On August 30, 2024, China Construction Bank Corporation (Stock code: SH: 601939; HK: 00939) ("CCB") reported operating results for the first half of 2024 (The following data for the Group were prepared in line with International Financial Reporting Standards and denominated in RMB). In the first half of the year, CCB resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council, fully and accurately adhered to the new development concept, vigorously cooperated with the central government's inspections, solidly promoted the study and education of Party discipline, actively cultivated and practiced the financial culture with Chinese characteristics, deepened the intrinsic intensive high-quality development, efficiently coordinated the scale, structure, efficiency and risks of development, and realized stable and orderly overall operation.

Core Indicators Were Balanced and Coordinated

The total assets and liabilities grew steadily and their structure continued to be optimized. As of June 30, 2024, the Group's total assets were RMB40.29 trillion, an increase of 5.14% from the end of the previous year. Among them, the net amount of loans and advances was RMB24.63 trillion, an increase of 6.70% from the end of the previous year, achieving steady credit growth. The total liabilities were RMB37.04 trillion, an increase of 5.37% from the end of the previous year. Among them, deposits were RMB28.71 trillion, up by 3.81%. The deposit interest rate was 1.72%, down by 5BPs YoY, and the cost of debt continued to decline. The proportion of core assets such as loans and financial investments increased by 1.5 percentage points YoY to 88.16%, which formed a strong base of net interest income.

The operating efficiency remained generally stable and the results of cost reduction and efficiency increase were evident. The operating income was RMB374.831 billion and the net profit was RMB165.039 billion. The net interest margin was 1.54%; the annualized average return on assets was 0.84%; and the annualized weighted average return on equity (ROE) was 10.82%, all remaining at a relatively good level. Through comprehensive cost management and higher cost efficiency, the operating expenses decreased by 1.67% year-on-year in the first half of the year, with a cost-to-income ratio of 24.15%. The non-interest income accounted for 21.02% of the operating income.

The asset quality remained generally stable and the risk compensation capacity was adequate. The non-performing loan (NPL) ratio decreased by 0.02 percentage points from the beginning of the year to 1.35%. The provision coverage ratio was 238.75%. The capital adequacy ratio was 19.25%; the Tier 1 capital adequacy ratio was 14.92% and the core Tier 1 capital adequacy ratio was 14.01%, which were somewhat higher than those at the end of 2023 and enabled CCB to continuously maintain relatively optimal capital level and capital structure as a solid guarantee for its sustainable development. Market risk, interest rate risk, liquidity risk and other risks were generally controllable.

The dividend ratio remained at a relatively high level and interim dividends increased to improve investor experience. In 2024, the interim dividends have increased by RMB 49.252 billion, with cumulative dividends of RMB1.2 trillion since listing; the cash dividend ratio has remained at 30% for a long time and the dividend yield per share has been above 5% in the past three years; the earnings per share, net assets per share, and cash dividends per share have remained at a high level, creating stable returns for investors in the long run.

The "Five Major Measures" Worked Effectively

CCB expedited the development of science and technology-based finance. CCB strengthened the efficient supply of science and technology-based finance, and injected strong financial momentum into the development of new productive forces. It formulated an action plan for the promotion of science and technology-based financial business and promoted the development of a comprehensive financial service system of "stock, loan, debt and insurance". It created the sci-tech innovative evaluation tools such as "Technology Flow", "Starlight STAR" and "Investment Flow" to improve the availability of financing for technology-based enterprises. It awarded the title of "China Construction Bank Science and Technology Financial Innovation Center" to some branches, offering them with differentiated approval and product innovation policies. It had a balance of RMB1.80 trillion in loans to technology-based enterprises, up by 12.31%. In the first half of the year, it underwrote 21 issues of sci-tech innovation notes, with an underwriting scale of RMB6.382 billion. It strengthened the synergy between the parent company and subsidiaries, and its subsidiaries supported more than 2,000 technology-based enterprises cumulatively through equity investment funds and other means.

CCB pursued integrated development of green finance. CCB integrated green concepts into its business management, strategic development and corporate culture. It had a balance of RMB4.46 trillion in green loans, up by 14.93%. It focused on the investment and financing needs of green and low-carbon transformation, created diversified green financing channels and participated in the underwriting of 37 issues of domestic and foreign green and sustainable development bonds in the first half of the year, with an issuance scale equivalent to approximately RMB59.494 billion. It promoted the Group's green operation in an all-round way and continued to build a green and low-carbon bank.

Inclusive finance developed steadily. The supply of inclusive financial credit grew steadily, and the balance of inclusive financial loans reached RMB3.29 trillion, up by 8.29%. The availability of inclusive financial services continued to improve, and "CCB Huidongni", an integrated ecological service platform, was optimized, with about 14,000 outlets enabled to provide inclusive financial services. CCB continued to provide county-wide and rural financial services. It had a balance of RMB3.38 trillion in agriculture-related loans, up by 9.54%.

Pension finance advanced steadily. CCB cultivated the pension finance brand of "Jian Yang An", and made every effort to build a professional bank for pension finance. It established the first batch of 60 "Jian Yang An" outlets featuring pension finance and preferentially developed the four major features of product equity, elderly service, pension investment and pension microecology. It coordinated development of the ecologies of pension finance, elderly care industry finance, elderly care service finance and elderly care finance. CCB Pension had a total asset management scale of RMB618.723 billion. It continued to enrich package of personal pension products, covering four types of products, i.e. savings, funds, insurance and wealth management. The elderly care industry was included in the scope of industries to be preferentially supported to guide credit resources towards elderly care industry.

Digital finance developed solidly. CCB promoted its own digital transformation and improved its digital capabilities, accelerated service for the digital economy and supported the integration of data and reality. It continued to improve the functional scenarios of the "Dual" platform, i.e. mobile banking and CCB Life, leading to continuous improvement in the scale and quality of platform traffic. At the end of June, the total number of "Dual" platform users reached 505 million. It actively supported the digital transformation of industries, served the improvement of digital efficiency in various industries and enhanced support for the core industries of the digital economy.

The Quality and Efficiency of Services for the Real Economy Improved

Financial services in key areas continued to deepen. CCB enhanced support for major strategies, key areas and sectors of weaknesses. The loans to the manufacturing industry reached RMB3.05 trillion, up by 12.79%. The loans to private enterprises reached RMB5.87 trillion, up by 8.74%. The loans to strategic emerging industries reached RMB2.72 trillion, up by 21.19%. The loans to domestic real estate industry reached RMB910.726 billion, up by 6.65%. It offered a supply chain financial support of RMB638.106 billion to 119,300 customers along the industrial chains of 5,049 core enterprises in the first half of the year, maintaining a leading position in the market. CCB aggressively supported major regional strategies and coordinated development of regions. Corporate loans in Beijing-Tianjin-Hebei Region, Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area and Chengdu-Chongqing Region increased by more than RMB800 billion. CCB supported the implementation of active fiscal policies. CCB increased investments in national debts, local government bonds and other government bonds and green bonds. Its financial investments increased by RMB285.923 billion over the end of the previous year. CCB supported high-level opening-up of China. CCB strengthened support for the policy of "stabilizing foreign trade and investment". In the first half of the year, the amount of trade financing was RMB1.18 trillion, up by 8.20% YoY; the cross-border RMB settlement value was RMB2.55 trillion, up by 36.66% YoY. The RMB clearing bank in the UK had a cumulative clearing settlement value of over RMB100 trillion and thus maintained its status as the largest RMB clearing bank outside Asia. It continued to improve the convenience of payment for foreign visitors to China.

The ability of integrated operation improved steadily. For corporate financial business, CCB focused on improving the ability of customer group operation and continued to deepen the integration of commercial and investment banking and the integration of domestic and foreign currencies at home and abroad so as to provide customers with integrated and comprehensive financial solutions. It had 11.34 million corporate customers. It had domestic corporate loans and advances of RMB14.68 trillion, up by 11.02%. For individual financial business, CCB deepened the service model of customer "layering, grouping, and grading" and improved the efficiency of full customer service; the total number of individual customers reached 762 million, and the managed financial assets of individual customers exceeded RMB19.74 trillion. For capital and asset management business, CCB satisfied the comprehensive investment and financing needs of customers and supported the capital market, with the Group's asset management business reaching a scale of RMB5.20 trillion and its total asset custody scale exceeding RMB23 trillion. The assets of overseas facilities grew steadily and the operating efficiency increased year-on-year; its subsidiaries with integrated operation remained stable in business scale and developed well overall.

The Foundation for High-quality Development Was Consolidated

Its intensive operation continued to be empowered. CCB promoted intensive operation and continuously increased the efficiency of burden release through digitalization. The cumulative number of items for intensive operation at outlets increased to 308. The application of robotic process automation (RPA) enabled the unified management and control of tasks and the intensive operation of scenarios, extensively covering 33 business areas including accounting, risk control, channel operation and credit cards, and helping to increase the operational efficiency of the whole Group. The contribution of individual customer direct service mode to productivity continued to increase and it had gradually become a new and effective production mode to serve public customers. It gave full play to the role of digital transformation in promoting the main businesses and improved the intelligence and convenience of financial services; and its online products and services such as network supply chain, smart investment banking, wealth management, personal pension, consumer credit and inclusive finance were more extensively available to customers.

CCB continuously improved the comprehensive risk management system. CCB re-examined risk preferences, strengthened the coordination and linkage of head office departments, domestic branches, overseas facilities and subsidiaries and reinforced the "three lines of defense" for coordinated risk control and integrated risk prevention and control of the Group. It solidly promoted the active management and control of asset quality and resolved risks in key areas in a prudent and orderly manner. It built a financial service system that matched the new model of real estate development and provided proper financial services for "guaranteed home delivery" and "three major projects". It steadily promoted satisfaction of Basel III standards. It continued to promote the development of an enterprise-level risk management platform and upgraded the intelligent risk control system to a new level.

CCB continuously deepened its sustainable development. CCB gave full play to the role of ESG elements in optimizing business structure, preventing operational risks and serving economic and social development. It continued to optimize the management of climate-related risks and opportunities, increase the availability of financial services, strictly adhere to the bottom line of data privacy and security, effectively safeguard the rights and interests of financial consumers, and build a broad platform for employees to grow and develop so that the outcomes of high-quality sustainable development could benefit all parties. Its MSCI ESG rating remained at AA, leading among the world's major banks.

Looking ahead to the second half of 2024, the long-term positive trend of China's economy will not change. CCB will always take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guide; fully implement the spirits of the 20th CPC National Congress, the  2nd and 3rd Plenary Sessions of the 20th CPC Central Committee, the Central Economic Work Conference and the Central Financial Work Conference; better balance volume and structure, scale and efficiency, short-term and long-term benefits, local and global considerations as well as development and security; strongly and effectively serve the real economy; strive to improve the quality of operations; comprehensively strengthen refined management; resolutely adhere to the bottom line of risk compliance; and unswervingly promote high-quality development, thus making new and greater contributions to the cause of building a great modern socialist country in all respects and achieving national rejuvenation through the Chinese path to modernization.