A：Thank you very much for your attention and support to CITIC Bank. In the first half of this year, in a complex and changing internal and external environment, CITIC Bank adhered to the coordination of the functionality and profitability of financial work, while balancing the service to the real economy and building a value bank, as well as coordinating current development and long-term development. Overall, our business development situation meets expectations and lays a solid foundation for achieving the annual business development goals.

A：I believe that three words can summarize the operating characteristics of CITIC Bank in the first half of the year, namely balance, stability, and sustainability. These three words not only reflect the operating results of the first half of the year, but also our long-standing business philosophy and strategic pursuits. In particular, balance has achieved coordination and balance of benefits, quality, structure, scale, customers and other multiple goals in a complex environment. As risks increase and uncertainties grow, we pay more attention to managing the relationship between scale and quality, risk and return, and short-term and long-term. By understanding and managing cycles, we strive to achieve the goal of navigating and crossing cycles, ensuring progress on the basis of stability, and truly achieving development through cycles.

A：Balance means achieving a balance of multiple goals in development, rather than just improving a single indicator. This balance is a sustained balance based on a certain scale, not temporary but long-term. In the first half of the year, we achieved balanced growth in revenue, net interest margin, and fee income, even in the context of general pressure on the banking industry, we still maintained stable development.

A：We insist on not sacrificing risk sinking for short-term gains, nor exchanging profit growth for damage to risk resistance capability. Even though current conditions may allow us to speed up and expand, we choose to pursue high-quality growth, adhering to the business philosophy of "Quantity to make up for price is a lazy path, Price to make up for quantity is exposed, only quantity-price balance is the way out".

A：In the first half of this year, we faced increased risks, but through proactive actions, we used revenue growth to further solidify the risk foundation. We identified risks early, exposed them early, and dealt with them early, achieving stability in non-performing loan ratios and provision coverage ratios, and even seeing an increase in the loan loss reserve ratio. Although net profit slightly decreased, we have strengthened our ability to resist risks, ensuring that our safety cushion remains unchanged, and even becomes thicker.

A：If the decrease of over 500 million in net profit is used to lower the provision coverage ratio by one percentage point, we can achieve profit growth. However, we have not chosen to do this, but instead have prioritized enhancing risk prevention and control capabilities.

A：In the first half of the year, we continuously strengthened our risk control capabilities, optimized our risk management system, improved our credit structure, and tilted credit resources towards core regions, advantageous industries, and high-quality customers. At the same time, we established a working mechanism for real estate platforms, continuously monitored risks to control asset quality, significantly reduced concentration risks in the corporate sector, and effectively managed and disposed of risks exposed in consumer loans and credit cards.

A：We have established a working mechanism for real estate and platform loans, continuously monitoring risks, and overall asset quality is improving. The new non-performing loan rate in the first half of this year continued to decrease by 0.02 percentage points compared to the previous year, the non-performing loan rate for corporate loans continued to decrease, migration rates improved, the trend of credit asset quality is clear, overall risk costs are consolidating upward, and we are confident in effectively controlling non-performing loan rates and provisioning coverage ratios.

A：We insist on doing difficult but correct things, such as increasing investment in small and medium-sized customer groups, transaction banking, light capital strategy, payment management, and retail first strategy. These accumulated small victories are gradually transformed into competitive advantages and capabilities, providing strong support for the development of the second half of the year and even the future.

A：With the support of CITIC Group and CITIC Group Corporation, we successfully converted convertible bonds, effectively increasing the capital safety cushion and raising three capital ratio indicators. Through the improvement of refined management level, we successfully completed the switch to the new capital regulations, anticipatory business structure adjustment and basic data governance saved risk assets, and the capital management capability continues to strengthen.

A：Despite facing challenges such as LPR adjustments, interest rate changes, and pressure from the C-end, it is expected that the overall operations will maintain a stable and positive trend throughout the year, thanks to central policy support, a strong customer base, and a warming financial market. We will continue to adhere to a prudent operating philosophy and collaborate closely to achieve good performance in the second half of the year, in return for the trust of our investors.

A：Through the integration of provincial management and inspection, on one hand we have strengthened the risk control of new businesses, and on the other hand, through deepening the reform of the problem asset management system, we have effectively digested and cleared old risks. In the first half of this year, the capability to dispose of non-performing assets significantly improved, with the amount of disposed non-performing assets reaching 40.4 billion, an increase of 8 billion compared to the first half of last year. Additionally, the efficiency of asset disposal has also been increasing, reflected in the increase of seller's income and clear results in asset write-offs.

A：There are three main reasons for the market: first, residents have a high leverage ratio, and currently the leverage ratio of residents in China has reached 63.5%; second, residents' income has decreased after the epidemic; third, the downturn in real estate has led to asset depreciation, thereby affecting repayment ability. The internal reasons of banks are mainly that some lending institutions pursue high returns, and the risks brought by excessive sinking of customers.

A：In recent years, Zhongxin Bank has taken measures in five aspects: 1) in customer selection, requiring freight forwarders to pay attention to the repayment ability of customers, focusing on the first source of repayment; 2) improving the risk system for overdue loans, optimizing the access of credit card customers, reducing the number of high-risk customers, and deepening asset structure adjustment; 3) in product selection, increasing the proportion of mortgage loans, especially housing mortgage loans; 4) enhancing digital risk control capabilities, reducing reliance on platform loans, strengthening their own data risk control, optimizing credit models, currently there are 147 credit models; 5) improving collection and disposal capabilities, adopting an early exposure and early disposal strategy, the retail non-performing loan disposal amount in the first half of this year was 28.4 billion, an increase of 7.7 billion compared to the same period last year.

A：The transformation of retail presents the characteristics of steady progress and resilience. In terms of market share, whether it is AUM, loan balance, or increment, all remain in the second position in the industry and continue to improve. In terms of customer growth, wealth management clients at all levels are increasing, with the growth rate of middle to high-end clients exceeding 10%, and good results have been achieved through the integration of the retail segment and corporate consolidation. In addition, focusing on centralized operations, improving the revenue rate of mass customers' AUM, significantly increasing the downgrade and upgrade rates of private banking customers, and achieving the highest historical growth rate. In terms of structural optimization, pricing structure continues to improve, settlement deposit average daily balance and asset settlement ratio further increase, while asset and regional structure are also optimized, adhering to the mainstream business positioning of retail credit, achieving reasonable growth and structural optimization through high-quality development, thereby effectively balancing risk and return. In retail loan issuance, more attention is paid to scenarios and target customers, with mortgage loan issuance volume remaining first in its class, significant operational effects in second-hand housing scenarios, and strengthening of the white list system for individual loans and social security fund deposit customer groups, improving credit card quality and optimizing customer structure. In addition, through the integration of online and offline channels, strengthening cooperation with high-quality offline traffic, improving online customer acquisition efficiency, optimizing the risk of new cardholders, continuously adjusting and optimizing the structure of existing customers, and achieving a double decrease in the expected scale and ratio. Finally, enhancing digital management capabilities, promoting the digital transformation of operations, management, operations, and risk control, building a unified platform, empowering front-line staff to cope with the pressure and challenges in complex situations.

A：In the first half of this year, CITIC Bank's deposit growth performance was good, and we took a series of measures to stabilize the growth of deposits. On the liability side, we maintained a balance between quantity and price by improving the quality of liabilities. In the first half of the year, the deposit cost rate decreased by 17 basis points compared to the previous year, now dropping to 1.88%, and further decreased to 1.81% in the second quarter, significantly outperforming the market as a whole. At the same time, we also improved the asset side to increase interest margins, focusing on loan disbursement, especially early and high-quality loans, to increase the overall asset yield. In the first half of the year, the asset yield was in the middle to upper levels among peers. Additionally, we optimized the asset structure and refined management to enhance the overall asset yield level. These measures have played an important role in stabilizing and improving interest margins.

A：Facing the pressure of narrowing interest spreads in the second half of the year, China CITIC Bank's focus is on improving business capabilities and optimizing business structure, striving to maintain interest spread advantage. We will continue to optimize the quality and structure of liabilities, especially by proposing the requirement to build a leading transaction settlement bank in the new three-year plan, increasing settlement deposits, current deposits, and retail deposits, optimizing the deposit structure, improving the quality of liabilities, and stabilizing interest spreads. At the same time, on the asset side, we will continue to increase the overall asset yield on the premise of effectively controlling risks, combine efforts to create five leading banks and discover and enrich high-quality business growth points, closely follow industrial policies, expand and deepen customer base, expand product coverage, and better serve entities, in order to jointly support and maintain the advantage of interest spreads.

A：In response to the stable growth of corporate deposits, after the manual interest supplement cancellation, China CITIC Bank quickly established a rapid response mechanism, communicated policy points to the front line, visited customers to interpret policies, stabilized customer emotions, and ensured fund stability. Tailored service plans have been introduced for different customer needs, while internal assessment policies have been adjusted to stimulate grassroots enthusiasm. In addition, in response to the scarcity of market resource products, resource allocation rules have been optimized to improve efficiency, meet customer financial needs, stabilize existing funds through financial products and synergies, and attract external funds. In terms of comprehensive services, nearly 10,000 employees throughout the bank have been mobilized, with senior branch leaders leading visits to key customers to deepen cooperation and upgrade products such as online banking, ensure settlement fund receiving work, and ensure customer fund stability. Through these efforts, corporate deposits increased by 35.3 billion in the first half of the year, and the cost rate decreased by 19 basis points compared to the beginning of the year.

A：The strategy adopted by CITIC Bank mainly focuses on customer insights, financial planning, industry analysis, asset allocation, and investment services. Firstly, through digital insights, understanding customer needs and using a full lifecycle approach to develop financial plans for clients. Secondly, combining investment research capabilities to provide robust asset allocation schemes, and through investment advisory assistance, help clients achieve wealth appreciation. In terms of customer insights, a complete system has been established, leveraging digital capabilities to discover customer value and achieve optimal fit. In addition, a lifecycle equity planning methodology has been introduced, planning in four steps based on customer income and expenses balance, risk protection, retirement planning, and investment appreciation needs, utilizing asset balance sheets and retirement account tools. In investment research capabilities, CITIC Bank has built a leading financial management team, conducting global market viewpoints and strategy analysis based on customer needs, financial planning, and investment research analysis for a full market selection. At the same time, asset allocation capabilities have been strengthened, establishing a retail allocation committee, releasing robust asset allocation reports quarterly, providing investment newsletters monthly, and publishing investment strategy weekly reports, covering robust assets and various allocation services for clients.

A：China CITIC Bank's loan volume in areas such as green inclusiveness, manufacturing, and key strategic emerging industries is growing rapidly, and its asset quality remains good. For these four major areas, the bank will resolutely implement national requirements, increase investment, and demonstrate the bank's political, people-oriented, and functional nature. In the short term, this is a policy requirement, while in the long term, it is the future key allocation direction for commercial banks, requiring high attention to risk. Specific risk prevention measures include specialization, systematization, and intensification: specialization involves deepening industry research, identifying industry development trends and customer competitive advantages; systematization involves good top-level design and branch centralization in the inclusiveness field, setting up expansion centers, and forming an efficient review and risk control system; intensification includes using data risk control to improve efficiency, such as inclusive finance building multiple approval and risk control rules and intelligent early warning models, optimizing online approval processes, and reducing manual workload by 80%.

A：China CITIC Bank has a wide layout in the field of technology finance, and has built a six-special system to serve new productivity, including specialized organizational support, professional approval, competition exemption, specialized risk rating models, rich products, and an increase in the proportion of technology enterprise services in KPI assessments for branches. In terms of customer considerations, a gradient layout strategy is adopted, focusing on industry-leading enterprises, growth-oriented enterprises, and hard technology start-ups. Compared to peers, the biggest advantage of China CITIC Bank lies in leveraging the synergy of its financial full license and industrial wide coverage, forming three major advantages of think tank research, solution integration, and customer collaboration. For example, by using research and investment banking teams from subsidiaries like CITIC Securities to provide precise industry analysis and first-mover advantage, synergistic resources are used to create diversified services for customers; the establishment of the CITIC Equity Investment Alliance connects the entire industry chain service system, providing a comprehensive product matrix service; and in the national-level specialized, refined, unique, and new small giant full coverage work, significant results have been achieved through group-wide collaborative efforts.