Group 1: Asset Quality Outlook - The company anticipates maintaining a good asset quality level within the industry despite new challenges from economic fluctuations and external conditions [2] - The bank will focus on key areas and adhere to a risk bottom line while enhancing its credit risk management through financial technology [2] Group 2: Loan Growth Prospects - The bank has been increasing its loan scale by focusing on key sectors such as private small and micro enterprises, manufacturing, and consumer spending [2] - Future loan growth is expected to remain reasonable, supported by policies aimed at expanding domestic demand and promoting consumption [2] Group 3: Capital Growth and Returns - The company emphasizes the importance of balancing dividends with internal capital growth to ensure sustainable development [2] - Internal capital is projected to create greater value for the company, with a commitment to enhancing performance and providing returns to shareholders [2]

Investment Rating - The industry investment rating is "Outperform the Market," indicating an expected performance that exceeds the market by more than 5% over the next six months [8]. Core Insights - The growth rate of financial institution loans has slightly declined, with retail loans experiencing low growth. The total balance of RMB loans reached 268.56 trillion yuan, reflecting a year-on-year growth of 7.1% as of the end of Q2 2025, with an increase of 3.14 trillion yuan in the second quarter [2][4]. - The decline in loan growth is primarily attributed to the accelerated issuance of government bonds, which has negatively impacted corporate loans. The growth rate of corporate loans remains the main focus, with industrial medium and long-term loans growing by 10.7% year-on-year [4]. - The growth of inclusive small and micro loans remains stable, with a year-on-year increase of 12.3%, which is 5.2 percentage points higher than the overall loan growth rate [4]. - The mortgage loan growth rate has stabilized, with a slight year-on-year decline of 0.1%. The report anticipates that continued reductions in loan interest rates may enhance home-buying enthusiasm [4]. Summary by Sections Loan Growth Trends - As of the end of Q2 2025, the growth rate of financial institution loans has decreased by 0.3 percentage points compared to Q1, with corporate loans being the primary focus of resource allocation [4]. - The growth of real estate loans has shown a slight recovery, with a year-on-year increase of 4.9% [4]. Policy Impact and Market Dynamics - The report emphasizes the importance of policy implementation effects, particularly in the mortgage sector, where the decline in growth has slowed down [4]. - The changing structure of funding is highlighted as a significant factor in driving sector valuation recovery, with stable inflows from passive indices and a preference for high-dividend bank stocks among long-term funds [4]. Investment Recommendations - The report suggests a strategic shift towards reallocation rather than trading, focusing on the dividend configuration value of the banking sector. It expresses optimism for A-share listed banks and certain regional banks with strong dividend advantages [4].

Core Viewpoint - The overall balance of RMB loans in financial institutions reached 268.56 trillion yuan by the end of Q2 2025, with a year-on-year growth of 7.1% and an increase of 12.92 trillion yuan in the first half of the year [1] Group 1: Corporate Loans - The balance of corporate loans in both domestic and foreign currencies reached 182.47 trillion yuan by the end of Q2 2025, with a year-on-year growth of 8.6% and an increase of 11.5 trillion yuan in the first half of the year [2] - Short-term loans and bill financing balance was 62.04 trillion yuan, growing by 9.4% year-on-year, with an increase of 4.25 trillion yuan in the first half [2] - Medium and long-term loans balance was 116.79 trillion yuan, with a year-on-year growth of 8.3%, increasing by 7.08 trillion yuan in the first half [2] Group 2: Industrial and Infrastructure Loans - The balance of medium and long-term loans for the industrial sector reached 26.27 trillion yuan, with a year-on-year growth of 10.7%, increasing by 1.74 trillion yuan in the first half [3] - Medium and long-term loans for the service industry reached 71.62 trillion yuan, growing by 6.8% year-on-year, with an increase of 3.99 trillion yuan in the first half [3] - Medium and long-term loans for infrastructure-related industries reached 43.11 trillion yuan, with a year-on-year growth of 7.4%, increasing by 2.18 trillion yuan in the first half [3] Group 3: Inclusive and Green Loans - The balance of inclusive micro and small loans reached 35.57 trillion yuan, with a year-on-year growth of 12.3%, increasing by 2.63 trillion yuan in the first half [4] - The balance of green loans reached 42.39 trillion yuan, growing by 14.4% since the beginning of the year, with an increase of 5.35 trillion yuan in the first half [5] - Loans for infrastructure green upgrades, energy low-carbon transitions, and ecological protection reached 18.75 trillion yuan, 8.25 trillion yuan, and 4.95 trillion yuan respectively, with significant increases in the first half [5] Group 4: Agricultural Loans - The balance of agricultural loans reached 53.19 trillion yuan, with a year-on-year growth of 7.4%, increasing by 3.07 trillion yuan in the first half [6] - Rural loans reached 38.95 trillion yuan, growing by 7.4% year-on-year, with an increase of 2.15 trillion yuan in the first half [6] - Agricultural loans balance was 6.9 trillion yuan, with a year-on-year growth of 8.1%, increasing by 5.451 trillion yuan in the first half [6] Group 5: Real Estate Loans - The balance of real estate loans reached 53.33 trillion yuan, with a year-on-year growth of 0.4%, increasing by 4.166 trillion yuan in the first half [7] - Real estate development loans reached 13.81 trillion yuan, growing by 0.3% year-on-year, with an increase of 2.926 trillion yuan in the first half [7] - Personal housing loans balance was 37.74 trillion yuan, with a slight year-on-year decline of 0.1%, but an increase of 510 billion yuan in the first half [7] Group 6: Support for Technology Enterprises - A total of 27.4 million technology-based SMEs received loan support, with a loan acquisition rate of 50%, up by 3.2 percentage points year-on-year [8] - The balance of loans for technology-based SMEs reached 3.46 trillion yuan, with a year-on-year growth of 22.9%, significantly higher than the overall loan growth [8] - High-tech enterprises received support with a loan balance of 18.78 trillion yuan, growing by 8.2% year-on-year, which is 1.4 percentage points higher than the overall loan growth [9] Group 7: Household Consumption Loans - The balance of household loans reached 84.01 trillion yuan, with a year-on-year growth of 3%, increasing by 1.17 trillion yuan in the first half [10] - Operating loans balance was 25.09 trillion yuan, growing by 5.4% year-on-year, with an increase of 923.8 billion yuan in the first half [10] - Consumption loans excluding personal housing loans reached 21.18 trillion yuan, with a year-on-year growth of 6%, increasing by 195 billion yuan in the first half [10]

Group 1: Capital Management - The bank's capital adequacy ratio was 15.32% at the end of 2024, maintaining a strong position in the industry [2] - The bank plans to issue capital bonds not exceeding 45 billion yuan to further strengthen its capital base [2] Group 2: Loan Growth Strategy - The bank focuses on key sectors such as private small and micro enterprises, manufacturing, import-export businesses, and consumer spending to enhance financial services [2] - Future policies aimed at expanding domestic demand and promoting consumption will support reasonable credit growth [2] Group 3: Dividend Policy - The profit distribution plan for 2024 includes a cash dividend of 9 yuan per 10 shares, marking the second consecutive year of increased dividends [2] - The bank emphasizes the importance of stable dividends as a key component of shareholder returns and aims to balance dividends with internal capital growth [2] Group 4: Investor Communication - The investor relations activity involved thorough communication without disclosing any undisclosed significant information [2]