Q2 2026 China Merchants Bank Co Ltd Earnings Call - Press

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

Zhong Desheng: Welcome to the 2026 interim results presentation. Today, I will cover three areas. Firstly, an overall introduction, and secondly, a detailed product information. Thirdly, a business strategy for the next phase. In the H1 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. 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 2.02% 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, ineffective 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 operating indicators registered steady progress with positive momentum. This was primarily reflected in four aspects: first, steady progress in operating performance with distinctive strengths of capability. 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 ¥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.

Zhong Desheng: 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 cost. 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 ¥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 expense management reached 2.47 billion yuan, rising by 18.44% year on year, representing the best level in the past five 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 continuous 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 13.71 trillion, up by 5.47%.

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

Zhong Desheng: Total loans and advances to customers, 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 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: Off by 300. 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, off 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 through consolidating our advantage in low funding cost. Total liabilities reached RMB 12.43 trillion, an increase of 5.45%, of which total deposits from customers exceeded RMB 10 trillion, up by 3.32%.

Speaker #1: Core daily core deposit balance was RMB 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: 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.

Zhong Desheng: 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 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.

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 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.

Zhong Desheng: 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 points, and up by 0.6 percentage points, 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 industry-leading capital adequacy levels. This places assets under the advanced approach and the weighted approach, which 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 of 0.08, and up 0.9 percentage points, respectively. As for the weighted approach, the numbers were 11.84%, 13.96%, and 15.06%—down by 0.08 percentage point, up by 0.6 percentage point, and up by 0.6 percentage point, 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.

Zhong Desheng: 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 competitive. 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%. Corporate customers reached 3.86 million, up by 6.56%, among which the number of newly acquired corporate customers was 347.9 thousand and retention customer 78.5 thousand, up by 3.7%.

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 wealth 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 which the number of newly acquired corporate customers was 347.9 thousand and institutional customers was 78.5 thousand, up by 3.7%.

Speaker #1: The number of corporate customers for withholding transactions reached 1.53 million, representing a year-on-year increase of 14.97%. AUM from retail customers exceeded 18 trillion yuan, up by 7.96% compared with year-end 2025.

Zhong Desheng: 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%. Loan professors and receptivity, CNY 23.58 trillion, representing a year-to-date increase of 8%, maintaining a leading position in the market. Secondly, we pursue differentiated development with more distinctive business strengths. First, we continue 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.

Speaker #1: The half-year increase reached ¥1.36 trillion, hitting a record high. The average daily balance of corporate wealth management products was ¥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 reached RMB 3.58 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. Third, we continued to consolidate our leading position in retail finance. We maintained the main role of our retail finance business, with its net operating income accounting for 54.35% of the total.

Speaker #1: We continued to strengthen our professional service capabilities and wealth management. The number of 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%.

Zhong Desheng: The customers holding wealth management products, 66.72 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 mutual 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 on 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. 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.

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%. Facing rising risk and weakening demand, we prioritized asset quality in retail loans.

Speaker #1: Resulting in a moderate contraction in scale. Retail loans totaled RMB 3.61 trillion, down 1.11% compared with the prior year-end. The percentage of retail loans to total loans and advances was 51.04%, down 1.88 percentage points compared with the prior year-end.

Speaker #1: Amidst the industry's cyclical adjustments, the growth appeared to be a stable and non-volatile operational strategy for its credit card business. Active credit card users totaled 74.4 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, while maintaining a leading position in the industry, and our market share further increased.

Zhong Desheng: Amidst 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 5.43% year-on-year, while maintaining a leading position in the industry and 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%. Growth of loans in key areas such as green loans, manufacturing loans, and agriculture-related loans are significantly outpacing the overall loan growth.

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

Speaker #1: Further enhanced quality and effectiveness of serving the real economy. Total corporate loans reached 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.

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%.

Zhong Desheng: 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 points. 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 amounting 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 14.26%. Those using cloud-based host-to-host connection increased by 13.04%, which continued to enhance professional capabilities in investment banking and financial market businesses.

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 ¥1.7 trillion, representing an increase of 9.68% compared with the prior year-end. We've provided diversified financing services to technology enterprises.

Speaker #1: Serving 378,300 biotech enterprise customers, including more than 200,000 enterprises listed on biotech 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 cash flow management cloud services increased by 14.26%. Those using cloud-based hostel connection increased by 13.44%.

Speaker #1: We continue to enhance professional capabilities in investment banking and financial market businesses. FPA contributed by the investment banking business increased by 8.64% year-to-date, and the net underwritten point amount was RMB 284.16 billion.

Zhong Desheng: FEA contributed by investment banking business increased by 8.64% year to date, and the net underwritten 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 instance. 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. Global Lease customers totaled 191.4 thousand, up by 11.49% year-on-year. Direct Bill 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: 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 financial market business, the number of hotel customers involved in Q4 trading was 7,800, up by 18.38% year-on-year, and their transaction value amounted to $212.72 billion.

Speaker #1: Up by 33.64% year-on-year. Bill discounting customers totaled 191.4 thousand, up by 11.49% year-on-year. Direct bill discounting value was 1.173 trillion yuan, up by 26.61%, ranking 22nd in the market.

Speaker #1: Fourthly, we have accelerated the development of branches in key regions to strengthen their market competitiveness. Multiple key indicators, including the growth rates of the 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.

Zhong Desheng: Multiple key indicators, including growth rates of such retail customer base, retail AUM for deposit, 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 points. 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 group companies increased. 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 points. 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 0.36 percentage points.

Speaker #1: Corporate loan balance increased by 0.56%, and the average daily core deposit balance rose 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 reached RMB 1.05 trillion, up by 10.16% compared with the prior year-end. Net operating income accounted for 12.93% of the gross total.

Speaker #1: Up by 0.39 percentage points. Net profit for CMB Greenland Bank reached HK$4.73 billion, up by 55.88%. Total assets reached HK$587.8 billion, up by 11.63%.

Speaker #1: Net profit of CMB International Capital was HKD 3.07 billion, up 124.14%. Total overseas asset management business reached HKD 94.37 billion, up 25.37%. Net profit of CMB Financial Leasing was RMB 1.63 billion, down 42.44% year-on-year.

Zhong Desheng: Net profit of CMB International Capital 3.07 billion Hong Kong dollars, up by 124.14%. Total overseas asset management business reached 94.37 billion Hong Kong dollars, 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 a decent fee income last year. The leasing business was CNY 7.49 billion, maintaining the 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 623.15 billion, up by 5.78%. Net profit of Cigna & CMB Life Insurance was CNY 52 million, down 12.68% year-on-year. Entrusted management of insurance funds totaled CNY 279.45 billion, up by 19.78%.

Speaker #1: This is mainly because of business fee income last year. The leasing business was 70.49 billion yuan, maintaining the leading position. Net profit of CMB Wealth Management was 1.51 billion yuan, up 10.92%.

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

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

Speaker #1: Interest management of insurance bonuses totaled ¥279.45 billion, 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.

Zhong Desheng: 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. Those institutions in Hong Kong seized opportunities and expanded 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 exceeded CNY 1 trillion. CMB International Capital completed three Hong Kong RTO sponsorship projects and 24 Hong Kong RTO and running 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 payments of corporate customers amounted to 263.6 billion U.S. dollars. 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 their operations, achieving fast growth. Net operating income grew by 33.71% year-on-year. Total assets under custody of the Global Custody Hong Kong Center exceeded ¥1 trillion.

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 in respect of 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 tokens usage increased by over 7% to 8% compared with 2025. Two hundred fifty-six 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.

Zhong Desheng: 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 capacities using AI and increased our capacity of complex business service. AI Xiaoban, an AI agent serving wealth management partners, was newly launched. Product banking AI tools now deliver one-stop legal service framework for better asset allocation, and protection and management. We have upgraded our client service system. The AI-powered intelligent customer service digital human system for institutional scenarios has served customers 37.66 million times. Internal management intelligence upgrade continued to accelerate.

Speaker #1: Large-model applications have delivered tangible quality and efficiency gains. AI contributed the equivalent of 13.88 million employee working hours in 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 since 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 now deliver one stop realized service framework or spanning asset allocation and protection and succession in terms we have upgraded our client service system the AI powered intelligent customers service digital human system for institutional scenarios.

Speaker #1: We have served customers 37.66 million times. Internal management intelligence upgrades continue to accelerate. AI is reshaping the credit process, with accelerated deployment across the pre-lending, lending, and post-lending stages.

Zhong Desheng: 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 risks 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 4.47%, down 0.31 percentage point. The NPL ratio for manufacturing industry was 0.39%, down 0.04 percentage point.

Speaker #1: In terms of business management, intelligence tools now span the front, middle, and back offices. Quickly, we uphold the bottom line of risk control and we enforce advantages in asset qualities.

Speaker #1: 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.

Speaker #1: Overall, asset qualities remain 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%, down 0.31 percentage points.

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

Zhong Desheng: 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 0.37 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 0.1 percentage point.

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, uphold fundamental principles and break new ground, accelerate capacity building, and advance transformation during the four initiatives.

Zhong Desheng: 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 advanced transformation through the four initiatives to consolidate existing strengths while building our new advantages, achieving distinctive business and economy business model. Firstly, we stay committed to long-termism to build stronger core competitiveness. We will remain customer-centric, reinforce 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 the 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: We can support existing strengths while building our new advantages, achieving distinctions within the economy and our business model. Firstly, we stay committed to long-termism to build stronger core competitiveness.

Speaker #1: We will remain customer-centric. We enforce the essential role of retail finance through wealth management, uphold asset quality as the foundation, and sustain strong technology support.

Speaker #1: While maintaining strategic focus, we will adhere to the principles of professionalism and market orientation. We will continue to innovate in products, services, technologies, and business models.

Speaker #1: By deepening and refining our core businesses, our business and revenue structure will take on a fixed earnings plus feature, which is resilient in down cycles and flexible in up cycles.

Speaker #1: Secondly, capture structural opportunities to continuously cultivate new drivers for medium- and long-term growth. With 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 customer sense of fulfillment and experience.

Zhong Desheng: 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 region branches to enhance differentiation. Thirdly, we will also seize opportunities arising from new quality productive forces, leveraging synergies between CMB and its subsidiaries. We will strive to build Sci-Tech Finance as a distinctive feature of CMB.

Speaker #1: Secondly, in corporate banking, we will further strengthen professional operations in different industries. We will deepen investigation across a broader range of sectors to refine the 'one branch, one policy; one industry, one policy' strategy in key regional 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. We will 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.

Zhong Desheng: Hopefully, we will leverage our local and global presence and establish a development framework comprising the head office, plus institutions in Hong Kong, plus 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 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 to better extensive 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, meaning maintaining our advantage in low-cost deposits, and strengthening risk-based pricing on the asset side.

Speaker #1: And increase our risk management capacity. We will leverage our strength from subsidiaries to better expand NRI and optimize 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.

Zhong Desheng: 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 plus 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 qualities, strengthen risk prevention and resolution in key areas, including retail risk, 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, reshape the capabilities of our workforce, and deepen the people-plus-digital intelligence model.

Speaker #1: We are establishing CMB as a benchmark for intelligent transformation in the AI era. Fifthly, we will 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, and strengthen risk prevention and resolution in key areas, including retail risk, credit, and the property sector.

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

Zhong Desheng: 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 operators, and 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, Xu 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 instructions of the operators.

Speaker #1: Your name and the industry and 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 the participant list open 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?

Wang Xiaoqing: Can you hear me?

Speaker #2: Yes we can hear you.

Zhong Desheng: 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 to be the president of CMB. I have a very simple question for you.

Wang Xiaoqing: 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. So 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 of the year? Thank you for your question. By the end of April, I assumed my new role to be the President of CMB.

Speaker #1: 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 half a year, and you have done a lot of work, so I would like to learn from you.

Speaker #1: What about your mindset? What are your thoughts on the future development of CMB's business?

Speaker #2: We see CMB in the second quarter—your revenue, your profit, all accelerate. Will that trend continue into the second half of the year?

Speaker #1: Thank you for your question.

Speaker #2: 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 is reflected in the following aspects. Well, first of all, CMB has been managing a 13 trillion 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, and how we could inherit the good experience and results from generations of CMB staff's hard work and stick to high-quality development.

Wang Xiaoqing: After that, first of all, I feel strong responsibility, which was reflected in the following aspects. Well, first of all, CMB has been managing CNY 13 trillion asset size. It shoulders a very strong responsibility and mission. Second, the bank's 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? 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.

Speaker #2: 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.

Speaker #2: I can recall an individual investor from our shareholders meeting mentioning that their funds come from their everyday lives, so making good investments is what they want.

Speaker #2: We should guarantee them good results and deliver to our investors, so as to guarantee their return. Of course, among all these three aspects, these are the most important. We also have other dimensions.

Wang Xiaoqing: 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. When we 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, they have been posed challenges to the banks and also the challenges they brought to the loan main development. Another factor I mentioned is that as the economic growth rate actually moderates, and also the whole society's financing structure are experiencing changes, the credit demand also shrinks.

Speaker #2: 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 banks and also the challenges they brought to the development and another dimension is that as we economic growth rate actually moderates and also the both societies financing structure are experiencing changes the demand for the private 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 the extensive wealth management is a very important strength of us.

Wang Xiaoqing: 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 successive 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. This is a phase, a special phase we have. For the second perspective, some of our households, they're having challenges in their willingness to repay and also their capability to repay. Thirdly, the joint debt risk also demonstrates in such an environment.

Wang Xiaoqing: For CMB, who boast a 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 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. Secondly, we should balance risk, return, and maintain a good management over the two factors and stick to good asset quality.

Wang Xiaoqing: 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 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.

Wang Xiaoqing: We need to take a customer-centric perspective to understand better about their demand, where is their demand, where is their pain points, and 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. To serve the sense of fulfillment and their investment gain of our customers. Of course, as a commercial bank, we should seize the pulse of this time to seize 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.

Wang Xiaoqing: 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. Well, for CMB, we have already accumulated a capability recognized by the market, and 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.

Wang Xiaoqing: We take these aspects as our targets 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. For the second perspective, I think we need to seize the opportunities arising from the new time and new environment. That is Sci-Tech 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.

Wang Xiaoqing: It is not just missing the opportunity, it may be a time that we miss. Of course, probably every financial institution is 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. 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.

Wang Xiaoqing: 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? 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, and the other eight are investment banking, investment management, AIC, leasing, and et cetera.

Wang Xiaoqing: 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 that about our international development. 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 that these two ideas are what we need to think further.

Well, logically speaking, our overseas branches are not having as many, um,

Outlets as the, uh, big state-owned banks. So how do we reflect our own characteristics in International Development?

Especially, how do we better leverage our Hong Kong institutions? Um, I think that...

um, these

Wang Xiaoqing: 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. 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. 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.

Two ideas are what we need to think further. And the fourth aspect is that in the intellectual intelligence era, it also brings us new opportunities for banks. It might not...

Be.

Obviously, or quickly, reflected in our balance sheet or even at recent spaces, they will be reflected as expenses or costs. But for us,

We think it’s the right thing to do. How do we

Use a more scientific.

The ability to grasp intelligent technology meant a lot for a commercial bank.

It could help us to enhance customer experience, increase our internal efficiency, and conduct even more accurate risk management.

and also,

To further, accumulate our knowledge.

so, this is for

Uh, the development of technology has always been a very important input.

Wang Xiaoqing: We are having plans for developing our intelligent bank, and 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. Also another need 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. According to the senior management analysis for 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. So 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.

Since long ago, it has 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 a plan, um, for developing our intelligent bank, and later on our, uh, Chief Information Officer, Mr. Joel, will give further introduction.

And last but not least, we believe this area also presents an opportunity.

And also, another niche long-term momentum is that during the development of the Chinese economy.

We should.

We should provide the full list of our branches in key areas.

According to the senior management analysis for the first half,

Recently, I've just reported the figures of development in branches. In key areas, they're having a better growth rate.

In the average level of the banks, all branches, all.

So, we need to stay close to the local industrial policy.

Stay close to.

Wang Xiaoqing: 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 capabilities, strengths, and strains so as to establish CMB's own driver of future development. Your last question is about the growth of H1. Will that trend be continued? 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.

Industries are fed into our understanding of risk and our preferences, and we stay close to our clients, including corporate and retail clients. This is what we need to do to further develop the key branches.

Reach branches in key areas.

So that they can contribute more to the bank's operating income and also profit.

this is,

For the next phase, we need to further foster our capitalistic strengths.

So, as to establish CMB's own,

Driver of future development.

Your last.

question is about the

The growth in the first half—will that trend continue? I'd like to hear 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 stable and steady progress to deliver such results to our market and make every effort.

To maintain our good quality and continue delivering strong growth momentum, we aim to consolidate what we have achieved.

To reflect those results to the capital market. Thank you.

Zhong Desheng: Next question, please. Next, we will invite Ma Kunpeng from China Securities. Thank you. I am Ma Kunpeng from China Securities. Thank you, 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. So 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 loyalty 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 Liang to answer this question. Thank you for the question. I think it is a very good question.

Next question, please.

Next.

From China security.

Thank you.

For President 1, for the introduction, we are clear about the Strategic Outlook.

I want to further ask my question on detailed banking business.

PNB 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, technical sophistication, and premium clearance of products and services for these clients?

This approach helps to avoid single price walls and marketing walls.

So that we can further improve customer loyalty and encourage returns.

Are there any indicators or metrics we can track to monitor the progress and effectiveness of these efforts?

We would like to invite Ms. Wong.

To answer this question: Thank you for the question.

I think this is a very good question.

Zhong Desheng: You not only 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 appearance. 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.

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.

This is a direction that CMB is focusing its efforts on, to serve the 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.

Deposits.

This has been elaborated upon with extensive work management. We will start from the client's sense of assurance. We select good products and construct a long-term, stable relationship.

As for that allocation system regarding loans.

Zhong Desheng: 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.

Which means we would satisfy clients' demands for different financing to provide for the needs in households, businesses, etc.

For.

Remittance.

We pay high attention and continuously enhance our basic account system construction, and are dedicated to safety.

A convenient.

Slightly promoted.

While the customer has more satisfied requirements.

Most of the clients are entering a space of growth.

Uh, material wealth accumulation. So, they have diversified from—

Different dimensions—that requirement has been.

Uh, well, succession and wealth protection, and more advanced needs under such kind of complexity, we have to take into consideration more factors.

Zhong Desheng: 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 serve across multiple accounts and multiple currencies, et cetera. Golden Sunflower and above customers growth in the past three years has accumulated to 55%, and the CAGR has been 13.26%. Another point that I would like to discuss with you is that we have always paid 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.

And provide more customized services and more differentiated services to the Quality clients. We provide 1 much and comprehensive and scenario-based service solution which is a 1 on 1 relationship, managers, and plus and expert teams for long-term companions to fully respond to the client's expectations on integrated services.

His product offerings—we would opt for, uh, all around.

Or category product offerings.

That's, uh, that's across multiple accounts and multiple currencies, etc.

Golden Sunflower and Above customers' growth over the past three years has accumulated to 55%, and the AGR has been 13.26%.

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

because retail customers in a

can is a 100 million.

volume based, uh, customers and

there are a lot of,

Categories of retail banking businesses, and there are multi-dimensional services involved in retail.

Banking client services: So, how do we match clients' requirements with our product offerings? This is a very important question.

Zhong Desheng: In the past, we used three 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 agent. 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.

In the past, we used three years to basically complete the human-plus-digital intelligence new model in Retail Finance.

And completed.

Our digits to, uh, three, matching for clients and channels and product offerings.

We have three dimensions to support us. First, our customer centricity.

Value.

And our strong delivery capacity.

From the head office to branches and to sub-branches, as well as our strong support for facts.

And this is the main support.

In the next phase, our retail banking service model will deeply involve artificial intelligence.

from and transfer for, uh, people plus intelligence, uh, people.

Clothe people with digital intelligence, plus AI agents.

Regarding metrics, I think there are many indicators to consider.

Pay attention to, for example, the number of customers holding wealth management products.

The allocation customers.

And maybe, active users, etc.

Zhong Desheng: The customers covered by our TREE system has increased by 55% for the past three years, and the compound annual rate has reached 13%. Our monthly active users has increased by 31% in the past three years and 9.36%. The 5.14% of the CAGR of the past five years. As for the indicators, 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 three years, and retail clients increased by 24.54% for the past three 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.

And the number of customers covered by our tree system has increased by 55% over the past 3 years, and the compound annual growth rate has reached 13%.

Our monthly active users have increased by 31% over the past three years.

and the rate of 9.36%,

And the, uh, 5.14% of the AGR over the past five years. So,

so, as for the indicators,

AUM and client base are the most fundamental indicators to look at.

Structure volume of these indicators is also something that we pay attention to.

Our AUM increased by 52.12% over the past period.

3 years.

And Retail clients.

Increased by 24.54% over the past three years, and the PGR was 6.72%.

Speaking, we use integrated campus service capacity to serve our clients as long as

Zhong Desheng: However, for CMB, their trust for CMB and their choice for CMB will not change. 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 that risks are accumulating. So 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.

We have our retail customer base, and even though their demands and pressures change across periods, for CMV...

Their trust in CMB and their choice of CMB will not change.

Next question, please. Next, we will invite a question from Morgan Stanley.

Thank you for giving me the opportunity.

I'm Sharan from Morgan Stanley. My question goes to Mr. Wing regarding loan growth. 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 around 7% would be approximately great.

What is the Management's long-term consideration on loan growth?

And previously, we thought that CMB is the retail.

Oriented toward banking and the retail sector.

Uh, we see that risk accumulating. So, what are your considerations regarding future portfolio allocation? Thank you for the question.

Indeed, as you mentioned and also as mentioned in the presentation previously, the bank's total loans and advances were 7.45 trillion.

Up by 4.73% year-on-year.

Zhong Desheng: In this process, we see that the difference between corporate loans and retail loans. The corporate loans increased by 13%, while retail loans increased by 0.05%, excluding corporate cards. So 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.

In this process, we see that...

The difference between corporate loans and retail loans is that corporate loans increased by 13%.

Retail loans increased by 0.05%, excluding corporate cards.

So, we, I think, corporate loan growth is outpacing retail loans.

This is, broadly, in line with the market trend.

we just mentioned,

the number 7,

This was mentioned in a previous investor discussion.

Regarding our expectation, which is 7%.

From actual operation.

We think.

That.

Uh, currently it is around 5%, so in

In the next half of the year, we think that the growth rate will remain relatively the same.

There are two reasons. Firstly, the external environment.

The.

The speed of loan growth is.

is slowing down, which is, and as the quality is improving, this is, uh, the

Choice of our own decisions.

Zhong Desheng: We do not blindly pursue scale expansion. 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 we should 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 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.

With insufficient credit demand in the market, especially in retail loans, there is periodically high risk. We do not blindly pursue scale extension.

We emphasize.

The philosophy of a balanced development of quality, profitability, and scale.

Period. What we discussed with the retail banking business sectors.

That we should.

Regarding the retail banking structure, and as a quality, we have...

We have increased our requirements, and we do not place very high emphasis on scale expansion.

So that our team in retail banking will have sufficient resources.

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 perspective of Commercial Bank operations.

We think that.

We hope to pay higher attention to the challenges and

adopt long-term perspective, and

And that ProActive Management.

Secondly.

I would like to mention that.

And I was being negotiating business. We are uh there's the volume is shrinking.

And we are implementing proactive management.

Zhong Desheng: The overall trend of demand is not changing very fundamentally. 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 Sci-Tech, so that we can achieve growth in both volume and quality, and increase our quality and effectiveness of serving the real economy. Thank you. 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.

The overall trend of demand.

Is not changing very fundamentally.

and if we are not seeing very good signs of improvement,

Trend.

The overall trend of TNB loan growth is still being maintained.

Retail loans.

In terms of retail loans, we will continue to consolidate our quality customer base, effectively control risk, and then we can...

have a great market share.

And in terms of corporate loans, we focus on key areas.

In the industry.

And the industry is affected by sickness.

So that we can achieve.

Growth in both volume and quality, and increase our quality and effectiveness in observing the real economy. Thank you.

Next question, please.

Next question is from.

From Goldman Sachs.

Thank you for giving me this opportunity.

Zhong Desheng: 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 Mr. Peng.

I have a question about deposits. Recently, we have seen that some major banks are resuming the issuance of large-denomination personal CDs. I would like to know whether this has had any influence on our liability cards. Also, I would like to understand the repricing of deposits and the trend of NIM at CMB.

Peng Jiawen: Thank you for your question. I think for the issuance of large denomination CD, we'll 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. 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.

The question will be taken by Mr. P.

Thank you for your question.

I think for the issuance of large-nomination CDs, there will be three purposes. One is based on maturity management, to match the duration and the liabilities to, uh,

Absorb the long duration, liability to maintain, uh, balance sheet management. And second, um, liquidity management. I think it's also the second purpose, and the third purpose.

It's relevant.

to provide the

product and service for our clients, and the demand for having such long-term deposits.

Product requirement. But based on our understanding, five-year large denomination CVS 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 CMD,

Our duration, liability duration, is appropriate and balanced. So, in market risk,

Peng Jiawen: 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. Of course, we will conduct further analysis and understanding that whether or not we have actual demand from our clients, and whether the demand should be satisfied by our product supply. We are also doing such kind of analysis and research. Also, for those products that was further released, we need to conduct some rollover products. 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.

We don't have quite strong requirements on the large denomination CD and we have good liquidity. So for temporarily we we won't need uh the issuance of large denomination TV 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 uh, our clients. Of course, we will conduct further analysis and understanding that whether or not we have actual demand from our clients,

The weather, the demand.

Should be satisfied by our product supply. So, we are also doing such kind of analysis and research.

And, uh, also for those products that were put—that were further released.

Uh, we need to conduct some rollover products. We will also...

Zhong Desheng: The next question is from Ma Tingting from Guotai Junan Asset Management.

Starting from the perspective of team management and also from the perspective of, um, liability management, I think the influence is rather limited. Uh, the next question is from Martin King from Securities.

[Analyst] (Guotai): Thank you, CMB management. I am Ma Tingting from Guotai Junan Asset Management. 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?

Thank you, Senior Management.

I am mining from Bai.

I have a question about the overall CNB's asset quality.

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

Taken to these risk areas. Uh, the question will be taken by Mr. Shi. He is in charge of risk management.

Xu Mingjie: Thank you for your question. For the H1 of this year, we have sticked to our prudent and stable risk management culture. We 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 maintain stable towards a good momentum. 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 culture risk asset classification. Loans overdue for 60 days and 90 days to NPL was 1.23, which was a good level among our peers. The 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.

Thank you for your question.

For the first half of this year.

We have 6 2 hour prudent and stable risk management culture and uh prevent the risk in t areas and increase our level of risk management our as a quality remain to be saved.

And it has three characteristics. The first is that the policy remains stable to maintain good momentum.

By the end of June.

Our MPR ratio.

When 0.94%?

Remain flat from the end of 2025.

This is quite a good level.

The second is that we speak to a student and culture risk classification, as well as asset classification.

Loans overdue for 60 days and 90 days.

To MPL was 1.23.

Which was a good level among our kids. It says we have the fountain position.

By the end of June.

the, under the groups, calibrate our

Adequate coverage ratio was 385%.

Having a strong compensation level.

Xu Mingjie: You have been paying attention to our understanding of risk areas. I would like to make some classification according different segments. First, I would like to talk about corporate loans. For H1, our corporate NPL ratio was CNY 27.4 billion. Corporate NPL ratio was 0.78%, down by 0.1 percentage points. Corporate asset quality actually improved for H1. The NPL formation ratio of corporate loans was just 0.16%. Stretching to see from a longer cycle, CMB's corporate loan asset quality continue to improve, remain stable towards a good trend. For the risk areas that we pay attention to, in terms of corporate loans, their 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.

You have been paying attention to our understanding of risk areas. I would like to, uh, make some classifications according to different segments first. I would like to talk about corporate loans.

For the first half.

Our MPL corporate MPL ratio.

Was 27.4 billion.

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%, stretching to see from a longer cycle.

CMB's corporate loan asset quality continues to improve.

Remain stable toward a good trend.

For the risk areas that we pay attention to.

In terms of corporate laws, the future risk will be lying in real estate–shredded perspective.

But the end of 20205.

We have uh, 14.5.

Billion of MPL.

Loan in the real estate area.

which,

This represents a 4.47% MPR ratio.

Xu Mingjie: 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. 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 property loan, corporate property loan. 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.

So even though these two figures remain at a relatively high level, we are taking a very cautious attitude towards these two figures. And, uh,

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're having poor asset quality.

So for this area, it is what we pay special attention to. That is the corporate real estate—we're taking measures as follows.

We continue to lower the proportion of retail of corporate loans, corporate real estate loans within total loan.

Its proportions.

With now.

9.3%, which

With lower.

Compared to the end of 2017, this is lower by 0.45 percentage points. We will further optimize the structure of property loans.

Corporate property loans.

We focus on long assessment in Tier 1 and Tier 2 CP.

And 85% of them are allocated to.

Xu Mingjie: 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 towards the projects. We have conduct close look fund management towards different projects. In the fourth perspective, we continue to dissolve the risk within the area and speed up the disposal. 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.

Tier 1 and tier 2 cities, and to receive from client structure.

Property laws are being upgraded at both the local and central levels.

State-owned enterprises are also very qualified. Private enterprises also have a stronger capability to pay their debt.

And the third perspective is to maintain strict management, uh, management of the projects.

We have conducted closed-loop fund management with different projects. And in the fourth perspective,

We?

Continue to manage the risks within the area and speed up the disposal.

And enhance. Um, collateral.

Enhanced guarantee.

And enhance—that is, other disposal methods taken by.

our staff, and 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.

Xu Mingjie: 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. But 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 loans. For H1, the retail NPL loans amounted to CNY 42.8 billion. The NPL ratio was 1.16%, up by 0.1 percentage points. Special mention loans ratio and balance of retail loan increased.

The provision level is over 3 times uh than the average level of the provision for the corporate loan. Looking into the year 2026 with many policies introduced by different Regulators. The uh, the that the market, the real estate markets are seeing the trend of further.

Concentrating in the risk.

And risk tends to be showing a momentum to continue to be contained.

But with

I think that even though there will be some individual events of risk outbreak, generally,

The market is now in a stabilizing process.

The second perspective I would like to mention is about retail loans. For the first half, the retail...

The retail MTL loan amounted to ¥42.8 billion.

The MPL ratio was 1.16%.

Up by 1, 0.1 percentage point.

Special mention loans.

Xu Mingjie: 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. Second, retail loan accounts for a high proportion in our loan book, so it is natural for us to have 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.

The ratio and balance of retail loans increased.

I noticed that some of these investors are paying special attention to the quality of our retail loan, and from my perspective,

The retail loans, as a quality is the major driver, the major reason that influence the, our overall as a quality even though the uh, indicators, the credit as a quality indicators of the retail loans are maintaining at a relatively good level, but they are still under pressure and the second retail Loan account for a high proportion in our loan book. So

natural for us, just having

Stronger pressure. Of course, some of the pressure is coming from the market front and the other side.

Xu Mingjie: 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. We are still having the idea that the retail loan risk is in an upward trend. 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.

Uh, I think the pressure is also coming from the expectations from our investors, and also CMB pursues to be the best retail bank.

So currently under such spec job of the economic uh structural transformation and also the downward trend of the real estate market. So, uh, under influence in terms of their capability of retail and also their willingness to play we pay. And also we are having joined that risk.

In the consumer loan area. So we are still having the idea that the retail loan risk within an upward trend. Of course we have been taken measures to contain to maintain the uh risk level of uh retail assets.

To.

What we have been doing is that we have adjusted our budget and target of, uh, retail loan business. In our evaluation and also, uh, internal encouragement, we even pay special attention to the quality that we can loan and also control the formation of retail loans, uh, retail MDL loans.

And, of course, we also see some positive signals with...

Xu Mingjie: Excluding credit card, our retail loan, we are having information of 247 million information of personal loans. That is retail loan excluding credit cards. Retail credit assets, the momentum of its NPL new formation momentum has been curbed. The second signal we see, our balance loan, that is our mortgage loan, for H1 of this year, the NPL balance was down by 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.

Uh, with how long as a quality—for the first half, extending credit card, our retail loan, our, uh, the empty, the—

We are having information of 247 million new information of personal loan. That is, that is retail loan. Excluding credit card.

Credit assets.

Momentum of MTL new information.

Momentum has been cut code.

And the second signal we see,

Our balance goes—that is our M-long.

For the first half of this year, the balance of empty accounts was down by $549 million.

And down by 0.03 percentage points, and realized the full decrease in the entire balance and ratio of our monthly figures for the first half of the year.

And of course, it's good. Signals are also showing in the credit card business.

Uh, due to some special reasons for the adjustment of the SS expectation within the credit card business.

Xu Mingjie: Overdue loans 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. Of course, we have to note that the credit card assets are still under pressure in terms of asset quality, but I believe it will still be a very important loan granting direction for us to pursue. 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 efforts. Fourth, we will conduct early identification, warning, and also disposal, et cetera.

We have been taking stricter measures to conduct, as a classification, so that we see some uptick in the formation of credit card MPL. Over these loans, the ratio was down by 0.1 percentage points in the credit card business for the first half.

And overdue loan ratio and balance are also both big reasons for credit card loans.

Of course, we have to make that a credit card, as that's also under pressure in terms of the setup policy, but I believe it will still be a very important loan granting direction for us to pursue. So in the following days, we will follow the market plan. We will emphasize both on quality and size, and we will give the full play to the strength of our customer base.

To, uh, increase the threshold of customer onboarding. And third,

We will take the ball to our existing customers.

And to prevent this coming from joint efforts, and both.

Uh, we will conduct early identification and warning, as well as make proposals.

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

And Etc.

Thank you. We will enhance our system capabilities with management functions to strengthen the leverage of AI and data, and also to further cultivate our accounting team.

We will put a question.

The management, overall, has a quality of recall to address.

We wish it would be developing with stable momentum.

Zhong Desheng: Next question, please. Next, we will invite Yin Yi from JPMorgan Chase & Co. for the question. Thank you for giving me the opportunity. My question is regarding corporate banking business. We noticed that corporate banking revenue and profits 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.

Next question, please.

Next will invite.

Thank you for the question. This is [Name] from J.P. Morgan. Thank you for giving me the opportunity.

My question is regarding corporate banking business.

We now notice that corporate banking revenue and profits,

Out of the different segments forming retail banking, what are the growth drivers, and what is the outlook going forward?

And today, with the current microeconomic situation, how can we maintain good corporate cash flow and ethicality? Thank you.

Thank you for the question.

So, I invite Mr. Who, 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 first half of the year.

Overall, speaking of growth, it is stable.

In the backdrop of the market environment.

and we,

Zhong Desheng: 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 client's needs as generating non-interest income. Fifthly, the fourth pillar growth drivers of CMB corporate banking, especially wealth management, asset management, interbank coordination, has strongly formed a growth. Sixthly, our good asset quality. Next, China Merchants Bank will continue. 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.

We have four group pillars. We have achieved good operating results.

In a half decade.

Corporate banking. Operation has formed.

We have differentiated advantages compared with our peers.

the key lies in our

C, the number and quality of our customer base, as well as our client experience and client coverage regarding our digital products.

So for mentioned 2 points, generate 3 points are cost of liabilities is performing on the peers.

And our investment banking and cost for their finance business is featured.

And satisfied our client needs as the first, generating non-interest incomes.

50.

Next, China Merchants Bank will continue.

To.

In terms of corporate banking, where would we focus on the 6F effects to support our differentiated advantages?

Zhong Desheng: 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 increase our asset origination. We focus on the new emerging quality clients and technical 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.

Firstly, leveraging digital empowerment, we will further strengthen our client service system.

Currently, the classification and segmentation are based.

Client operation or model.

Will be continued.

and,

This is a focus for our customer base operations. We will enlarge our clients' loyalty and increase our income at low cost. In terms of liability compared to peers, we have a better advantage in both the volume and quality of our clients.

Base for technology evolving and growing clients.

We should address their needs in operations and become a principal bank.

For the client.

Next, in terms of authorization, we need to continue to optimize our services. Secondly,

to improve our operational processes, professional operations, capacity, and increase our asset origination

in terms of we focus on the new emerging quality clients and thickness clients, Etc. We will have specific industrial investigation.

Zhong Desheng: 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 would 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 SPA to increase our income. Next, we will improve cross-border finance business management, serving Chinese enterprises going global.

And improve our risk investigation and forward-looking judgment on their demands, and impose differentiated credit policies so that we can obtain an asset allocation with controllable risk. We also strengthen

To build an, uh, industrial ecosystem.

We have already covered 36 industries of professional investigation. Thirdly, we will improve our investment banking and commercial banking integrated service systems.

First, we want to improve our digital.

Products including cross-border, finance, investment banking business, transaction banking, etc. 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 improve our client loyalty, know better our clients, and foster stronger ties.

Leveraging high efficiency and synergy, we will project capital.

Ecosystem to provide our clients.

With more diversified products, this has resulted in an increase in our MLA financing and direct financing.

Increase our FNAs, increase our FTA to improve our income. Next, we will increase cross-border finance and business management.

Zhong Desheng: 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.

Serving can, uh, Chinese enterprises growing, grow global in terms of customers, of the, uh, value, cross-border financing.

Compared with our comparable peers, we are leading in our position.

Next, we will.

In profound synergy, we are building capacity in cross-border institutions so that we can help.

The client, Chinese Enterprises Going Global, needs our help with their products, bringing global investments and financing. Going global means that we can provide better services for this client.

Simply, we will increase the coordination between the four major business segments.

The coordination of these four segments is a feature of CMB, especially the development of the growth management business.

As well as the other segments, the coordination.

By leveraging this coordination, we can achieve the cooperation of these different entities.

Categories. Next, we will continue to afford differentiated.

Processes and mechanisms.

Quickly, we will use AI.

Zhong Desheng: Seventhly, we want to increase our response speed to our clients and increase our risk management capacity and internal operation efficiency, as well as integration and synergy capacity. That is my answer. Thank you. Next question, please. Next, we would invite Xianshuang Wang from Guolian Securities. Can you hear me? Yes. Thank you. I am Xianshuang Wang 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.

Especially, we will want to increase our response speed.

To our clients and increase our risk management capacity, as well as the efficiency of our internal operations management.

As soon as you have the capacity, that is my answer. Thank you.

Next question, please.

Next, we would invite a representative from Security.

Can you hear me?

Yes.

Thank you.

I'm walking from

Thank you for delivering stable performance.

And such kind of service means you have good performance in preparation results, and the increase. I see an increase in market price in Asia and Asia. My question is regarding assets and liabilities.

I want to ask the management: What is the outlook on the new trends?

The second is about fintech.

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

Zhong Desheng: 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 basis points year-on-year.

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

Thank you for the question.

We were invited to Japan. To answer the question for the second question. We will invite Mr. Jones, for the answer, thank you for the

Question regarding me changes.

This is a heated topic in the market.

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

But the others, we are seeing decline.

As for cmd's perspective, kindly.

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

Zhong Desheng: As Q2 compared to Q1, one bit lower. We are declining, but the decline is narrower, and it is staying stable. As for CMB, we think that the main factor lies in asset size. First, the repricing factors have not been fully displayed. This is a common factor impacting all the banks. Also, we are facing insufficient credit demand, which drives to 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 is applicable for CMB. 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.

In the best-up, the name was down 1.83%, 56% year on year.

As for the answer to Q1,

1, 1 bit lower.

Well, it's declining, but the decline is narrower.

And it is being stable.

as for CMV,

We?

I think that the manufacturer lies in asset size.

Those 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 contributes to the downturn of pricing.

And secondly.

For technology banks, for 10% retail banking—especially credit card banking—assets are a high proportion.

And current circumstances.

It has been lowering in growth, so pausing pressure on our name decline.

I think, for CNB, there are common factors as well as factors that are specific to CNB.

So, overall is speaking.

No matter how.

Each bank shows different changes in their name trends.

We can come to a conclusion that.

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

Zhong Desheng: 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 asset, it has not been fully recovered. So we are not seeing very rapid rebounce 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 application for reasonable competition.

For the banking industry in the future, we are still facing pressure of 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 our deposit repricing,

It is basically, uh, finished. Simple.

The strong term.

Of course of liability.

Has been, uh, slowed down due to the impact on them.

and in terms of,

As for the 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,

Your face with many, uh, preferential image factors. And, for example, under the current macroeconomy,

especially our effective monetary policy, scientific monetary policy, as well as

Zhong Desheng: Our competition will be more reasonable, which is a good factor for our NIM as well. Secondly, loan repricing is expected to finish within the year. If there is a large amount 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 liabilities.

The, uh, advocate show for reasonable competition, and competition will be more reasonable.

Which is a good Factor.

for our team as well. And secondly,

but we expect pricing to be finished within the year,

If there is a large amount 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 base, which is more stable.

CMV will continue.

Um, management or asset liability.

And make good arrangements in terms of structure.

For example.

On the premise of good asset 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.

Zhong Desheng: In terms of deposits, we think that quality is more important than volume, so that we can contribute more to the stabilization of NIM. 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. Thirdly, 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 intensifying 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.

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

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

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

We strive to.

Achieve stability in it. Thank you.

Our answer the second question.

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

We?

How elaborate AI to help? Uh, CNB transformation. We have a sensify. Our efforts in that regard.

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

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

We have achieved 13.88 million equivalent employee working hours, contributed by AI.

Zhong Desheng: 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 want to give two examples. One, our Golden Sunflower clients operation. Secondly, 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 effect. 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.

AI has been playing a role, in fact, spanning front, middle, and back offices.

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

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

Uh, operation.

Kindly.

I am Assist. Its assistant is playing a good effect.

Of AI in.

For Golden sunflower RMS.

We are also seeing.

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

In the first half of the year.

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

Currently, 90% of the content in the data needs reports for small businesses can be generated or assisted by AI.

Zhong Desheng: The average service time is reduced from 36 hours to 2.72 hours. The tender guarantee can be issued within minutes. The adoption rate of AI monitoring results for loans has been 68%, and the RMs can resolve risk in advance, and 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 strategic 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 assist in decision-making. So the average service time is reduced from 36 hours to 2.73 or 2.72 hours. So, and then the guarantee can be issued within minutes with AI.

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

Triggering time has.

Reduced by 40–45 days as compared with the traditional mode.

Currently.

On the basis of 10-, 15-, to 5-year strategic plans, we have more specific and detailed arrangements regarding AI empowerment, and we have raised the high targets to a higher target.

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

Zhong Desheng: Next question, please. Next question is from May from UBS. Thank you, senior management for giving me this opportunity. I am May 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 a good increment. 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.

Next question, please.

Next question is from.

May from UBS.

Thank you, Senior Management, for giving me the opportunity. I'm May 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 an environment, will you consider further increasing your dividend payout ratio?

and um,

For your corporate loan business, you have seen very good improvement. 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, I will then give you the payout.

Uh, event.

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

board of directors.

Peng Jiawen: We have rather corresponding arrangement. 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 operation. 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, uh, the capital adequacy ratio and also the article rate and capital position at the end of June. We have held a shareholder meeting.

and under in answering,

A question about our, um, market value arrangement. We have provided relevant answers. We will, based on our capital adequacy ratio, coordinate asset growth and asset return.

and the financing of capital, and also dividend payout management, and also the market recognition, and to finally realize the Target 1 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 a return and create value for our shareholders.

Peng Jiawen: 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 rate of our capital. Second, scientifically manage RWA growth rate. 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.

This is also based on what we have heard from 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 light 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 returns is to optimize the allocation of our resources and enhance the utilization rate of our capital, second, scientifically.

Managed growth rate.

It.

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

Occupation of capital and third.

Peng Jiawen: 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, and we should also be aligned with our own operation. Thank you for your question. The next question, please. Next question is Gary Lam from HSBC. Hi, senior management. I am Gary Lam from HSBC. I have a question about fee income and AUM. We see that your fee income increase accelerate in the Q2. Will that trend continue for the next half?

This is what we have always been adhering to: the internal generation of our capital. We indulge in this generation of our capital, and so forth.

Is the recommendation given by the market regarding the value?

Of a valuation of CMD.

Image.

To make sure that we can have a better market evaluation.

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

We will both take full consideration of the opinions from every perspective, from investors and from analysts.

They are also serving as a very important channel.

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

The next question is.

Next question.

Is scary means from HSBC.

Hi. Can you hear me? I am Gary from Agent A. I have a question about the income. As you can see, your fee income increased and accelerated?

Zhong Desheng: 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. Well, 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 the H1, CMB's AUM has growing at a good pace, hitting a record high of CNY 1.63 trillion, 7.96%.

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

Your retail AM reported quite a fast growth rate.

Which was analyzed as 15% faster than the deposit growth rate. I would like to understand what is the underlying reason behind this, and what is the underlying driver.

of these phenomena. And at the same time,

We see that in the wealth management income, the driver has been changing. Most of the growth had been driven by the agency distribution of mutual fund and wealth management products, left from bank or insurance products. Well, in terms of future developments, could you leverage the growth from your profound wealth management products to offset the decline from bank insurance? Thank you.

Thank you for your question. It will be taken by Yangfang Xia.

For the first half, CNB's AM.

Has been growing at a good rate, hitting a record high of 1.63 trillion.

Wang Liang: The wealth management products are giving them full play, and we have also seen new growth drivers in the structure. Non-deposit AUM accounts 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, Agency fees, 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 both retail 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.

Uh 7.96%.

The wealth management products are giving them full play, and we have also seen new growth drivers in the structured non-deposit area.

Accounts for a higher proportion.

Including the third-party market value.

So 85% of the growth are coming from um non deposits at that. I think that is highly relevant to the high growth rates of our Equity related products, for instance, mutual funds, third party, depository, payments, trusting 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 and above customers are having higher AUM brokers compared with the same period of last year, and also that the average level of all customers.

Wang Liang: In income contribution, wealth management relevant AUM yield has created better returns compared with other type 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 3 tiers. That is to provide full 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. 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 12 management scenarios, there were intentional scenarios. We also see better Abraham grow.

In income contribution.

Wealth management relevant fields have 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 on the following aspects, as I think it is relevant to CMB's capabilities that we have long accumulated in terms of wealth management. It contains three tiers.

That is to provide both products and policy products. The second is,

customer relationship manager, and also our wealth management consultant and investment consultant.

They are forming a team to provide combined allocation status to our clients. And third, our longtime companion service, who provides to clients,

But for us, we understand that A1 growth is not just relevant to management differences. It is more relevant to all of 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 could not be seen or analyzed isolatedly. They are working with each other as a whole.

Banking, that is also supposed to be relevant to settlements and similar matters.

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

Whether this is the first course.

Well, for our clients, if it's their account, it might not be using CMB, so they are only purchasing involvement products. They also would like to make transactions because it is CMB. They would like to use the CMB account to do the principal. When it comes to the 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 do that part with CMB. I think behind the a...

Indicators cannot be seen or analyzed in isolation; they are related to one another.

Wang Liang: 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. How do we leverage a strong technology infrastructure to break the silo among different database, which is very important for us to provide a very smooth service to our clients. AUM growth, income growth, could we maintain such high fees? Well, for us, CMB's AUM structure is quite light because it's very capital oriented, 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. For a long period of time, we will continue to maintain our growth fee. Next question, please.

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

a large customer base. That's a large talent team of such diversified channels. How do we

Leverage a strong.

Technology in our software to rate for SOAP. The silo among the friends of the database. This is very important for us to provide a very full service to our clients.

So, anyone will see some growth that we can see, except for high fees. Well, for us, CNCs and structure is quite light because it's very capital-oriented—capital market-oriented—wealth management businesses are accounting for a high proportion with the solution. So, it is quite hard for us to say that we can maintain...

A very high growth, because it's relevant—highly relevant—to the capital market for development and transaction itself. But for a long period of time, we will continue to, uh, maintain our growth field.

The next question, please.

Zhong Desheng: Next, we invite Zhang Shuaishuai from CICC. Thank you for giving me the opportunity. I'm Zhang Shuaishuai from CICC. My question is regarding management. Previously, when the senior management is doing roadshows, you mentioned synergy a lot. It 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 synergies 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.

Next, we invite.

Thank you for giving me the opportunity. My question is regarding management. Seriously, when—

The cleaner management is doing roles—you mentioned energy—a lot. This is a very important concept because currently, the market is limited, and many banks are institutions that are seeking profitability from management.

By various metrics, CMV is a leader in Infinity.

So, I want to ask the management.

How does management?

Chief practice synergies.

Across business lines and my branches, as a series.

Not just in words, but in practice, how to—

Maximize cost and resource efficiency.

That is my question.

Regarding management and energy.

Peng Jiawen: Thank you for your attention on synergy. This is a question that I would like to address. 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 energy.

this is,

A question that I would like to address.

As you mentioned, on every level of CMB—including our subsidiaries, between branches in Canada, and branches across business lines.

We have achieved a result in synergy.

Zhong Desheng: 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 the zero attribution and share rewards mechanisms. This design is helpful to the effect of synergy. Secondly, the design of performance-driven incentives. In our assessments, 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.

We have set up a mechanism.

For, in the case.

For example, regarding cross-institutional synergy, we have designed the Zero Attributions and Share, Share Reports mechanisms.

This design is helpful to the effect of synergy.

Secondly, the design of performance-driven incentives. In our assessments, we have incorporated these into the evaluation process and they have given us great synergy.

For different institutions and the Head Office Department, we have given assessment indicators for synergies.

Thirdly model Innovations.

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

Mechanism, Incorporated, Investment Banking, Ms, Product Banking, Commercial Banking, scientific research, etc. So, based on these very effective models.

Different institutions can have good collaborations.

Fourthly the corporate culture.

Energy is not a task.

that is uh, promoted with

Uh, administrative forces, but a corporate culture.

That is, uh, internalized into the bank.

Zhong Desheng: 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, many 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 the above mentioned five perspectives are a very good and very important factor to promote successful synergy within CMB. Apart from the above-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 different lines and institutions will proactively embrace the concept of energy in CMD. This is my feeling.

The fifth point is about organizational, uh, organization or enablers.

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

Many departments—many, uh, structural designs are based on a consideration of synergy. For example, we have the Rocket 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 five perspectives mentioned above,

They 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 place a high value on...

the Synergy concept, including the bottom directives, through our senior management,

Zhong Desheng: 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 one 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's international development strategy?

Each CNB employee would have such kinds of concepts in mind. Secondly, our data system and system design,

It is a good support to the measurement of synergy effects and contributes to performance, uh, incentives.

This is very important for a Synergy mechanical building.

So we need to talk here. We have to talk to your awareness and, uh, fundamental technical support system support.

Is this 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 we just mentioned.

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

Now, please read other questions. The question is:

Zhong Desheng: 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 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 periodical 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, and we have six overseas branches. This is our overseas presence. When I mentioned about the growth drivers for the medium and long term, I also mentioned international development.

The country is encouraging commodities and enterprises to join global CMV and begin internationalization efforts. Ten years ago—my question goes to Mr. Wang—what is the future direction of the MD? In terms of 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 PNB 6, 155 Years, Specific, Strategic Plan, and also one of the, uh, transformation initiatives of our four initiatives.

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

and also the International Development of the

another factor is the

periodical interest rate gap between domestic and international interest rates.

And some Enterprises.

It can, uh, benefit from the pricing gap.

China Merchants Bank pays high attention to international development.

in terms of,

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

We have 1.

The theory bank in, um, in Hong Kong.

And we have six overseas 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.

Zhong Desheng: 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 a 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 much business presence or as many business outlets compared to the large state-owned banks.

So we have to adopt practical measures.

What we hope is that we can serve, we can better serve Chinese food enterprises' global operations.

Especially.

We?

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

and also, we also

We also serve.

Uh, the foreign enterprises for, uh, having their presence in China, leveraging our house-wide finance service system.

Even though we do not have many business outlets globally,

Cross-border, five minutes of China versus Bank has four.

Advantage for China website.

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 this advantage.

Zhong Desheng: In the working conference for the H1, our development pattern will be the one plus one plus five development. The first one 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. 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 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 elaborate, uh, 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, the number 5 represents...

New York branch, New Branch, October branch, and Singapore branch, and the others, which form the five major business institutions. They are serving as the regional hubs of our overseas business.

Hong Kong, uh, institutions in Hong Kong.

This is the China Merchants Bank, Global Cities Center, Authentication 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,

Zhong Desheng: In the process of serving these clients, we have also increased our capacity, our tech capabilities, and experience. We will further service companies who are the lighthouse companies to improve our product range and accumulate capacity and experience from the lighthouse enterprises, leveraging this experience to serve more clients. Thirdly, bank-wise, CMB will cultivate more and more international talent teams. Fourthly, we will make full use of our 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 domestic 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, service industry, a service company—who are the lighthouse companies?

To, uh, improve our product offerings.

And accumulate capacity and experience from the lighthouse enterprises, leveraging this experience to serve more clients.

Certainly thanks, wide. CMD will

We will cultivate more and more international talent teams.

Fourth place, we will make four years of our channel, like partner channels such as 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 with our operation with...

the boundary of our capacity.

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

The range of our capacity.

Zhong Desheng: 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 the end of the meeting.

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 communication. Thank you again, goodbye.

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