Investment Rating - The report maintains a strong recommendation for the company, suggesting active attention due to its solid fundamentals and strong growth potential [4]. Core Views - The company has shown significant growth in total assets, with a year-on-year increase of 16.02% as of Q2 2025, driven by a 20.62% increase in corporate loans and an 18.07% increase in investment assets [2]. - The net interest margin has improved to 1.53%, which is a 2 basis points increase compared to the previous year, indicating a positive trend despite a challenging interest rate environment [2]. - The non-performing loan ratio has decreased to 1.09%, with a provision coverage ratio rising to 343.24%, reflecting improved asset quality [2]. - The company has experienced a 13.64% year-on-year increase in net fee and commission income, outperforming peers in this area [2]. Summary by Sections 1. Performance - In H1 2025, the company reported revenue growth of 5.76%, pre-provision operating profit (PPOP) growth of 6.00%, and net profit growth of 16.48% [1][4]. - The growth in net profit is supported by a decrease in provision expenses and an effective tax rate [1]. 2. Non-Interest Income - The company faced a decline in other non-interest income, with a year-on-year decrease of 24.25% in H1 2025, despite strong growth in net fees and commissions [3][30]. 3. Interest Margin and Asset-Liability Management - The net interest margin has shown resilience, increasing to 1.53% in H1 2025, while the cost of interest-bearing liabilities has improved significantly [2][12]. - The company has effectively managed its funding costs, with a notable reduction in the cost of deposits and bonds issued [2]. 4. Asset Quality - The non-performing loan ratio has decreased to 1.09%, with a significant drop in non-performing loans by 1.23 million yuan [2][12]. - The provision coverage ratio has improved to 343.24%, indicating a strong buffer against potential loan losses [2]. 5. Capital and Shareholders - The company has completed the conversion of 8 billion yuan in convertible bonds, further strengthening its capital base [4]. - The major shareholder is the Commonwealth Bank of Australia, holding a 14.66% stake [4].

Group 1: Financial Performance - In Q1 2025, the bank's revenue was CNY 33.709 billion, a year-on-year decrease of 13.1% [2] - Net profit for Q1 2025 was CNY 14.096 billion, down 5.6% year-on-year [2] - The bank's operating expenses were CNY 9.055 billion, a decrease of 13.2% year-on-year [2] Group 2: Dividend Distribution - For the year 2024, the bank plans to distribute a cash dividend of CNY 6.08 per 10 shares, totaling CNY 11.799 billion, which is 28.32% of the net profit attributable to ordinary shareholders [3] - The interim dividend for 2024 is CNY 2.46 per 10 shares, amounting to CNY 4.774 billion [3] - The final dividend for 2024 is CNY 3.62 per 10 shares, totaling CNY 7.025 billion [3] Group 3: Asset Quality - As of March 2025, the non-performing loan (NPL) ratio was 1.06%, unchanged from the end of the previous year [5] - The provision coverage ratio was 236.53%, with a provision-to-loan ratio of 2.50% [5] - In Q1 2025, the bank wrote off loans amounting to CNY 17.065 billion and recovered CNY 9.425 billion in non-performing assets [5] Group 4: Interest Margin - The net interest margin in Q1 2025 was 1.83%, a decrease of 18 basis points year-on-year [4] - The bank anticipates continued downward pressure on the net interest margin in 2025, but at a slower rate [4] Group 5: Wealth Management - Wealth management fee income in Q1 2025 was CNY 1.208 billion, a year-on-year increase of 12.5% [6] - Personal insurance income grew by 38.7% to CNY 0.344 billion, while personal fund income increased by 5.7% to CNY 0.522 billion [6] Group 6: Capital Adequacy - As of the end of 2024, the bank's capital adequacy ratios were 9.12% for core tier 1, 10.69% for tier 1, and 13.11% for total capital [8] - The bank plans to balance internal and external capital replenishment to maintain adequate capital levels [8] Group 7: Deposit Growth - As of March 2025, personal deposits totaled CNY 1,330.883 billion, a growth of 3.4% from the end of the previous year [9] - The average daily balance of personal deposits in Q1 2025 was CNY 1,316.631 billion, up 6.5% year-on-year [9] Group 8: Loan Growth - As of March 2025, personal loan balances were CNY 1,729.046 billion, a decrease of 2.2% from the end of the previous year [10] - Housing mortgage loans increased by 4.1% to CNY 339.434 billion, while credit card receivables decreased by 7.9% to CNY 400.638 billion [10]