structure of corporate property loans. We focus on loan disbursement in Tier 1 and Tier 2 cities, and 85% of them are allocated to Tier 1 and Tier 2 cities. To see from client structure, over 80% of our corporate property loans are granted to local and central state-owned enterprises and also very qualified private enterprises who are having stronger capability to paying their debt. The third perspective is to maintain strict management with the projects.

Xu Mingjie: We have conduct close loop founder management towards different projects. In the fourth perspective, we continue to dissolve the risk within the area and speed up the disposal, and enhance collateral, enhance guarantee, and enhance the other disposal methods taken by our staff. Also, last but not least, to enhance our provision level to make sure that the risk compensation level within the corporate real estate sector is sufficient. The provision level is over three times than the average level of the provision for the corporate loan. Looking into the year 2026, with many policies introduced by different regulators, we are seeing that the real estate markets are seeing the trend of further concentrating in the risk. The risk tends to be showing a momentum to be contained.

Xu Mingjie: We think that even though there will be some individual event of risk outbreak, generally, the market is now in a stabilizing process. The second perspective I would like to mention is about retail loan. For H1, the retail NPL loan amounted to CNY 42.8 billion. The NPL ratio was 1.16%, up by 0.1 percentage points. Special mention loan ratio and balance of retail loan increased. I noticed that some of the investors are paying special attention to the asset quality of our retail loan. From my perspective, the retail loan asset quality is the major driver, the major reason that influenced our overall asset quality. Even though the asset quality indicators of the retail loans are maintaining at a relatively good level, they are still under pressure.

Xu Mingjie: The second, retail loan accounts for a high proportion in our loan book, so it is natural for us to having stronger pressure. Of course, some of the pressure is coming from the market trend. The other side, I think the pressure is also coming from the expectations from our investors and also CMB's pursuit to be the best retail bank. So currently, under such backdrop of the economic structure transformation and also the downward trend of the real estate market, clients are under influence in terms of their capability of repay and also their willingness to repay. Also we are having joint debt risk in the consumer loan area. So we are still having the idea that the retail loan risk is in an upward trend.

Xu Mingjie: Of course, we have been taking measures to maintain the risk level of retail assets. What we have been doing is that we have adjusted our budget and target of retail loan business. In our evaluation and also internal encouragement, we even pay special attention to the quality of retail loan and also control the formation of retail NPL loan. Of course, we also see some positive signals within retail loan asset quality for H1. Excluding credit card, our retail loan, the NPL, we are having information of 247 million information of personal loan. That is retail loan excluding credit card. Retail credit assets, the momentum of its NPL new formation, momentum has been curbed.

Xu Mingjie: The second signal we see, our balance loan, that is our mortgage loan, for H1 of this year, the NPL balance was down by CNY 5.9 million and down by 0.03 percentage points and realized the full decrease in the NPL balance and ratio of our mortgage loan for H1 of the year. Of course, good signals are also showing in credit card business. Due to some special reasons, the adjustment of the asset classification within the credit card business, we have been taking stricter measures to conduct asset classification so that we see some uptick in the formation of credit card NPL. Overdue loan ratio was down by 0.1 percentage points in credit card business for H1. Overdue loan ratio and balance also both decreased in terms of credit card loans.

Xu Mingjie: Of course, we have to note that the credit card assets are still under pressure in terms of asset quality, but I believe it still be a very important loan granting direction for us to pursue. So in the following phase, we will follow the market trend. We will emphasize both on quality and size, and we will give the full play of the strength of our customer base to increase the threshold of customer onboarding. Third, we will dig deeper into our existing customers and to prevent the risk coming from joint debt risk. Fourth, we will conduct early identification, warning, and also disposal and et cetera. Fifth, we will enhance our systematic risk management capability to strengthen the leverage of AI or data and also to strengthen the cultivation of our talent team.

Xu Mingjie: We will further strengthen the management over the asset quality of retail assets. We wish it will be developing in a stable momentum.

Xia Yangfang: Next question, please. Next, we will invite Yin Yi from J.P. Morgan for the question. Thank you for giving me the opportunity. My question is regarding corporate banking business. We noticed that corporate banking revenue and profit are outperforming those of retail banking. What are the growth drivers and what is the outlook going forward under today's macroeconomic situation? How can we maintain good corporate loan asset quality? Thank you. Thank you for the question. We invite Mr. Lei Caihua, who is in charge of corporate banking business, to answer this question. Thank you for the question. You mentioned about the growth of corporate banking in the H1 of the year. Overall speaking, our growth is stable. In the backdrop of the market environment, we have four growth pillars. We have achieved good operating results.

Xia Yangfang: Next question, please.

Operator: Next, we will invite Yin Yi from J.P. Morgan for the question.

Yin Yi: Thank you for giving me the opportunity. My question is regarding corporate banking business. We noticed that corporate banking revenue and profit are outperforming those of retail banking. What are the growth drivers and what is the outlook going forward under today's macroeconomic situation? How can we maintain good corporate loan asset quality? Thank you.

Operator: Thank you for the question. We invite Mr. Lei Caihua, who is in charge of corporate banking business, to answer this question.

Lei Caihua: Thank you for the question. You mentioned about the growth of corporate banking in the H1 of the year. Overall speaking, our growth is stable. In the backdrop of the market environment, we have four growth pillars. We have achieved good operating results.

Lei Caihua: In the past decades, corporate banking operation has formed differentiated advantages as compared with our peers. The key lies in the number and quality of our customer base, as well as our client experience and client coverage regarding our digital products. The aforementioned two points generate three points. Our cost of liabilities is outperforming our peers. Our investment banking and cross-border finance business is featured and satisfied our clients' needs as generating non-interest income. Fifthly, the fourth pillar growth drivers of CMB corporate banking, especially wealth management, asset management, interbank coordination, has jointly formed a growth. Sixthly, our good asset quality. Next, China Merchants Bank will continue to, in terms of corporate banking, we will focus on the six aspects to forge our differentiated advantages. Firstly, leveraging digital empowerment, we will further strengthen our client service system.

Lei Caihua: Currently, the classification and segmentation-based client operational model will be continued, and this is a core for our customer base operation. We will enlarge our client loyalty and increase our income and low cost liability. Compared to peers, we have a better advantage in the volume and quality of our client base. For technology, evolving growing clients, we should address their needs in operations and become a principal bank for the clients. Next, in terms of operations, we need to continue to optimize our services. Secondly, to improve our professional operation capacity and enhance our asset origination. We are focused on the new emerging quality clients and segments clients, et cetera. We will have specific industrial investigation and improve our risk investigation and forward-looking judgment under demand, and impose differentiated credit policy so that we can obtain asset allocation which is with controllable risk.

Lei Caihua: We also strengthened to build an industrial ecosystem. We have already covered 36 industries of professional investigation. Thirdly, we will improve our investment banking and commercial banking integrated service system. First, we will improve our digital products, including cross-border finance, investment banking, transaction banking, et cetera, so that we can enhance customer experience. In terms of customer experience, we are leading the industry, and we should maintain our advantage so that we can deepen our client loyalty, know better our clients, and forge stronger ties. Leveraging high efficiency synergy, we will forge a capital ecosystem to provide our clients with more diversified products and increase our M&A financing and direct financing, increase our FPA to increase our income. Next, we will improve cross-border finance business management, serving Chinese enterprises going global.

Lei Caihua: In terms of customers of COP value, cross-border financing, as compared with our comparable peers, we are leading in our position. Next, we will improve our synergy capacity in cross-border institutions, so that we can help the Chinese enterprises going global, help their products going global, and financing going global so that we can provide better services for these clients. Fifthly, we would increase the coordination between the four major business segments. The coordination of these four segments are the feature of CMB, especially the development of wealth management business, as well as the other segments. By leveraging this coordination, we can achieve deep cooperation of these different client categories. Next, we will continue to forge differentiated processes and mechanisms. Sixthly, we will use AI to empower our business.

By leveraging this coordination, we can achieve shift alteration of these different categories. Next, we will continue to forge differentiated...

processes and mechanisms.

Quickly, we will use AI.

Lei Caihua: Seventhly, we want to increase our response speed to our clients and increase our risk management capacity and internal management of internal operation efficiency, as well as integration and synergy capacity. That is my answer. Thank you. Next question, please. Next, we would invite Wang Xianshuang from Guolian. Can you hear me? Yes. Thank you. I am Wang Xianshuang from Guolian. First of all, thank you CMB for delivering stable performance. Under such kind of circumstances, you have good performance in operation results and see an increase in market price in H share and A share. My question is regarding asset and liability. I want to ask the management, what is your outlook on the NIM trend? The second is about FinTech. We noticed in the interim report you elaborated a lot on AI, and we believe CMB is leading the industry in AI deployment.

To empower our business.

Firstly, we want to increase our response speed.

To our clients, and to increase our risk management capacity and the internal management of operational efficiency.

That is my answer. Thank you.

Xia Yangfang: Next question, please.

Next question, please.

Operator: Next, we would invite Wang Xianshuang from Guolian.

next, we would invite

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Wang Xianshuang: Can you hear me?

Can you hear me?

Operator: Yes.

Wang Xianshuang: Thank you. I am Wang Xianshuang from Guolian. First of all, thank you CMB for delivering stable performance. Under such kind of circumstances, you have good performance in operation results and see an increase in market price in H share and A share. My question is regarding asset and liability. I want to ask the management, what is your outlook on the NIM trend? The second is about FinTech. We noticed in the interim report you elaborated a lot on AI, and we believe CMB is leading the industry in AI deployment.

Yes.

Thank you.

I'm walking from

Thank you for delivering a stable performance.

And with this kind of service, you now have quick performance in your operational results and can see an increase in market price in Asia. My question is regarding assets and liabilities.

I want to ask the management: What is your outlook on the main trend?

The second is about fintech.

We noticed that, in the interim report, you elaborated a lot on AI, and we believe CMB is leading the industry in AI deployment.

Xia Yangfang: The market is not having very direct feeling of the AI application. Is there any tangible impact on the business? Can you give a few examples so that we can have more concrete feelings? Thank you for the question. First, we will invite Mr. Peng to answer the question. For the second question, we will invite Mr. Zhong for the answer. Thank you for the question. Regarding NIM changes, this is a heated topic of the market. Since this year in the banking industry, the NIM is becoming stable. However, there are some divergence in this regard. In some banks, we are seeing a rebound, but the others, we are still seeing decline. As for CMB's perspective, currently, we are still declining. However, the decline is rapidly narrowing. In H1, the NIM was 1.83%, down five bits year-on-year. As Q2 compared to Q1, one bit lower.

Wang Xianshuang: The market is not having very direct feeling of the AI application. Is there any tangible impact on the business? Can you give a few examples so that we can have more concrete feelings?

Operator: Thank you for the question. First, we will invite Mr. Peng to answer the question. For the second question, we will invite Mr. Zhong for the answer.

The market is not having a very direct impact on the AI application. Is there any tangible impact on the business? Can you give a few examples so that we can have more concrete feelings?

Thank you for the question.

Peng Jiawen: Thank you for the question. Regarding NIM changes, this is a heated topic of the market. Since this year in the banking industry, the NIM is becoming stable. However, there are some divergence in this regard. In some banks, we are seeing a rebound, but the others, we are still seeing decline. As for CMB's perspective, currently, we are still declining. However, the decline is rapidly narrowing. In H1, the NIM was 1.83%, down five bits year-on-year. As Q2 compared to Q1, one bit lower.

We were invited to Japan. To answer the second question, we will invite Mr. Jones to respond.

Thank you for the.

Question regarding me changes.

This is a heated topic in the market.

Since this year, in the banking industry, the NIM is becoming stable. However, there is some divergence in this regard. In some banks, we are seeing a rebound.

But the others we are seeing decline.

As for cmd's perspective currently.

We are still declining; however, the decline is rapidly narrowing.

In the first half, the number was down 1.83%, a 56% decrease year-over-year.

As due to Q1.

Peng Jiawen: We are declining, but the decline is narrower, and it is staying stable. For CMB, we think that the main factor lies in asset size. First, the repricing factors have been fully displayed. This is a common factor impacting all the banks. We are facing insufficient credit demand, which drives the downturn of asset pricing. Secondly, for China Merchants Bank retail banking, especially credit card banking assets, has a high proportion. Under current circumstances, this asset has been slower in growth, so posing pressure on our NIM decline. I think for CMB, there are common factors as well as factors that are applicable to CMB. So overall speaking, no matter how different each bank changes in their NIM trends, we can come to a conclusion that the NIM is facing less pressure of decline and gradually rebounding.

1, 1 bit lower.

Well, declining, but the decline is narrower.

And it is being stable.

as for CMV,

We?

I think that the manufacturer lies in asset size.

The first three pricing factors have been fully displayed. This is a common factor impacting all the banks.

And also, we are facing insufficient credit demand, which drives the downturn of, uh, asset pricing.

And secondly.

For China, much is banked. For 10 people, credit card banking assets have a high proportion.

And the current circumstances.

It has also been lowering in growth, so that is easing pressure on our NIM decline.

I think for CMB, there are common factors as well as structures. That is ethical for CMB.

So, overall is speaking.

No matter how.

Each bank has different trends in their name changes.

We can come to the conclusion that.

Means it's been less pressure of Decline and gradually rebounding.

Peng Jiawen: For the banking industry, in the future, we are still facing pressure of further decline in NIM. The main factors also include, there has not been a very clear turning point of insufficient credit demand. In terms of deposit repricing, it is basically finished. Therefore, this downturn of cost of liability has been slowed down to the impact on NIM. In terms of asset quality, in terms of property assets, it has not been fully recovered. So we are not seeing very rapid rebound in this area. In terms of NIM, we are still facing pressure. From my personal point of view, the most difficult time for NIM decline has already passed. We are also faced with many preferential factors. For example, under the current macro economy, especially our good monetary policy, scientific monetary policy, as well as the advocate for reasonable competition.

For the banking industry in the future, we are still facing the pressure of a further decline in team.

The main factors also include.

Uh, there hasn't been a very clear turning point of insufficient credit demand.

In terms of web deposit, repricing.

It is basically, uh, finished. Therefore,

The sum.

Of cost of liability.

It has been, uh, slowed down due to the impact on name.

and in terms of,

As a quality in terms of property, it hasn't been fully recovered.

So, we are not seeing very rapid rebounds.

In this area, in terms of means, we are still facing pressure.

From my personal point of view,

Uh, preferential image factors. And, for example, under the current macroeconomy,

especially a good monetary policy, scientific monetary policy, as well as

Peng Jiawen: Our competition will be more reasonable, which is a good factor for our NIM. Secondly, loan repricing is expected to finish within the year. If there is not large amounts of rate cuts, we think that lower pricing is also turning gradually stable. So my point of view is that although we are facing a certain extent of pressure in NIM, we will gradually enter a phase which is more stable. CMB will continue our management of asset liability and make good arrangements in asset structure. For example, on the premise of good asset quality, we will promote the reasonable growth of retail credit loans and promote a growth of retail loans which is considered appropriate. We will strengthen cost management for liability. In terms of deposits, we think that quality is more important than volume, so that we can contribute more to the stabilization of NIM.

The, uh, advocation for reasonable competition—our competition will be more reasonable.

Which is a good Factor.

For our limb as well. And secondly,

But when we expect pricing to finish within the year,

If there are a large number of rate cuts, we think that lower pricing is also turning gradually stable.

So my point of view is that although we are facing a certain extent of pressure,

in them, we will gradually

Enter a fate which is more stable.

CMV will continue.

Our management of asset liability.

And make good arrangements in terms of structure.

For example.

On the premise of good quality, we will promote the reasonable growth of retail credit loans.

and, uh, promote the growth of retail loans, which is

considered appropriate.

And we will strengthen post management.

For liability.

In terms of deposits, we think that quality is more important than volume.

So that we can contribute more to the stabilization of LIM.

Zhou Tianhong: In the beginning of the year, we raised three targets. First, to narrow the decline of NIM, which I believe can be done. Secondly, maintaining market leading position, and we are confident about that. Third, we strive to achieve stability in NIM. Thank you. I will answer the second question. Intelligence transformation is the trend of the time and also an opportunity for CMB since 2024. We have leveraged AI to help CMB transformation. We have intensified our efforts in that regard. In our employees' daily workflow, AI has been implemented and is playing effect. The working items we identified with AI empowerment has been over 1,000. We have achieved 13.88 million equivalent employee working hours contributed by AI. AI has been playing its effects spanning front, middle, and back offices. You mentioned that you hope to learn about what are the specific influence to our businesses.

Peng Jiawen: In the beginning of the year, we raised three targets. First, to narrow the decline of NIM, which I believe can be done. Secondly, maintaining market leading position, and we are confident about that. Third, we strive to achieve stability in NIM. Thank you.

At the beginning of the year, we raised three targets. First, to narrow this kind of name, which I believe can be done. Secondly, maintaining market-leading positions, and we are confident about that. And thirdly,

We strive to.

Achieve stability in it. Thank you.

Zhou Tianhong: I will answer the second question. Intelligence transformation is the trend of the time and also an opportunity for CMB since 2024. We have leveraged AI to help CMB transformation. We have intensified our efforts in that regard. In our employees' daily workflow, AI has been implemented and is playing effect. The working items we identified with AI empowerment has been over 1,000. We have achieved 13.88 million equivalent employee working hours contributed by AI. AI has been playing its effects spanning front, middle, and back offices. You mentioned that you hope to learn about what are the specific influence to our businesses.

I'll answer the second question.

Intelligence transformation is the trend of the times and also an opportunity for CMV since 2024.

We?

How can we elaborate on AI to help CNB transformation? We have been testifying to our efforts in that regard.

AI has been implemented in our employees' daily workflow and is having an effect.

And so, the working items we identified with AI empowerment has been over 1,000.

We have achieved 13.8 million equivalent employee working hours contributed by AI.

AI has been making its impact felt across both middle and back offices.

Zhou Tianhong: I want to give two examples. One, our Golden Sunflower clients operation. Currently, RM assistant is playing good effect of AI for Golden Sunflower RMs. We are also seeing that for all of the bank-wide relationship managers for Golden Sunflower clients are using AI and achieving possible impacts. In H1, the average effective outreach cost per RM increased by 14.65%, with average transaction value per client increased by 35.82%, generating good effects. In terms of corporate credit, currently 90% of the content in the due diligence report for small business can be generated assisted by AI. In the in-lending stage, AI can help with extraction of key information and assisted decision. The average service time is reduced from 36 hours to 2.72 hours. The tender guarantee can be issued within minutes.

You mentioned that you hope to learn about what are the specific influences on our business?

I want to speak to two examples. First, our Golden Sunflower client.

Uh, operation.

Kindly.

I am Assist Assistant, saying 'Good effect.'

Of AI in.

For Golden sunflower RMS.

We are also seeing.

That's for, uh, many of us, all of the Penguin relationship managers for Golden. Some of our clients are using AI and achieving possible impacts.

In the first half of the year.

The average effective outreach course period increased by 14.65%, with the average transaction value per client increasing by 35.22%, generating good effects in terms of corporate credit.

For, uh, currently, 90% of the content in the due diligence reports for small business can be generated or assisted by AI.

Zhou Tianhong: The adoption rate of AI monitoring results for loans has been 68%, and the RMs can resolve risk in advance. The alert triggering time has reduced by 45 days as compared with traditional mode. Currently, on the basis of China Merchants Bank 15th Five-Year Plan, CMB has more specific and detailed arrangements regarding AI empowerment and raised a high target, imposed a high target. We are having full range deployments regarding this area. Thank you.

And in the landing stage, AI can help with extraction of key information and assisted decision-making. So, the average service time is reduced from 36 hours to about 2.7 to 2.72 hours, and the guarantee can be issued within minutes with AI.

Uh, the adoption rate of AI monitoring results for the loan.

Reviewed by 40 to 45 days, just compared with traditional mode.

Tell me.

On the basis of our 10- and 15-year strategic plan, we have more specific and detailed arrangements regarding AI empowerment and have raised the high targets—and how to achieve these high targets.

And we are having full-range deployments regarding this area. Thank you.

Xia Yangfang: Next question, please. Next question is from Mei from UBS. Thank you, senior management, for giving me this opportunity. I am Mei from UBS. I have a question about the dividend payout ratio, the dividend policy. We can see that the state-owned banks, they increased their interim dividend payout ratio by 1 percentage point from 30% to 31%. While for CMB, you maintain at a 35% level. However, under such environment, will CMB consider to further increase your dividend payout ratio? For your corporate loan business, you have seen five good improvements. Will that consume a lot of capital? In the future, how do you plan your capital position and the RWA development? Thank you. Thank you for your question. Well, for China Merchants Bank, our dividend payout event, we have been authorized by the shareholders meeting and also the board of directors. We have rather corresponding arrangement.

Xia Yangfang: Next question, please.

Operator: Next question is from Mei from UBS.

Next question, please.

Next question is from.

May from UBS.

May Yan: Thank you, senior management, for giving me this opportunity. I am Mei from UBS. I have a question about the dividend payout ratio, the dividend policy. We can see that the state-owned banks, they increased their interim dividend payout ratio by 1 percentage point from 30% to 31%. While for CMB, you maintain at a 35% level. However, under such environment, will CMB consider to further increase your dividend payout ratio? For your corporate loan business, you have seen five good improvements. Will that consume a lot of capital? In the future, how do you plan your capital position and the RWA development? Thank you.

Thank you, Senior Management, for giving me this opportunity. I'm Mei from UBS.

I have a question about the dividend payout ratio and the dividend policy.

We can see that the state-owned banks increased their interim dividend payout ratio by 1 percentage point, from 30% to 31%.

While for CMD, you maintain that at a 35% level; but, however,

Under such environments, will CMB consider further increasing your dividend payout ratio, and, um,

Your corporate loan business has seen good increments. Will that consume a lot of capital in the future? How do you plan your capital position and the RWA development? Thank you.

Wang Xiaoqing: Thank you for your question. Well, for China Merchants Bank, our dividend payout event, we have been authorized by the shareholders meeting and also the board of directors. We have rather corresponding arrangement.

Thank you for your question.

Well, for China Merchants Bank, I will give you the scale-out.

Uh, event.

We have been authorized by the shareholders' meeting and also the...

board of directors.

Wang Xiaoqing: We understand that the capital market has been paying special attention to this matter. We have also communicated with our investors to understand better about the capital adequacy ratio and also the RWA growth rate and capital position. At the end of June, we have held a shareholder meeting. In answering a question about our market value arrangement, we have provided relevant answers. We will, based on our capital adequacy ratio, coordinate the asset growth, the asset return, and the financing of capital, and also dividend payout management and also the market recognition, and to finally realize two targets. One target is the risk remains under control for the bank's operations, and for the second perspective, to value investors and shareholders' requirements, their demand, and provide return, and provide value creation for our shareholders.

We have, rather, uh, corresponding arrangements.

We understand that the, uh, capital market has been paying special attention to this matter. We have also communicated with our investors to better understand the capital adequacy ratio, as well as our growth rate and capital position at the end of June. We have held a shareholder meeting.

and under in answering,

A question about our market value arrangement: we have provided relevant answers. We will base it on our capital adequacy ratio to coordinate the growth as a return.

And the financing of capital, and also dividend payout management, and also the market recognition. And to finally realize two targets. One target is...

The risk remains under control for the bank's operations.

And for the second perspective, to value investors and shareholders' requirements, their demand is to provide returns and create value for our shareholders.

Wang Xiaoqing: Our mindset and the efforts we made are also based on what we have listened to our investors and shareholders. Based on these considerations, we have making plans in our RWA growth, in our capital adequacy ratio and dividend payout ratio. We have always followed one principle, that is to balance the development of both light and heavy assets, and also arrangements. Under such guidance, I think we can understand this matter from four perspectives. One is to guarantee the intent of our return, to optimize the allocation of our resources, enhance the utilization rates of our capital. Second, scientifically manage RWA growth rates. It means that we need to be more efficient in using our capital and reduce the idle occupation of capital. Third is what we have always been adhering to. That is the internal generation of our capital, endogenous generation of our capital.

Our mindset and the efforts we made.

These are also based on what we have listened to.

Our investors and shareholders.

And based on these considerations, we have been making plans in our RWA growth, in our capital adequacy ratio, and dividend payout ratio. We have always followed one principle, that is, to balance the development of both life and heavy.

Assets and also Arrangements.

Under such guidance, I think we can understand this matter from four perspectives.

1 is to.

Guarantee that the intent of our return is to optimize the allocation of our resources and enhance the utilization rate of our capital, second, scientifically.

Manage our growth rate.

It means that we need to be more efficient in using our capital and reduce idle funds.

Occupations of capital and third.

Wang Xiaoqing: Fourth is the recognition given by the market of the value of valuation of CMB. To maintain our good market image, to make sure that we can have a better market valuation and deeper recognition from the market. We have multidimensional consideration and thoughts. We will take full consideration of the opinions from every perspective, from investors, from analysts. They are also serving as very important channel of comments. We should also be aligned with our own operations. Thank you for your question. The next question, please. Next question is Gary Lam from HSBC. Hi, senior management. I am Gary from HSBC. I have a question about fee income and AUM. We see that your fee income increase accelerate in Q2. Will that trend continue for the next half?

That is what we have always been adhering to—that is, the internal generation of our capital, industrial generation of our capital, and so forth.

It is the recognition given by the market of the value.

Of a valuation of CNB.

This way, we can have a better market valuation.

And deeper recognition from the market. We have multi-dimensional considerations and thoughts.

We will take full consideration of the opinion, from every perspective—from investors and from analysts.

They are also serving as a very important channel.

Of course, we should also be aligned with our own operations. Thank you for your question.

Xia Yangfang: The next question, please.

Operator: Next question is Gary Lam from HSBC.

The next question is.

Next question.

Is scary means from HSBC.

Gary Lam: Hi, senior management. I am Gary from HSBC. I have a question about fee income and AUM. We see that your fee income increase accelerate in Q2. Will that trend continue for the next half?

Hi. Can you hear me, management? I am Gary from Agent A. I have a question about the income and am...

You see that your fee income, uh, increased—accelerated?

Gary Lam: Your retail AUM reported quite fast growth rate, which was annualized to 15%, faster than the deposit growth rate. I would like to understand what is the underlying reason behind, what is the underlying driver of these phenomena? At the same time, we see that in the wealth management income, the driver has been changing. Mostly they are driven by the agency distribution of mutual fund and wealth management products, less from bancassurance product. In terms of future development, could you leverage the growth from mutual fund and wealth management product to offset the decline from bancassurance? Thank you. Thank you for your question. It will be taken by Wang Liang. For H1, CMB's AUM has growing at a good pace, hitting a record high of CNY 1.63 trillion, 7.96%. The wealth management products are giving them full play.

In the second quarter, will that trend continue for the next half?

Your retail AUM reported quite a fast growth rate.

It was analyzed that this was 15% faster than the deposit growth rate. I would like to understand, what is the underlying reason behind this? What is the underlying driver?

of these phenomena. And at the same time,

Operator: Thank you for your question. It will be taken by Wang Liang.

We see that, in the wealth management income, the driver has been changing. Most of the time, it is driven by the agency distribution of mutual funds and wealth management products, led from the bank's own products. Well, in terms of future developments, could you leverage the growth from your proprietary fund and wealth management products to offset the decline from bancassurance? Thank you.

Thank you for your question. It will be taken by Jiawen Peng.

Wang Liang: For H1, CMB's AUM has growing at a good pace, hitting a record high of CNY 1.63 trillion, 7.96%. The wealth management products are giving them full play.

For the first half, CMB's AUM...

Has.

AUM growing at a good pace, hitting a record high of RMB 1.63 trillion.

Uh 7.96%.

Wang Liang: We have also seen new growth drivers in the structure. Non-deposit AUM account for a higher proportion including the third-party market value. So 85% of the growth are coming from non-deposit assets. I think that is highly relevant to the high growth rate of our equity-related products. For instance, mutual funds, third-party depository payments, trust fees, et cetera. They have all realized high growth, and also bring us the change in the structure of growth. Of course, in customer base, we also see the performance in the growth. Both the Golden Sunflower and the bulk customers are having higher AUM growth rates compared with the same period of last year, and also than the average level of all customers. In wealth management scenarios, for instance, pension, cross-border business scenarios, we also see faster AUM growth.

The wealth management products are giving them full play. And we have also seen new growth drivers in the structure of non-deposits.

Accounts for a higher proportion.

Including the third-party market value.

So, 85% of the growth is coming from non-deposit assets at that.

I think that is highly relevant to the high growth rate of our equity-related products, for instance, mutual funds, third party, depository, payments, trustees, and etc. They have all real life and also bring us the change in both structure of growth.

And, of course, in our customer base, we also see the performance in the wealth management sector. Some "Flour in a Box" customers are having higher AUM growth rates compared with the same period last year, and also compared with the average level of all customers.

Wang Liang: In income contribution, wealth management relevant AUM yield has made better returns compared with other types of products. You just asked us what is the underlying logic behind our AUM growth. I would like to conclude in the following aspects. I think it is relevant with CMB's capabilities that we have long accumulated in terms of wealth management capabilities. It contains three tiers. That is to provide both products and quality products. The second is customer relationship managers and also our wealth management consultants and investment consultants. They are forming a team to provide combined allocation service to our clients. And third, a long time convenient service we provide to clients. But for us, we understand that AUM growth is not just relevant to wealth management business. It is more relevant to all retail banking business. It is also closely relevant to settlement and payment.

In world management scenarios, there were intentional business scenarios. We also see better aim for growth,

In income contribution.

Wealth management, relevant AM fields, has created better returns compared with other types of products.

So you just asked us what is the underlying logic behind our A1 Road? I would like to continue in the following aspects. I think it is relevant with CND capabilities, that we have more accuracy in terms of wealth management capability. It contains three tiers.

That is to provide both products.

And policy products. The second is,

Customer Relationship Manager, as well as our Wealth Management Consultant and Investment Consultant.

They are forming a team to provide combined allocation services to our clients, and to further our longtime companion services we provide to clients.

But for us, we understand that A1 growth is not just relevant to what management is—a difference. It is more relevant to all retail.

Wang Liang: Our debit cards, our credit cards, whether it is of good use, whether it is safe, whether it is convenient, whether it is the first choice for our users. Well, for our clients, they might not be using CMB for purchasing wealth management products only. They also would like to make transactions within CMB. They would like to use their CMB account to be the principal settlement and payment account. They are willing to buy wealth management products within CMB. They would like to use credit cards with CMB. They would like to use debit cards with CMB. I think behind the AUM growth, indicators cannot be seen or analyzed isolatedly. They are working with each other as a whole. As I answered the last question, the most important thing is we have a strong support, such a large customer base, such a large talent team, such a diversified channels.

Banking, that it is also so free, is relevant to settlements and things.

Our debit cards, our credit cards, whether it is with you, whether it's safe, whether it is convenient,

whether it is the first choice.

For, for our users.

Clients are, is it, there? It might not be using CMD, so purchasing involvement products only. They also would like to make transactions because it is CMD. They would like to use the CMD account to do the principal settlement and payment account. They are willing to buy wealth benefits products within CMDs. They would like to use credit cards with CMD. They would like to do service cards with CMD. I think, behind that, indicators cannot be seen or analyzed in isolation.

Working with each other as a whole, as I answered the last question, the most important thing is that we have strong support.

Wang Liang: How do we leverage a strong technology infrastructure to break the silo among different database? This is very important for us to provide a very smooth service to our clients. So AUM growth, income growth, could we maintain such high fees? Well, for us, CMB's AUM structure is quite light because it is very capital market oriented. Wealth management business are accounting for a high proportion of this business. So it is quite hard for us to say that we can maintain a very high fee growth because it is highly relevant to the capital market, the development, and transaction itself. But for a long period of time, we will continue to maintain our growth fee. Next question, please.

Such a large customer base and such a large talent team across diversified channels. How do we...

Leverage a strong.

Technology in their software helps to break the silos among the brands of database. This is very important for us to provide a full service to our clients.

So, anyone will become well if we can see, except for five teams. Well, for us, CMB is a structure. It's quite light because it's very capital-oriented. Capital market-oriented wealth management and business account for a high proportion of the business, so it is quite hard for us to say that we can maintain very high quality growth because it is highly relevant.

...them to the capital markets or development and transactions itself. But for a long period of time, we will continue to maintain our growth speed.

Xia Yangfang: Next question, please.

Next question, please.

Xia Yangfang: Next, we invite Zhang Shuishuai from CICC. Thank you for giving me the opportunity. I am Zhang Shuishuai from CICC. My question is regarding management. Recently, when the senior management is doing roadshows, you mention synergy a lot. This is a very important concept because currently the market is limited and many banks or institutions are seeking profitability from management. By various metrics, CMB is a leader in synergy. So I want to ask the management, how does management achieve effective synergy across business lines, among branches of subsidiaries, not just in words, but in practice, how to maximize cost and resource efficiency? That is my question regarding management and synergy.

Operator: Next, we invite Zhang Shuishuai from CICC.

Next, we invite.

Zhang Shuaishuai: Thank you for giving me the opportunity. I am Zhang Shuishuai from CICC. My question is regarding management. Recently, when the senior management is doing roadshows, you mention synergy a lot. This is a very important concept because currently the market is limited and many banks or institutions are seeking profitability from management. By various metrics, CMB is a leader in synergy. So I want to ask the management, how does management achieve effective synergy across business lines, among branches of subsidiaries, not just in words, but in practice, how to maximize cost and resource efficiency? That is my question regarding management and synergy.

Thank you for giving me the opportunity. My question is regarding management.

Seriously, when top management is doing roadshows, you mentioned energy a lot. This is very important.

The concept is that currently the market is limited, and many banks are institutions that are seeking profitability through management.

Uh, by various metrics, CMB is a leader in synergy.

So, I want to ask the management.

How?

Does the management.

Um, she affected synergies.

Across the business lines and my branches, as a series.

Not just in our work, but also in practice, we need to maximize cost and resource efficiency.

That is my question.

Regarding management and synergy.

Wang Xiaoqing: Thank you for your attention on synergy. This is a question that I would like to address on. As you mentioned, on every level of CMB, including our subsidiaries, between branches, between head office and branches, across business lines, we have achieved results in synergy.

Peng Jiawen: Thank you for your attention on synergy. This is a question that I would like to address on. As you mentioned, on every level of CMB, including our subsidiaries, between branches, between head office and branches, across business lines, we have achieved results in synergy.

Thank you for your attention.

On synergy.

this is,

A question that I would like to address.

As you mentioned.

On every level of CMV, including our subsidiaries, between branches, between head office and branches, and across business lines.

We have achieved results in synergy.

Peng Jiawen: There are a few supporting factors. There are five perspectives. Firstly, we have set up a mechanism for synergy. For example, regarding cross-institutional synergies, we have designed zero attribution and share rewards mechanisms. This design is helpful to the effect of synergy. Secondly, the design of performance-driven incentives. In our assessment, we have put in the assessment and given great attributes to synergy. For different institutions and head office departments, we have given assessment indicators for synergy. Thirdly, model innovation. An institution needs a mature model for synergy. We have a mechanism incorporating investment banking, private banking, commercial banking, scientific research, et cetera. Based on this very effective model, different institutions can have good collaborations. Fourthly, the corporate culture. Synergy is not a task that is promoted with administrative forces, but a corporate culture that is internalized into the bank.

There are a few supporting factors.

There are 5 pairs perspectives.

Firstly.

We have.

Set up a mechanism.

For synergy.

For example, regarding cross-institutional synergy, we have designed zero-attribution and shared reward mechanisms.

This design is helpful for creating the effect of synergy.

Secondly, the design of performance-driven incentives. In our assessments, we have put in the assessment and given us great attributes to synergy.

For different institutions and the head office department, we have given assessment indicators for synergies.

Thirdly model Innovations.

Um, mechanism—uh, we need, an institution needs a mature model for synergy.

So, based on this very effective model,

Different institutions can have good collaborations.

Fourthly the corporate culture.

Energy is not a task.

That is promoted with administrative forces, but it's a corporate culture.

That is, uh, internalized into the bank.

Peng Jiawen: Many business lines and institutions will proactively embrace the concept of synergy in CMB. This is my feeling. The fifth point is about organizational enablers. Our organization structure is beneficial to the operation of synergy mechanism. Many departments, much structure designing is based on a consideration of synergy. For example, we have set up a synergy committee bank-wide, and President Wang Xiaoqing is the head of the committee, so that we can promote synergy via organizational structure. I think we have both mentioned the five perspectives are a very good and very important factor to promote successful synergy within CMB. Apart from the five mentioned perspectives, there are also two extra factors. Firstly, we adhere to and pay high value to the synergy concept, including the board of directors as well as our senior management. Each CMB employee would have this kind of concept in mind.

So, many, many lines and institutions will proactively embrace the concept of synergy in CMB. This is my feeling.

the fifth point.

Is about organizational.

Uh, organization or enablers?

Our organization structure is metaphysical to the operation of the synergy mechanism.

Many departments—many, uh, structural designing is based on a consideration of synergy. For example, we have set up a Synergy Committee.

Bank-wide, and they want to talk. King is the head of the committee.

So that we can promote synergy and via organizational structure.

I think the above-mentioned five perspectives,

They are a very good and very important factor to promote successful synergy within BMB. Apart from the five mentioned perspectives, there are also two extra factors.

Firstly, we appear to and place high value on

The Synergy concept, including the bottom directors, runs through our general management.

Xia Yangfang: Secondly, our data system and system design is a good support to the measurement of synergy effects and which contributes to the performance incentives. This is very important for a synergy mechanisms building. We have top-tier awareness and fundamental technical system support. This is my answer to your question. Thank you. Thank you, Mr. Peng. Due to time constraints, we will now take the final question. To ensure the rights of individual investors, we have selected questions from individuals, as most of them overlap with the questions we just mentioned. Now, I would like to choose the representative one for answer. Now, please read out the question. The question is: "The country is encouraging commodities and enterprises going global. CMB began its internationalization efforts 20 years ago." My question goes to Mr. Wang. What is the future direction of CMB international development strategy?

Each CNB employee would have that kind of concept in mind. Secondly, our data system and system design...

It's a good support to the measurement of synergy effects, which contribute to the performance incentives.

This is very important for a Synergy mechanical building.

So, we need to talk here. We have talked to your 11th and fundamental technical support system support.

Operator: Thank you, Mr. Peng. Due to time constraints, we will now take the final question. To ensure the rights of individual investors, we have selected questions from individuals, as most of them overlap with the questions we just mentioned. Now, I would like to choose the representative one for answer. Now, please read out the question. The question is: "The country is encouraging commodities and enterprises going global. CMB began its internationalization efforts 20 years ago." My question goes to Mr. Wang. What is the future direction of CMB international development strategy?

This is my question. This is my answer to your question. Thank you.

Thank you, Mr.

Due to time constraints, we will now take the final question.

To ensure the rights of individual investors, we have collected...

Uh, questions about individuals.

As most of them overlap with the questions you just mentioned, you may proceed.

Now, I would like to choose 1 of the 1 to represent 1 for the answers.

Now, please read other questions. The question is:

The country is encouraging commodities and enterprises to join globally. CMB began these internationalization efforts 10 years ago.

Wang Xiaoqing: Are there any adjustments compared to the past? Are there any specific targets for international development? Thank you for the question. International development is an important component of CMB's 15th Five-Year Plan strategic plan, and also one of the transformation initiatives of our four initiatives. Regarding the background of internationalization, one of them is the Chinese enterprises going global, and also the international development of CMB. Another factor is the theoretical interest rate gap between domestic and international interest rates, and some enterprises can benefit from the pricing gap. China Merchants Bank pays high attention to international development. In terms of global presence and development presence, we have one subsidiary bank in Hong Kong and CMB International. We have six overseas branches. This is our overseas presence. When I mentioned the growth drivers for the medium and long term, I also mentioned international development.

Operator: Are there any adjustments compared to the past? Are there any specific targets for international development?

Wang Xiaoqing: Thank you for the question. International development is an important component of CMB's 15th Five-Year Plan strategic plan, and also one of the transformation initiatives of our four initiatives. Regarding the background of internationalization, one of them is the Chinese enterprises going global, and also the international development of CMB. Another factor is the theoretical interest rate gap between domestic and international interest rates, and some enterprises can benefit from the pricing gap. China Merchants Bank pays high attention to international development. In terms of global presence and development presence, we have one subsidiary bank in Hong Kong and CMB International. We have six overseas branches. This is our overseas presence. When I mentioned the growth drivers for the medium and long term, I also mentioned international development.

My question goes to Mr. Wong. What is the future direction of the MD International Development strategy? Are there any adjustments compared to the past? Are there any specific targets for International Development?

Thank you for the question.

International development is an important component of the PNB system's 15-to-5-year specific strategic plan and is also one of the transformation initiatives in our four initiatives.

Regarding the background of internationalization, one of them is Chinese enterprises going global.

And also the international development of the city.

Another factor is the

periodical interest rate gap between domestic and international interest rates.

And some Enterprises.

Can, uh, can benefit from the pricing gap.

China Merchants Bank. Hey, please pay attention to International Development.

in terms of,

In terms of global presence, we have a development presence.

We have 1.

The theory, bank, and, um, in Hong Kong.

And here the international.

These branches.

This is our overseas precedent.

When I mentioned the growth drivers for the medium and long term, I may have also mentioned International Development.

Wang Xiaoqing: In terms of global presence, we do not have as much business presence, business outlets as compared to the large state-owned banks. We have to adopt practical measures. What we hope is that we can better serve Chinese enterprises' global operations. Especially, we hope to do well in cross-border finance services to these clients. We also serve the foreign enterprises who are having their presence in China, leveraging our cross-border finance service system. Even though we do not have as many business outlets globally, cross-border finance of China Merchants Bank has formed advantage for China Merchants Bank. Many clients have given us feedback that our cross-border finance team is very professional and have delivered very responsive services. We hope to consolidate these advantages. We will fully leverage the current institutions we have.

In terms of global presence, we do not have as many business outlets as compared to the large state-owned banks.

So we have to adopt practical measures.

What we hope is that we can serve, that we can better serve Chinese school enterprises’ global operations.

Especially.

We hope to do well in cross-border finance services to these clients.

and also, we also

We also serve.

Uh, the foreign enterprises, for, uh, having their presence in China, leveraging our hot water finance service system.

Even though we do not have many business outlets globally,

Cross-border finance of China region. The bank has...

formed Advantage for China website.

Many clients have given us feedback that...

Our cross-water finance team is very professional.

And have delivered very responsive services. We hope to consolidate this advantage.

Wang Xiaoqing: In the working conference for H1, our development pattern will be the one plus one plus five development. The first one is head office, which is the strategic guidance. The other one is our institutions in Hong Kong, which is a very important business hub for us in Hong Kong. The number five represents New York branch, Sydney branch, Luxembourg branch, and Singapore branch and the others, which forms the five major overseas business institutions. They are serving as the regional hubs of our overseas business. Institutions in Hong Kong is the China Merchants Bank Global Custody Hong Kong Center, Syndications Center, and other business centers. CMB will continue to increase resource input in that regard. In the past, we have served a lot of companies with global presence and accumulated experience.

We will fully leverage the current institutions we have.

And the working conference for the first half.

Our development pattern will be the 1+1+5 model.

Development.

First 1 is head office.

Which is the strategic guidance. And the other one is our institutions in Hong Kong.

Which is a very important business hub.

For us, in Hong Kong, what does the number 5 represent?

New York branch, new branch of CMB branch.

And the Singapore branch, along with the others which form the five major overseas business institutions, are serving as the regional hubs of our overseas business.

Hong Kong, uh, institutions in Hong Kong.

is the China Merchants Bank Global Cities Center communications center and

other other business centers.

We will continue to increase resource input.

In that regard.

In the past, we have served.

a lot of companies with global presence and accumulated experience,

Wang Xiaoqing: In the process of serving these clients, we have also increased our capacity, our tech capabilities, and experience. We will further serve these companies who are the lighthouse companies to improve our product range, and accumulate capacity and experience from the lighthouse enterprises, leveraging these experience to serve more clients. Thirdly, bank-wise, CMB will cultivate more and more international talent team. Fourthly, we will make full use of our common channels like agent banks, so that we can build an express highway that connects the major financial institutions globally. More importantly, I think we need to improve our capacity in risk recognition capability. As for CMB, we continue with pragmatic operations within the boundary of our capacity. We will continue to build up our capacity, but we will not do businesses outside the range of our capacity. That is my answer. Thank you.

In the process of serving these clients, we have also increased our capacity, our tech capabilities, and experience.

So, we will further.

Uh, in the service industry, which service company is considered the lighthouse company?

To, uh, improve our product offerings.

And accumulate capacity and experience from the lighthouse enterprise, and leverage this experience to serve more clients.

totally Bank, White CMZ will

We will cultivate more and more international talent teams.

Fourthly, we will make four years of our channel like, uh, channels like Asian banks.

So that we can build an express highway that connects the major financial institutions globally.

More importantly.

I think we need to improve our capacity in risk, uh,

recognition capability.

As for CMV, we will continue within that our operation with...

the boundary of our capacity.

We will continue to build up our capacity, but we will not rule out the businesses outside.

The range of our capacity.

That is my answer. Thank you.

Xia Yangfang: In the interest of time, we will conclude the meeting here. This is the end of the meeting. If you hope to learn more about the details, you can go to CMB's official website for the interim report of CMB. If you hope to get further explanation of detailed questions, you are welcome to contact CMB's IR team for further communication. Thank you again. Goodbye.

Operator: In the interest of time, we will conclude the meeting here. This is the end of the meeting. If you hope to learn more about the details, you can go to CMB's official website for the interim report of CMB. If you hope to get further explanation of detailed questions, you are welcome to contact CMB's IR team for further communication. Thank you again. Goodbye.

In the interest of time, we will conclude the meeting here. This is also

If you hope to learn more about the details, you can go to the CMB official website for the interim reports of CMB. If you hope to get further explanation of detailed questions, we are welcome to contact CMB for the communication. Thank you again. Goodbye.

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Q2 2026 China Merchants Bank Co Ltd Earnings Call - Press

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