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Han Jing: Distinguished investors, analysts and the media friends, ladies and gentlemen, good afternoon. I'm very happy to welcome all of you to China Construction Bank's 2025 Interim Results Announcement. Thank you all for your long-standing trust, interest and support to CCB. Today's briefing has two venues in Beijing and Hong Kong, will be connected by video and also live streamed to shareholders and the public. Attending in Beijing include President of CCB, Mr. Zhang Yi; Vice President, Mr. Lei Ming. Attending in Hong Kong include Vice President, Mr. Ji Zhihong; Vice President, Mr. Li Jianjiang; and the Chief Financial Officer, Mr. Sheng Liurong. Also present are Non-Executive Directors, Independent Directors and supervisors. Heads from head office departments and our Hong Kong entities are also attending. I'm Deputy President, Han Jing. CCB's 2025 interim results have been officially released today. The presentation material is also available on our website for your reference. We will begin with the remarks by President, Zhang Yi, followed by Q&A session. Now President, Zhang, please.
Yi Zhang: Distinguished investors, analysts and media friends, good afternoon. Welcome all of you to CCB's 2025 interim results announcement. Thank you all for your care, your trust and support. Over this year, under the socialized spirit upheld by President Xi Jinping and we have executed the State Council's policy, followed a steady principle and also, we begin -- we have a very high-quality development. For the first half of this year, our operation performance is very good. The key indicators are also very good. We have an operating income of CNY 385 billion, increased by 2.95%. The net fee and commission income is CNY 65 billion, increased by 4%. Net profit provisions CNY 290 billion, increased by 3.37%. Now I would like to disclose more details to you. First, we have the three stabilities in assets, liabilities and the key indicators and the performance is very steady with some developments. In terms of core assets, it's growth very steady. By the end of June 30, we have also released -- we have the gross loans to customers of CNY 27.4 trillion, increased by 6.2%. The financial investments also stand at CNY 11.77 trillion, increased by 10%. Core liabilities also increased by 6% to CNY 30.47 trillion. And the NIM is standing at 1.4%; ROA, 0.77%; ROE 10.08%; CAR is at 19.51%. And all the indicators are also leading in the industry. In terms of the three optimizations. We have the optimization assets, liabilities and income structure, and it takes up 90%. And we also have the resources allocation to key areas. We optimized the asset structure and we also have the loans and the financial investments of over 88%. And for the optimized liability, the structure is also very good. We have a 43% to the domestic demand deposits. Also optimized our income structure and the net fee commission income continued to perform well. It takes up 16.9%. It is also leading in the industry. And we have optimized our investment policy and the NIM and the noninterest income on the net level, also increased by 111% to CNY 34 billion. In terms of controls, we also have very good results in linear controls and the quality has been also optimized. The cost-to-income ratio was 23.72% outperforming our peers. And in terms of risk control, we have also optimized our structure. NPL ratio is only 1.33%, a decrease of 1 bp from 2024. And we also have a very good capital control results. The CAR is 14.34%. The capital utilization efficiency is also leading in the industry under our the public support, we have a strengthened high-quality financial service. And we -- for example, we have coordinated the 5-dimensional and integrated service system. We also have promoted these integrated 5-dimensional system, especially with alignment of a customer service business process and we try to reach new growth engine. In terms of procedures, the product channels, the institution pensions, we also have a 5-dimension system. The loans to technology- related industries is standing at CNY 5.15 trillion, increased by 16%. And we have also completed the establishment of filing of 9 AIC equity pilot business funds. In terms of green finance, the balance is CNY 5.72 trillion, increased by 14.88%. We have underwritten green and sustainable development bonds of CNY 235.6 billion. Utilized financial instruments, including green bonds, green leasing, green trusts to support and cultivate the sustainable development. We have diversified our green service finance, ESG is also maintaining at a global leading level. In terms of inclusive finance, we also optimized and upgraded off-line and online system. And we have this CCB Huidongni ecosystem. The balance of inclusive loans to SMEs is CNY 3.74 trillion, increased by 9.8%. And we also try to improve the business capability of three pillars. We have also maintained a leading level in terms of pension management. The pillar 2 AUM of CCB pension management is CNY 654 billion, increased by 53.96% in terms of annuity customers. In terms of digital finance, we have empowered 274 cumulative scenarios, MAU of the Binary Stars is standing at CNY 243 million, grew by 14.4%. The loans to core industries of the digital economy is CNY 852.4 billion, grew by 13.44%. We also upheld the core mission of financial services and supported the national development with balanced focus on scale and quality. In terms of infrastructure-related industries, there is a steady growth in loan balances medium and long-term loans to manufacturing industry reached CNY 1.79 trillion, grew by 10%. We also have aggregated our corporate loan growth in major regions, including Beijing-Tianjin-Hebei, Yangtze River Delta, Greater Bay, et cetera. We also have the action plan to support the private enterprises. The loans to private enterprises totaled CNY 6.59 trillion, up by 9.92%. The subscription volumes for government and local government bonds also reached a record high. We also have accelerated the implementation of the various policies. We also injected financial momentum in the domestic demand and promoting consumption over CNY 90 billion in loans have been issued. Personal consumption loans reached CNY 614.2 billion, up by CNY 86 billion from end of last year, ranking the first in both balance and growth among our peers. We also issued 1.26 billion debit cards with the consumption transaction volume reaching CNY 12.12 trillion. Credit card loans reached CNY 1 trillion, maintaining a leading position in the industry. In terms of personal housing loans, there is -- the number is CNY 400 billion with a balance of CNY 6 trillion. Both figures rank in the first among our peers. Thirdly, we also accelerated the implementation of a comprehensive set of incremental policies including the supportive mechanism for SMEs with credit exceeding CNY 2 trillion, we strengthened support for the three major projects serving the urbanization projects. We also increased loans to the stock buybacks, serving over 100 listed companies and their major shareholders. Firstly, we fully support the high-level opening up, support the rationalization of RMB and the cross-border RMB settlement is CNY 3 trillion, up by 23%. The CCB London Branch after being the RMB clearance Bank, it has reached CNY 148 trillion, the largest RMB overseas clarence bank. And there is a total asset of institution in RCEP region exceeding CNY 200 billion. We also realized rapid profit growth of overseas institutions with a Y-o-Y increase of 57%. We maintained a customer-centric approach with growing improvement on quality and efficiency. First, we enhanced the institutional operation and a deepened customer service through delicacy management with the integration -- unified indicator system and there is various financial service needs with urban, rural, domestic, foreign commercial investment banking, integration, online/offline integration and group-wide integration. We also established the daily -- the institutional evaluation, daily operation and the customer profiling indication system, we enhanced the multidimensional market awareness and provide differentiated customer services. And we also continue to strengthen the customer base. We served 12.26 million corporate customers, up by 590,000. Personal customers is 777 million, up by 5.7 million. The daily average AUM of payroll disbursement increased by CNY 644 billion. Payroll disbursement service is standing at 91 million. We are also awarded the best large-scale retail bank in China from the Asian Bankers for five consecutive years. And we have also accelerated our risk control mechanism. We also have the coordinated system of our domestic and overseas branches enhanced the group's integrated risk management and control capability. We also focused on risks in key areas. The NPL ratio is only 1.3%, down by 1 bp. The special mentioned loans ratio is 1.81%, also down by 0.08%. Provisional coverage also increased by 5.8% to 239.4%. And we also continued our inclusive finance services and we also controlled some -- we have overall risk levels for real estate and the local government loans controllable. We also continuously improved compliance management and we try to guarantee the stable and safe operation of the cyber systems. This year is also the threshold year for the 14th 5-year plan and the 15th 5-year plan. And we faced with various opportunities and challenges, and we have some basic trend which remains the same. We will also stand at the new landscape and based on our principles and policies to cope with the uncertainties from the external environment. We will focus on the key areas of economic development, providing more financial services to the real economy. We'll focus on five priorities, and we'll continue to improve on comprehensive financial services at an enterprise level. We will focus on the key projects in special infrastructure projects, and we will implement this spirit of urban work confidence by the central government and seize the structural opportunities and implement the consumption stimulus projects, so we can implement the loan project for personal loans and SME loans. We will stay committed to high-quality development, and we will optimize our operational strategy. On the asset side, we will optimize structure and extend duration. On the liability side, we will focus on foundation and control term and lower cost. On the income side, we will strengthen our basic income and explore new drivers. On the services side, we will enhance customer engagement and product portfolio, so we can build market competitiveness. We will prevent risks and build strong risk mitigation mechanism. In risk prevention, we will improve our ability to promote development with optimized credit policies and loan-granting policies, so customers from tech companies can play a better role, and we will focus on real estate, inclusive finance and retail finance in risk control. This year marks the 20th anniversary of our IPO. With your support, our shareholders and with the support of the society, we will focus on our main business, and we will stay true to the financial development with Chinese characteristics, and we will contribute our financial power to the development of China's modernization and will create more value to our shareholders and stakeholders.
Han Jing: Thank you. Mr. Zhang, now we will take questions. We will now open the questions from Beijing and Hong Kong, that will take questions in turns. [Operator Instructions] Please begin. We will now take a question from Beijing.
Unidentified Analyst: Ms. Han from Citi. In your presentation, I'm very pleased to see some improvement compared with the Q1 results, especially in revenue. Can you please expand on the drivers? And what's your outlook for the profit for this year? And what are the further measures that you can resort to boost income further?
Han Jing: Mr. Zhang will take the question.
Yi Zhang: Thank you, Mr. [ Ma ]. This year we have seen marginal improvement in all the business and profit indicators. Operational income and profit before provision has seen positive growth, 2.95% and 3.37%, respectively. ROA, ROE NIM, cost-to-income ratio and capital adequacy ratio have been industry-leading. We have taken the following measures: Number one, we improved on our capability to balance volume and price. We have seen narrowed decline in NIM, and we strengthened high-quality financial services. In the first half, interest-bearing assets have increased by 7.45% on an average daily, that's 1.53 more percentage points than the first quarter. Loan and bond investment have added CNY 2.7 trillion compared with the end of the 2024. That's a record in 3 years, and we focus on key areas in optimizing credit structure among the five priorities. And in infrastructure and in loans to manufacturing industries, we have seen fast growth and the growth rate is higher than bank average. And we strengthened our efforts in traded finance and personal finance. And in personal finance, the growth rate is over 5%, and we have taken a more refined approach in pricing management. The NIM in the first half was 1.4%, and there was only a 1 percentage point down compared with Q1. Demand deposit is 41% and that's industry-leading. Secondly, we fostered new drivers, increasing the contribution from noninterest income. In the first half, noninterest income is at CNY 99.2 billion, up 25.9%. Noninterest income takes up 25.7% of operating income, 4.68 percentage points compared with the last year. On the first half, loan commission and fees have added 4.02%, especially in wealth management, investment banking, asset management and transaction bank. On the other hand, we strengthened our market analysis and transaction strategy leading to higher income in other noninterest income. Thirdly, we have improved our cost management system. In the first half, we have seen a 1.18% increase in operating income; cost to income ratio, 23.72%, down 0.43 percentage points, industry-leading. Fourthly, we solidified the foundation for risk control. We have seen very stable asset quality. NPL ratio being 1.33%, down by 1 bp compared with the last year. We have seen higher risk mitigation capabilities. Provision ratio is up 5.8 percentage points, reaching 239.4%. Looking at the whole year, we remain steadfast with the high-quality development. We will optimize our asset liability structure and focus on comprehensive financial services, and we will strengthen asset quality control, we will remain a stable profit growth.
Han Jing: Thank you, Mr. Zhang. Now we will take another question from Hong Kong.
Unidentified Analyst: From Citibank. I have a question related to NIM. Among the major banks, CCB has very good NIM levels. In Q2, the decline in NIM has narrowed. So from asset and liability perspective, can you please talk about NIM outlook? With several rate cuts, what's the impact on NIM? And when do we expect the NIM to return to a normal level?
Han Jing: Mr. Sheng will take the question.
Liurong Sheng: Thank you for the question. Mr. Zhang in his presentation mentioned that in Q2, our NIM was 1.4%. So there was a month-to-month quarter-on-quarter narrowing that was a 1 percentage point decrease. But if you compare that with our peers, this level is still industry- leading from both asset and liability perspective. On the asset last year, LPR cuts and the LPR deposit rate cuts in May this year, both factors have led to market changes where interest rates remain low. To the industry in general and to CCB, especially, they have some impact on yield on the asset side. There was a 45 percentage points decline in the yield rate of asset side. But on the liability side, as Mr. Zhang puts it, we have strengthened the control of liability asset control, especially on the long-term deposit with long duration and high interest. And last year, in the first half, the interest rate for deposits were down by 32 bp. On top of deposit, we have controlled the liability side with the interest rate down by 34 bp, and we have optimized asset allocation, and we controlled the interbanking assets, and we increased our effort to allow more loans and bond investment. In the first half, loans and financial investments when it comes to daily balances, their share in interest-generating assets have seen a 1.6 percentage point increase. So the higher share of high-yield assets has offset the decline in NIM. Your second question is relating the impact of lower LPR on NIM going forward and the general NIM outlook going forward. Well, in general, both the LPR cut last year and the deposit rate cut in this year have some lingering effect. Given that the pricing of loans have developed faster than deposit rate, so there will be further pressure on NIM in decline going forward. And our stance is that given that the Central Bank is improving a monetary policy framework and especially in promoting transmission mechanism of interest rates, so there are some changes in how they use monetary policy tools. In recent years, in guiding the interest cuts on the deposit side, on the loan side and supporting the real economy, they emphasized the balance between liability and asset side. So in the recent years with LPR cuts, they have resorted to some mechanisms in guiding the decline of interest rates on the liability side. Last year, on top of guiding the interest rate cut on the deposit side, they have also strengthened the self-disciplinary mechanism of interbank deposits. So last year, since Q4 2024, the interest rate in interbank loans have declined even further. And you may have noticed that since the first half of this year, the Central Bank has used better monetary policy tools. They have been more prudent, especially using structural monetary policy tools to guide the banking industry to support key economies. For example, in May, the government came up with the refinancing tools worth CNY 500 billion to support services industry and elderly care. And the use of this monetary policy tools has less impact on NIM. So we believe that when it comes to NIM trend, we believe the decline of NIM will further narrow and we are confident that through our proactive management, our NIM level will be industry- leading going forward as usual.
Han Jing: Thank you, Mr. Sheng. Now we'll take a question from Beijing.
Unidentified Analyst: From China Media Group. I have a question regarding the directions of loans. You have presented on the business results in the first half. What are the key areas that you lend your loan to? And in the first half, what's your arrangement for infrastructure loans in the first half and the second half? And 2 days later, the government will roll out the subsidy for interest rates for consumption loans and are you prepared for that?
Han Jing: Mr. Zhang Yi will answer the question.
Yi Zhang: Thank you. CCTV journalist for your question. The first is about the loan issuance. For the first half of this year, CCB has executed the guidelines and we also stick to the market expansion, support the way economy to transform and upgrade. So we have had a balanced loan issuance. Actually, the loan issuance increased by CNY 1 trillion. It is faster than the industry average and we have supported the real economy. In terms of the direction, the corporate loans increased very fast. And actually, the speed is at 1.59% -- 8.59% and it is standing at CNY 11 trillion. For the personal loan increase, it's quite steady and there is also the domestic loan increase. There are several characteristics. First is the consumption loan is continuing to be solidified, including the personal loan, the personal housing loan and the consumption loan continue to keep a leading position in the industry. In terms of the total amount and the increment of personal loans, it is leading in the industry. The inclusive loan balance reached CNY 1.74 trillion. And for the retail loan, it is also maintaining at a leading level in terms of the percentage. Secondly, we have a very precise direction support, especially on the 5 key areas. The average speed is faster than the industry average. In terms of technology loan, it is also increased by 16.81%, standing at CNY 5 trillion. And for the strategic and emerging industry loans, it is a CNY 3.3 trillion, increased by 18.92%. In terms of some green and low carbon transformation loans, it is CNY 5.72 trillion, with a speed of 14.88%. In terms of digital core industry, the loans is also standing at CNY 852 billion with a speed of 13%. So for the loans, actually, the growth rate is developing at an industry-leading position with very steady growth. Just now you mentioned infrastructure loans. CCB is also born with the mission of construction. We also prosper because of development and construction. So the infrastructure loans is our pillar. Over the years, we have strengthened our capability to strengthen the infrastructure development of the country. And we also stick to the whole cycle loans and the related services. We have also enhanced our financial services to the infrastructure development and the related loan growth is also higher than the industry average. It also increased by 0.23 percentage points on a Y-o- Y basis for the second half of this year with the key national projects execution and the application of some dedicated and earmarked bonds, there will be better results. We also have taken a more powerful KPI policy and optimized some credit loan policy, and we also have the white list to be included in our head office. We had the related mechanism to support the infrastructure loans and the results will be more obvious for the second half. Your third question is about the personal retail loans -- consumption loans and the service sector loans. For the personal consumption loan, we attach high importance. We also made our whole bank deployment. We think that the policy issuance will decrease the cost for the people to file loans. There will be a leverage effect for more loans to the consumption area. And we should also have -- we should also identify the real needs from the people and try to integrate the loan issuance to the consumption scenarios, try to improve high-quality financial services so that the bonus of these national policies will be released in a better way, and the consumption potential will be fully released. So that's all of my answer to your questions.
Han Jing: Thank you Mr. Zhang. Next question will be to the Hong Kong venue. The gentlemen from the left-hand side on the fifth row. Thank you.
Jia Wei Lam: I'm from HSBC. I'm Gary. I'm an analyst. We noticed that for the second half, your bond investment also increased to -- from CNY 10 trillion to CNY 11 trillion with a relatively high speed with fluctuation of bond market, how you make your plans for bond investment? And we also noticed that the Ministry of Finance also had some policies on the stock market stamp. So that -- will that affect your bond investment?
Zhihong Ji: Thank you for your question. For the first half, the landscape is having two characteristics: First, low interest, and then there is the some fluctuation on both sides. So we have also combed our thoughts and optimized our policies. First, we actively participate in the real economy, providing various supports. For the financing amount, it is around CNY 8.8 trillion. This amount is higher than last year. We try to guarantee the smooth issuance of the local bonds and the national bonds so that the financing demands of the real economy can be better met. So we try to leverage our role as a big commercial bank. And the RMB bond investment also increased by CNY 1 trillion as compared with last year. For the incremental, it is mainly flowing to the national bond, local bond and the corporate bond. The percentage of these three types takes up is 92%. And in terms of a green bond investment, it is also increasing by several times. Secondly, our strategy is more proactive. The total bond investment scale is at CNY 11 trillion. It is quite a high level. For these such scale, we have to take a more proactive managing policy. And for the first half, affected by various internal and external factors. The interest rate is also fluctuating. We also put emphasis on the structure of the inventory, try to adjust various structures. The percentage of treasury also increased by 1 percentage points or the national bond. We also seized the opportunity of the markets and try to optimize the structure of the secondary market investment. And we have also kept a leading position in the industry in this regard. And we also try to improve the capacity of the market -- as a market maker. Our country has also -- is also the world's second largest bond market. So we try to improve our capacity as a market maker. And we also increased the percentage of the financial assets with a market value. It also increased by 6.5 percentage points. And we also try to expand our services of Panda bond and various other credit bonds. The customer volume also increased by 75%. And we also participated in the multilevel bond market development through various ways and we try to improve our services, increased the types of the technology-related bonds. And the position also increased by CNY 14 billion from our customer side. And in terms of scale, we are also ranking the first. In terms of the underwriting volume over CNY 400 billion. We also promoted the facilitation of bond market development, try to push forward the opening up of the capital market. You also mentioned another issue. Recently, for the newly issued national bonds and local bonds, there is a new policy. With a new policy by the Ministry of Finance, the overall bond market is very smooth and steady and the impact actually is quite neutral for CCB. We try to adjust -- we think that this policy is quite beneficial for the inventory bonds. And our percentage of these type of bonds is 79%. So in the future, this policy will be more beneficial for such premium assets. In the future, we will follow closely the macro policy and these assets development. We will also attach importance to the taxation policy and its impact. And we will continue to make a good role of the market maker and try to improve high-quality transaction services to our clients. Thank you.
Han Jing: Thank you, Mr. Ji. Now we will invite the Beijing venue to raise questions. The gentlemen from the right-hand side to the fourth row.
Unidentified Analyst: I'm from Guangdong Development Securities. I'm [ Lijun ] I want to ask a question about deposits. Can you elaborate on the increase of deposits, what measures you have taken? And with the interest cut environment, what kind of measures will you take to stabilize and increase the deposits?
Han Jing: Thank you for your questions. I will answer this question. Marks once mentioned, deposits is always important for a bank, CCB has always put deposits as the pillar of our bank, especially in recent 2 years, the interest rate is on the down trend. So the deposit balance is a benchmark for high-quality bank. For the first half of this year, the deposits of CCB is steady with optimal structure and also with optimal interest rate. Mr. Zhang also introduced. And for the first half, the two deposits volume is also increased by CNY 1.76 trillion with a total amount of CNY 30 trillion and the interest payment ratio also decreased by 32 bp, the increasing ratio is also at the industry-leading position. We have several measures. First, we should also emphasize on the expansion of our talent pool, we have to expand more of our customer base. We have always taken this as our basic principle. For the first half, our corporate customers is over 12 million and our personal customers is 777 million. This is the basis of our achievements. Secondly, we must adapt to market dynamics with more innovative products so we can create a closed loop of all industrial chains. As Mr. Zhang put it, we need to adapt to market changes to corporate customers to personal customers. We need to take an integrated approach. Through different scenarios and platforms, we must enhance customer engagement so we can connect ecosystems of customers. And vertically, we need to extend our industrial services chain and supply chain. As for clusters of industrial products, we will make steady progress with marketing services. So through this closed loop, our product mixes will be integrated into every step of their production process. So the funding of the customers can be kept in this close loop. So this will lay a good foundation for our low-cost deposit growth. Thirdly, we will leverage on technology and data, especially AI as an enabler, so we can target customers in custom profiling and marketing. This is true in both personal and corporate finance. We have customer insights and we can identify right products and services. For example, as for long-tail customers, we will resort to good management. In the first half, we have added CNY 130 billion of new corporate loans and in retail business through robotics services, we have seen renewal of 95% of our existing services. This is not an easy job because we are talking about a trillion level size in across the bank without technology, without data, this is impossible. Fourthly, we need to adapt ourselves to the new market reality that lower deposit interest rate, the customers are going for multi-asset in their asset management. By the end of June this year, the AUM in our personal finance exceeded CNY 22 trillion and to customers -- corporate customers, the total assets amounted to CNY 12.8 trillion. We have added 4.48 million customers in personal wealth management services and we have seen added value from personal customers of CNY 1.7 trillion. So with steady deposit growth, another indicator that I'd like to share is that we have a higher contribution from demand deposits in the first half. Demand deposits exceeded 30%, a 15% year-on-year growth. That means through our innovative management systems, we have seen higher share in demand deposit, which is a bell weather for a good customer relationship and it's also a good sign for a bank's integrated service capabilities. Going forward, CCB will keep a close eye on market dynamics and especially in capital market when people have higher demand for wealth managed services, we will foresee the trends of the capital market. So we will move with this trend and further innovating our services, so we can lay a much solid foundation for deposit services. In this way, CCB will improve its capabilities to serve the real economy. And that's what I wanted to say for this question. Now we will take another question from Hong Kong.
Unidentified Analyst: From Phoenix TV. I have a question related to asset quality. In the first half, the asset quality was stable. Could you please talk about which measures you have taken? And what are the features of the asset quality in the first half? And what's your outlook for asset quality in the second half?
Han Jing: Vice President, Mr. Li would take the question.
Jianjiang Li: Thank you. CCB has always committed itself to risk control. And we will take a visionary approach in risk control. By the end of June 2025, NPL ratio was 1.33%, down by 0.01 percentage points. Special mention loans 1.81 percentage points, down by 0.08 percentage point compared with the same period of last year. We have seen stabilized asset quality. Provision coverage ratio is 239.4%, up 5.8%. We have maintained very good risk mitigation capability in key areas, in real estate aside from meeting the demand for financing from the industry, we have deeply analyzed the dynamics of risks, and we have strengthened monitoring so we can prevent these risks by end of June NPL ratio from a real estate industry is down by 0.05 percentage points compared with the end of 2024 in inclusive finance. Given the risks in recent years, while we are supporting consumption and support SMEs, we are also enhancing our risk management system and building a better risk management system, so we can embed this risk control tools in our credit policy and process, and we are strengthening different processes from warning to loan collection, so we enhance the management of risks from end to end. We can increase the efficiency of risk control so we can guarantee the stable development of our business with stable and steady measures in risk control. The asset quality of a bank has to do with the real economy, but it's also closely linked to its risk control capabilities. On a macro level, in the first half, we have seen very steady economic progress with sound, prudent macroeconomic measures. And in some key areas, the risks have been mitigated steadily. To CCB, we will continue to monitor our credit policies, and we will go for differentiated policies, and we will enhance our credit policy. We will keep a close eye on key areas and take different measures to mitigate risks and further solidify the foundation of risk management. Going forward, in the second half, we will implement the instructions from the Party Central Committee and the state control on mitigating financial risks, and we will enhance risk control adjust structure and strengthen our own risk mitigation capabilities. So going forward, in the predictable future, we can maintain a stable indicators and we have abundant risk mitigation capabilities.
Han Jing: Thank you, Mr. Li. And next question will come from Beijing.
Unidentified Analyst: From Economic Journal. CCB has the first-mover advantage in financial technology or fintech, so in digital technology and digital economy, what's the latest progress? And is this work efficient and what's our next step plan?
Unidentified Company Representative: Mr. Lei will take the question.
Ming Lei: Digital transformation, fintech and serving digital economy. These are the responsibilities of our bank endowed by the Central Committee of CCB and also one of the important drivers behind high-quality development, we will implement government instructions and focus on the five priorities, solidifying the foundation for digital transformation and support digital services and the digital economy. There are four major areas. Number one, the foundation for digital economy will be strengthened. After the transition to distributed system, we have seen higher system capability. And the processing time is reduced by 30% and our integrated transaction handling capability is doubled, and we proceed with AI technology, and we have thousands -- billions of parameters in CCB large language model. In risk management, our smart assistant will provide end-to-end immersive service to customers and our special customer managers can serve more customers from 200 to 600. Our AI assistant can cover different services, financial analysis, assessment. They can complete financial analysis report in minutes, not hours, and it takes only 40 seconds to generate financial assessment report and 80% of our personnels are using AI in coding and 30% of the coding is used in reality. At the same time, we strengthened the governance of enterprise level data. So data safety and security and quality can be managed systematically. In the first half, we have seen an 8% increase in the users of AI services, especially in product innovation, risk control, et cetera. So we have more multiplying effect. We use CPU distributed time technologies to increase the computing power by 25%, so we can use resources more efficiently and the technologies are greener. Secondly, we have enhanced our digital ecosystem. We strengthened our mobile app as the main service platform, and we continue to optimize customer experience, so we have more new products. And when it comes to healthy life, we focus on consumption, financing and personal financing so we can allow customers to use our financial services in different scenarios. By the end of June, these two platforms combined have served a 530 million customers. Monthly average customers, active customers reached 243 million, up 44.4%. We have wealth management customers on our mobile banking of 40 million, up 14.75%. And we have strengthened our RMB operation system. By the end of June, the personal wallet and corporate wallet for digital RMB have increased by 9.96% and 10.73%. The accumulated number of consumptions have increased by 16.75%, reaching 522 million, leading the industry. Thirdly, in digital operations, we have made huge progress, especially in personal customers. By the end of June through different steps of our process from monitoring to customer access, we can serve 62.57 million customers, a 6x increase in 3 years. We have customer managers serving 18,000 customers and the AOM online is 10% higher than offline, and we are strengthening the operational management system at an enterprise level, so we can improve customer experience. We have enabled our customers to finish their services at one go and leveraging on ICR knowledge spectrum and other new technologies, we can enable the digital technology used in opening foreign currency accounts and other services. Our risk monitoring platforms have supported our subsidiaries to mitigate risks. 98% of our customers have been able to send warnings to the bank before the risks were exposed. Fourthly, our highly efficient services can enable the development of digital economy. By the end of June, the loan to core digital economic sectors have amounted to CNY 852 billion, up by 13.44%. We offer Internet companies, small- and medium-sized companies with different services, for example, payment, invoicing, wealth management and data, and we will continue to upgrade our supply chain finance, so we can create all process of supply chain in the first half. In total, we have served 132,000 customers with funding support of CNY 688 billion. The financing loan is CNY 782 million. We will continue to strengthen the digital transformation and promote the low-carbon green finance and digital center development. We will also try to release the power of the computation and algorithm, try to promote the systematic development of AI with the systematic application and also the database development at the corporate level. We will also have the whole chain systematic digital transformation to contribute our power to the digital transformation of the country.
Han Jing: Now we will hand over the question to the Hong Kong venue. The lady from the fourth row on the left-hand side.
Unidentified Analyst: I'm from Credit Suisse. I want to ask a question about the fee income. I also noticed that for the first half, your net fee income also has a positive growth of 4%. What is the driving force of this growth? How do you look at the whole year prospect? And what are the measures to promote the better performance of fee income growth?
Han Jing: I will invite Mr. Sheng Liurong, our CFO, to answer.
Liurong Sheng: Thank you for your question. You are the old friend of CCB. Thank you for your support. So for the first half, of this year, we also acted according to the flow of the policy and the market and try to improve our service capability and try to create more fee income. Just now, Mr. Zhang also brief to you, for the fee income, we realized CNY 65.2 billion, with an increase of 4%. You mentioned what -- you asked what are the influencing factors? There were three actually. First, our customer base continues to be enhanced and solidified. The central government encouraged the banks to strengthen the support to the physical economy. So with such macro policy, we increased our expansion and outreach to the customers and projects. We continue to expand our customer pool. There were some statistics. For example, for the first half, our credit customers exceeded 100 million. For the wealth management and private bank customers also increased over 20% by growth. Our corporate customers in RMB settlement also exceeded 70 million. The increment is nearly 1 million. We also have a system called [indiscernible] . So this is the investment banking service. This is about providing the financial consultancy services to our corporate banks. And in this system, we have over 70,000 customers. So we have realized the fee income increased because of this customer base expansion. Secondly, we also improved our service capability, for example, to the private banking customers through digital operation and linear management, our third-party payment also contributed over CNY 10 billion then in terms of the fee income. And we also increased our coverage of the products. So the whole corporate customer-related income is also very steady. We are also leading in the industry. Just now President Zhang also mentioned for the first half, we also increased our loans to the physical economy, especially for some key projects and key regions. And in the meantime, our loans, the investment banking business and the engineering consultancy services also increased the income. The third factor is we see the opportunity of the recovery of the capital market. For the underwriting fund business, the growth is over 20%. We also have the CTS no matter from the volume of the customer or the volume of the deposits, they also realized a very good increase. For CTS income, it increased by over 40%. For the insurance business, -- for the first quarter, the volume increased, but the income has not realized positive growth and for the second quarter, there is very positive results, we realized both positive growth in terms of the volume and also the customer and the income increased by nearly 30%. So because of -- thanks to these three factors, the fee income increased very positively and it also contributed to the optimization of our income structure. I will explain in two aspects. First, as just mentioned by Mr. Zhang, our noninterest income also takes up -- represented 25% of the whole income. For the fee income actually, the fee income and commission income represents 16.9%. Actually, Ms. [indiscernible] you are a professional analyst, what does it reflect? I think you are very -- you can tell that. It shows our light asset, percentage is also increasing. Another factor is that we have increased some new function. For example, the wealth management and investment banking, the income of these areas also exceeds the 60% of the whole fee income. For the next step, we will continue to stick to our principle putting the customer at the center, improve our service. We will try to do two solidification and two improvements. For the solidification, we will solidify our basic -- our fundamental capability and policies. We will try to stimulate the internal demand and promote consumption. For the second half, we will increase the business on credit cards, on consumption and also several key and hot areas like travel and tourism consumption. We hope that through these aspects, we will increase the income of credit card business and the related business. For the third-party payments, the income is also increasing. And in terms of the products and the settlement system and also the cash management system, we will continue to improve, to optimize in order to elevate the customer experience and consolidate our fundamental capability. For the two improvements, we will first improve our wealth management capability. The other is our corporate financing service. For the wealth management, we know that there is high demand. So for the next step, we will continue to improve our consultancy and investments research capability, have a more precise customer profiling and based on that, we will customize the asset allocation policy to the customers based on their risk appetite. And through that, we try to improve the fee income further. And for the corporate wealth management, we will also put forward some specified resolutions and try to meet their wealth management demands. Another is, we will also try to improve our financing service capability to the corporate customers. We know that this year marks the final year of the 14th 5-year plan and the starting of the 15th 5-year plan. So the -- for the 15th 5-year plan, there were also some projects unfolding. President Zhao also mentioned that CCB is born with the mission of construction. So we should emphasize on these businesses. For example, for some incremental projects, we can provide the consultancy, consortium and the investment banking services. These can bring about new income. The other is that for the inventory of the fund, we can -- we have a stable cash flow, so we can, through these aspects, bring about the new growth of the fee income. So thank you.
Han Jing: Thank you. We will have the question from Beijing. The lady from the third row.
Unidentified Analyst: I'm from [ Xinhua ] News Agency. We know that for the high-tech companies and the related companies are also developing rapidly. So what is the measures and policies CCB has put forward to support these high-tech companies?
Han Jing: Thank you for your question. I will answer this question. Just now the journalist from Taiping also mentioned that CCB has an advantage on fintech and digital economy, actually, we also have the preemptive advantage on technology finance. We're very happy to see that over the years, the high-tech companies and tech companies are booming rapidly. CCB, if you look at our history, I think many investors are very familiar with the CCB, the analysts, too. If you look at the history of CCB, we emphasize on innovation. This is in our DNA. For example, in tech finance, the central government has put forward the policy to -- on the innovative -- innovation of the industry and finance. CCB is also among the first to establish the technology-related department, and we also have the innovation of related products and structures, especially from this year, our party secretary also attach high importance. We convened the meeting. And we have this systematic action plan for the technology finance. And then the central government convened a meeting and mentioning that the technology innovation and industry innovation should be integrated in a deeper way. So we feel that CCB has seized the focuses. We made some preemptive arrangements already. And for the positioning of our bank, we want to become the top choice. We will start from this position, try to do a good job in serving the technology finance. Our balance also reached CNY 5.15 trillion. The increment also reached CNY 741 billion. Now the percentage of technology loans is 18.78%, up by 1.7 percentage points. We have over 300,000 technology corporate customers. This is also leading in the whole industry. We also have found the high-tech foundation with a scale of several hundred billion and we also have a 77 technology funds with a scale of over CNY 160 billion. And we also have the whole investment of over CNY 90 billion for the technology companies equity investment. In technology companies in our financial services to them, the bank headquarters have identified very clear strategy. And secondly, we have built this customer ecosystem that supports both tech innovation and industrial innovation. On top of our prior experience, we will extend our services to research institutions and national laboratories, namely this fundamental research capabilities. And on the other hand, our services will be extended to local industrial funds and venture capitalist, so we can pull everything together, financial capital, industrial and social capital, so we can form the national task force of patient capital. This is how we can lay a good foundation for supporting tech companies with commercial and investment banking. In this way, we seized the opportunity of RSA, and we work with 18 provinces in collaborative projects and we work with NDRC, especially their special fund for major FIs. And to serve national strategic industries, we can mobilize billions, hundreds of billions of RMB of social capital, so we can build this customer ecosystem. And secondly, we can build this integrated commercial and investment banking product mix that combines technologies and whole life cycle management of customers with our complete product portfolio, we can offer an integrated service package so we can offer equity loans for the tech startups, and we can offer collateralized loans for intellectual property if any of them have the demand for technology transfer. So we can serve these companies in every phase of their lifetime. We have complete product portfolio and the information which is available online. And thirdly, we will build this ecosystem where we can have real-time interaction with our customers and the transaction can be carried out real-time as well. On our website and our mobile banking app, customers can enjoy real-time interaction with the bank. And we have special sections on our website for financial services to tech companies so we can accurately identify customers to improve service efficiency. In this way, we can build this smart brain for technology finance in our bank. By the end of June, Fei Chu Yijao saw over 340,000 customers, registered customers. We have 6,200 projects, and total funding approved was CNY 370 billion, and the successful matching ratio is 90%. So our tool has withstood the test of time and market, and we created this Huidongni mobile service platform for inclusive finance, so we can offer offline and online financial services. And fourthly, CCB has created this huge network that covers 5 layers with the bank headquarters and outlets. For example, we have identified 405 outlets and banking branches that are specialized in technology and this outlet can cover all the areas where their tech companies are thriving. And going forward, we will implement the instructions from the Party Central Committee, and we will contribute to our national initiative in building a strong technology powerhouse, so we can make our banks due contribution to that great effort. Not long ago, we announced that -- and we also solicited -- we also received feedback from our investors. And this press conference is also live streamed, we have received comments from investors online as well. All your questions have been covered in the Q&A session. Regarding questions related to real estate, we will select one of the questions to answer. The question goes, since the beginning of this year as the national policies stopped the decline in the proper market, your -- regarding your mortgage loans, how did it fare in supporting the real economy in terms of size, growth and interest rate? And how do you look at the outlook for housing loans for the whole year? Mr. Ji will take the question.
Zhihong Ji: Thank you for the question. Since the beginning of the year, the government has rolled out a series of policies to stop a housing price decline. Different cities have different measures and these measures have paid off. CCB is actively responding to these changes. We strengthened our differentiated approach to regional development supporting our customers in their demand, both as a first-time homebuyer and for housing update. As Mr. Zhang puts it, in the first half, housing loans have increased remarkably compared with last year. We have seen stable outstanding loan amount. By the end of June, the outstanding loan balance for real estate was CNY 6.15 trillion, leading the industry. Speaking of structure, some new changes in the real estate market have created better rooms for improvement. Since this year, secondhand houses have seen higher percentage in total transactions, we took advantage of this opportunity given that secondhand houses have different types and are distributed more evenly geographically. We have extended our service outlets, so we can serve our customers at a higher efficiency to boost the development of secondhand house businesses. In the first half, loans to secondhand buying was leading the industry 20% year-on-year growth compared with last year. Newly added loans have seen CNY 43.6 billion of newly added loans to secondhand houses, outstanding bank loan balances to secondhand housing was CNY 1.89 trillion, the first in the industry. We've also been involved in affordable housing. We offer loans to affordable housing as well. In 2024, we issued the first loan to affordable housing in Changzhou. And on the heels of that, we issued loans to affordable housing project in Dalian, Qingdao, Xial, Fuzhou and Guangzhou. In these new models, we have explored new service areas. As you mentioned, speaking of interest rates, we have seen lower interest rates in mortgage loans. The first half saw 3.11%. Q2, it was 3.08%. So we have been playing this role of stabilizing our society and property market with financial services, and we took favorable measures to stop the decline of housing prices and Beijing and Shanghai governments have optimized their property policies to boost market expectation. The Central Urban Work Conference strengthened the transformation of dilapidated houses and urban villages and this will lead to more demand for good houses. We will seize the opportunities of these favorable policies, so we can extend our financial services. We can help our customers in building this close loop of financial services for -- especially in housing loans, so we can continue to strengthen our capability in this area. We expect that the performance of housing finance will be better than this year.
Han Jing: Thank you, Mr. Ji. Today is Friday, we believe you have some other appointments and commitments in the evening. So we will close the Q&A session here. Thank you for your participation. The management had frank, candid and professional communication on different topics. We hope that our presentation and answers can help you better understand our strategic initiatives, business performance and development of CCB. If you have further questions, please feel free to get in touch with the Board office and our PR Department. In the end, I wish all the leaders, guests, analysts and investors and friends from press, I wish you good health, I wish you good business and I wish you a wonderful weekend. Thank you. This close the press conference today. [Statements in English on this transcript were spoken by an interpreter present on the live call.]