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Chengwen Zhuo: [Interpreted] Investors, analysts and friends from the media, good afternoon. Welcome to the Bank of China 2025 Interim Results Press Conference. I am Zhuo Chengwen, Board Secretary of BOC. Today's press conference will be co-hosted by me and Ms. Yu Ke, BOC Spokesperson. In light of recent major event preparations in Beijing and considering everyone's schedules and participation preferences, this press conference will be conducted via live broadcasting live webcast, we extend a warm welcome to all participants joining online. Firstly, allow me to introduce the bank's leadership in attendance. Mr. Zhang Hui, Vice Chairman and President of BOC. Mr. Cai Zhao, Vice President; and Wu Jian, Vice President, Jinliang Zhang, Vice President, and [ Liu Jin ], Member of the Party Committee. Additionally, Madam [ Zhang Ran ], representative of our bank's independent directors is also participating online. Our 2025 interim results have been publicly announced today, the presentation materials are available for download on our official website or can be viewed on the live streaming page. All financial figures mentioned today, unless otherwise stated, are prepared in accordance with the International Financial Reporting Standards, IFRS. Today's agenda consists of 2 segments: results presentation and Q&A session. First of all, let me invite Mr. Zhang Hui, President of BOC, to present our interim results.
Hui Zhang: [Interpreted] Dear investors, analysts and friends from the media, good afternoon. Welcome to Bank of China's 2025 Interim Results Press Conference. Thank you for your long-standing trust, attention and support for the Bank of China, BOC. Please allow me first to briefly introduce BOC's operating performance for the first half of 2025 and the full year outlook. Subsequently, together with the attending members of the senior management team, we will engage in in-depth discussions and exchanges on the topics you are concerned about. And just now the senior management team members were already introduced to you may notice there are some new faces. And we have a stronger leadership now at the senior management team of BOC. And please rest assured you will have higher return as investors. Since the beginning of this year, BOC has thoroughly implemented the decisions and deployments of the CPC Central Committee solidly advanced various management and operational tasks while serving high-quality economic and social development, achieving positive results. First, steady progress in financial performance. The group achieved operating income of RMB 329.4 billion, a year-on-year increase of 3.61% with net fee income growing 9.17% year-on-year. Post-tax profit reached RMB 126.1 billion, and post-tax profit attributable to the bank's shareholders was RMB 117.6 billion, remaining stable year-on-year with the trend of change continuously improving compared to the first quarter. The NIM stood at 1.26%. The ROA was 0.7%. ROE was 9.11% and the cost-to-income ratio was 25.11% all maintained within reasonable ranges. Second, steady growth in assets and liabilities. Total assets reached RMB 36.79 trillion, an increase of 4.93% from the end of the last year. The proportion of high-yielding assets such as loans and bond investments increased by 2.32 percentage points. Total liabilities amounted to RMB 33.66 trillion, an increase of 4.85% from the end of the last year. The proportion of customer deposits to total liabilities increased by 0.7 pps. The market competitiveness of RMB-denominated average daily deposit domestically has improved year-on-year and the leading advantage in foreign currency deposits has expanded. Third, improve the quality and growth in customer base. The number of total corporate customers, total individual customers and the total financial assets of individual customers steadily increased customer structure optimized with the number of medium- sized corporate credit customers offering higher comprehensive returns, increasing by 13.48% from the end of the last year and the proportion of mid- to high-end individual customers rising by 0.16 pps. Fourth, solid and effective risk prevention and control. Asset quality remains stable with the NPL ratio at 1.24%, down by 0.01 percentage points from the end of the last year. The NPL coverage ratio was 197.39%. The bank was among the first to complete the replenishment of RMB 165 billion in core Tier 1 capital. The core Tier 1 CAR and CAR reached 12.57% and 18.67% respectively, up by 0.7 percentage points and 0.69 percentage points from the end of the last year. Before the capital increase, laying a more solid foundation for BOC's medium- to long-term development. Fifth, continuous commitment to shareholder returns. We formulated and implemented market value management measures, focusing on stable operations to continuously create long-term investment value for shareholders, efficiently completed the interim and financial -- final dividend for 2024 with a total distribution of RMB 7.36 million. The Board meeting held today proposed an interim dividend for 2025 of RMB 1.094 per 10 shares totaling RMB 35.25 billion, maintaining a high payout ratio of 30%. Specifically, in the first half of the year, BOC proactively addressed the new situations, responding to new challenges with solid and effective measures and seized new opportunities with an innovative spirit, achieving new breakthroughs in its own high-quality development, mainly reflected in the following 5 aspects. First, continuously optimize the financial service supply fully supporting high-quality real economy development. By the end of June, RMB loans issued by domestic institutions increased by RMB 1.41 trillion from the end of the last year, up 7.72%. We increased the financial support for key areas such as 2 major projects and new 3 initiatives. The balance of equipment renewal loans exceeded RMB 90 billion. Loans directed to the manufacturing sector grew by 12.99% from the end of the last year and loans to strategic emerging industries increased by 22.92%. We actively supported initiatives to boost the consumption with personal consumption loans growing by 15.42%. We adhere to the 2 unwavering supporting the development and growth of the private sector, the private economy with loans to private enterprises increasing by 12.93% from the end of last year. We helped stabilize the real estate market, meeting rigid and upgraded housing demand. We supported the healthy and stable development of the capital market with credit services for listed company stock repo and increased plans in maintaining a market- leading position. Second, we solidly executed the 5 key areas of finance, supporting the development of new quality productive resources according to local conditions. We seized the market opportunities such as AI and M&As of tech enterprises. We innovated technology, finance products like computing power loans. The balance of technology loans reached RMB 4.59 trillion. The number of credit customers among technology enterprises exceeded 160,000. Comprehensive services provide cumulatively exceeded RMB 780 billion. The intended scale of the Sci-Tech Innovation final fund, exceeded RMB 50 billion. The balance of green loans increased by 16.95% from the end of last year. Green bond investment and underwriting scale remained the highest among Chinese financial institutions. We solidly advanced the implementation of the financing coordination mechanisms for small and micro enterprises. The balance of inclusive loans of SMEs reached RMB 2.65 trillion with the number of borrowing enterprises surprising 1.72 million. The number of credit customers and coverage rate for national and provincial level little giant specialized and sophisticated enterprises that produce new and unique products led the market. We further increased the financial support for the pension industry ranking high in the market in terms of the number of enterprises, annuity individual accounts and the scale of enterprise new custodial funds. Digital finance accelerated business empowerment depending on the application of new technologies, like the number of MAU of personal mobile banking grew by 8.59% year-on-year consumption volume by digital RMB remained market-leading position. Thirdly, we fully elaborate global presence and comprehensive operations to support high-level opening up with further increased the financial supply for stabilizing foreign trade. The volume of international settlement handled by domestic institutions exceeded USD 2.1 trillion up 16.5% year-on-year, maintaining a market-leading position in international trade settlement business. We proactively serve the new forms of foreign trade formulating service loans to -- service plans to support cross-border trade facilitation. The total transaction volume of cross-border e-commerce increased by 42.1% year-on-year. The leading advantage in cross-border RMB business remain solid. The number of direct and indirect participants in the cross-border interbank payment systems, CIPs and the number of RMB clearing banks remained the highest among peers. Cross-border RMB clearing volume exceeded RMB 560 trillion, maintaining a global leading position. We actively serve going global and bringing in such strategies. Guided by the 8 actions for high-quality Belt and Road cooperation, we supported a major landmark projects and small yet smart livelihood programs. We ranked first in underwriting volume for Panda bonds, Chinese offshore bonds and offshore RMB bonds. The full market size of cross-border custody continue to rank first among Chinese financial institutions. Overseas commercial banking accelerated transformation development with continuous optimization of the asset and liability structure, overall improvement in basic product service capabilities and strengthened IT support. Operating income and pretax profit for the first year for the first half of 2025 increased by 9.02% and 10.88% year-on-year, respectively. Comprehensive operations involved in quality -- improved in quality and efficiency with core business indicators of several subsidiaries advancing BOC Wealth Management moved up 2 places to rank first among the big 4 banks. BOC Aviation's owned fleet value ranked first in Asia, BOC International's IPO underwriting ranking rose to 6 in the market. Fourthly, balanced the development and security, fully preventing and mitigating financial risks. We deepened the comprehensive risk management system, conducted forward-looking control of various risks and strengthen systematic risk prevention. We enhanced the credit asset quality management, steadily progressing NPL resolution, improve the quality and efficiency of a recovery and disposal, and maintained reasonable and sufficient risk buffer levels. We strengthened overseas risk management to ensure the safety of overseas assets and personnel effectively responding to financial market fluctuations proactively conducted special stress tests in key areas. We accelerated digital transformation, continuously improved the group's technological operation level. We consolidated basic technological capability solidly, advanced infrastructure and construction with the total number of servers in the group's cloud platform reaching 40,000. We deepened the innovative application of new technologies, released the AI application and promotion work plan and utilize the large model LLM technology to empower over 100 scenarios across the bank. We also deepened efforts to reduce the burden on grassroots levels with enterprise-level RPA covering over 3,300 scenarios. Going forward, BOC will continue to focus on its main responsibilities and businesses fully leverage its global presence and comprehensive operations, solid advance is on high-quality development, while serving the real economy and lay a solid foundation for the conclusion of the 14th 5-year plan period and the commencement of the 15th 5-year plan period. First, we will optimize our financial supply and improve the diverse and professional product and the service system. We will actively serve domestic demand expansion, consumption promotion and investment stabilization. We will increase credit allocation to key areas and weak links. We will support enterprise production, operation and job in stabilization and expansion through finance. BOC will continuously improve the product and service system highly adaptable to new quality productive forces focused on the overall building modern people's cities supporting the stable and healthy development of the real estate market through finance. Second, we will leverage advantages and characteristics to enhance global layout capabilities and international competitiveness. We will strengthen financial support for key regions and areas of Belt and Road cooperation will improve the quality and efficiency of services for Chinese enterprises going global and foreign investment coming into China. We'll support the construction of the RMB clearing network and expand the leading advantage in cross-border RMB clearing. We will fully meet customers' diversified investment and financing needs in a low interest rate environment and enhance the adaptability and competitiveness of comprehensive financial services. Third, we'll focus on risk prevention and control and firmly at the bottom line in preventing systematic financial risks. And fourthly, we will strengthen asset quality management, enhance forward-looking digital market risk, improve the quality and efficiency of internal control and compliance management, accelerate digital transformation continuously consolidate the foundation for high-quality development and deepen the application of new technologies like AI, agilely respond to market and customer needs to accelerate product innovation and promotion. Friends, facing a complex and changing internal and external environment, all employees of BOC will unite and overcome difficulties and make progress to repay the trust and support of our customers, investors and all sectors of society with stable operating performance. Thank you. And your questions are more than welcome.
Meizhi Yan: Sure. Thank you for giving me the first opportunity. I'm Yan Meizhi from UBS. First of all, I would like to congratulate BOC for achieving very prudent results in the first half of the year. So since the beginning of this year, the bank has faced complex and changing macro environment. So how does the management evaluate your performance in the first half of the year? Just now, President Zhang has mentioned key areas of work for BOC. So given the latest domestic and international situation, what's your business objective and the strategy for the future? Chengwen Zhuo Company Secretary Thank you very much for your continued interest in BOC's operation strategy, I will address this question to Mr. Zhang.
Hui Zhang: Thank you for your question. Just now I have given you a comprehensive introduction of the business results. I've mentioned that in the first half, the financial benefits of BOC was steady and the assets and liabilities have steady growth. We have done a good job in risk control and improve the quality and quantity of our customers. And this has been fully recognized by everyone here. Now, how do we see the results of the first half of this year? Well, I think there are 5 areas. First, we have fully implemented our responsibility as a state-owned major bank. We have implemented the spirit of the Central Politburo Committee meeting on April 25, focused on the 2 majors and 2 new areas and play a bigger role in serving the real economy. In terms of fulfilling our responsibilities as a major state-owned bank, BOC has made our own contribution and efforts. Also, it has laid a very good foundation for our continued business growth. For example, RMB loans of domestic institutions increased by RMB 1.41 trillion. Also our loans to -- mid- to long-term loans to manufacturing sector and to the business sector have outpaced our peers. We've also implemented the consumer support policy and the loans for trading consumption have increased nearly threefold compared with the last year. Also in Technology Finance, our new financing has exceeded our peers. So this is the first thing. Second, we have consistently created very good shareholder returns. Ever since BOC's listing after the joint stock reform, BOC has delivered over RMB 940 billion of dividends. So since 2015, the dividend ratio has remained at 30%, which is very high. And the investors fully share the business results of the BOC. Especially since the beginning of this year, we have overcome the difficulties and challenges to promote high- quality transition in a low interest environment. And the operating income increased by 3.61% year-on-year and is expected to maintain at this level among the state-owned banks. Third, we have actively seized the market opportunities brought about by the changing external environment. Actually, this has brought a lot of opportunities for the transition of commercial banks like us. We have seized the opportunities of implementing the package of financial policies. And we have introduced a series of comprehensive service plans for AI and the going Global of businesses. We've also seized the opportunities of the recovery of the capital market, and we have built the open wealth management platform and developed the Wealth Management business. And this fees from the wealth management business have also achieved rapid growth and outpaced the market. And this is also hedged the insufficient credit demand and also helped us address the profit and income difficulties in the low interest income. Number four, continue to consolidate our global advantages. We have consistently enhanced the resource input for the overseas institutions. Now we cover 64 countries and regions and established a financial service network of one access and global response. In the first half of this year, we have consistently optimized the One bank, One policy strategy for overseas institutions and the contribution -- the profit contribution of overseas institutions reached 29.76%, up by 2.12 point percentage points year-on-year. And #5, we have strictly observed the bottom line of risk compliance. We have been among the first banks to complete the replenishment of RMB 165 billion of CET1. We have improved and deepened the comprehensive risk management system development and have maintained a very good and reasonable level of risk compensation capabilities. We've also improved the overseas risk shock response mechanism and has carried out an exercise for responding to extreme scenarios so that we can better control risks for the overseas institutions. In the second half of the year, we face some shared pressures and challenges as our peers, but we are competent to address those challenges and to achieve steady operation results. I think it can be seen from 3 aspects. First, in the domestic low interest environment, this is our common challenge. We will have to continue to improve our asset and liability structure and further expand the noninterest income. Second, the Federal Reserve will probably start -- will probably start the interest cut. So we need to seize this window period and make sure that the overseas business will make more contribution to our overall business. Third, we will continue to address the risk pressures from inclusive finance and consumer finance. We need to strengthen risk control in key areas so as to ensure asset quality and control risks. Just as you have mentioned. In the interim results release, I have talked about 8 [indiscernible]. We will continue to follow this strategy to carry out our operation work. And I would like to highlight the following for your reference. First, consolidate our advantages to improve our global competitive advantage. We need to leverage our competitive advantage of global layout to offset the low interest rate environment so that our global business will make greater contribution to the group. As you can see in the first half of the year, our global advantage have played a very important role in heading -- in offsetting the risks of the external environment. So in the future, we will improve our global financial markets business, global financial institutions business and to accelerate capacity building for the global custodian businesses so as to nurture new growth points for our business and make us more competitive globally. Second, we need to maintain our net interest income. We need to consolidate the customer deposit base and to increase the size of low-cost deposits. We need to seize the market opportunities offered by the wealth management businesses and to further increase our total financial assets. We also need to reduce the cost of liabilities and so that the low-cost customer deposits and a comprehensive income will play a greater role. Also, we need to expand to more medium to large -- medium-sized credit clients, improve the return on assets. Also, we need to be flexible in investment -- bond investment so as to increase their contribution. Third, coordination for better comprehensive services we need to establish a comprehensive asset management platform for the group. So as to meet the investment and financing needs of the customers in a low interest environment. We need to dive deeper into the Hong Kong market because we have a lot of advantages in the Hong Kong market. We need to fully leverage that, especially investment, insurance and the comprehensive capabilities. Also, we need to establish a technology finance ecosystem so as to expand our early mover advantage in patient capital. And #4, we need to maintain a high contribution of the noninterest income. We need to accelerate strategic transition and promote the development of noninterest business, among interested businesses so as to ensure relatively rapid growth. For personal business, we need to establish an open wealth management platform covering whole group and 4 markets. And for corporate business, we need to seize opportunities of bond issuance, mergers and reorganizations and public REITs. So as to expand the income for the M&A adviser consultants and seize the opportunities in market volatilities and make sure that the financial market business make greater contribution to the group's value. And #5, reduce cost and increase efficiency. We need to focus on intensive operation that is strong front desk, intensified middle desk and efficient back end so as to optimize business procedures and risk control. And second, we need to strengthen the granular management of the financial cost, focus on resource guarantee in key areas and remain committed to strategic and benefit orientation so as to improve the efficiency of investment. Number six, we need to make sure that we have prudent operation. We need to enable digital and smart transformation of the risk management. The management has developed relevant plans, and we are implementing those plans. And just as you have pointed out, inclusive finance, consumer finance has some key risk areas and we need to strictly control the new NPLs and strengthen substantive collection and enhance asset quality control for key accounts. Also, we need to strengthen compliance control for overseas institutions to improve the efficiency and quality of internal control and compliance management. Number seven, remain target-oriented to optimize customer and business structure. For corporate clients, we need to expand more midsized clients and strengthen the digitalized operation system. So as to dig deeper into those clients that offer high comprehensive value. And for financial institutions business, we need to have granular management and operation to target more international clients. And for retail clients, we should target high net worth individuals and leverage our global advantages to play a better role in the asset allocation for those high net worth individuals. And also, this is also an important way to expand our low-cost liabilities. And in terms of business structure, we need to focus on the 5 key areas. For example, technology finance, we need to create an ecosystem and for green finance, we need to have more credit supply for the highway -- high-speed railway in green buildings operation. For inclusive finance, we need to strengthen the financial coordination mechanism for small micro businesses. And for pension finance, we need to enrich our product offerings for the senior citizens and also for technology and digital finance, we need to promote digital transformation. We also need to improve our government financial services so as to create a unique model of BOC in serving the government financial needs. Number seven -- #8, we need to empower our business through digital technology and enhance our basis of self-controlled technology, just as you have heard, BOC and its branches and subsidiaries have made a lot of attempts in digital empowerment and have yielded very good results. And for the group level, we are actually spreading and promoting these practices and have yielded good results. We strengthened the application of new technologies such as AI to improve the efficiency of customer services and management. So in the first half of this year, China's capital market has recovered and both the Shanghai and the Shenzhen stock markets have rallied and bottomed out and BOC has the confidence and capabilities to leverage this capital market recovery to create more value for the investors. And also, I hope that the investors will continue to pay attention and support BOC. Chengwen Zhuo Company Secretary Thank you, Mr. Zhang. Okay. Next question, please.
Shuaishuai Zhang: I'm Zhang Shuai from CICC. We know that we are in a low interest environment. And so net interest income is under a lot of pressure. And that makes noninterest income even more important. So could you give us briefing of the core drivers of the noninterest income growth in the first half of the year and also give us an outlook for the trends in the second half of the year. Will this trend continue? Chengwen Zhuo Company Secretary Thank you, Mr. Zhang from CICC. And I would like to invite Vice President, Zhao Cai to answer this question on noninterest income.
Zhao Cai: Thank you for your question. In the first half of this year, the group achieved a noninterest income of RMB 114.6 billion, including net fee income of RMB 46.8 billion as the domestic commercial bank with the highest level of internationalization and comprehensive operations, noninterest income, such as fees accounts for over 30% of operational income. As Vice President Zhang has mentioned just now, its contribution to the group has been steadily increasing in recent years, playing a positive role in hedging the impact of interest rate cuts domestically and overseas. According to our analysis, this was mainly attributable to the following aspects. First, seizing capital market opportunities to grow wealth management income by serving customers asset allocation needs, proactively optimizing business deployments and expanding total customer financial assets serving the national strategy and policies, our wealth management income continue to grow. Domestically, focusing on the common prosperity goal and prioritizing customer experience, our fund distribution fees increased by 4%. Wealth Management product distribution fees grew by 3.3%, with us as the agent and precious metals income rose by 37%. In addition, the impact of the unified reporting and implementation policy for personal agency insurance was gradually absorbed with significant improvement in distribution volume and fee trends. Meanwhile, capitalizing on active Hong Kong stock market and warming investment environment, agency fees for insurance, stocks, funds, et cetera, in Hong Kong and Macau institutions doubled and investment banking and asset management comprehensive company fees as well as insurance service income from insurance, comprehensive companies both achieved double-digit growth. Second, optimizing comprehensive financial services to stabilize the basic fee income base. We consistently emphasize customer and account expansion, continuously strengthening the business foundation. Domestic corporate settlement fees increased by 5.8%. We closely followed the national proactive fiscal policy and serving -- served customers' financing needs. Our bond underwriting fees grew by 25.3%. Leveraging advantages in foreign trade and foreign exchange business, personal international settlement fees rose by 13%, and spot ForEx settlement fees increased by 2.2%. Thirdly, capturing financial market opportunities to maintain contributions from other noninterest income serving customers' capital preservation needs amid interest and exchange rate fluctuations expanding client fund trading business, driving steady growth in the group's net trading income. We have aligned with the trends in domestic and foreign currency bond markets, opportunities and we prudently conducted operations dynamically optimize the investment portfolio structure, which has led to stable growth in the group's financial investment income. Going forward, as macro policies become more proactive and effective economic growth momentum and vitality will recover faster and financial consumption behavior such as wealth management and payment settlements by residents and enterprises will become more active presenting opportunities for the development of BOC intermediaries business. We'll closely focus on customer needs, prudently grasp market conditions and maintain stable and healthy development of noninterest business. We will work hard on 3 aspects. First of all, wealth management. We will actively adapt to the positive trend in capital markets adhere to the concept of synergized operation of total financial assets, leverage the advantages and channel resources of both markets, that is onshore and offshore markets. Strengthen asset allocation services and enhance all-around revenue generation capabilities. We will enrich the whole group plus home market open wealth management platform vigorously expand fund distribution, agency insurance, wealth management products and precious metals business, achieving value win-win results for customers and the bank. In terms of settlement business, we'll focus on growing account management and settlement needs of market entities. We will strengthen the full chain service capability of transaction banking capitalized on the favorable environment of marginal recovery in consumer demand, enhance the market competitiveness of fast payment products and steadily increase the contribution of anchor type income. In terms of the financial markets business, we'll fully seize the opportunities presented by RMB internationalization, improve emerging market currency services and the offshore RMB product system and strengthen market maker functions. We will provide exchange rate risk management and cross-border investment and financing services, capture the expansion opportunities of global asset management industry in the low interest rate environment and increased income from ForEx settlement, international settlement and custody business. We'll enhance our adjudication of macroeconomics and market trends, balance risk and returns and seize business opportunities amid market fluctuations. Chengwen Zhuo Company Secretary Now the next question.
Katherine L. Lei: Senior management members. I have a question about NIM. The low interest rate environment is a challenge faced by the entire industry since the beginning of the year, BOC's management has implemented a series of solid and effective measures. Can you give us an outlook on the NIM trend in the second half of the year? Sorry, I forgot to introduce myself. I'm from JPMorgan. Chengwen Zhuo Company Secretary Yes, I know you, Madam Lei. Yes. Low interest rate environment is a big challenge faced by the entire industry. And just now when President Zhang made the presentation, he also mentioned that point. And now let's invite President Zhang to address the question.
Hui Zhang: Thank you for your question. Yes, the NIM of commercial banks has always been a focus of attention. In recent years, the NIM of the domestic banking industry of China has generally narrowed significantly and BOC's NIM performance target is no worse than main comparable peers. And now we have realized the target and I know that you are concerned with this question because compared with our comparable peers, our NIM is slightly lower than theirs. So first of all, if you look at the change trend in the first half of this year, our NIM is 1.26%, down 14 bps year-on-year and down 3 bps from the first quarter. So if you look at the quarter 1 and quarter 2 changes, it is a large narrowing margin trend. That is the trend. And when you pay attention to the -- when you follow the operations of BOC, you need to pay attention to the advantages and the characteristics of BOC. You should not only pay attention to NIM, but also the overall changes in our income and performance. As Vice President, Cai Zhao responded to the previous question, compared with comparable peers, BOC's noninterest income percentage in our income is higher, more than 1/3. In the first half of this year, the percentage reached 34.79% that is a very good level compared with our peers in Chinese mainland. And for overseas institutions, noninterest income growth trend is very good. In the first half of the year, the growth was more than 70% year-on-year, playing a positive role in achieving greater shareholder value. So while the operational income is not showing a very favorable picture, our income still -- this income still increased by 1/3 in terms of the operating income. So you should pay attention to the overall changes in the income and performance of BOC instead of only pay attention to NIM. Of course, NIM is the fundamental indicator for a bank and we have made strategic arrangement. First, we need to get the bottom line of NIM. And in the first half, we hedged against the impact of the low interest rate environment. We have conducted forward-looking analysis and taken effective measures. First, we increased asset allocation to enhance fund utilization efficiency. Credit allocation, maintained steady and balanced growth with RMB loans from domestic institutions increasing by RMB 1.41 trillion from the beginning of the year, over RMB 200 billion more than the same period last year. And at the same time, we seized opportunities in domestic and international markets and increased the bond investments. The proportion of bond investments in interest earning assets rose by 2.4 percentage points year-on- year. Our second measure was we continuously optimize the liability structure to effectively reduce liability costs. And the scale of low- cost customer deposits with market competitiveness in improving for 3 consecutive years. And third, we have fully leveraged the global advantages to strengthen centralized management of foreign currency funds. With U.S. dollar interest rate cuts, we dynamically adjusted active financing strategies and we have also smoothen the channels for domestic and overseas fund utilization to fully utilize the benefits of domestic low-cost deposit funds and improve the efficiency of foreign currency fund utilization. Through these measures, BOC's asset liability structure continued to optimize pricing capabilities kept improving, achieving coordinated development of both volume and price. As I have mentioned, entering the second quarter, the month-on-month decline in NIM narrowed significantly. Overall, at present, the main reasons for the NIM decline are the continuous downward trend of LPR since last year. And also another factor is the adjustment of the existing mortgage rate. And third factor is the flat interest rate cuts, which led to a faster decline in asset yield compared to liability costs. It should also be noteworthy that in our operational strategy, BOC fully leveraged its advantages in financial markets, foreign exchange business and actively managed asset liability mismatches in different currencies through ForEx swaps. This indicator is having a lot of impact on NIM. With the same standard we calculated NIM will be increased by 3 bps from 1.26%. And then the year-on-year decline would -- so that will be similar with the whole industry strength. Looking ahead to the second half of the year, from the external market perspective, the domestic banking industry as a whole faces a low interest rate environment and expectations of USD interest rate cuts are heating up. The banking industry's NIM will still be certain narrowing pressures. BOC will be based on its own asset liability structure and business characteristics and fully mobilize various positive factors to play a supportive role in the NIM. First, we'll continuously strengthen deposit and lower management to effectively hedge against the LPR decline pressures. With -- as the RMB time deposits gradually mature and reprice the positive impact of declining liability costs of BOC will gradually emerge effectively hedging against the downward pressure on RMB asset yields. On the other hand, BOC will continue to optimize its product structure. We will intensify efforts in expanding key business -- in expanding key business such as payroll services, fast payments and third-party depository services and grow the scalable cost deposits. Such measures are already yielding results. I'm sure that the low-cost liability scale will be expanded. In terms of the loan business, as I have mentioned, for corporate customers, we will further enhance the strategic expansion of the customer base of medium-sized businesses and also the income from corporate customers. In terms of the individual customers, we'll also enhance personal asset management development so that we can increase the overall level of loan pricing. And BOC will also actively implement regulatory requirements and ensure self-discipline. We will resist disorderly competition. This will be conducive to the deposits interest bearing results and the overall improvement of loan and deposit situation. Second, we should seize the opportunity of high interest rate in the U.S. and increase our investment in foreign currency denominated bonds to improve the efficiency of foreign currency fund utilization. So we are ahead of our peers in terms of our domestic foreign currency deposits and in the future, we will seize this window opportunity and increase our investment in foreign currency bonds and enrich the investment types. And third, leverage our global operation advantages and stabilize the NIM for the group. We will leverage the leading role of the Hong Kong and Macau region and encourage other key overseas institutions to leverage their local market advantages and dynamically adjust their business strategies as to respond to the market interest rate changes and just consolidate the foundation for local operation development and improve the market competitiveness of the main business. So as to make greater contribution for stabilizing the group's NIM. Overall, we should fully seize the opportunities offered by the market and be more proactive, timely and targeted in our management and operation to properly respond to the impact of the low interest environment so as to promote the high-quality development of the group. Chengwen Zhuo Company Secretary Thank you, President Zhang. Let's move on to the next question.
Unidentified Analyst: I'm [indiscernible] in from GF Securities. My question is about asset quality. So since the beginning of this year, the pressure points for BOC's asset quality. Are there any changes about that? And what's your outlook for the future? As for the key industry capacity governance, so what is BOC's credit strategy, credit exposure and asset quality? Chengwen Zhuo Company Secretary Okay. Mr. Liu Jin, please answer this question.
Jin Liu: Thank you for your question. Since the beginning of 2025, BOC has strengthened proactive management of credit risk and improve our granular management of the risks, in particular, we have improved the efficiency of asset quality and management. We have done a good job. As of the end of June, the NPL ratio of the group stood at 1.24%, down by 0.01 percentage points over last year's end and provisioning coverage ratio was 197.39%. And we have reasonable risk compensation capability. Now the pressure mainly come from 3 areas. First, domestic corporate business, mainly the property market risk. From the perspective of new NPLs, the real estate market remains the biggest source of new NPLs but a substantive new NPL has slowed down. As the policies on both the supply and demand end of the real estate market takes effect, we expect that the real estate market will hit the bottom and rally out. And second, for retail business. In the first half of the year, the retail operation loan and consumer loan NPL has increased year-on-year. We expect the asset quality will continue to face pressure for some time to come, and we have taken some measures that is we've strengthened the whole process risk management. And also for such assets, we will have better expectations management. And the third part is about the overseas business. In the first half of this year, the new NPL has declined a little bit, but we are still coolheaded because in the second half of the year, there are still uncertainties in the external environment. So BOC will continue to strengthen the risk judgment, prediction and response and solution in key areas and regions and strengthen the differentiated support for the premium clients and promote the high-quality development of the overseas business. So looking into the second half, we expect that China's economy will continue to see steady growth and development, and the BOC will continue to strike a balance between development and security, and we are confident to maintain high quality and stable development of the group's assets in 2025. As for your second part of your question, for the new policy requirement issued by the State Council. And after the Central Economic and Financial Affairs Committee's meeting in July, the politburo have put forward the requirement to crack down on the unorderly competition of the businesses and promote the capacity governance of key industries. And for BOC, we mainly focus on the key industries such as NEVs and PV panels. And we have just timely adjusted and optimized our credit policies and strategies. We remain committed to a market-based and law-based business development and risk management philosophy, so as to address the structural conflicts and there are several key points. First, implement differentiated strategies for key industries. There are support and there are control measures. For companies with premium capacities, we will provide support for them. And for the backward capacities, we will strictly control the credit supply. Second, we support mergers and reorganizations within the industry, so as to strengthen the consolidation of the lead companies. And third, support the transition upgrading and technological innovation of the key industries, focus on key technology breakthroughs and the nurturing of new growth points so that the industry will become more high ended. Now the overall size of credit extended to key industries at BOC is reasonable and asset quality is stable. And in the future, we will continue to follow the requirement of the nation's industry policies and continue to help address the structural problems in key industries and ensure the steady quality of the assets while preventing risks. We will also actively pay attention to business opportunities of industry consolidation and M&As so as to achieve better business development for ourselves. Chengwen Zhuo Company Secretary Next question, please.
Unidentified Analyst: My question is about credit extension and credit growth. So after the capital injection, will BOC adjust your credit growth plan for the whole year? And which areas do you think the credit demand will come from for the second half of the year and how to conduct credit supply? Chengwen Zhuo Company Secretary Okay. Thank you for your question. Mr. Yeung will answer the question for you.
Unidentified Company Representative: Thank you for your question. In the first half of the year, BOC has actively implemented the macro control policy requirement and worked hard to improve the efficiency of financial services -- financial sector serving the real economy. And the credit extension have achieved a steady growth. As of the end of June, our domestic RMB loan has increased by RMB 1.1 trillion over year beginning, up by RMB 200 billion. In June, we have completed the capital replenishment. CET1 is the main pivot for the banks to serve the real economy and achieve high- quality development. Judging from past experiences, the injection of CET1 has a leverage effect. Every CNY 1 of core capital can enable several times of credit supplies. So for the long run, this capital injection will enable us to better inject a dynamism for the real economy with more sufficient capital strength. better financial services and more effective risk control. So as the proactive fiscal policy and moderately easy monetary policy continued to be implemented. We believe that market vitality will continue to increase, and we will seize -- fully leveraged the business opportunities brought by the capital injection and follow the existing plans to conduct our credit extension work. While maintaining the steady and balanced growth of the total credit supply, we will further improve the fund utilization efficiency and the level of financial services to consolidate our customer base and the reserve of premium projects. We should focus on the 5 key financial services areas and consolidate the good recovery of the economy. First, strengthen our technology finance capabilities, established a coordination mechanism to establish a 3-dimensional network coverage capabilities, professional equity investment capabilities, differentiated credit support capability and diversified financing and fundraising capabilities to create an ecosystem for the technology innovation services. Second, to promote infrastructure project development. We'll actively participate in the signature projects and support the upgrading and transition of the manufacturing sector [indiscernible] to provide strong support for the transition of new and old drivers. Third, consolidate the advantage in green finance, focus on green technology, energy conservation and decarbonization and the green transportation, optimize products and services and to innovate the carbon extension collateral and collateral loans and the transition loans. Fourth to provide financial services to stabilize foreign investment and foreign trade. We will work with the Ministry of Commerce to build this brand of invest in China and hold relevant promotion and publicity activities to implement the multinational comprehensive financial services programs. Number five, to promote better quality and efficiency of the consumer loans, to support the trade-in programs and the national subsidies expansion and provide financial services for the trade-in policies for consumer products and to make sure that the policy dividends will directly reach the consumers and to make our contribution for unleashing the consumption potential. And number six, implement the coordination, financing corporation mechanisms for the real estate sector, implement the spirit of the Central Urban Meeting Conference effectively improve the competitiveness of the new home loans and also for the second home loans to meet people's housing needs for elastic needs and improving needs and also introduce relevant procedures for micro and small businesses and effectively help better financing for the SMEs and micro businesses so as to provide high-quality and effective financial services for the clients. Chengwen Zhuo Company Secretary Thank you, Mr. Yang. Our next question, please.
Ran Xu: Hello, everyone. I'm Xu Ran from Morgan Stanley. My question is about global operation over the past 2 years. The BOC's advantages in global operation has been fully reflected in your performance results, and we just won the recognition of the market. However, given the increasing uncertainties of the external environment, how can we get to understand the differentiated features and outlook of BOC? Also, can you share with us BOC's global operation status and development strategy from the perspective of a regional layout and business categories? Chengwen Zhuo Company Secretary Indeed, global operation is our advantage and draws the attention of the investors and Mr. Zhang will give you an answer. Thank you.
Hui Zhang: Thank you for your attention and your question. Globalization is BOC's most prominent differentiating advantage. It's like our biggest highlight. And over the past 130-plus years, BOC has always adhered to the concept of global development, forming our own unique characteristics and advantages. Going forward, we'll continue to adhere to this strategy that is global operations. and accelerate our efforts. In the midyear, we had a conference on global operations. We stated that we'll continue to insist on this strategy. It is a core strategy for us. That is also how we will serve our real economy diplomacy and international development. This is also a task for us to have our own development. You have mentioned that over the past 2 years, globalization differentiating advantages has given us a lot of benefits. Yes. Indeed, after efforts in the first half of the year, BOC's global development has achieved further new breakthroughs. The operating income and pretax profit of overseas institutions increased by 14.43% and 10.29% year-on-year, respectively. Their contribution to the group was 23.77% and 29.76%, respectively. Going forward, BOC will continue to enhance its global deployments and international competitiveness and continuously consolidate and expand its global advantages. Of course, what investors are interested in is the global external environment and the interest rate cut trend and their impact on our globalization advantages. We have made forward-looking arrangements, and will work on the following [ 6 ] aspects to cope with such risks and challenges. First, accurately navigate the characteristics of different regional markets and strive to create a new global pattern with Hong Kong and Macau as the main body and support multi-pillar development. We will continuously consolidate the advantages of being a leading mainstream bank in Hong Kong and Macau, expand and strengthen BOC Hong Kong business and make the integrated development of Southeast Asia, the top priority of the group's global operations. You know starting from 2017, Southeast Asian region, was -- began to be led by BOC Hong Kong. BOC Hong Kong is our regional headquarter which normally serve the Hong Kong region, but also Southeast Asian region. So BOC Hong Kong will play its role as a mainstream bank, so that it's capabilities in different fronts can further empower the development of Southeast Asia and its role in this regard is gradually playing out, and we'll continue to strengthen our efforts in this regard. And we will take into consideration the different characteristics of different regions to strong -- to have high-growth regions development like Middle East, Southeast Asia, America, et cetera. Second, we'll continuously strengthen domestic overseas interactions and seize the major opportunities of China's high level opening up, RMB has become the world's fourth largest payment currency and the third largest trade financing currency, coupled with the restructuring of global supply chains and trade relations. This brings broad market opportunities for BOC's global operations. BOC will proactively leverage the coordination effects and income complementarity of domestic and overseas business, promote overseas with domestic, support domestic with overseas business, coordinate internally and externally and have good interactions with our global operations to effectively enhance the group's overall financing -- financial stability and growth is resilience. Thirdly, we'll actively promote the diversification of the diversification of the group's business and expand and strengthen financial institution and financial market businesses. We'll increase marketing and expansion of financial institution customers, comprehensively enhanced comprehensive customer service capabilities, increase customer asset allocation, and expand financial institution customers' bond investment, trading scale and foreign exchange trading volume so that we can continuously improve the comprehensive value contribution of financial market business, optimize bond investment structure, enhance global customer group quotation service capabilities and consolidate and expand the competitive advantage of leading Chinese peers. We hope that we can -- we and financial institutions that share complementarity with us in terms of business and customers, we can work together with each other. In the first half of the year, together with some commercial banks, we are making full use of cross-border connect to empower other Chinese-funded peers so that we can have win-win results. At the same time, together with leading insurance groups, we have further conducted joint services to develop new products involving both commercial banks and insurance companies. This work is going on and has yielded preliminary results. Fourthly, we will enhance comprehensive financial services and accelerate the development of global custody capabilities. We'll continuously increase resource investment, enhance the basic product service capabilities of overseas institutions, and continuously improve the comprehensive financial service system. In the first half of this year, BOC has formulated the 3-year development plan for overseas custody business. We'll accelerate the improvement of our custody network, ensure the continuous improvement of the custody product service system and operational efficiency and continuously expand its absolute leading position among comparable peers. In the current -- amidst the current environment, overseas custody business has a huge market, and we have early comer advantage. We are forward-looking, and we have anticipated such market changes. So previously, we have already made our plan for expansion in this regard. We are confident that within 3 years, we will be able to build up our capability similar to that of Western developed banks or even on par with them. Fifthly, accelerate the promotion of RMB internationalization and continuously expand market-leading advantages. We'll see the window period of RMB financing cost advantages, leverage and attract customers to prioritize the use of RMB in trade financing and project loans and promote the formation of a closed-loop model of RMB financing, settlement and repayment. We will strive to secure more RMB clearing bank qualifications and enhance the performance capabilities of RMB clearing banks. Sixth, strengthen risk and compliance management to ensure the safety of overseas assets. We will dynamically carry out overseas risk assessment investigation, deeply analyzed weaknesses in overseas risk prevention and control target, targetedly optimized risk management mechanisms and processes and ensure no mechanism management shortcomings. We'll promote the digital and intelligent transformation of risk management, accelerate the application of new technologies further enhance overseas compliance risk management capabilities and have firmly hold the bottom line of preventing systematic risks. Looking back, after many years of global operations, BOC has continuously enhanced its global development capabilities and global business has continuously made important contributions to the group's development. Going forward, we'll continue to work hard and expand global operations to ensure asset safety. So global operations have continued to contribute to the BOC performance, not just in the past 2 years. In the current low interest rate environment, global development is not only responsibility entrusted by the country to BOC but also a to priority for BOC's high-quality development and for us to win customers' markets in the future. We'll go all out to seize opportunities and continuously expand and strengthen global business and make the century-old BOC golden brand, shine brighter. Chengwen Zhuo Company Secretary Thank you. Due to the time constraints, that's all for the questions from investors and analysts, and I would like to thank all the investors and analysts for your long-term attention and support, and thank you for the past exchanges. If you should -- if you have any further questions or inquiries, please contact our Investor Relations teams after the present -- this part. Now I invite Ms Yu Ke, Spokesperson of BOC to host the media Q&A session.
Yu Ke: Thank you. Thank you Board Secretary Zhuo. Good afternoon. I am Yu Ke, Spokesperson of Bank of China, BOC. A big welcome to all media friends joining today's interim results press conference online. Over the past 6 months, you have documented through your words and lenses, you have documented BOC's concrete actions and sense of responsibility in serving national strategies and supporting the real economy. You have also witnessed our efforts to innovate financial services and drive high-quality development. Thank you for your consistent support and attention. Now we move on to the media Q&A session. Please take the first question.
Unidentified Analyst: I'm from China Daily. My question is like this, recently PBOC and 5 other departments don't release the guiding opinions on the financial sector supporting consumption expansion stating the road map, what major measures have been taken by BOC to expand the financial supply for this? Thank you.
Yu Ke: I would like to invite Vice President, Xiaodong, to answer this question.
Xiaodong Zhang: Thank you for your question. BOC has always taken on its shoulders the responsibility of serving national strategy and made advanced deployments for boosting consumption. We have immediately formulated action plan and detailed measures to expand financial services and boost domestic consumption from both sides, that is supply and demand. First, in terms of the support for boosting people's consumption capabilities, and have inclusive finance to support people's employment and entrepreneurship. We have expanded our support for entrepreneurship guarantee loan. And in the first half of this year, we disbursed dedicated loans in this regard, more than CNY 300 billion. We also help people to increase their income. We strengthened product screening, asset allocation and customer companionship. At the end of June this year, the group's personal customers base -- for them, the financial asset scale reached CNY 16.83 trillion. We have also optimized our system to enrich the personal pension products to have consumer loans to have bailout for these targeted audience. And we have also implemented 2025 national student loan interest payment policy by wavering or reducing interest payment benefiting more than -- about 80,000 students. We are also making the housing mortgage interest rate adjustment as a routine measure. Second, we are promoting consumption for higher quality and upgradation in the first half of this year, personal consumption loans disbursement amount and credit card consumption amount have in cumulative terms exceeded CNY 1 trillion and through professional wealth management, we have created asset income of nearly CNY 100 billion for our customers. And for consumption subsidies and concessions in this regard, it reached about CNY 5 billion. And for national subsidy consumption loan, the loans scale has greatly exceeded that of the level of last year, the whole year. In terms of serving consumption, we are using service consumption and pension reloan -- relending policy instruments to expand our efforts of credit support for accommodation, catering, recreational activities, tourism, education and pension or elderly care. By the end of June, for these priority areas of serving consumption and for elderly care industry, our loan balance reached CNY 202.5 billion. In terms of supporting new types of consumption, we are deepening cooperation with Internet, with online e-commerce platforms and our digital RMB consumption amount is leading in the market. Thirdly, we are helping improve consumption environment to make the consumption more convenient. We are expanding a secondary consumption for overseas visitors visiting China so that they can immediately have tax refund after buying and in Beijing, Tianjin, we have had the first transaction of cross-border interoperability business in Beijing CB District and [indiscernible] Central Plaza, such core commercial catchments, we have established a centralized tax refund spot for the whole city. And on [indiscernible] app, we are having online application channel so that we can bring about a one-stop service experience for purchase and tax refund. In the first half of our -- of this year, our outbound tax refund, outbound visitors when -- for overseas investor -- visitors when they leave the country, the tax refund transactions of our bank had a year-on- year increase of nearly 80%. And we are also promoting payment facilitation for ATM foreign card service, for example, withdrawing cash, the coverage is almost 100%. We are also strengthening financial consumer protection initiative and we are conducting a lot of outreach activities, including on March 15. And these activities have touched 2.1 billion person times. In the future, BOC will further play out its global advantages to help individuals and enterprises to have more income and boost the consumption environment. Second, to innovate products and services around the key consumption areas and focus on the organization and implementation of the discount policies around personal consumer loans and serving the business -- businesses; and third, to create reassuring consumption environment to support the urban and rural consumption infrastructure development and support the modern circulation system play out, continue to optimize the payment system so as to protect the consumer.
Yu Ke: Next question, please.
Unidentified Analyst: I'm [indiscernible] from Xinhua News Agency. My question is about -- so your support for the foreign trade in the first half of this year, the foreign orient -- the trade-oriented businesses have actively explored the domestic and overseas markets and promoted the steady growth of imports and exports. So as a primary bank to support a high-quality development of foreign trade, what specific actions has BOC taken to support those export-oriented businesses.
Yu Ke: Okay. Thank you for your question. Mr. Yang will take this question.
Yang Jun: Thank you for your question. As you all know, BOC as a primary leader in terms of foreign exchange and foreign trade businesses. And we have always been a leader in serving the new development paradigm. We have taken this as our mission and responsibility, faced with a complex and the changing international trade situation, BOC has continued to invest in resources to support foreign oriented companies to face the pressure, maintain their vitality and show their advantages. BOC continued to provide financial supplies for foreign trade and to help those businesses respond to the external shock. First, for a more convenient cross-border settlement. We have upgraded the cross-border remittance services and expanded the customer coverage. We have reduce the handling time to less than a second and help the businesses seize the market window period through our digital and intelligent financial services. From January to June this year, our domestic institutions have helped various types of businesses handle over USD 2.1 trillion worth of international settlement businesses increasing by 6.51% year-on-year. Second, stronger financial support. We have used working capital loans, supply chain finance, letter of credit and letter of guarantee to satisfy the different financing needs of different companies to facilitate the flow of funds for the foreign trade companies. And third, more convenient foreign exchange risk avoidance. Online banking and mobile banking have added special sections for foreign exchange services to make it easier for the businesses. We've actually responded to the needs of the businesses and hosted various analysis sessions on the topic of current foreign exchange, and we continue to promote this risk-neutral philosophy to help the foreign-oriented enterprises respond to the foreign exchange volatilities. BOC also nourish and participate in the management of new growth drivers. We have supported the development of new foreign trade business mode. We supported and introduced a series of measures and introduced the overseas e- commerce overseas collection service and established an integrated cross-border e-commerce settlement system with our business scale increasing by 42%. Number two, we supported the steady growth of trade transactions with emerging regions. For example, we have offered foreign exchange settlement and the sales services in Serbia and Poland and strengthened support for foreign trade with RCEP, Latin America and other key areas. And third, support the over -- going global of new businesses. We have introduced a comprehensive service plan to support overseas trade to satisfy the service -- to satisfy the need for fund security and optimize the global supply chain. Number four, to help the FTZ development scale new heights. We leveraged our advantage in cross-border businesses and actively participate in the FTZ business innovation pilot, we have the international settlement -- the international trade settlement of key FTZ branches and the settlement and the foreign exchange settlement and sales of cross-border RMB services have remained market leadership position. BOC have also supported the foreign export-oriented companies to explore diversified market. And we have supported the Spring Guangzhou Fair and the Consumer Expo to help those companies expand their friends circle. Second, to promote the use of cross-border RMB use in key areas. For example, in commodity trade, capital market investment we have customized a lot of product programs for cross-border RMB settlement, financing plus foreign exchange trading, so as to effectively reduce the transaction cost for the businesses. Third, to provide in-depth services for the customers and to enable 2-way connections. For example, we have hosted a series of activities. The Chinese and French enterprises matchmaking events and the matchmaking activities for Chinese and Italian businesses. We have attracted the participation of companies from various countries and regions around the world and support the sales channels of premium commodities and products. Looking to half -- the second half of the year, China's foreign trade still face a very complex and external situation challenges. BOC will closely follow the national policy to stabilize foreign trade, leverage our global advantages and integrated operations features to make greater contribution. First, to make global settlement service more convenient. We will focus on cross-border remittance, cross- border e-commerce and shipping trade to improve the digitalization and the facilitation of trade settlement, increase efficiency and reduce costs for the businesses. And second, consolidate our advantages in global cash management services. We will improve our capabilities, create a round-the-clock operation support capability and increase the efficiency and security of the fund pool to make sure that the global fund management for the businesses is visible, controllable and operationable. And third, we should leverage our global network advantage to leverage both markets and both resources, domestic and overseas markets so as to provide -- to introduce competitive financial funds for those businesses and to connect the trade transactions. Number four, support the global economic and trade transactions, we will provide better services for the asset expo -- import expo and the [indiscernible] Guangzhou fair so as to promote some cross-border matchmaking and [indiscernible] trade and help the export-oriented enterprises expand market and improve quality of their businesses.
Yu Ke: Okay. Next question, please.
Unidentified Analyst: Thank you for the opportunity. I am from chinanet.com. Now China's silver economy is developing rapidly, and they have strong demand for financial services. So how does BOC plan to better meet the growing service demand from the senior citizens and promote the high-quality development of the silver economy.
Yu Ke: Thank you for your question. So this question is about pension finance. So President Yang will take this question.
Yang Jun: Well, thank you for your interest in pension finance. In the first half of this year, there are a lot of incremental policies in the area of pension finance. And the silver-hair economy potential continues to be released as a major financial institution, BOC has remain committed to serving the people and promoted the supply-side structural reform of the financial sector to care for the security of the pension assets, and we have worked hard to cultivate the senior citizens customers. First, preserve and grow the pension assets. We have offered some dedicated product portfolios, and we have issued new -- 6 new dedicated deposit products for the senior citizens. And as of the end of June, it reached CNY 140 billion. And we've offered 2 new retail pension wealth management products and reaching CNY 40 billion by the end of June, and it has outperformed the market. Second, enable the reasonable planning of the pension assets. There is a dedicated pension finance section in the mobile app, covering the basic pension insurance, enterprise annuities and individual pension. So it provides a very comprehensive visual insight into the pension assets. It has various functions. For example, measure your pension treatment, filling the gaps and make up for the pension assets so that people were rest assured. And third, the social security card has integrated more livelihood functions. We are one of the first banks to issue a social security bank card which enables the integration of social security, financial services, transportation and high-speed railway services, so that the social security card services can be expanded to the high-frequency scenarios for the people. Cardholders can go to the hospitals, buy medicines, can also take their salaries and can just take this card -- swipe this card to take the Beijing-Tianjin Expressway. So this enables the seamless connection of commute financial services and life scenarios. And number four, strengthen our capabilities to serve the senior citizens. We have expanded our outlets and also developed the code of conduct for special clients in the outlets so that we can better serve those senior citizens. And in Guangdong for 3 consecutive years, we have hosted over 50 events in collaboration with the Guangdong government. And we have created a senior citizen consumer ecosystem covering supermarkets, hospitals, banks and securities to providing massive experience for our pension products and services, serving over 40,000 senior citizens. And number five, serving the high-quality development of the silver-hair economy, so that is easily accessible to the senior citizens. So under the guidance of the local PBOC, we have completed the first or first batch of pension loans and we have supported the old-age care services, the old-age technology and the smart old-age care services. And we have provided nearly 350 new pension industry or old-age care industry loans. In the second half of this year, BOC will continue to implement the government incremental policies for pension finance and we'll focus on the pension finance, old-age care service financing and old-age care industry finance and build a pension finance service system with Chinese BOC characteristics. First, we will improve our professional advantage of pension finance. We will focus on the 3 pillars and to implement some measures such as portfolio manager profile and integrated operation. We will focus on the strategic opportunity of long-term care insurance and provide full life cycle and full [indiscernible] financial comprehensive solutions for the government and the pension institutions. Number two, continue to strengthen our advantages of pension service financing. We will closely follow the policy dynamics and timely introduced some premium products to the satisfaction of the customers. Centering on the entire life cycle, financial needs of the pension customer group will actively innovate. We have actively innovated various types of pension products with low thresholds and stable returns, building a more systematic financial product shelf. Third, we'll continuously increase credit support for the pension industry, focusing on silver consumption areas such as care, health and self enjoyment, we will introduce comprehensive financial service solutions, fully utilize policy tools like relending and loan interest subsidies, increased credit support for the pension industry and maintain rapid growth in the scale of pension industry loans. And fourthly, we will continuously build differentiated advantages in online and off-line channels. For off- line, we will expand and strengthen our pension service administration outlets. For online, the mobile banking pension finance section will further introduce high-quality nonfinancial resources such as medical wellness and travel-based retirement living, providing finance plus pension service ecosystem experience. Fifth, we'll continuously publish the BOC silver age pension and finance brand. From the customers' perspective, we will further integrate and innovate pension financial products and services, building a pension financial service system with BOC characteristics making BOC silver age and [ Changqing ] leading brands in the industry pension finance sector.
Yu Ke: Thank you, Vice President Yang. Now let's continue with the questions.
Unidentified Analyst: Thank you for the question for the opportunity to raise the question. I'm [ Lijing ] from China Securities I have question what impact will the private placement in the first half of the year to supplement core Tier 1 capital have on BOC's risk resistance capability? And second, what are the next steps to improve capital reuse efficiency? How do you view the future dividend payout ratio and the level of dividend per share or DPS?
Yu Ke: Thank you for your question. I would like to invite Board Secretary, Mr. [indiscernible] to answer those questions.
Unidentified Company Representative: Thank you for your question. On June 13, our bank conducted a private placement of A shares to the Ministry of Finance or easing RMB 165 billion. After deducting related costs, the entire amount was used to increase core Tier 1 capital. Core Tier 1 capital is the highest level and highest quality capital serving as an important foundation for the bank to resist risks and operate safely. An increase in core Tier 1 capital also correspondingly enhances the capacity for supplementing other levels of capital. After this round of capital increase, our bank's core Tier 1 capital adequacy ratio reached 12.57%, an increase of 75 basis points compared to the end of the first quarter, marking the highest level in our bank's history. Other capital adequacy ratios or CARs were also further improved with the Tier 1 capital adequacy ratio and total capital adequacy ratio rising by 52 bps and 69 bps, respectively compared to the end of quarter 1. This capital increase has effectively solidified our bank's capital foundation, optimized the capital structure and thickened the defensive buffer against the various risks and market volatility shocks enabling our bank to better cope with complex economic situations and maintain operational resilience. This capital increase has replenished our bank's ammunition depot for a sound operation and navigating cycles. We will take this core Tier 1 capital replenishment as an opportunity to further improve capital use the efficiency, leverage the fundamental role of capital in operation and management and accelerate the transition towards a capital-efficient and economical usage model. First, we will fully utilize the leverage effect of capital, continuously enhanced fund utilization efficiency and finance service financial service levels and solid work on the 5 key areas of finance to serve the development of the real economy. Second, we'll optimize business and capital allocation and accelerate the improvement of global deployment capabilities and international competitiveness and strive to expand diversified revenue sources. Third, we'll further strengthen the concept of capital return and value creation, enhance the application of value creation indicators in resource allocation and improve the capability in high-quality developments under capital strains. Fourth, we'll strengthen refined capital management, optimize and excel in capital-heavy businesses and enhance the comprehensive customer returns through all-round financial services will expand and strengthen capital light business, reasonably adjust the business structure and vigorously develop intermediary business such as settlement custody and wealth management. BOC has long value the investor returns since its share reform and listing cumulative dividends have exceeded RMB 900 billion for dividend payout. Since 2015, the dividend payout ratio has been maintained at a high level of 30%. Starting in 2024, interim cash dividends were also implemented, allowing investors to share earlier share in our bank's operational performance results earlier. And currently, for 2025, BOC's dividend payout ratio and frequency remains stable. In the morning, the Board of Directors also recommended an interim dividend for 2025 of RMB 1.094 per 10 shares with the payout ratio continuing to be maintained at a high level of 30%. In the long term, from the long-term perspective, the enhancement of capital strength brought by this private placement will promote the recovery and improvement of BOC's profitability as well as earnings per share and dividend levels, helping to create greater value and deliver long-term, stable returns for investors. Thank you.
Yu Ke: Thank you Board Secretary [indiscernible] . Due to the time constraint. We have time for one last question. Please connect with the last journalist.
Unidentified Analyst: I'm from Phoenix TV. My name is [indiscernible]. I have a question related to technology finance. Since the beginning of this year, a series of policy measures have been introduced to guide financial resources to better support technological innovation. How is BOC seizing the opportunities to intensify the development of technology finance? What are the key focuses for your next steps?
Yu Ke: Thank you for the question from general from TV, that's it President Zhang to answer the question.
Hui Zhang: Thank you for your question. I'm very happy -- but at this press conference, I can answer this last question. Technology Finance is the priority among the 5 key areas of finance and is of great significance for promoting industrial innovation led by technological innovation and actively cultivating and developing new quality productive forces. BOC regards technology finance as a top priority in business development, actively integrated into the national technological innovation system, leverages the group's global advantages and comprehensive characteristics. Supports the high-quality development of the technology industry and enhances the momentum for technology finance development. Therefore, as a result, service quality and efficiency of our bank have steadily improved , overall this represents 3 characteristics. First, the technology content of credit has further increased for the whole group of BOC. By the end of June, BOC's technology loans accounted for -- of over 30% of corporate loan balances, maintaining a leading position among major peers. Second, loans to technology-based SMEs, that is small and micro enterprises and little giant specialized and sophisticated SMEs also lead the marketing credit scales. This can ensure the efficiency and quality of inclusive finance at the same time. Third, comprehensive service capabilities continue to improve. For comprehensive services provided for technology of finance, it does not include a credit with cumulative comprehensive service supply exceeding RMB 780 billion and efforts in investing in early and small early start-ups and small and micro enterprises continue to intensify. So these are the 3 characteristics for technology finance of BOC. In the second half of 2025, our technology finance measures are manifested in the following aspects. First, we built a 3-dimensional service network to enrich financial resource, supply and technology innovation hubs. And through technology finance centers covering 24 provinces and cities with concentrated technology innovation resources such as Beijing, Shanghai and Shenzhen, and 275 technology finance outlets, we are now providing credit support to over 160,000 technology-based enterprises. We're also enhancing the comprehensive technology finance service level in innovation hubs like Beijing, Tianjin Hebei, Yangtze River Delta and Guangdong-Hong-Kong-Macao Greater Bay Area continuously -- we are continuously increasing credit supply and steadily improving customer coverage. And second, we are also supporting the key areas, high-quality development, for example, in AI sector. And we have launched our action plan to support the development of the AI industry chain in January this year. We were the first to do so. This has comprehensively supported the upstream computing power infrastructure, midstream technologic innovation and downstream scenario applications in the industry chain with plans to provide -- our plan is to provide RMB 1 trillion in special comprehensive financial support over the next 5 years in the forthcoming 5 years. In May, we launched the BOC technology innovation, computing power loan scheme in AI innovation in active regions such as Beijing, Shanghai, Shenzhen and [indiscernible]. We are actively serving enterprises computing power resource procurement needs with this initiative and fully supporting the construction of the technology innovation hubs. And in Beijing, we are providing manufacturing and investment loan. In Shenzhen, we are providing sci-tech R&D loan. So with such a characteristic loan -- products for sci-tech innovation. Many sci- tech enterprises or many regions have benefited in terms of the loan balance, the comprehensive service provided and the customer service level in terms of all those brands, BOC is leading among our peers. Third, we have built globalized cross-border services to strengthen financial service support for technology enterprises going global, leveraging BOC's global network layout and advantages in high-quality customer groups, cash management, cross-border payments and asset custody, we're now providing 14 technology finance services including basic account settlement services plus private financing plus technology, finance loans plus cornerstone investment custody plus IPO collection. Through domestic overseas interactions and integrated commercial and investment banking services, we precisely support a group of technology innovation enterprises in fields such as biomedicine, chip design and intelligent computing. And in the first half, we had the IP, we have made full use of IPO opportunities to provide such services. Fourth, we are building diversified comprehensive services to deepen the technology finance product service metrics. We deeply participate in the construction of the bond technology innovation board and led the market. We since the launch of the technology board, BOC's technology innovation bond underwriting scale has exceeded RMB 30 billion underwriting 69 bonds, including the first batch of technology innovation bonds announced by several leading technology innovation enterprises, and the market's first long-term technology innovation bond by a private entity equity investment institution further reaching financial supply methods in the hard technology field. At the same time, we are also making full use of sci-tech innovation and technological retrofitting relending and the newly added loans exceeded CNY 90 billion in this regard. In terms of the product and the service innovation, we are also working with our peers to enhance our efforts. We have worked together with China Life to provide joint efforts so that we can provide differentiated bank and insurance services for pilot scale testing. And fifthly, we are building digital platform tools to strengthen technological empower in operational management. In sci-tech -- in technology finance core regions, we independently developed the quantum digital platform in Shenzhen and other places and continuously iterated and upgraded it using advanced technologies such as AIGC or generative AI, knowledge graphs and privacy computing, we've targeted [indiscernible] evaluated enterprises innovation capabilities and automatically recommended suitable financial products for tech enterprises at different stages of their life cycle. This has been spoken highly by enterprises and the local governments. So supporting sci-tech innovation is an important strategic measure for financial services to serve the high-quality development of the real economy. And it is also a very important area for us to undertake our responsibility entrusted by the country. Going forward, BOC will continue to thoroughly implement the national strategic direction, promote high-level planning, high-standard services and high-quality development of technological finance. You mentioned just now you want me to introduce to you the key deployments in the future. First, focus on key technology breakthroughs and serve the AI Plus initiative. We will expand the depth and the breadth of financial sector serving the AI. Now we are implementing the relevant plans. Second, to improve our integrated services and to promote the diversified technology finance ecosystem development. We have promoted the BOC sci-tech partnership program. And we are actively working on the BOC technology integrated partnership program to build a coordinated risk sharing and benefit sharing if -- innovation mechanism so as to help the key enterprises. Number three, to leverage our global advantage actively serve the high- tech companies and especially their cross-border financial services. We should [ average ] our working mechanism of 1-point access and global response, integrate resources and actively support the cross-border financing channels for high-tech companies also serve the global -- going global and bringing in and the opening up and cooperation of technology finance. In the future, BOC will continue to leverage our advantage and the features, and we'll work hard to leverage the competitive advantage of our technology finance and it elevated into our strategy advantage and the brand advantage so as to contribute more to high-level technology independence and high-quality productivity. Thank you.
Yu Ke: Thank you, Mr. Zhang. For the interest of time, that's the end of the media Q&A session. So if you have further questions, or intentions of communication, please contact us. Thank you very much again for the investors, analysts and friends from the press. BOC will continue to remain committed to our original intention and respond to the challenges ahead through reform and live up to the expectations of all walks of life. That's the end of the release. I look forward to seeing you next [indiscernible]. [Statements in English on this transcript were spoken by an interpreter present on the live call.]