民生银行(01988) - 2025 - 中期业绩

Important Notice Overview The Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, with the financial report for the period being unaudited; the Board approved a 2025 interim profit distribution plan of RMB 1.36 per 10 shares (including tax) - The Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the report content[6] - The semi-annual financial report is unaudited[7] - The Board of Directors approved the 2025 interim profit distribution plan: a cash dividend of RMB 1.36 per 10 shares (including tax)[7] Definitions Overview This section defines common terms used in the report, including the Bank, the Group, names of major subsidiaries, financial regulatory bodies, and relevant exchanges, ensuring clear understanding of the report content - Clarifies the references for "the Bank" and "the Group"[11] - Lists abbreviations for major subsidiaries such as Minsheng Financial Leasing, Minsheng Caixin Fund, Minsheng International, and Minsheng Wealth Management[11] - Defines the reporting period as from January 1, 2025, to June 30, 2025[11] Chapter 1 Company Profile Company Overview China Minsheng Bank, established in 1996, is China's first national joint-stock commercial bank primarily initiated by private enterprises, aiming to become a first-class commercial bank with distinct features, continuous innovation, value growth, and stable operations, with its A-shares and H-shares listed on the Shanghai Stock Exchange and Hong Kong Stock Exchange, respectively - The Bank is China's first national joint-stock commercial bank primarily initiated by private enterprises, established in 1996[14] - The strategic development goal is to become a first-class commercial bank with distinct features, continuous innovation, value growth, and stable operations[15] - A-share stock abbreviation: Minsheng Bank, code: 600016; H-share stock abbreviation: Minsheng Bank, code: 01988[15] Development Strategy and Business Overview The Bank adheres to its positioning as "the bank for private enterprises," leveraging market advantages to support the real economy, particularly establishing its brand in small and micro financial services, while also striving to be an "agile and open bank" driven by technology for ecosystem and smart banking development, and upholding the philosophy of "a service-oriented bank" by providing professional and digital services centered on customers, with business scope covering deposits, loans, settlements, bills, bonds, foreign exchange, bank cards, letters of credit, and guarantees - Adheres to the positioning as "the bank for private enterprises," fully supporting the development of the real economy, especially in small and micro financial services[16] - Adapts to the digital economy trend, promotes continuous innovation, and drives the development of ecosystem banking and smart banking with technology[16] - Business scope includes accepting public deposits, issuing loans, domestic and international settlements, bill acceptance and discounting, issuing financial bonds, trading government bonds, interbank lending, foreign exchange trading, bank card business, letter of credit services, and guarantees[17] Chapter 2 Summary of Accounting Data and Financial Indicators Key Accounting Data and Financial Indicators The Group's operating income for the first half of 2025 increased by 7.79% year-on-year to RMB 70.701 billion, but net profit attributable to the Bank's shareholders decreased by 4.87% year-on-year to RMB 21.380 billion; total assets slightly decreased, while total loans and advances slightly increased; non-performing loan ratio slightly increased by 0.01 percentage point to 1.48%, and provision coverage ratio increased by 3.12 percentage points to 145.06%; capital adequacy ratios all improved 2025 H1 Key Operating Performance (RMB million) | Indicator | 2025 H1 | 2024 H1 | Change (%) | | :--- | :--- | :--- | :--- | | Operating Income | 70,701 | 65,589 | 7.79 | | Net Interest Income | 49,203 | 48,582 | 1.28 | | Net Non-Interest Income | 21,498 | 17,007 | 26.41 | | Credit Impairment Losses | 26,039 | 20,551 | 26.70 | | Net Profit Attributable to Bank Shareholders | 21,380 | 22,474 | -4.87 | 2025 June 30 Key Scale Indicators (RMB million) | Indicator | 2025 June 30 | 2024 Dec 31 | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 7,768,921 | 7,814,969 | -0.59 | | Total Loans and Advances | 4,469,874 | 4,450,480 | 0.44 | | Total Deposits | 4,311,002 | 4,249,095 | 1.46 | | Total Equity Attributable to Bank Shareholders | 688,544 | 642,859 | 7.11 | 2025 June 30 Key Asset Quality and Capital Adequacy Ratio Indicators (%) | Indicator | 2025 June 30 | 2024 Dec 31 | Change (percentage points) | | :--- | :--- | :--- | :--- | | Non-Performing Loan Ratio | 1.48 | 1.47 | 0.01 | | Provision Coverage Ratio | 145.06 | 141.94 | 3.12 | | Core Tier 1 Capital Adequacy Ratio | 9.50 | 9.36 | 0.14 | | Capital Adequacy Ratio | 13.25 | 12.89 | 0.36 | Supplementary Accounting Data and Financial Indicators The Group's liquidity ratio, liquidity coverage ratio, and net stable funding ratio all meet regulatory requirements, with the leverage ratio increasing; however, loan migration rates show a significant rise in special mention loan migration rate to 34.95%, and substantial increases in substandard and doubtful loan migration rates, indicating challenges in credit risk management 2025 June 30 Key Liquidity and Leverage Ratio Indicators (%) | Indicator | Standard Value | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | :--- | | Liquidity Ratio (RMB and foreign currency) | ≥25 | 74.46 | 82.95 | | Liquidity Coverage Ratio | ≥100 | 155.16 | 161.99 | | Net Stable Funding Ratio | ≥100 | 106.68 | 108.31 | | Leverage Ratio | ≥4.125 | 7.58 | 7.18 | 2025 June 30 Loan Migration Rate (%) | Loan Migration Rate | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Normal Loan Migration Rate | 1.69 | 1.56 | | Special Mention Loan Migration Rate | 34.95 | 28.93 | | Substandard Loan Migration Rate | 171.38 | 86.85 | | Doubtful Loan Migration Rate | 135.74 | 79.02 | - The single largest customer loan ratio is 1.56%, and the top ten largest customer loan ratio is 8.73%, both meeting regulatory requirements[23] Chapter 3 Management Discussion and Analysis Overall Business Performance During the reporting period, the Group adhered to high-quality development, advanced strategic implementation, and maintained stable yet progressive operations, with continuous optimization of asset and liability structure, a slight decrease of 0.59% in total assets but a 0.44% increase in total loans and advances, raising their proportion of total assets; total liabilities decreased by 1.28%, while total deposits increased by 1.46%, with an increased proportion of individual deposits; operating income grew by 7.79% year-on-year, with both net interest income and net non-interest income increasing, but net profit attributable to the Bank's shareholders decreased by 4.87%; risk and internal control management systems continued to improve, asset quality remained generally stable, with the non-performing loan ratio slightly increasing by 0.01 percentage point and the provision coverage ratio increasing by 3.12 percentage points - The Group's total assets were RMB 7,768.921 billion, a decrease of 0.59% from the end of the previous year; total loans and advances were RMB 4,469.874 billion, an increase of 0.44% from the end of the previous year, with its proportion of total assets rising by 0.59 percentage points[29] - Total liabilities were RMB 7,066.609 billion, a decrease of 1.28% from the end of the previous year; total deposits were RMB 4,311.002 billion, an increase of 1.46% from the end of the previous year, with individual deposits' proportion of total deposits rising by 1.40 percentage points[29] 2025 H1 Operating Performance Overview (RMB billion) | Indicator | 2025 H1 | Year-on-Year Growth (%) | | :--- | :--- | :--- | | Operating Income | 70.701 | 7.79 | | Net Interest Income | 49.203 | 1.28 | | Net Non-Interest Income | 21.498 | 26.41 | | Net Profit Attributable to Bank Shareholders | 21.380 | -4.87 | - Non-performing loan ratio was 1.48%, an increase of 0.01 percentage point from the end of the previous year; provision coverage ratio was 145.06%, an increase of 3.12 percentage points from the end of the previous year[31] Business Review During the reporting period, the Group comprehensively advanced the "Five Key Initiatives" strategy, encompassing technology finance, green finance, inclusive finance, elderly care finance, and digital finance, achieving steady development in corporate banking, retail banking, treasury business, and overseas branch operations, while consolidating major equity-invested subsidiaries, all of which maintained good operating conditions Implementing the 'Five Key Initiatives' The Group prioritizes technology finance, green finance, inclusive finance, elderly care finance, and digital finance as strategic focuses, comprehensively supporting real economic development and social livelihood needs through optimizing mechanisms, enriching product systems, strengthening digital and intelligent services, and increasing credit投放, achieving positive progress in each area - Technology Finance: Served 121,900 technology-oriented enterprises and 28,000 "specialized, refined, unique, and innovative" customers, winning the "Golden Bull Bank Award for Supporting Sci-Tech Innovation"[32][33] - Green Finance: Issued RMB 10 billion in green financial bonds, with green credit balance reaching RMB 326.485 billion, an increase of 9.63% from the end of the previous year[34] - Inclusive Finance: Inclusive small and micro enterprise loan balance was RMB 666.751 billion, an increase of RMB 4.033 billion from the end of the previous year, serving 482,900 loan customers with an average interest rate of 3.70%[37] - Elderly Care Finance: Individual pension accounts reached 2.455 million, an increase of 6.94% from the end of the previous year; enterprise annuity account management business individual accounts reached 278,200, an increase of 9.23% from the end of the previous year[38] - Digital Finance: Retail online platform users reached 124.4944 million, an increase of 3.18%; corporate online platform users reached 4.1997 million, an increase of 4.13%[40] Review of Major Businesses The Group's corporate banking business maintained stable development, with a slight decrease in corporate deposits but a 5.96% increase in general corporate loans; retail banking business managed retail customer assets grew by 7.05%, and private banking customer numbers increased by 12.84%; treasury business custody scale grew steadily by 3.26%; among overseas branches, Hong Kong Branch's total assets grew by 11.83%, and net income grew by 22.62%; major equity-invested subsidiaries such as Minsheng Financial Leasing, Minsheng Caixin Fund, Minsheng International, and Minsheng Wealth Management all maintained steady development - Corporate Banking Business: Corporate deposit balance was RMB 2,919.108 billion, a decrease of 0.48%; general corporate loan balance was RMB 2,610.065 billion, an increase of 5.96%[41] - Retail Banking Business: Managed retail customer total assets reached RMB 3,153.976 billion, an increase of 7.05%; private banking customer numbers reached 70,074, an increase of 12.84%[49] - Treasury Business: Custody scale reached RMB 12.66 trillion, an increase of 3.26%[63] - Hong Kong Branch: Total assets were HKD 236.933 billion, an increase of 11.83%; net income was HKD 1.648 billion, an increase of 22.62%[66] - Minsheng Financial Leasing: Total assets were RMB 176.907 billion, operating income was RMB 3.017 billion[71] - Minsheng Wealth Management: Wealth management product scale reached RMB 1,138.084 billion, an increase of 12.05%[76] Industry Overview In the first half of 2025, China's economy showed an improving trend but still faced challenges such as insufficient domestic demand and low-level prices; the government intensified macro-control, implementing proactive fiscal policies and moderately loose monetary policies to support the real economy; the banking industry closely followed policy guidance, with reasonable credit growth, continuous structural optimization, marginal stabilization of net interest margin, expected improvement in asset quality, and enhanced service quality and efficiency through financial technology empowerment - China's economy is improving but faces challenges such as insufficient domestic demand and low-level prices[77] - The government implemented proactive fiscal policies and moderately loose monetary policies, increasing support for consumption, technological innovation, small and micro private enterprises[78] - The banking industry saw reasonable credit growth, optimized structure, marginally stabilized net interest margin, improved asset quality, and enhanced service through financial technology[79] Analysis of Key Income Statement Items The Group's net profit attributable to the Bank's shareholders for the first half of 2025 decreased by 4.87% year-on-year to RMB 21.380 billion; operating income increased by 7.79% year-on-year, primarily driven by a significant 26.41% increase in net non-interest income, with net gains from investment securities growing by 379.13%; net interest income slightly increased by 1.28%, and net interest margin stabilized; operating expenses slightly increased by 0.32%, but credit impairment losses significantly increased by 26.70%, and income tax expenses grew by 71.84%, putting pressure on net profit 2025 H1 Income Statement Key Item Changes (RMB million) | Item | 2025 H1 | 2024 H1 | Change (%) | | :--- | :--- | :--- | :--- | | Operating Income | 70,701 | 65,589 | 7.79 | | Net Interest Income | 49,203 | 48,582 | 1.28 | | Net Non-Interest Income | 21,498 | 17,007 | 26.41 | | Credit Impairment Losses | 26,039 | 20,551 | 26.70 | | Net Profit Attributable to Bank Shareholders | 21,380 | 22,474 | -4.87 | - Net interest income growth was primarily due to stable scale growth and stabilized net interest margin[82] - Net non-interest income growth was primarily due to increased key intermediary business and investment income, with net gains from investment securities growing by 379.13%[93][94] - Credit impairment losses increased by 26.70% year-on-year to RMB 26.039 billion, mainly due to increased impairment of loans and advances[97][98] - Income tax expenses increased by 71.84% year-on-year to RMB 1.318 billion, primarily due to reduced interest paid on perpetual bonds[99] Analysis of Key Balance Sheet Items As of the end of the reporting period, the Group's total assets were RMB 7,768.921 billion, a decrease of 0.59% from the end of the previous year; total loans and advances slightly increased by 0.44%, with their proportion of total assets rising; total financial investments decreased by 2.02%; total liabilities decreased by 1.28%, while total deposits increased by 1.46%, with an increased proportion of individual deposits; issued bonds increased by 11.58%; total shareholders' equity increased by 6.97%, with total equity attributable to the Bank's shareholders increasing by 7.11% 2025 June 30 Asset Structure (RMB million) | Item | 2025 June 30 Amount | Proportion (%) | 2024 Dec 31 Amount | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Net Loans and Advances | 4,413,765 | 56.82 | 4,396,036 | 56.25 | | Net Financial Investments | 2,348,866 | 30.23 | 2,398,702 | 30.69 | | Total Assets | 7,768,921 | 100.00 | 7,814,969 | 100.00 | 2025 June 30 Liability Structure (RMB million) | Item | 2025 June 30 Amount | Proportion (%) | 2024 Dec 31 Amount | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Deposits from Customers | 4,382,087 | 62.01 | 4,332,681 | 60.52 | | Due to Banks and Other Financial Institutions and Financial Assets Sold Under Repurchase Agreements | 1,056,506 | 14.95 | 1,321,830 | 18.47 | | Debt Securities Issued | 1,049,973 | 14.86 | 941,025 | 13.15 | | Total Liabilities | 7,066,609 | 100.00 | 7,158,401 | 100.00 | - Total equity attributable to the Bank's shareholders was RMB 688.544 billion, an increase of 7.11% from the end of the previous year[112][113] - Off-balance sheet items showed an 8.58% increase in bank acceptance bills and a 25.78% increase in letters of credit issued[114] Loan Quality Analysis As of the end of the reporting period, the Group's total non-performing loans were RMB 66.052 billion, an increase of 0.67% from the end of the previous year, with the non-performing loan ratio slightly increasing by 0.01 percentage point to 1.48%; corporate non-performing loan ratio decreased, while individual non-performing loan ratio increased; non-performing loans in the real estate industry decreased by RMB 5.112 billion, but those in leasing and business services, manufacturing, and wholesale and retail industries increased; non-performing loans in the Yangtze River Delta region and headquarters increased significantly; total pledged/mortgaged loans decreased, while total credit loans increased; both restructured loans and overdue loans increased; loan impairment provisions at period-end were RMB 95.816 billion, with a net provision of RMB 23.452 billion for the period 2025 June 30 Loan Five-Category Classification (RMB million) | Item | 2025 June 30 Amount | Proportion (%) | 2024 Dec 31 Amount | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Normal Loans | 4,403,822 | 98.52 | 4,384,870 | 98.53 | 0.43 | | Non-Performing Loans | 66,052 | 1.48 | 65,610 | 1.47 | 0.67 | | Total | 4,469,874 | 100.00 | 4,450,480 | 100.00 | 0.44 | - Corporate non-performing loan ratio was 1.21%, a decrease of 0.05 percentage points from the end of the previous year; individual non-performing loan ratio was 1.89%, an increase of 0.09 percentage points from the end of the previous year[117] - Non-performing loans in the real estate industry decreased by RMB 5.112 billion from the end of the previous year, while non-performing loans in leasing and business services increased by RMB 3.916 billion[119] - Total restructured loans were RMB 27.226 billion, an increase of RMB 0.825 billion from the end of the previous year; total overdue loans were RMB 98.067 billion, an increase of RMB 5.108 billion from the end of the previous year[126] - Loan impairment provisions at period-end were RMB 95.816 billion, with a net provision of RMB 23.452 billion for the current period[130] Capital Adequacy Ratio Analysis As of the end of the reporting period, the Group's Core Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio, and capital adequacy ratio were 9.50%, 11.62%, and 13.25% respectively, all meeting regulatory requirements and showing an increase from the end of the previous year; the leverage ratio was 7.58%, an increase of 0.34 percentage points from the end of March 2025 2025 June 30 Capital Adequacy Ratio Indicators (%) | Indicator | 2025 June 30 | 2024 Dec 31 | Change (percentage points) | | :--- | :--- | :--- | :--- | | Core Tier 1 Capital Adequacy Ratio | 9.50 | 9.36 | 0.14 | | Tier 1 Capital Adequacy Ratio | 11.62 | 11.00 | 0.62 | | Capital Adequacy Ratio | 13.25 | 12.89 | 0.36 | - The Group's leverage ratio was 7.58%, an increase of 0.34 percentage points from the end of March 2025[132] Liquidity Related Indicators As of the end of the reporting period, the Group's liquidity coverage ratio was 155.16% and net stable funding ratio was 106.68%, both exceeding regulatory requirements, indicating sufficient liquidity reserves and stable funding sources for the Group 2025 June 30 Liquidity Coverage Ratio (%) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Liquidity Coverage Ratio | 155.16 | 161.99 | | High-Quality Liquid Assets | 1,109,676 | 1,086,316 | | Net Cash Outflow in Next 30 Days | 715,192 | 670,628 | 2025 June 30 Net Stable Funding Ratio (%) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Net Stable Funding Ratio | 106.68 | 108.31 | | Available Stable Funding | 4,533,208 | 4,558,823 | | Required Stable Funding | 4,249,188 | 4,209,212 | Segment Reporting The Group's business segments are divided into corporate, retail, and other businesses, while geographical segments are managed across eight major regions including headquarters, Yangtze River Delta, and Pearl River Delta; corporate business dominates in terms of total assets and profit before tax, but retail business contributes significantly to operating income; headquarters and the Yangtze River Delta region show outstanding performance in total assets and operating income 2025 H1 Business Segment Operating Performance (RMB million) | Item | Corporate Business | Retail Business | Other Businesses | Total | | :--- | :--- | :--- | :--- | :--- | | Operating Income | 35,340 | 28,565 | 6,796 | 70,701 | | Profit Before Tax | 14,560 | 6,485 | 1,749 | 22,794 | | Total Assets | 5,090,354 | 1,784,720 | 835,697 | 7,710,771 | 2025 H1 Geographical Segment Operating Performance (RMB million) | Item | Headquarters | Yangtze River Delta Region | Pearl River Delta Region | Bohai Rim Region | Northeast Region | Central Region | Western Region | Overseas and Subsidiaries | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Income | 27,677 | 11,855 | 7,555 | 6,562 | 1,231 | 5,094 | 5,816 | 4,911 | 70,701 | | Profit Before Tax | 8,931 | 5,061 | 3,079 | -2,034 | 1,411 | 1,603 | 2,374 | 2,369 | 22,794 | | Total Assets | 3,306,490 | 1,239,070 | 758,174 | 1,383,899 | 135,374 | 578,286 | 694,823 | 454,986 | 7,710,771 | Other Financial Information The Group has established a sound internal control system for fair value measurement and implemented new accounting standards such as IFRS 9; there were no significant overdue debts during the reporting period; net cash flow from operating activities was negative but the net outflow decreased year-on-year; net cash flow from investing activities turned into a net inflow, increasing by RMB 73.158 billion year-on-year; net cash flow from financing activities slightly increased year-on-year - The Bank has established the "China Minsheng Bank Management Measures for Fair Value Accounting and Valuation of Financial Instruments," implemented new accounting standards such as IFRS 9, and conducts multiple verifications and early warning monitoring for fair value measurement[140][141] - As of the end of the reporting period, the Group had no significant overdue debts[142] 2025 H1 Net Cash Flow (RMB million) | Item | 2025 H1 | 2024 H1 | Change Amount | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -219,043 | -283,843 | Net outflow decreased by 64,800 | | Net Cash Flow from Investing Activities | 107,517 | 34,359 | Net inflow increased by 73,158 | | Net Cash Flow from Financing Activities | 125,190 | 125,005 | Net inflow increased by 185 | Key Issues in Operations The Group's net interest margin increased by 1 basis point year-on-year, primarily due to improved liability costs and optimized asset structure; net non-interest income grew by 26.41% year-on-year, driven by increased investment income and intermediary business; non-performing loan generation rate slightly increased, with new non-performing retail loans rising, but the Bank intensified efforts in non-performing asset recovery and disposal; real estate risk prevention received high attention, with a decrease in corporate real estate-related credit balance and a 1.53 percentage point decrease in non-performing loan ratio; in capital management, all capital adequacy ratios remained stable and met regulatory requirements - Net interest margin was 1.39%, an increase of 1 basis point year-on-year, primarily due to improved liability costs and optimized asset structure[145] - Net non-interest income was RMB 21.498 billion, an increase of 26.41% year-on-year, with its proportion of operating income rising by 4.48 percentage points, mainly driven by increased investment income and settlement and clearing fee income[146] - Non-performing loan generation rate was 1.51%, an increase of 0.02 percentage points from 2024, mainly due to increased new non-performing retail loans; accumulated recovery and disposal of non-performing assets amounted to RMB 35.156 billion[147] - Corporate real estate-related credit balance was RMB 390.653 billion, a decrease of 1.14% from the end of the previous year; real estate non-performing loan ratio was 3.48%, a decrease of 1.53 percentage points from the end of the previous year[151] - Core Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio, and capital adequacy ratio were 9.50%, 11.62%, and 13.25% respectively, remaining stable overall and meeting regulatory requirements[152] Risk Management The Group continuously improves its comprehensive risk management system, strengthening management of credit risk, market risk, operational risk, liquidity risk, country risk, banking book interest rate risk, reputational risk, information technology risk, compliance risk, and anti-money laundering risk; through optimizing models, strengthening monitoring, improving systems, and leveraging technology, it effectively controls various risks to ensure stable business development - The Bank is dedicated to building an "upgraded" comprehensive risk management system, enhancing its support for the Bank's high-quality development, and won the "China Best Risk Data and Analytics Implementation Award"[153] - Credit risk management covers the entire process, strengthening technology empowerment to promote the digital and intelligent transformation of credit risk management[154] - The large exposure management mechanism is sound, with single non-interbank customer, group non-interbank customer, single interbank customer, and group interbank customer exposures all meeting regulatory requirements[155] - Liquidity risk regulatory indicators remained well within compliance, and intraday liquidity risk was safe and controllable[160] - Deeply practices the philosophy that "compliance operation is core competitiveness," organizing the "High-Quality Compliance Development Year" activity to continuously improve compliance management[165] Outlook Looking ahead to the second half of 2025 and beyond, the Bank will focus on the overall economic transformation and upgrading, adhere to serving the real economy, comprehensively enhance customer value creation capabilities, strive to build distinctive market competitive advantages, dynamically adjust asset-liability management strategies, and continuously strengthen comprehensive risk management capabilities to achieve high-quality development - Comprehensively enhance customer value creation capabilities, providing more suitable and higher-value integrated financial solutions[167] - Strive to build distinctive market competitive advantages, accelerate digital transformation, and improve service efficiency and intelligent application levels[167] - Dynamically adjust asset-liability management strategies, increase financial services for national strategies, key areas, and weak links, and strengthen refined liability management[167] - Continuously strengthen comprehensive risk management capabilities, upgrade digital risk control methods, and implement precise prevention and control strategies[168] Chapter 4 Share Changes and Shareholder Information Ordinary Share Information As of the end of the reporting period, the Bank's total ordinary shares were 43,782,418,502 shares, all of which were unrestricted shares, with RMB ordinary shares accounting for 81.00% and overseas listed foreign shares accounting for 19.00%; there were no changes in the total number and structure of ordinary shares during the reporting period, nor were there any restricted shareholders 2025 June 30 Ordinary Share Changes (shares) | Item | 2025 June 30 Quantity | Proportion (%) | 2024 Dec 31 Quantity | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Unrestricted Shares | 43,782,418,502 | 100.00 | 43,782,418,502 | 100.00 | | Of which: RMB Ordinary Shares | 35,462,123,213 | 81.00 | 35,462,123,213 | 81.00 | | Overseas Listed Foreign Shares | 8,320,295,289 | 19.00 | 8,320,295,289 | 19.00 | | Total Ordinary Shares | 43,782,418,502 | 100.00 | 43,782,418,502 | 100.00 | - During the reporting period, the Bank had no shareholders with restricted shares[170] Securities Issuance and Listing During the reporting period, the Bank did not issue new ordinary shares, and there were no changes in the total number and structure of ordinary shares, nor were there any internal employee shares; information on bond issuance can be found in the notes to the financial statements - During the reporting period, the Bank did not issue new ordinary shares, and there were no changes in the total number and structure of ordinary shares[171] - The Bank has no internal employee shares[171] Shareholder Information As of the end of the reporting period, the Bank had a total of 299,397 ordinary shareholders; among the top ten ordinary shareholders, HKSCC Nominees Limited held the highest proportion at 18.93%; Dajia Life Insurance Co., Ltd. held a combined 17.84%, making it the largest shareholder; the Bank has no controlling shareholder or actual controller; there were no share repurchases, sales, or redemptions during the reporting period; some major shareholders' shares were pledged or frozen - As of the end of the reporting period, the Bank had a total of 299,397 ordinary shareholders[172] Top 10 Ordinary Shareholders (excluding shares lent through securities refinancing) | Shareholder Name | Shareholding Proportion (%) | Shares Held at Period-End (shares) | Share Type | Share Status | | :--- | :--- | :--- | :--- | :--- | | HKSCC Nominees Limited | 18.93 | 8,287,619,818 | H-shares | Unknown | | Dajia Life Insurance Co., Ltd. - Universal Product | 10.30 | 4,508,984,567 | A-shares | None | | Dajia Life Insurance Co., Ltd. - Traditional Product | 6.49 | 2,843,300,122 | A-shares | None | | Shenzhen Liye Group Co., Ltd. | 4.49 | 1,966,999,113 | A-shares | Pledged | | New Hope Liuhe Investment Co., Ltd. | 4.18 | 1,828,327,362 | A-shares | None | | Tongfang Guoxin Investment Holding Co., Ltd. | 3.59 | 1,573,675,801 | A-shares | Pledged | | Shanghai Jiantai Life Technology Co., Ltd. | 3.15 | 1,379,679,587 | A-shares | Pledged | | China P&I Club | 3.02 | 1,324,284,453 | A-shares | None | | Orient Group Co., Ltd. | 2.92 | 1,280,117,123 | A-shares | Pledged, Frozen, Marked | | Hong Kong Securities Clearing Company Limited | 2.84 | 1,241,360,874 | A-shares | None | - The Bank has no controlling shareholder or actual controller; the largest shareholder, Dajia Life Insurance Co., Ltd., holds a combined 17.84%[181] - During the reporting period, the Group did not sell, repurchase, or redeem any of its securities[182] - As of the end of the reporting period, 118,433,618 shares of the Bank were subject to judicial freezing, and 1,311,632,512 shares were subject to judicial marking[194] Preference Share Information During the reporting period, the Bank had no preference share issuance and listing, dividend distribution, repurchase or conversion, or restoration of voting rights; as of the end of the reporting period, the number of preference shareholders was 56; the Bank accounts for its issued and outstanding domestic preference shares as other equity instruments - During the reporting period, the Bank had no preference share issuance and listing[195] - As of the end of the reporting period, the number of preference shareholders (or their nominees) was 56[196] - During the reporting period, the Bank had no preference share dividend distribution, repurchase or conversion, or restoration of voting rights[198][199][200] - The Bank accounts for its issued and outstanding domestic preference shares as other equity instruments[201] Chapter 5 Corporate Governance, Environmental and Social Responsibility Overview of Corporate Governance During the reporting period, the Bank strictly complied with laws, regulations, and regulatory requirements, continuously strengthening the organic integration of Party leadership and corporate governance; the general meeting of shareholders approved the proposal to no longer establish a Supervisory Board, which will be abolished upon approval; the Board of Directors' operational mechanism is sound, independent directors play an important role, and the actual corporate governance situation is consistent with regulatory requirements - The Bank continuously strengthens the organic integration of Party leadership and corporate governance[203] - The general meeting of shareholders approved the proposal to no longer establish a Supervisory Board and to revise the Articles of Association, which will be legally abolished upon approval[203] - The Board of Directors operates with a sound mechanism, and independent directors play an important role in risk management assessment, internal control management, related party transactions, remuneration, and nominations[203] Meetings of the Board of Directors and its Special Committees During the reporting period, the Bank's Board of Directors held 6 meetings, deliberating 58 proposals and reviewing 54 special reports; the six special committees under the Board held 25 meetings, deliberating 79 proposals and reviewing 50 special reports, ensuring the effective operation of corporate governance - During the reporting period, the Bank's Board of Directors held 6 meetings, deliberating 58 proposals and reviewing 54 special work reports[204] - The six special committees under the Board, including the Strategy and Development and Consumer Rights Protection Committee, held 25 meetings, deliberating 79 proposals and reviewing 50 special work reports[204] Meetings of the Supervisory Board and its Special Committees During the reporting period, the Bank's Supervisory Board held 4 meetings, deliberating 20 proposals and reviewing 67 reports; the Supervisory Board's special committees held 2 meetings, deliberating and reviewing 7 matters, effectively fulfilling their supervisory duties - During the reporting period, the Bank's Supervisory Board held 4 meetings, deliberating 20 proposals and reviewing 67 reports[205] - The Supervisory Board's special committees held 2 meetings, deliberating and reviewing 7 matters[205] Information on Directors, Supervisors, and Senior Management The Bank's list of directors, supervisors, and senior management and their shareholdings remained stable, with appointments and departures of directors and senior management during the reporting period, and changes in some directors' and supervisors' information; under Hong Kong regulations, some directors held interests in securities of associated corporations; the Bank has adopted a code of conduct for securities transactions, and no violations were found during the reporting period; the Bank and relevant personnel were not subject to significant administrative penalties - Mr. Gao Yingxin serves as Chairman and Executive Director, and Mr. Wang Xiaoyong serves as President, Vice Chairman, and Executive Director[99] - During the reporting period, Mr. Liang Xinjie and Mr. Lin Li's qualifications as directors were approved by the National Financial Regulatory Administration, and Mr. Zhang Hongwei resigned from his positions including Vice Chairman[208] - Mr. Shi Jie resigned as Vice President due to retirement, and Mr. Li Wenshi was appointed as Vice President[209] - The Bank has adopted a code of conduct for securities transactions for directors and supervisors that is no less stringent than Appendix C3 "Model Code" of the Hong Kong Listing Rules, and no violations were found during the reporting period[219] - During the reporting period, the Bank, its directors, supervisors, senior management, and controlling shareholders were not under investigation for suspected crimes or subject to significant administrative penalties[220] Employee Information As of the end of the reporting period, the Group had 62,044 employees, of whom 59,279 were Bank employees; among Bank employees, males accounted for 43.0% and females for 57.0%; those with postgraduate degrees or above accounted for 22.4%, and those with bachelor's degrees accounted for 73.8%; the Bank's human resources and remuneration policies are value-oriented, establishing a position-based remuneration management system, and implementing deferred payment and clawback mechanisms for performance-based remuneration for senior management and key personnel; the training system covers professional and management series employees, aiding in capability enhancement and strategic implementation - As of the end of the reporting period, the Group had 62,044 employees, of whom 59,279 were Bank employees[221] - Among Bank employees, males accounted for 43.0% and females for 57.0%; those with postgraduate degrees or above accounted for 22.4%, and those with bachelor's degrees accounted for 73.8%[221] - The Bank's remuneration management system follows the principles of "setting positions based on needs, determining pay based on positions, adjusting pay with position changes, and rewarding based on performance," and has established deferred payment and clawback mechanisms for performance-based remuneration[222] - Training content focuses on strategic culture promotion, risk and compliance training, professional knowledge and skill enhancement, and management and leadership development, building a layered and categorized training system[224] Departmental Structure The Bank's departmental structure encompasses customer segment departments, product and support departments, risk management departments, back-office support departments, and Board/Supervisory Board institutions, forming a clear organizational framework to support the conduct of various businesses and effective risk management - The Bank's departmental structure includes customer segment departments (e.g., Corporate Banking Department, Personal Finance Department), product and support departments (e.g., Financial Markets Department, Credit Card Center), risk management departments (e.g., Risk Management Department, Legal and Compliance Department), back-office support departments (e.g., Human Resources Department, Information Technology Department), and Board/Supervisory Board institutions[226] Organizational Structure of the Bank As of the end of the reporting period, the Bank had established 41 domestic first-tier branches, 2 overseas first-tier branches, and 105 second-tier branches (including off-site sub-branches), totaling 148 branch-level institutions; additionally, it had 2,416 sub-branch outlets, covering 139 cities in mainland China, with a total of 59,279 employees - As of the end of the reporting period, the Bank had established 41 domestic first-tier branches, 2 overseas first-tier branches, and 105 second-tier branches (including off-site sub-branches), with a total of 148 branch-level institutions[227] - The Bank's sales network covers 139 cities in mainland China, including 2,416 sub-branch outlets[57] - As of the end of the reporting period, the Bank had a total of 59,279 employees[235] Internal Control and Internal Audit The Bank has established a sound corporate governance structure and internal control management system, regularly evaluating the effectiveness of internal controls in accordance with relevant laws and regulations, effectively promoting the improvement of the internal control system; internal audit is managed vertically by the headquarters, reporting independently to the Board of Directors and its Audit Committee, with an audit scope covering all business and management activities, continuously enhancing audit supervision quality and efficiency through a combination of conventional and digital auditing - The Bank has established a sound corporate governance structure and internal control management system, annually assessing the effectiveness of internal controls[236] - Internal audit is managed vertically by the headquarters, reporting independently to the Board of Directors and its Audit Committee, with an audit scope covering all business and management activities[238] - Internal audit work combines conventional and digital auditing, is risk-oriented, continuously strengthens research-based auditing, and enhances the quality and effectiveness of audit supervision[239] Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures During the Reporting Period As of now, the Bank has not implemented any equity incentive plans, employee stock ownership plans, or other employee incentive measures - As of now, the Bank has not implemented any equity incentive plans, employee stock ownership plans, or other employee incentive measures[240] Compliance with Appendix C1 'Corporate Governance Code' of the Hong Kong Listing Rules During the reporting period, the Bank fully complied with the code provisions contained in Appendix C1 "Corporate Governance Code" of the Hong Kong Listing Rules and met most of the recommended best practices - During the reporting period, the Bank fully complied with the code provisions contained in Appendix C1 "Corporate Governance Code" of the Hong Kong Listing Rules, and also met most of the recommended best practices listed therein[241] Environmental and Social Responsibility The Bank adheres to green development, actively deploys green finance, and strictly complies with environmental laws and regulations, receiving no administrative penalties for environmental issues during the reporting period; in terms of social responsibility, the Bank continues to promote financial services for rural revitalization, having raised a cumulative RMB 30 million in gratuitous assistance funds and invested RMB 72.9718 million in compensated assistance funds; concurrently, it actively carries out charitable and cultural public welfare activities and highly values ESG management improvement, achieving the highest global AAA rating in MSCI ESG - The Bank adheres to green development, actively deploys green finance, and strictly complies with environmental laws and regulations, receiving no administrative penalties for environmental issues during the reporting period[242] - The Bank has continuously provided targeted assistance to Huaxian and Fengqiu counties in Henan for 23 years, raising RMB 30 million in gratuitous assistance funds and investing RMB 72.9718 million in compensated assistance funds for designated poverty alleviation counties[243] - Actively carries out charitable public welfare activities, hosting the 10th "ME Public Welfare Innovation Funding Program", supporting 29 public welfare projects[244] - The Bank's MSCI ESG rating is the highest global AAA level[246] Assessment of Progress in Quality Improvement, Efficiency Enhancement, and Return on Investment The Bank actively responded to the "Quality Improvement, Efficiency Enhancement, and Return on Investment" special action, adhering to strategic guidance, building a value bank, solidifying its customer base, enhancing refined management and innovation empowerment; concurrently, it strengthened its risk control system, improved asset quality, prevented risks in key areas, and emphasized investor returns, maintaining a stable dividend policy; the Bank also optimized corporate governance, strengthened investor communication and information disclosure, and encouraged major shareholders to make long-term investments and voluntary share increases to enhance the Bank's investment value - The Bank adheres to the strategic positioning of "the bank for private enterprises, an agile and open bank, and a service-oriented bank," with "strengthening customer base, optimizing structure, controlling risks, and promoting revenue growth" as its main work priorities[248] - As of the end of the reporting period, the number of core customers driven by strategic clients increased by 558, retail customer numbers increased by 3.89%, and private banking customer numbers increased by 12.84%[248] - The Bank continuously upgrades its AI and large model infrastructure capabilities, strengthening AI applications in customer service, risk prevention, and other areas[250] - The Bank has established deferred payment and clawback mechanisms for performance-based remuneration for senior management, key positions, and positions with significant impact on risk[222] - Since 2018, the proportion of cash dividends to net profit attributable to ordinary shareholders has consistently remained above 30%, with interim dividends added in 2024[254] - During the reporting period, the Bank organized and participated in 97 investor relations activities, covering nearly 500 investment institutions, doubling the frequency of communication compared to the same period last year[257] Chapter 6 Significant Matters Significant Litigation and Arbitration Matters During the reporting period, the Bank had no litigation or arbitration matters that had a significant impact on its operations; as of June 30, 2025, the Bank was a defendant or respondent in 252 pending lawsuits and arbitrations, involving approximately RMB 5.853 billion, but these are not expected to have a significant adverse impact; some lawsuits related to Wuhan Center Tower and Oceanwide Holdings have obtained effective judgments and entered enforcement - During the reporting period, no litigation or arbitration matters had a significant impact on the Bank's operations[262] - As of June 30, 2025, the Bank was a defendant or respondent in 252 pending lawsuits and arbitrations, involving approximately RMB 5.853 billion[262] - The Bank's lawsuits with Wuhan Center Tower Development Investment Co., Ltd. and Wuhan Central Business District Co., Ltd. have entered enforcement; 7 lawsuits with Oceanwide Holdings Co., Ltd. and China Oceanwide Holdings Group Co., Ltd. have obtained effective judgments (Bank won) and entered enforcement[262] Acquisition and Disposal of Assets, and Merger Matters During the reporting period, the Bank had no significant asset acquisitions, disposals, or merger matters - During the reporting period, the Bank had no significant asset acquisitions, disposals, or merger matters[263] Significant Contracts and Their Performance The Bank's Z4 plot project in the Beijing Central Business District (CBD) core area of Chaoyang District, Beijing, which it participated in and won the bid for, is currently undergoing mechanical, electrical, and interior decoration works; the project on the south side of Aofeng Road, Taijiang District, Fuzhou, has been completed and accepted, and the branch has relocated; the Beijing Shunyi Headquarters Base Phase II Cloud Computing Data Center project has completed acceptance - The Z4 plot project in the Beijing Central Business District (CBD) core area of Chaoyang District, Beijing, is currently undergoing mechanical, electrical, and interior decoration works[264] - The project on the south side of Aofeng Road, Taijiang District, Fuzhou, has been completed and accepted by government departments, and the branch has relocated[264] - The Beijing Shunyi Headquarters Base Phase II Cloud Computing Data Center project has completed acceptance[265] Significant Guarantees During the reporting period, other than financial guarantee businesses within the scope approved by regulatory authorities, the Bank had no other significant guarantee matters requiring disclosure, and there were no instances of entering into guarantee contracts in violation of laws, administrative regulations, and the China Securities Regulatory Commission's regulations on external guarantee approval procedures - During the reporting period, other than financial guarantee businesses within the scope approved by regulatory authorities, the Bank had no other significant guarantee matters requiring disclosure[266] - There were no instances of entering into guarantee contracts in violation of laws, administrative regulations, and the China Securities Regulatory Commission's regulations on external guarantee approval procedures[266] Commitments of the Bank and Related Parties The Bank and its directors and senior management have formulated and committed to measures to mitigate the dilution of immediate returns caused by the non-public issuance of preference shares; during the reporting period, the Bank and relevant personnel did not violate the aforementioned commitments - The Bank has formulated measures to mitigate the dilution of immediate returns caused by the non-public issuance of preference shares, including strengthening capital management, optimizing business models, and enhancing risk management capabilities[267] - The Bank's directors and senior management have also made corresponding commitments regarding the effective implementation of measures to mitigate immediate return dilution[267] - During the reporting period, the Bank and its directors and senior management did not violate the aforementioned commitments[267] Appointment of Accounting Firms The Bank appointed KPMG Huazhen LLP (Special General Partnership) as its domestic accounting firm for 2025 and KPMG as its international accounting firm for 2025; the total audit service fee for the year is RMB 9.81 million, and non-audit service fees are RMB 1.093 million; KPMG confirmed that non-audit services would not impair its audit independence - The Bank appointed KPMG Huazhen LLP (Special General Partnership) as its domestic accounting firm for 2025 and KPMG as its international accounting firm for 2025[268] - The total audit service fee for the year is RMB 9.81 million, including RMB 1 million for internal control effectiveness audit[268] - Non-audit service fees paid to KPMG and its member firms in the first half of the year totaled RMB 1.093 million, and KPMG confirmed that such non-audit services would not impair its audit independence[268] Significant Related Party Transactions The Bank has no controlling shareholder; information on related party transactions under relevant accounting standards at the end of the reporting period can be found in Note 9 to the financial statements - The Bank has no controlling shareholder[269] - Information on related party transactions under relevant accounting standards at the end of the reporting period can be found in Note 9 to the financial statements[269] Profit Distribution The Bank has completed its 2024 annual profit distribution, with a cash dividend of RMB 0.062 per share (including tax), totaling RMB 2.714 billion; together with the interim dividend, the total cash dividend for 2024 was RMB 0.192 per share (including tax), totaling RMB 8.406 billion; the Board of Directors approved the 2025 interim profit distribution plan, proposing a cash dividend of RMB 1.36 per 10 shares (including tax), totaling approximately RMB 5.954 billion, representing about 29.95% of the net profit attributable to ordinary shareholders for the current period - 2024 annual profit distribution: a cash dividend of RMB 0.062 per share (including tax), totaling RMB 2.714 billion[270] - Total cash dividend for 2024 was RMB 8.406 billion, or RMB 0.192 per share (including tax)[270] - 2025 interim profit distribution plan: proposes a cash dividend of RMB 1.36 per 10 shares (including tax) to all shareholders[271] - The total interim cash dividend for 2025 is approximately RMB 5.954 billion, representing approximately 29.95% of the net profit attributable to the Bank's ordinary shareholders for the current period on a Group basis[271] Review of Interim Results KPMG has reviewed the Bank's interim financial report prepared in accordance with International Financial Reporting Standards and Hong Kong Listing Rules disclosure requirements; the Bank's Board Audit Committee has reviewed and approved the submission of this report to the Board for deliberation, and the Board approved it on August 29, 2025 - KPMG has reviewed the Bank's interim financial report[272] - The Bank's Board Audit Committee has reviewed and approved the submission of this report to the Board for deliberation[272] - The Board of Directors approved this report on August 29, 2025[272] Integrity of the Bank, Controlling Shareholder, and Actual Controller The Bank has no controlling shareholder or actual controller, with Dajia Life Insurance Co., Ltd. being the largest shareholder; during the reporting period, the Bank, its largest shareholder, and its ultimate controller did not fail to fulfill obligations determined by effective court legal documents or have large amounts of matured debts unpaid - The Bank has no controlling shareholder or actual controller; the largest shareholder is Dajia Life Insurance Co., Ltd[273] - During the reporting period, the Bank, its largest shareholder, and its ultimate controller did not fail to fulfill obligations determined by effective court legal documents or have large amounts of matured debts unpaid[273] Non-Operating Fund Occupation by Controlling Shareholder and Other Related Parties The Bank has no controlling shareholder, with Dajia Life Insurance Co., Ltd. being the largest shareholder; there was no non-operating occupation of funds by the largest shareholder, its ultimate controller, or other related parties - The Bank has no controlling shareholder; the largest shareholder is Dajia Life Insurance Co., Ltd[274] - There was no non-operating occupation of funds by the largest shareholder, its ultimate controller, or other related parties[274] Pre-emptive Rights The "Company Law of the People's Republic of China" and the "Articles of Association" do not stipulate pre-emptive rights, thus not requiring the Bank to offer new shares to existing shareholders in proportion to their shareholdings; the Bank may increase its registered capital through various means, but the "Articles of Association" do not contain mandatory provisions regarding shareholders' pre-emptive rights - The "Company Law of the People's Republic of China" and the "Articles of Association" do not stipulate pre-emptive rights, thus not requiring the Bank to offer new shares to existing shareholders in proportion to their shareholdings[275] - The Bank may increase its registered capital through various means, such as issuing ordinary shares to unspecified investors or allotting ordinary shares to existing shareholders[275] Consumer Rights Protection Work During the reporting period, the Bank continuously and comprehensively implemented consumer rights protection work through five measures: improving the management system, perfecting operational mechanisms, focusing on key areas, practicing the "Fengqiao Experience," and strengthening education and publicity, continuously optimizing products and services, comprehensively enhancing customer experience, and addressing consumer demands to improve the quality and effectiveness of root cause analysis and rectification - The Bank comprehensively enhances customer experience through five measures: improving the management system, perfecting operational mechanisms, focusing on key areas, practicing the "Fengqiao Experience," and strengthening education and publicity[276] - Continuously improves the consumer protection governance system, strengthens the vertically and horizontally integrated consumer protection coordination mechanism, and enhances the consistency and effectiveness of consumer protection management[276] - Deeply practices the "Fengqiao Experience" in the new era, continuously improving work mechanisms such as classified complaint management and escalated handling of repeated complaints, enhancing the quality and effectiveness of root cause analysis and rectification[276] Other Significant Matters During the reporting period, the Bank had no other significant matters requiring disclosure - During the reporting period, the Bank had no other significant matters[277] Financial Report Review Report on Interim Financial Information KPMG has reviewed the Group's unaudited interim financial information for the six months ended June 30, 2025, in accordance with International Standard on Review Engagements 2410; the review concluded that nothing came to their attention that caused them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 - KPMG has reviewed the Group's interim financial information[280] - The review was conducted in accordance with International Standard on Review Engagements 2410[281] - The review concluded that nothing came to their attention that caused them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34[282] Condensed Consolidated Financial Statements This section provides the Group's condensed consolidated income statement, statement of comprehensive income, statement of financial position, statement of changes in equity, and statement of cash flows for the six months ended