Core Viewpoint - CITIC Bank reported a decline in revenue but an increase in net profit for the first half of 2025, indicating a mixed performance with improvements in certain areas [1][2]. Financial Performance - Revenue for the first half of 2025 was CNY 105.76 billion, a year-on-year decrease of 3%, while net profit attributable to shareholders was CNY 36.48 billion, a year-on-year increase of 2.8% [1]. - The annualized weighted average return on equity was 9.77%, down 0.92 percentage points year-on-year [1]. Revenue and Profit Structure - Revenue and PPOP decreased by 3% and 2.5% year-on-year, respectively, but the decline was less severe compared to the first quarter [2]. - Net interest income fell by 1.9% year-on-year, while non-interest income decreased by 5.1%, with the latter's decline narrowing significantly compared to the first quarter [2]. Asset and Loan Growth - As of the end of the second quarter, interest-earning assets and loans grew by 7.8% and 3.7% year-on-year, respectively [3]. - The bank's loan structure shifted towards higher-quality loans, with significant growth in loans to key sectors such as green finance and manufacturing [3]. Deposit and Funding Structure - Interest-bearing liabilities increased by CNY 317.2 billion in the first half, with a slight decrease in the second quarter due to a reduction in interbank liabilities [4]. - The proportion of time deposits increased to 57.3% by the end of the second quarter, reflecting a trend towards more stable funding sources [4]. Interest Margin and Cost Management - The net interest margin was recorded at 1.63%, a slight narrowing from the first quarter [5]. - The bank managed to lower the cost of interest-bearing liabilities through strategic adjustments, which is expected to continue benefiting from the rolling repricing of existing deposits [5]. Non-Interest Income and Asset Quality - Non-interest income fell by 5.1% year-on-year, but the decline was significantly less than in the first quarter, with certain fee income categories showing growth [6]. - The non-performing loan ratio remained stable at 1.16%, with a slight decrease in the corporate loan non-performing rate [7]. Capital Adequacy and Dividends - As of the end of the second quarter, the core Tier 1 capital adequacy ratio was 9.49%, showing a slight increase [7]. - The dividend payout ratio for the mid-year 2025 increased to 30.7% from 30.5% in 2024 [7]. Future Outlook - The bank aims to strengthen its financial services model and enhance its operational foundation, with earnings per share forecasts for 2024-2026 set at CNY 1.25, 1.29, and 1.33, respectively [8].

Core Viewpoint - The report outlines the capital management and risk assessment framework of the Bank of China, emphasizing the adherence to regulatory requirements and the establishment of a comprehensive risk management system. Group 1: Capital Adequacy and Regulatory Compliance - As of December 31, 2024, the capital adequacy ratio reached 18.76%, an increase of 102 basis points from the previous year, indicating a stable and reasonable level of capital adequacy [1][5]. - The bank is classified as a domestic systemically important bank, subject to an additional capital requirement of 1.5% [1][5]. - The risk-weighted assets (RWA) totaled RMB 19,217,559 million, with a core Tier 1 capital adequacy ratio of 12.20% [1][5]. Group 2: Risk Management Framework - The bank has established a comprehensive risk management system that includes identifying, assessing, measuring, monitoring, reporting, and controlling various risks [2][3]. - A three-line defense structure is in place for credit risk management, ensuring clear responsibilities across different levels of the organization [16][15]. - The bank conducts regular stress testing to evaluate the impact of adverse scenarios on asset quality, profitability, capital levels, and liquidity [3][4]. Group 3: Internal Capital Adequacy Assessment - The bank has completed the design and implementation of its Internal Capital Adequacy Assessment Process (ICAAP), aligning with regulatory requirements [4][5]. - The ICAAP framework includes governance structure, risk assessment, capital planning, and monitoring systems [4][5]. - The bank's capital management plan is designed to enhance value creation and meet regulatory capital requirements [5][4]. Group 4: Credit Risk Management - Credit risk management policies are tailored to different business types, with specific guidelines for industry, region, customer, and product [15][16]. - The bank employs both primary and advanced internal rating methods to assess credit risk exposure, with 34.27% of default risk exposure covered by primary internal rating methods [18][15]. - The bank's credit risk management framework includes regular reporting to the board and senior management on the status of credit risk [15][16].