平安银行股份有限公司 (000001) August 2026 Investor Update Transcript

Dear investors, analysts, media friends, good afternoon. Welcome to Ping An Bank's 2026 Interim Briefing. I'm Zhou Qiang, the Board Secretary. Thank you all for coming. I know it's really far away for you to come here and recently it's raining season here in Shenzhen. Thank you all for the hard effort. We really appreciate that. And to those joining us by phone or online, PocketBank, Panorama, and other platforms, welcome. In the first half, the A-share market showed a clear K-shaped pattern. When it kept moving between tech and high-dividend stocks, banks felt the pressure. Within banking, divergence also widened. So how to promote a value recovery for banks is a common question for banks. And for years, bank stocks were seen as dividend plays, but the market is looking for banks who can show its value. And amid this environment, we have proactively looking for changes and improve our influence efficiency, and it went on a differentiated path. So we want to answer the valuation question with real fundamentals. And in Q1, both revenue and profit growth turned positive, aging a long losing streak. In Q2, the recovery got stronger, asset mix improved, and all the factors have contributed to recovery and improvement in our valuation. And they started a positive cycle. And the past years, we have started earlier than our peers to do this transformation. And looking forward, we will be very confident and will continue to revamp our customer base and aim for a sustainable growth and to lay a solid foundation for our future growth. So that's what we want to share with you today. And next, we'll give you a full update on our transformation. And please allow me to introduce our management team, Mr. Ji Guangheng, Party Secretary and President. Mr. Shang Youzhi, Vice President and CFO, Mr. Fang Weihau, Vice President, Mr. Wu Leimin, Vice President and CRO, and Mr. Wang Jun, Assistant President. And we also have heads of key business units with us. First, let's welcome Mr. Ji Guangheng to give his remarks. Welcome to Ping An Bank's 2026 Interim Briefing. 2026 starts the 15th five-year plan. It's a key year we are building a financial powerhouse, we are reshaping the economy. It's a key year. The world stays complex, geopolitics run deep, opportunities and risks both exist, uncertainties keep growing. In the first half, China stayed in a reasonable range and faced pressure, and we are seeing newer drivers and a better structure. Banks still face low rates, margins are thin. Risks remain in real estate, local debt, and retail. But our financial system is sound. Tech and industry shifts are speeding up. That gives banks real chances for quality growth. Meantime, macro policies are also aligned. Asset mixes are better, and risk resolution moves forward, profits improve a lot, and our overall strength growth. I'll cover three things today, first, our first half results, second, our management work, and third, our next steps to return to growth. First, let's look at the first half results. We did well in the first half. Our turnaround shows. First, profits are back. Revenue was over $17.6 billion. That's up 1.8% year-on-year. Net profit was $25.7 billion, up by 3.3%. and that's three points higher than first quarter and second, assets grew, mix improved. By in June, total assets reached 6 trillion, that's up 1.7% from year start. Loans grew 1.8%. Bill discounts were cut by 17%. Third, NIM held steady. It rose a bit, and funding costs dropped. First half, our name was 1.8%, that's up 2 bps from 2025, among which deposit cost was 1.38%, that's down by 27 bps. And fourth, asset quality stayed stable, our coverage is good, NPL ratio was 1.05%, stayed flat. And first off, NPL formation ratio was 1.15%, down by 49 bps, and provision coverage ratio was about 220%, roughly flat. Credit cost was 1.1%, down 33 bps. Fifth, we kept capital tied. Ratio stayed steady at end June. Our core Tier 1 ratio was about 9.3%, Tier 1 was 11%, total CAR was about 13.1%. All were above requirements. And second, we kept party leadership at the core of our business. We ran a program, it was about the right way to measure performance. And that means serving the public, deciding with the facts, getting things done. We build that into daily work. And the results, first our revenue and net profit turned positive, key metrics hit our targets, and we've built a stronger base and more momentum for the long run. First, we aligned with the party leadership and the 15th plan. We follow the party's lead on finance, we serve the public, we stay disciplined, and party leadership is everywhere in the bank, in governance and in operations. In the first half, we tracked the 15th plan closely. We made progress on five key financial areas. In June, tech loans reached about $294 billion, that's up nearly 9% from the year's start. Green loans hit about $273 billion, up by about 2.6%. And we have small business loans covered about 858,000 firms, and the balance was about 477 billion. Agri-related loans was about 131 billion, up by around 13%. In this new phase, we step up, we keep markets stable. On one side, we lend more to tech, we lend more to small firms, to advanced manufacturing, grain sectors, and we help old industries upgrade and help new engines grow. On the other side, we serve people. We boost spending and we apply subsidies and broaden wealth products meet diverse needs. And second, we are driving change and quality growth. We stay with our strategy by strengthening retail, sharpening corporate, and specializing in interbank. We decide with facts, we act with discipline, and we pursue quality growth. And first, let's talk about retail, which has bottomed out. On assets, we faced a market drop. we kept the size stable and we improved mix. Retail loans were flat from year start, medium yield products grew, they got better, pricing power rose, our own sales team got sharper and cars are growing again, new car quality is up and we held revolvers and grew installments. We built our age with perks, rescue, health, pack care, and auto finance pushed in EV lending, used the car loans stayed steady. We refined risk, cut channel costs, and we said no to high rate, high commission deals. On wealth, fee income rose, good deposits grew. We used PN Group's integrated edge. We enriched asset allocation around bank insurance. We grew high-value AUM, and agency insurance income was up by 51.2%. Agency fund income was up by 45%. And second, corporate is being refined. We're shifting. We used to grow reactivity. now we focus on new productive areas. By end June, corporate loans rose about 5% from year start. The mix improved, their assets were cut. On one side, we help old industries upgrade. We keep our age in supply chain, cross-border, M&A and syndication. On another track, we place bets, like AI compute, chips, new energy, and we go deeper into these sectors. Treasury and interbank are doing well. We use bonds to diversify assets, and we deliver steady revenue.

Third, our internal management became more effective. We improved the assessment system. We set targets sensibly. we still behave towards quality and returns, we respect market rules and we stay alert to risk, and we give compliance metrics relative. We strengthen the focus on returns and we reject the cut-road competition in finance. We balance the whole picture, earning more and spending less. Our guiding principle is less volume, higher quality, and we also close a batch of the low-performing outlets, and we keep our cost-to-income ratio healthy. We are also building a professional team. We promote the right people. We value not just ability and result, but also characters and reputations. We invest in Thailand and succession. We strictly enforce job rotation, and we give strong performance and young staff room to broaden their horizons. We hold the compliance line. We nurture a prudent, disciplined culture. We focus on oversight on groups root units, key posts, and critical business lines, and push through the regulatory rectifications and improve the consumer protection. Thirdly, strengthening risk control, we follow the guidelines of the party and financial regulator. Their call is to prevent risk, tighten supervision, promote low-quality growth. We manage and diffuse risks in key areas. First, we upgraded our risk strategies for real retail lending. This covers personal business loans, consumer loans, and credit cards. and we also have a tight end control across a full circle and we made this routine. Before landing, we screen clients using multiple dimensional data. During landing, we apply differentiated credit limits. After landing, we use smart risk models and we monitor asset quality and diffuse risks. Today, our retail asset quality keeps improving. Our NPR formation ratio has fallen for three straight years. Second, we stay steady on real estate risk. We rate market shifts ahead of the time, and we fully separate entity risk from the project risk. We reinforce closed-loop fund supervision, and for commercial properties, we focus on quality borrowers. By end June, our corporate retail estate NPR ratio was 2.15%. That was seven basic points from the year's start. And exposure to major clients is under control, and recovery efforts are progressing steadily. Sadly, we keep diffusing local government debt risk. We firmly hold the red line. No new hiding local debt. And we support the platform in existing property. Our RGFV clients sit in economically strong regions. Their physical strength is solid, and, obviously speaking, the risk is manageable. Thirdly, the 5P is less to return to growth. We set this card gate by the beginning of this year. Our H1 results give us confidence and conviction. But we see the picture clearly. There is still a gap. A gap between today's result and the true quality growth. A gap on sustained earnings. At our mid-year meeting, I made this point directly. The growth we seek is not simply scale expansion. This is not growth built on ranked-based risk-taking. This is quality growth. This is sustainable growth and the profit growth that can withstand the circle. Going forward, we will stay the course, we will hold our momentum, and we will build our capacities around the five pillars. First, growth aligned with national strategy. We serve the national broad agenda. We will seize opportunities of the 55-year plan, and we will deliver on the five key chapters of finance. We are also driving fresh breakthroughs in future industries. Our focus is on the critical links, tech R&D and production, commercialization of the research, equipment upgrade. At the same time, we will foster new use case, and we will support the expansion of the consumption. Secondly, growth, debt, balance, return, and risk. On the asset side, we will refine differentiated pricing. We will firmly guard against disorderly competition, and we will optimize our mid-year-old product strategy. On the liability side, we will show up our deposit base, and we will strengthen our wealth products and service. On risk, we will raise our vantage point. We will make the midfield function work. We will keep close watch on the key areas, including real estate, local government debt, real credit, and bond investment. We will strictly follow the asset risk classification and will make prudent food provisions. Thirdly, growth-driven by per-capital efficiency, we will do less but better. We will cut cost and lift efficiency. We will optimize our institutional footprint, and we will improve operational efficiency. We will place even greater emphasis on synergy, and we will break down the bell rails across the business lines and across the levels. PMBank will deepen collaboration between lines and between the head office and branches. We will also build an integrated operating force that will help to strengthen our Thailand pipelines, strictly enforce job rotation, and we will also refine performance assessment to match that can unleash the full vitalities of the organization. fourthly grow powered by deep technology we will lead by technology strengthen our core functions including data computing power and algorithm and we will build on our technology dna grounded in real business needs and clients demand we will embed ai and large language model into our operations we will also upgrade our digital workforce build on our own intelligent trading system and grow our digital market ecosystem. And we will enhance our smart risk control system, stay committed to self-reliance and control, and strengthen our information security and prevent technological risks at the source. Fifthly, role build on our solid compliance. We will fully carry out every regulatory directive, track the guidance closely and respond fast. We will hold compliance accountability firm at every level, improve our oversight and accountability mechanism, deepen the governance in key areas, and never cross a compliance line. We will raise the quality of the consumer protection, strengthen risk early warning and emergency response. We will also build a strong shield of the safety development and making sure the whole bank is on a steady long-term course. This year is pivotal. A year of our reform delivers the results. Going forward, we will stay firmly on the path of sustainable quality growth. We will deepen integrated operation, and we will also build differentiated competitive age. Besides that, Ping An Bank places great value on shareholder returns. We have already set up an evaluation enhancement plan, making our dividend more stable, timely, and predictable. For this interim dividend, we will maintain a reasonable payout ratio and we will share the fruits of our performance with investors. Thank you very much. thank you very much thanks for President Xi who actually helped us to truly understand the five pillars to return to growth it's been grounded in present landscape and also the management team keep a very super mind understanding what we need to improve and continue to look into the future to deepen our efforts in business structure and efficiency strengthen our business foundation and continue to navigate the uncertainties making sure our business continues to be more stable, sustainable, and long-tosting. We will also lay a solid foundation for long-term development, and we will also communicate with the capital market as our business continues to navigate. Ladies and gentlemen, coming next, let's welcome our CFO and the Vice President of Ping An Bank, Mr. Xiang Youzhi, to work you through the H1 performance, including the financials and operationals. Let's welcome, please. Dear investors, as well as our friends from the media, good afternoon. Coming next, please allow me to brief you on our H1 performance. Overly speaking, there are a few highlights I'm happy to draw your attention to. First of all, on revenue and on growth, we have achieved double growth. Revenue increased by 1.8%, and we also continue to promote cost reduction and efficiency improvement. Operating expense and credit cost has also decreased on a year-on-year basis. Net profit increased by 3.3% while wide. Secondly, the net interest income margin has been stabilized. Non-interest income has increased while wide. The NIM was 1.8%. Flat widths, the same period of last year, grow by two basic points compared with the whole year of last year. non-interest borrowing net income grew by 5.8% due to the growth of the wealth management and bond market business income. And thirdly, the business scale remained stable and the structure continued to optimize. In terms of the long scale, it increased by 1.8%. Retail was basically remained unchanged. Corporate business grew by 3.7%. Generally speaking, for the liability side, the scale of the deposit maintained a relatively stable growth. But at the same time, the structure was optimized. The proportion of the demand deposit increase and interest expense ratio decreased significantly. Forcibly, Ping An Bank continued to make great efforts in the five greater chapters and continue to improve our technology finance, inclusive finance, green finance, elderly care finance, digital finance, maintain continued growth in general. And we also support the real economy and boost rural revitalization. Well, regarding the financials, the non-performing long-formation ratio has been improved in H1 of this year. NPR formation ratio was 1.15 percent, down by 0.49 percentage point, remained unchanged compared to the last NPR ratio was remained unchanged. The proportion ratio was 290.6 percent, maintaining at a good level. From the capital side, PM banks have continued to work hard on refine management of the capitals. Judging from each year of this year, the Tier 1 core capital adequacy ratio was the same as beginning of this year, and the Tier 1 capital adequacy ratio and capital adequacy ratio decreased compared with the beginning of this year, mainly due to the redemption of the 20 billion yuan of the preferred stock in H1 of this year. If this factor has been excluded, it's basically the same as the end of last year. While at the same time, in fourth quarter of last year, we issued the perpetual bonds in advance, which also upset at 20 billion of the preferred stock redemption being made in this year. In terms of the business, the retail business trend was positive, along with revenue and profits all resumed to positive growth. The revenue of the retail business increased by 10.6%, and the profit of the retail business, despite the reduction in capital, saw a good increase in revenue and profit on a yearly basis. The net profit of the retail business also increased its contribution to the overall net profit. The structure of the retail clients and AUM continue to be optimized. Wealth management revenue also reached a new growth. The number of the clients' wealth accounts grew by 2.4 percent. AUM of the retail clients grew by 10.8 percent. In the process of the AUM growth, the quality and the underlying asset quality was looking pretty good. And especially in H1 this year, the retail deposit structure continued to be optimized. Propulsion of the demand deposit continued to increase. Interest expense ratio continued to decrease. And by the end of H1 of this year, the retail interest expense ratio was 1.54 percent, down by 40 bps. And my fourth point, the scale of the retail loan gradually stabilized, with key product gradually increasing in volume. In H1 of this year, mortgage loan performed well, maintained positive growth. And it is also the first time for us to disclose auto loans and credit e-loans for the first time. By the end of June, the total amount of both was around 50.9 billion yuan, with an increase of 60 percent compared with the beginning of this year. Retail business emphasized on building capacities in digitalization and comprehensive finance and integrated finance. On the left side, you can see the digital construction continued to progress. On the right side, I show you the integrated finance. Its contribution to the retail business, especially contribution ratio of the new wealth management clients and the new customer AUM exceeds 50%. Let's also take a look at the corporate business. In H1 of this year, the corporate loan structure has been optimized. Deposit interest expense ratio was optimized too. In terms of the loans, the growth of the entire loan to corporate loans was 3.7%. Long-wage general loans increased by 5.2%, reduced the discounting bills. In terms of the liability side and the deposit side, the balance grew by 3.2%. The deposit interest expense ratio was 1.3%, a nice decline compared with last year. Regarding the corporate business, we have three strategies for refined efforts, including refining the industry, streamline the clients, and improve the product quality. In terms of the overall client base, it's increased by 4.8% in H1 of this year, exceeding 1 million clients in H1 of this year. And we also see very nice growth regarding the product business data. Well, for the interbank business, due to our strategy of the dual well-drive of the investment trading and clients business, it was generating steady growth in H1 of this year. Especially in terms of the revenue contribution, bond investment, equity investment business contributed a lot. Where at the same time, we also have other interbanking business, including trading and institutional sales asset custody, also maintain good growth.

And next, about asset quality. Let's go through asset quality in more detail and overall asset quality remained stable. We have a rather stable performance in both retail and corporate. We recovered $20.1 billion in NPLs, up 9% YOY. And write-offs came down sharply by 58% as we stepped out of collection efforts. And next page about real estate risk. We continue to disclose on this regard. In first half, our unbalance sheet loans decreased $11.8 billion year-to-date and NPL ratio improved by 0.07 percentage points. And we continue to enhance our management on the risk in real estate side. And we highlighted the management program itself. And for the other part, if you look at the non-credit part, it was done as well. And for the second half, our plans for the next stage, we just heard about the detailed plan from President Xi. And looking ahead, I think our priorities remain consistent to support the real economy, optimize asset liability management, and strengthen our customer-centric retail franchise and focus on quality growth as well as enhance compliance and risk control. And for asset and balance sheet, we will enhance our capability to manage it well. And in retail, we will keep building a customer-centric franchise. And for corporate banking, we will keep our three new strategies and dig deeper in the five articles. goals, and we will seize market opportunities to promote our revenue. And also digital finance will be a key strategy for Ping An Bank as well. With all those plans, we will continue to unleash the application force for the AI and technology in our bank's business. That's all for my presentation. Thanks, Mr. Xiang. He walked us through the key numbers, explained the logic behind them, and touched on some market concerns. And that gives us a good starting point for a deeper conversation later on. So now, without further ado, let's move to Q&A session. First, please welcome our management team to the stage.

You请管理层台上就座.

All right.

Let's start the Q&A. First, in order to have more friends to join us and to hear more suggestions from you, so please raise one question only for her participants so that more can raise their questions. And we have two parts for this Q&A session. First part for investors and second part for media friends. Thank you for cooperation and support. so let's start please raise your hand if you got any questions and please inform your company and your name okay first we have Richard from Morgan Stanley we thank you for this opportunity I'm Richard from Morgan Stanley, I'm the banking analyst. President Ji just mentioned our return to growth strategy early this year. We also noticed that nonprofits and revenue in the first half, especially NRI, have returned to positive growth. Moving forward, what are the drivers that we can watch? because we noticed that fee income was quite weak. So what are the sustainable drivers for growth? Thank you for the question. So for the first half, we just reported that our net profit in the first half was stable and contributed quite a lot to our revenue growth. and I think going further on we still face quite big pressure from revenue side, NII and net interest income. We will break into detail into each part. So for net interest income, first half we saw some good trend. We saw NIME was stable, stabilized and standing at this time point for the banking sector, I think NIME was facing a stable trend and this laid a solid foundation for future. In terms of volume, in terms of deposits, ratio, the cost, we still face quite some pressure. In the management of liability side, we need to enhance our capability to be more cautious with the need to rule out those low-efficient assets so that we can have more assets, more efficient assets. Internally, we said that we need to price deposits based on our loans. systems. This is the main principle for the granular management. In terms of volume, we are looking at the macro environment and the new industry so that we can improve gradually on our capability in liability management. And risk control will also still be a very important part for us. And wealth management, especially in bond investment, I think among peers we have quite good performance by seizing the market opportunities. But this is closely related to the market conditions. We will further specialize on our expertise and to find more new opportunities. And in the cost side, mainly there are two. One is risk cost and second is deposit cost. We will keep control cost in a granular way so that we can have better revenue growth in the coming quarters. Well, in fact, I think over the past three years reform or transformation, I don't think it's possible for banks to return to the old high-growth, high-yield, and high-cost model. This will no longer be the case. Amid this new environment, how to control our cost in a steady way is a very key issue for us to address. And you understand that there are some costs that we can't control unlimitedly. For example, deposit costs, all banks are facing a quick downward decline for deposit costs. The pays were different somehow, but overall trend is going downward and they're meeting them in the same similar point in some time point. In recent years, for performance, there was a big divergence. So that's why we keep saying that we can't expand our assets blindly, especially there are many uncertainties on the line ahead for traditional industries, their lack of real demand and in the first half our retail loans for quite some long time we were the number one in volume growth but behind that what i want to say to you is that the growth was like a dozens of like a hundred million of growth for the whole industry so that means many banks they are seeing their retail book shrinking. And for the macroeconomy, we have these three main drivers, they're performing quite good, but still quite big pressure was on the consumption side of this well, of course, be a drag to our credit card business, to our auto finance business. So we controlled our risks well in the first half and we have digested those existing NPLs. And for new information, we controlled well. And secondly, we did a lot in maintaining our deposit cost, risk cost well. And our granular management has been doing quite well. That includes our focus on capital management. Behind that, the foundation or the base is the quality of customers. For the past several years, we obviously noticed that our total corporate clients for efficient with the real loans, the client number grew quite quickly. One is for volume and secondly whether those customers are of good quality, whether this is a fertile soil, this is very important. So over the past years of quick transformation or adjustment, several years ago, we have already started to say that we don't focus solely on asset growth, we focus more on the profit growth per person. We look at the profit growth per outlet. So that's the efficiency ratios we are looking at. Basically, I can say our strategy was right here now and our teams have already accepted these new tactics and they are becoming more professional and they can do their math well. And for new presidents of those businesses, they know very clearly that it's important to control, to improve the efficiency, to improve the profit per person, per outlet. And this is very important for sustainable growth, because amid today's environment with so many uncertainties, if you can instill some certainty into your business, one important part is that you can make your moves, make your strategy sustainable. So, this is the one point I want to add, because what you are concerned with is the same issue that we are concerned with. There is no need to do like a cutthroat competition, no need to compete with low interest rates. Regulators forbid that as well, so we are saying that to ourselves. We don't want to do those useless or low-efficient tactics for assets that a seed will acquire with low interest risk. This will be a huge problem later on. This will bring us very big risk potential, so we don't want to do that. So, we are trying to fine-tune our strategy, our tactics, so that we can gradually, stably return to a growth track, because it's not possible for a patient who just did his surgery to recover really quickly during this process. we understand that it's important not only to upgrade ourselves but it's important to be patient as well. Thank you President Xi and President Xi. It's not easy for us to return to growth. We are confident to steadily work on this growth track. And next question.

Thank you very much, and thanks for giving me the chance to raise this question. My name is Yan Miju, a banking analyst from UBS. Just a question regarding the financial details. Just now, Wei Pichang and also President Ji were all talking about the name, net interest income is retained to a growth. In Q2 of this year, we do see a positive growth of 2.25%, which is showcasing a good momentum. Whether such a growth trend would be continued to H2 of this year, whether throughout the year we're going to have a positive growth of the NIME, because it's accounted for around 62% of your total revenue. But I know this is actually a complicated question because you have to consider the interest spread, same as volume changes. So I have a question regarding the interest spread. Just now, in your prepared remarks, you already mentioned the cost of the liability of the Roberts Bank continues to decrease. I think now the peak is already gone. It seems that there are more long-term fixed deposits matured in H1 of this year. We are also happy to see that the demand deposit is increasing. Whether the increased demand deposit is going to go on in H2 of this year, where from the NIM perspective, it seems corporate loans being quite stable, but retail loans continue to decline. Do we still face a great pressure on the retail loans? Do you foresee there will be any rates cut in H2 of this year? So I see that in Q2, we do have two pips, quarter-on-quarter growth on NIM. Whether it's going to be flat or rise in H2 of this year, and I think that the volume is looking right, the same as corporate loans, whether such a growth trend would be continued in H2 of this year. Thank you. Let me just try to answer the question. I'm not sure I will be able to cover all the questions you mentioned. But talking about NIM, I think the trend would be quite stable in H2 of this year. Why should I mention so? Because President Xi has already mentioned, in the existing market environment, it's not realistic for us to use volume to make up for the price. So we would like to just maintain a good and stable volume. However, if we'll be able to keep the NIM stable, same as net interest margin stable, then I surely believe we'll be able to have a good and stable growth from the quarter-on-quarter or month-on-month perspective. In H2 of this year, if the performance continues to go up, it's also going to show a possible trend of positive growth, but it truly depends on the market going to change. Subsequentially, we're talking about NIME. I see at least from the asset perspective, the existing pricing was still under pressure. There are some pressure we have to admit in such a competitive market. However, we need to follow the requirements, especially managing the asset liability well, but we still need to catch up with the mega trend of the overall market. On the liability side, just now, you were talking about the time for us to reduce the interest cost. Let me just make the story in this way. You mentioned for the past few months the fixed deposit matured. The fact has already been released and we believe there are some in H2 of this year for the fixed deposit matures to be released. But we are trying very hard to strengthen the control over the interest cost. So we hope that these would be maintained at a good level throughout the year. If you are going to ask me to talk about both corporate and retail side, I think for the retail name, it's been very well managed. The interest rate of the retail business was well under control. And then it is around 1.13 for RMB. Well, for the retail business, you can see the NIMS being well managed down by 40 BIPs. However, I think we still have further room for us to continue to reduce that number from the absolute number perspective. However, in the near future, we will surely follow the market change, especially within PM Bank. We would like to grow more high-quality deposits. And ultimately, when all things being well controlled, and then it truly depends on whether we're going to have a sustained growth of the high quality deposit so in h1 of this year no matter from our internal kpis or from the external part of growth expectation we hope we can continue to grow the current deposit whether the trip are going to happen we don't know you guys are the experts but for sure we're going to follow the pace of the market to well advance our business. But know that for banks, we need to be quite forward-looking on a longer circle. We need to make sure we have a good asset and liability management at every stage. Because once the rates reduce, asset and liability will surely be affected to some extent. Thank you. Thanks for your question. Let me just give you a few regarding the name according to the latest data of this month compared with our peers we were ranking number two around five to six pips compared with the first place runner and the third place runner whose name was around 1.62 percent ours is better than the third place runner ours is around 20 pips higher so in other words For PN Bank, we would like to make sure we stabilize the name at a higher yet stable level. If we're going to stabilize it above 1.8%, that's not going to be easy. However, in the depths of our heart, we do have a moot that we need to protect. Because ultimately for PN Bank, we hope we can have a good asset quality. where at the same time for the provision ratio and the non-performing law ratio should also make us the top performing ones in the market, same as the name. If we're going to achieve so, we need to have the high quality asset allocation. If I have a good interest cost control, then I can surely guarantee we have a good profit being delivered. But sometimes for bond business, it's more like it depends on the market growth. And there are some market opportunities for the fluctuations, for varieties, and for asset allocation. Overall speaking, we just want to make it more flat, less fluctuation, and more predictable. For PM Bank, what we're trying to do is to improve the proportion of the non-interest income in our total revenue. but it has everything to do with the overall market development. Internally, we're talking about the interest rate hike or cost. We may have our internal judgment, but it's not easy for us to speak it out because it has everything to do with the overall trend of the domestic economy and the triple cost of the USD. It seems that there are so many uncertainties and disputes in the market. So, for PM Bank, we don't think there is such an urgent need for rates cut. It may take a longer time or be quite forward-looking to see how the economy may look like in the near future. I think, overly speaking, our total economic aggregate and resilience are still sufficient to support the economic growth. Thank you. Thanks for both. And in age 1 of this year, our name has been kept at a historical high level. It is also due to the refined management of the whole bank. Thank you. My name is Zhang Shui. I come from CICC. I have a question regarding the volume. I have a question regarding the retail credit business. A question to President WP Wang. It seems that from the microeconomic data, and I see that we are in a process of deleveraging for the past few months, or even more than half a year, it seems that the piece has continued to slow down. The volume was also going to decline. And I also heard for Ping An Bank, from the interim perspective, your retail credit was having a flat growth, which is a hard one. So I would like to ask you how you allocate the retail credit in H1 of this year. And is there any principle you are following? And the second question regarding the allocation of the retail credit, are you going to make it and remain stable? And because the PM Bank seems only a few banks can increase its market share in this regard. Thank you. Thanks for the analyst. A very good question. As you just mentioned, in H1 of this year, the market was going down. The retail credit market was indeed under pressure. Well, for PM Bank, through a long period of active structural oil adjustment, Our scale of the retail loans has been further stabilized, with asset qualities being remained stable, and business structure continues to optimize. What I can say is that now, I see there are some positive changes for the retail loan business, especially in the bottom-out period. The reason is because for the past few years, we continue to optimize our stock structure, responding to the national policy need, and also improve our product system. Those are the three efforts we made. First of all, we continue to optimize the stock structure, and we actively clear out high-risk assets, which lay a solid foundation for our development. For the past few months, for PN Bank, we were taking initiative of optimizing the business structure, reducing high-risk assets. NPR formation and NPR ratio are all declining. Especially, the NPR ratio for personal loans was 1.23 percent unchanged from the beginning of this year. Asset qualities also remain stable. Through all those active structural changes and adjustment. We will be able to allocate more business resources to the high-quality asset and high-quality client to respond to the new development. Secondly, we actively respond to the national policy guidance, strengthen the high-quality basic assets. For example, we continue to work on the auto-finance, credit card consumptions, housing mortgage, And in terms of stabilizing the real estate market, we are actively responding and supporting the demand for rigid and improved housing, continue to provide good housing financial service. By the end of June, our balance of the housing mortgage loans increased by $8.48 billion compared with the end of last year, increased by 1.8%, which was led to an increase of the asset size and the proportion. In terms of expanding domestic demand and boosting consumption, we actively implement the National Consumption Loan Discount Policy and support the reasonable consumption demand of the residents. Since 2025, we have already cumulatively issued 70 billion yuan of the consumer loans that meet the standard of the 2.5 million customers. The discount interest exceeds 130 million RMB. At the same time, in the credit card trading program with additional subsidies, along with the development of the auto finance and new energy vehicles, we are working with the OEMs very well. And you can also see the balance of the personal new vehicle loan increased by 6.16 billion yuan, compared with end of last year, grew by 5.2%. Thirdly, we further improved the product and service system with the risk control of a new product and a new customer group forming a new growth point. And we are now focusing on the high-quality individuals and the self-employed individuals for new product release. By the end of June, the balance of the two products is already exceeding $50 billion, grow by 69.5% compared with the end of last year, which actually become a new driver of the new loans. That was about H1 of this year. Well, I know you would like to know more about H2 of this year. Regarding H2 of the ACN, as everyone can see, the household balance sheet is still in the process of recovering. It takes some time for credit demand to recover. Meanwhile, the optimization of our own retail credit structure is still an ongoing process. We still have many uncertainties and pressures. In the face of the pressures and uncertainties, we are going to be customer-centric, continue to work on the stratifications of the customer structures and the business segmentation.

Of course, we are not just simply returning to the old model. We will be more like focusing on the real needs of our customers and to equip with the right, suitable products. And we will keep optimizing our product mix and our asset mix. In order to realize all these targets, we have several steps. First, we will dig deeper into customer base to segmentize them in a more detailed way and to transfer the real demand from customers into our good quality products or businesses. This is not just a simple manner to acquire customers, but more like optimization to our strategy. For example, Chen Yizai, we have planned some new tactics. And second, we will improve our capability to acquire customers or to manage customers with our proprietary teams and further expand our knowledge among different industries and to make our capability stronger to provide diversified services to our customers. And third, we identify our customers in a more accurate way and in order to serve them well, we will further enhance our digital capability and the risk control to choose the right customers and to reach or to get in touch with our customers in a more friendly way. And fourth, we will further optimize process in credit approval and to make our services all online so that it's more convenient for our customers and their experience will be better. And of course, we will hold our asset quality as the priority. We will not change for high growth with short-term profit growth with longer-term risk or asset quality. So we have to maintain high-quality growth in the future. All in all, I think there is still a process where we need more time to recover the growth we used to have before. During this process, we will be mindful to serve the real economy and to contribute more to the economy. Thank you, President Wang. Next, another analyst. Let's have a lady. We have Shen Jun from Huatai Securities. My question is related to corporate. The management team mentioned that we are shifting toward quality growth trend. And so I noticed that corporate loan growth slowed a bit in second quarter. So my question is that regarding on these performance, I know the home banking industry is facing the same trend. But what's your current strategy for corporate banking down the road? And what are the key areas that you will focus? because you said you want to be selective in corporate banking. And how should we understand this selective? What results are we looking to have in the future? And can you elaborate on your tactics in corporate business? Because as an analyst, we want to know what are the key metrics we can follow. Thank you. I take this question. So in first half, our corporate banking has performed, grew by 9.5%, include forfeiting business. We have reached this growth. So overly speaking, among benchmarking peers, we are above the average. you can see first quarter it was relatively quick and second quarter a little bit slow. Several reasons to that. First, asset allocation. There are some seasonal differences. So in first quarter, all banks, they will step up to issue more corporate loans because you can see the full year's profit. It can be good to your interest income. So that's why first quarter, we usually see quicker loan issuance, including Ping An Bank. And second quarter, comprehensively, if we look at it, it's related to market demand. Because second quarter, we see some adjustments or changes in the markets, and our trend is in line with the market situation. But of course, we also noticed that for the first half, the overall low insurance, first quarter plus second quarter, we have maintained a steady growth. One key reason is that we are proactively adjusting or optimizing our portfolio. For net insurance in second quarter, a little bit slow or go down is because we are proactively ruling out some business from traditional industry, but of course their demand got weaker as well. And another part is that in order to avoid latent risks, we are shrinking our book to some degree because we don't want more risks in later years. Those are the proactive actions we've been taking. And we held to our selective corporate strategy. We are being selected in 12 industries, including auto parts for the chips, storage, etc. And in the first half, our net growth was $13 billion, and the growth ratio was 22%. those are satisfactory changes that we have noticed so what I'm trying to say is that this growth in volume will be like good foundation for future even though right now their size are quite small you can see that we are transitioning from the old model to new model and this new model I think it is going to sustain for quite a long time for the future two years at least this transition period. So in the second half, the priorities for corporate first is we need to stabilize our traditional industries. For example, like our commercial and service industry and infrastructure etc. In the meantime, we will identify new opportunities, for example, in city management operation or in transportation, etc., because there are some new spots surfacing in those traditional industries. And of course, AI. And not long ago, I visited a chemical, like a company that they are trying to upgrade to a new business model. So I think they will be planting opportunities that we can identify during this process. So this is the first priority for us. And second, we will promote for new businesses. We are trying to explore new areas so that our pipeline will be with more programs. We want to be selective in service and products and in key areas, and for branches in those key areas we will empower them so that we can accelerate the step in finding this new And in inclusive finance or small business, medium and small businesses, we have a quite long pipeline as well. We have a lot of scenarios that we are deploying some pilot programs, and those will be drivers for future growth. So in a nutshell, still quite a big challenge for us in the second half because the macroeconomy is facing this transition as well, including us. So we will focus on these two priorities that I just said, so that our corporate business can grow sustainably and delay a good momentum for future growth. Thank you. Thank you, President Feng. We often say till the soil grows, the crops, we've spent years building our client base. For the very first time, we now have over a million corporate clients. That's a strong foundation. Going forward, we'll keep lending, we'll fine-tune the mix, and try to maintain loan growth and stable return at the same time. Okay, next, another analyst, a long-time friend, Mr. Yang Shuo from Goldman Sachs. Thank you, management team, for giving me this opportunity. I'm Yang Shuo from Goldman Sachs. So my question is that I noticed that retail has been digesting risks gradually and NPL ratio was quite stable. And for corporate, you said risk was going down as well. So among these macro environments, which was not that optimistic. So in terms of your alpha, your differentiated advantage in risk control, what are they? And how do you see it trending for the second half in the full year? And another question is regarding unprovision coverage ratio. For the past several years, it has been maintained quite stable for the past several quarters. So, what are your outlook for coverage ratio down the road? Thank you. You mentioned about as a quality, I give you a big picture, several key metrics. First, for MPL ratio was a stable flat from year start, and formation ratio was 1.15. largely or noticeably improvement from year start. And let's break down retail and the corporate separately. For retail, we have started much earlier than our peers to transform and to do this transformation. for retail NPL ratio, which was 1.23%. I think it was start to 2024, we have seen a downward trend in the formation ratio down by more than 100 BIPs and the credit cost went down as well by 159 BIPs. So that showcased our strategy was right. And we are gradually seeing these results were in fact showing in recent time but we mentioned the macro environment which was a quite big pressure first in the title deed mortgage I think there was still quite big pressure even though a little bit better or improvement from year start in terms of the NPL ratio in this business but still quite big pressure and secondly internet related loans performance improves but overall the market is facing grim challenges especially with the new regulatory rules and third credit card compared with the first quarter or a year start we have seen some improvement or compare with our peers, our credit card has performed quite good in terms of risk level, but still that merits our attention. So for retail, we see the proportion of low-risk assets went up, and the NPL formation or asset quality for the new issued loans stayed quite stable and also we see the improvements for internet related loans.

You can see that for the existing entire risk management system including the anti-fraud, fraud in, before and after the loans being issued, a significant improvement has been made in recent years. Even if in the current industrial landscape, in terms of the retail, I think we have limited space to further reducing the NPR ratio. However, we have every confidence to guarantee the stability of the overall asset quality. This is a question regarding retail. I think you also raised a question regarding property rate. Oh, no, it's a provision coverage ratio. Let me just talk about the overall asset quality and then I'll touch upon promotion coverage ratio. Overly speaking, the high risk for corporate business is already gone. We will always be able to keep the top-notch performance in the industry only 1.087 percent, and the risk being well resolved. We also maintain a very stable corporate business, same as retail business. In 2026, the asset quality has been quite stable. Let's then talk about the provision coverage ratio, it was 290.6%, stabilized compared with beginning of this year, only down by one pips, but also maintained the leading level among the peers. The provision coverage ratio, I have to admit, as the economy is facing the structural pressure, the overall is going to reduce. But talking about PN bank earning, as I mentioned, non-performing loan was decreasing, provisions for loans were decreased. And secondly, our overall asset quality has been further improved. So we're going to reduce the overall provisions. And thirdly, we have already made a collection of $20.1 billion, a significant increase, which can actually help to reverse the lot of the provisions. So overall speaking, our asset quality has been quite stable, same as the asset structure for NPR formation and NPR ratio were all declining. I think that the provision coverage ratio will decline somewhat. However, we're going to keep it at a reasonable and good level among the industry peers. Thank you. Okay, let's welcome one more question. Thank you. Thanks for the management team. My name is Li Chen. I come from China Securities. I have a question regarding the retail credit. Taking a look at the whole industry, I think the risk pressure for retail credit was still high, and I see some fluctuations in the second quarter of this year. And is there any potential pressure you are facing on credit card or consumption loans? And we also surely noticed there are some regulatory policies that can support the bank of resolving those issues. What did Ping An Bank do and how the future policy might be from the Ping An perspective? Thank you for the question. Just now I mentioned a few pressures. The first one is regarding the mortgage or the housing loans. Very similar to what was happening to consumption loans. Let me just go for another set of the data first. You know that because of the regulatory policy, you can see for the housing loans we actually provide some support for the customers in the financial difficulties overly speaking you can see that we are under pressure because the real estate market was going down this is actually a heavy pressure for us and also for the peers in the industry but we'll still be able to maintain a stable growth because we have our solid business and will also continue to downsize the high-risk assets and also made many well-measured kind of good reductions for the past few years. There are some risks, but it's been widely taken. My second point, talking about the Internet loans, we call it self-loans internally. There are many of the regulatory policies continue to roll out, especially the high-risk consumer loans. or the soft loans. There are some risks passed on from the peers. Let me just share with you a set of the data. In 2.2 of this year, our non-performing ratio was around 2.9, down by 80 bps compared with Q1, but increased by 36 bps compared with beginning of this year. NPR formation was 4.86, down by 99 bps compared with Q1, but increased by 75 bps compared with beginning of this year. PMBank, we take protective risk control. We have great autonomy in interest loans. We have our own model continue to reduce non-performing loans with visible decline. We also have a very strong self-risk control. We have every confidence we can manage this business right well. The third part was regarding credit cards. You are going to see the result from other banks later. Internally for PMBank, I think we are still ranking the number two regarding the credit card risk control, but over speaking, the NPR loan ratio for credit card is still relatively high. That's going to be the main source of the pressure, where for other businesses, the pressure is still manageable. And you can also see our risk control capabilities has been increased for the past three years, especially using a systematic level, VP1 just now mentioned, will not scatter our efforts. We actually have the corresponding risk control strategy based upon the consumer groups, which can actually have a high perception in helping us to improve the risk of the population. And we have every confidence to maintain our performance. We're going to have a stabilized quality of the retail business, which is indeed a hardened ones, because the proactive adjustment in the early days can help us to achieve a good performance. Next question, please. Please. Hello, everyone. My name is Du Xingchuan. I'm the chief analyst from Merchant Securities. I have a question to Mr. Zhou Qiang. You have a stable dividend payout for interim. What about the full year? How should I think about it? Any further room for improvement? My second question was regarding the capital replenishment. Do you have the refinancing plan? Thank you. Thank you. Thanks for both questions. Dividend payout ratio is indeed a great concern of the stakeholders in the market. We attach great importance to the investor returns. For the interim dividend-payout ratio, we consider multiple factors. In each round of this year, revenue and profit are all growing, and our net profit in each round of this year was 25.7 percent, grow by 3.3 percent, which actually further improve our capital replenished capacities, which can support our business growth. It can also help to lay a solid foundation to stabilize the dividend-payout ratio, where at the same time We clearly understand investors are betting on a higher dividend payout ratio. So we're going to have 20% for the interim result dividend payout ratio. And the total dividend amount was 4.83 billion RMB, increased from 4.58 billion last year. We're showing the growth result with the investors. However, we should also consider what is needed for H2 of this year and next year, as we are really determined to grow. We need to reserve a safe cushion of the capitals to afford our future development. In the near future, we will continue to act with our means, do our best, and combine with actual business situation to pay back to the shareholders. I think regarding the dividend and the frequency of the dividends, we will maintain a stable Regarding the capital replenishment, in H1 of the ACN, our capital adequacy ratio and our pay dividend every year in Q2. But overall speaking, the total capital adequacy ratio remains stable. As you mentioned, we have a profit grow, so our self-cash can support our business growth. And we don't have the needs for refinancing QNL. And we're going to continue to work on the capital replenishment, arrange our asset allocation accordingly, and making sure we will meet the policy needs and meet our long- and mid-term development. They are a solid foundation for our high-quality growth in the near future. Thank you, ladies and gentlemen. Let's welcome the final analyst, please. Please. Thank you. Thanks for giving me the opportunity for the final question. I have a question regarding wealth management. In H1 of this year, the revenue of the wealth management was going up very good. And what about the trend of the full year? And a follow-up question kindly asked you. It seems that AUM growth was kind of slowed down. And are there any measures for us to further accelerate the AUM growth? Thank you. Thank you very much. Talking about the wealth management as well as AUM growth, let me just give you a brief introduction. First of all, let's talk about the wealth management revenue. In H1 of this year, for the wealth management revenue, we are continuing to follow the wealth management business upgrade model to further optimize the AUM structure. The wealth management revenue was grown by 35.6%. Especially bank insurance revenue grew by $1.007 billion, grew by 51.2%. The corporate asset management revenue was $1.55 billion, grew by 45.1%. If you are taking a look at those numbers, you will not purely take a look at how the revenue is being increased. You need to understand the quality of the customer base behind the growth and whether the management and operational capacity has been further solidified to lay a future foundation. So that's the key changes we'd like to draw your attention to. But at the same time for PMBank, I think we still continue to grow our customer base and continue to accelerate our growth. Those are the key we need to work on in H2 of this year with some concrete actions being taken. Well, regarding the wealth management revenue, how we're going to increase it and improve it, there are two factors I'd like to draw your attention to. First of all, we need to have the segmented customer and optimize the product configurations. In H1 of this year, we fully grab the change of the market and the wealth management need. According to the need of the customer, we differentiated the product, we provide more production product, and also making sure we have a supply of the equity investment product, enhancing the competitiveness of the product shelf, and making sure that we better meet the needs of the clients in wealth, preservations, and appreciation, especially diverse needs of the long-term production and family inheritance, which make a big contribution of the wealth management business. Secondly, we further improve the quality of the professional service, enhancing the synergy within the ecosystem. On one hand, we continue to strengthen asset allocation, especially improvement of the professional capacity in investment research and investment consulting. We hope our team not only introduce products to clients, but also understand what is needed by the market and the clients, providing the combined portfolio allocation with long-term companionship. Thirdly, we rely on PIN and ecosystem of a global emergency rescue service As well as the differentiated benefits in healthcare and elderly care And we also continue to optimize the service of the mobile banking apps We do provide optimized versions for business owners and the new customers and elderly To improve our service efficiency online Differentiated benefits won't help us to sell the product directly. However, in our real life to each customer, differentiated benefits can help them to take care of their needs in real world. So wealth management not only helps clients to well manage their assets, but also making the financial service ready with a human touch. So that's the reason we're going to continue to have segmented operations, improve the team performance, and continue to improve the service to the customer. Regarding the wealth management, especially AUM structure optimization in H2 of this year, on one side, we are now facing a low interest rate. I think challenges and opportunities for wealth management coexist. On one side, the demand for the management of the household wealth continue to expand, a huge room for further improvement. Secondly, the market is full of uncertainties which need us to have a well-suited capacity for wealth management. In the future of this year, we're going to continue to optimize the structure of AUM.

We hope the AUM's growth would be the efficient and the quality growth rather than a single-sided AUM growth we need to grow the size and the efficiency and quality at the same time so in h2 of this year we have three things to do regarding the AUM optimization first will be customer centric and we used to have products first and then we find customers but this will be not be the case with vice versa we will focus on the full life circle of our customers and centered on their changes in demand to stand in their shoes to find the right products or services to for them we will no longer focus on sore product products or sore like growth volume growth in certain time spots but more be like the full cycle of customer. And second, we will make our services more friendly and this is in line with the changes of the market and we will focus on two main capabilities. First is the capability to equip the complex products for our customers. And second is the yield target for our customers to improve their returns. So those are the two key areas. And third, we will further unleash the potential of our bank assurance, which is a differentiated edge for Ping An Bank. so we will dig deeper into our ecosystem and to fully contribute to the further growth of bank shortings. In another respect, we will enhance our non-principal guaranteed products like those wealth management products to have new growth drivers. All in all, we don't think that wealth As management or asset allocation is just a one-time business or once-off business, we will cooperate with our customers or accompany our customers all along the road so that during this long process with our professionalism or expertise so that we can help customers to earn better in this market, this will all be the key areas that will further enhance on and we believe that we can have some healthy growth in wealth management business. So one side we will serve the economy, the real economy, and to also instill high quality contribution to sustainable growth for Ping An Bank's wealth management business. Thank you, President Wang. Customers are the cornerstone for our retail business. So we are willing to accompany our customers across the cycle. Let's wrap up the analyst and investor QA session and turn to our media friends. First, we have Xinhua News Agency. I'm from Xinhua Agency, so management talk about the return to growth targets and in the first half we are glad to see that both revenue and net profit return to positive growth. So with this opportunity to raise question, I'd like to understand behind this return to growth because we also stress the right approach to performance so looking at this h1 numbers how much of the recovery um so how how do you balance the growth target with the like a real internal improvement we whether it is sustainable or high quality growth instead of short-term recovery or expansion or like a risk, latent risk accumulation. So thank you. Well, I see your question because when we don't have positive growth, people are asking when will you have and when you already have positive growth, people will doubt whether this is real are positive growth or not, and also whether that's a sustainable or short-term thing. I totally understand that. And also you mentioned a very broad topic about the right approach to performance, which was mentioned by the high level of the government. So, about the genuity of our business performance, I think, well, first of all, among politics, those are quite different stories, but for banks, we are saying we need to have a healthy business performance. Well, I will try to answer your questions with two main points. Well, first, our performance, we will try to convince you that this is a sustainable growth. And second, we will showcase that the tactics that we have applied are not short-term things. Over the past several years, in this hall and in this conference, we have discussed many times internally with the management team that we want to build Ping An Bank in a sustainable way. We will be down to earth and to treat it just as a traditional industry to give it more patience and to give more certainty to our shareholders, our colleagues, and our teams. I told my colleagues that it can be quite easy for you to forecast six months ahead, but for one year or even two years, that will be very difficult. Even though you are a very talented person, it's not easy for you to forecast during today's environment. Over the past three years, for the management team, what I can say is first, we are long term minded. And with the hard work we've been doing for the past three years, even before this briefing, we will look at last time like what we have said to the market and what are what were the main concerns for the market well you care about the logic is behind the data several years ago you were concerned with whether we can be committed to retail strategy and the first year I took office you were asking how big is the risk for retail sites. So questions are different, concerns were different during all those years. Also, I went to a conference in Beijing and there were some young analysts chasing after me asking some questions with those like business data or DJs. They are very down-to-earth and they want to find out what's behind those data. So I told my colleagues, it's useless for you to hide the truth. We need to be honest, be genuine to our shareholders, to our investors. And based on the requirements the party has put forward, we have been thinking about what measures were like a strategy we need to keep committed to. Well first, this This year, I think it's a little bit better. We already see the profit back to positive growth, but two years ago, or the past two years, there were huge pressure. And also, even though no one was asking, but we still have very big pressure in the consumer rights protection side. I remember at the beginning of last year, at this conference, I said that 2025 was the most difficult year. That was off script. I was hoping that 2025 would be the most difficult year, and after that, we will have some light ahead. But that was quoted by media and some was mistaking the meaning. So what I was trying to say is that we will be very firm with the right strategy or right direction. And from internal foundation, we will improve the granular management for our team. We were trying to summarize what are the right things we've done. For last conference, in the annual results conference, we said that we have the heads for branches and key business units. we summarized what are the right things we need to hold on to. Well first is to hold on to the party lead principle and so that we can follow the party's Because you are from media so I will not elaborate data. And second, we will be clear about where the market leads us into. And just like the question about the corporate banking, the analyst asked, I said at the time that was more like a recovery for corporate, because I know market at that time was worrying that we will shift our focus to corporate banking instead of building us into a retail bank. And I repeatedly said we are not trying to revamp the bank, we are just fine-tuning. And last year, I said we need to be strong in both retail and corporate. And standing at this time point, I will re-emphasize that there was no bank that you can find that is strong in only one business because the one that you are familiar with in Shenzhen the one peer China merchants they are good at both retail and corporate because without good developer loans how can you find good mortgage resources and without small business owners without clients like them how can you find your high net worth individual customers so those are intertwined and so going forward we will take retail as our flagship but when the economy is you know there are a lot of uncertainties it's quite hard for today's environment so corporate business will be a very method for us to withhold or to pass through this situation. So this year we know that everyone is trying to compete in the corporate scenario. China merchants or those banks in Beijing or those in Shanghai, they were trying to compete in corporate banking as well. So challenges are getting bigger in this year. So that's why we need to be mindful with our cost control and the improve our efficiency, and to build ourselves into a professional bank. I remember the first time when I took the first briefing conference, my colleagues were asking whether we need to put on a red-colored tie. I remember at the time I said there is no connection between a red-colored tie or our our business performance because with a good performance you will not even notice what kind of color I was wearing with my tie. So what I'm trying to say is that we need to be genuine with our business performance and we need to be down to earth.

My fourth point, we need to improve our business management capacities to improve the operationals and also attach great importance to the Thailand environment. Be strict the governance of the entire bank. Those are also the manifestation of our insisted long-term reason. In H1 of this year, you can also see the result of the reform continue to show up with positive trend. The NIMC has been stabilized, remaining a high level in the industry. The revenue structure has been further optimized. Efficiency per capital has been increased. And also, the NPR formation ratio continues to decrease. You know that I've been worthy again. A few questions have been already asked by the analysts. I hope that in the near future, when we become a more professional team, you're going to have less questions. And more questions will be asked in private occasions. You may pay much attention to our operational details. And I was also talking about we were working very hard to clear the high-risk assets. Now, NPR ratios have been declined on a wide-wide basis. Asset quality continues to be optimized. All indicators are improving. But for sure, while facing many challenges and pressures, the financial market is facing the uncertainties and the volatilities, insufficient effective credit demands in the market. and also the need of their continuous pay attention to the risk in key areas such as real estate. While in face of the challenges, we need to be strategically focused. In H1 of the ACN, we have already carried out the equation on establishing and practicing the correct political achievement and view. Having such a good culture and view would be the prescript for us to maintain a high-quality growth. What we are chasing is not expanding the business goal or allow the risk to lower tiers. What we are trying to do is that no matter how urgent, don't panic. No matter how urgent, don't mess around. And no matter how urgent, don't seek medical treatment indiscriminately. If you are not sure about something, you'd rather wait and see. if you don't have the ability to control the risks, then you set a relatively high threshold. We actually learned the lessons from the past, the lessons from our peers and our own lessons. Our own risk management is somewhat disconnected from our target audience, which leads to the unintended consequences. So, I believe whether the final result would be of high quality, sustainable and tested by the industrial circle. At the annual conference, I have already mentioned about the five connotations of the growth or the five pillars. You know that we were talking about the growing with national strategic growth. Secondly, balancing the risk and the reward rather than just pursuing the scale. Thirdly, we need to have a growth based upon improved the per capita efficiency, fourthly, growth driven by deep technology empowerment, and fifthly, growth driven by continued compliance strengthening. Moving forward, I surely believe with a good performance view and scientific performance view, with the six characters I have already mentioned in my prepared remarks, we not only need to have the slogan but also the long-term commitment. Our management team, our executives, and also the operational team, we need to work together. When we are facing the hardships, we should never be panicked. And when we are going well, we should also not get complacent. As long as we continue to advance the business steadily, when the economic environment is truly aligned with our management capacity. By then, I think we will be able to have the opportunity to continue for a second growth. We know that every week we provide the performance view education program and making sure our view is truly in line with our business. For example, we never have the data fraud. This is quite important. We never allow data fraud in our operational level. All data, when it's been escalated to me, to Wei Psiang, and to our accounting department, all those data need to be accurate and be clear in our minds. Sometimes you know that I'm not good at responding to the questions to the media. While I was talking about numbers, I might be more sensitive. I'm not sure whether I cover your question. If not, we're going to have our media department help to refine my words for the final report. Okay, thank you. Thanks for President Xi. Performance view is how we're going to support long-term execution and commit it for the long-term growth. Let's welcome another media friend, Mr. Chen from People's Daily. Hello, everyone. I come from People's Daily. We know that in November of this year, AIPAC would be staged in Shenzhen. so Ping An Bank as a bank headquartered in Shenzhen and also having the offshore license and it is also a national joint stock bank in facing the significant opportunity as APAC meetings being staged in Shenzhen how Ping An Bank sees the opportunity to provide cross-border financial service for foreign trade entities in Asia Pacific region that can really support the foreign trade and high quality development of China to the rest of the world. Thank you very much. APEC leaders' informal meeting is the highest-level meeting, and China has already hosted such meeting for twice. This year marks the third time. But this time is different from the past two additions. It is not only an international conference. It is also a manifestation and opportunity for China to advance high-quality and high-standard situational development at cross-border finance, which would be able to contribute the China solution to the global open economic development and the practice in Shenzhen. PM Bank, we're headquartered in Shenzhen, we have a national wide business, and we are also a national stock joint bank with the offshore business license. We're going to focus on three drivers with multiple measures to be available for the foreign trade facilitations and high-quality opening to the Chinese financial system to the outside world. First of all, we are going to prepare to fully open up the five cross-border financial accounting channels, build up high-speed cross-border fund settlement channels, and improve the capital tenor efficiency of the enterprises. We are going to allow to open the onshore settlement accounts, offshore bank accounts, free trade zone accounts, onshore accounts for overseas institutions, and overseas branch accounts, which are the five accounts we mentioned, to facilitate the cross-border trade and investment, the offshore and onshore work, and foreign exchange business policies. By leveraging our own Shun Li Hui, our own product, we will be able to continue to provide a high-speed flow channel for funds of the five major cross-border financial accounts, allow clients to complete the whole process online without papers through the product, achieving zero delay, nonsense. And you can also see in each one of these here, this product has already served 12,000 cross-border business entities, and the scale of the settlement for instant payment, and the collection already exceeding $170 billion USD. Secondly, we will give full play to the advantage of offshore finance license, deepen business linkage between applied services, to inject more financial into the foreign trade enterprises. PM Bank will give full play to the offshore license, having the synergetic effect with the offshore business, taking through the cross-border credit, and also upgrade the cross-border financial service, taking care of the financing difficulties and high financing costs. As you can see that in H1 of this year, PMBank's cross-border trade financing reached 173.1 billion yuan with worldwide growth of 11%, covering 50 countries and more than 30,000 enterprises, ranking the leading one in our industry. Well, for SMEs, we also have the Chen Ye loans, which is targeting the enterprise clients, especially the foreign trade entities. We provide a tailor-made yet low-cost and convenient financing service to support SMEs. Thirdly, we also leverage diversified resources of Ping An Group to build a one-stop, integrated cross-border financial service in power enterprises' global economic development. In terms of the efficient cross-border settlement, professional cross-border financing service, Ping An Bank also leveraged Ping An Group's unique advantage in financial service. We also build an integrated matrix of the cross-border finance and comprehensive service, both onshore and offshore, supporting enterprises for their China and global business operation. But at the same time, comprehensive surveys for onshore and offshore also include the investment financing, cross-border trade financing, cross-border payment, settlement, fund management, and the core scenarios like global exchange, rate hedging, and working for SMEs and the multinational groups for their end-to-end need. We are also working with the Ping An Investment Banking Assurance, diversify the resources, integrate investment financing to provide a tanky solution by having settlement, risk catching and fund management into one, supporting foreign trade entities to secure their order, expand the global market expansion, supporting Chinese companies for their global journey, and also supporting the dual circulations. Thank you. Thank you. Let's welcome one more question, please. Thanks for the management tip. My name is Liu Xiaoyu from Securities Times. Analyst has already asked most of the questions, but just one more question regarding your business. I have already noticed in H1 of this year, your wealth management clients grow by 2.4%, reaching 1.53 million households, which was increased by 80% compared to last year. What are those growths coming from the recovery of the external market? How much are coming from the effective operation and transformation of our internal clients' base? Are there any new strategies being presented in H1 of this year? Thank you. Thanks for the question. One, regarding the wealth management clients, it's grown 2.4 percent compared with beginning of this year. You asked me about internal and external factors. I think it's actually a synergetic work between the two. First of all, we have more wealth management clients. The reason is because in H1 of the ACN, we continue to have a more clear and well-defined stratification of the client and continue to be more clear on the attributes and demographics of the clients. So we are differentiating the needs of the clients, providing them targeted service. This is a very important factor. Another factor I would like to draw your attention to is that for wealth management clients, we still would like to be customer-centric, and that would be the fundamental baseline for our service. If we're going to be customer-centric, then we must be committed for the long-term development. For the past two to three years, as President Xi mentioned, we will be insisting on the long-term operation, be patient in providing service. In order to achieve the overall target, you need to have a good understanding of the wealth management clients. Then you need to respond to three questions. First of all, who your customer is. And secondly, whether you truly understand what is needed by the client. And thirdly, how are you going to take care of the client's need? Then the three questions together would be the key driver to help you to navigate what you need to do in order to provide high-quality service to the customers. Well, coming next, we still would like to follow what has been asked by President Xi. Continue to be customer-centric, committed for long-term operation, creating benefits and value to the client, providing differentiated service. So for us, we will continue to operate the client base to strengthen and differentiate the service. For example, for parent-children, family clients, we're going to provide the tailor-made needs for children's education, health securities, and family wealth. We provide the parent-children exclusive cards, as well as educational programs, the insurance for the kids, funds fixed investment, and even the financial education and parent-child activity rights and interest. Providing those related benefits to the parent and children families. Those are the differentiated services we can provide. At the same time, we also take a look at the pet lovers.

First off, we have this pet-related credit card, and we are sending pet lover segment to provide pet insurance, daycare, and travel with pets. Those high-frequency needs, we are building a one-stop pet-specific financial service. And also we are targeting at a silver segment where their kidneys are retirement wealth, fraud prevention and daily convenience. So we offer pension products, annuities and insurance protection with balance. We issued more than 90% of the elder credit card, and we also stepped up our capability on those specific segments. So those are the foundation for us to improve our wealth management capacity. And further on, we will dig deeper into the operation scenarios for retail customers. But we understand that on one side, we need to identify their real needs to solve their problems. And that is client-first and to generate more profits or returns for our retail customers. Thanks, President Wang. Client is fundamental for retail business. It's not a slogan for us to do customer operations, but it's more like a strategy that we'll further be committed to. And next question, we have China Security Journal. My question is that in the interim report I noticed that corporate NPL ratio was flat from your start so has corporate risk fully played out and which areas are seeing more pressure and in the future when you further promote this transformation in corporate banking does it bring more risk and how do you see as a quality going forward okay NPL ratio was 0.87%. We still are amid the first tier in our joint stock bank peers. And this stability is largely thanks to continued improvement in corporate real estate. And corporate real estate NPL was 2.15% at mid-year. That's down 7 bps from year start and that's among the better levels in the industry. Well, going forward, there are two parts. One is for the growth. In the first half, we have corporate loans rose by about $127 billion and over 70% went to policy-backed areas like infrastructure, public utilities, and borrowers are mostly meet to high-rated. And on existing assets, we keep watching real estate. And currently, I'd say the property market is still adjusting, and some developers are slow to collect the sales proceeds, and rental income on commercial property is declining, and we need to keep monitoring closely and stay on top of risk resolution recoveries. Overall speaking, I I think we will watch market and policy shifts closely. Just like President Xi mentioned, we need to be more professional and to understand our clients better, and to adjust business and risk strategies in time. And to maintain a good risk performance in issuance. And our existing property risk has eased notably, and in terms of proportion, I'd say our exposure is concentrated in developed regions, and new NPLs are well collateralized. And in 2026, we are confident that we can attain a low point in NPL formation ratio and NPL ratio, and better than peers' performance. Due to time, I will have the last question from Media. Thank you, management team. Thank you for the opportunity. I'm from National Business Daily. So in your interim report in 2025, I noticed tech have appeared 79 times and the annual report it was 119 times that shows how much you value it and with AI moving fast how are you actually getting efficiency and growth from tech I take your question well this is a hot topic and the technology is really playing a big role to our life and our economy. And of course, it will be valuable for our economy. And Ping An Bank, just like you mentioned, for all those years, we have been inputting or investing quite a lot into technology and its application in our banking scenarios. So in our slogan, we have tech lead as the first one so that showcased how much we value it and in terms of tech it has helped us to improve efficiency across marketing advisory risk and office work There are many cases I can show you. And also in terms of CIR, cost-to-income ratio, which has been optimizing all those years. It has everything to do with the empowerment of AI and technology. And we know that the market is transitioning really quickly in terms of the AI scenarios. So we are thinking to ourselves how can we better seize the new technology and to better empower our business. We have planned very detailed outlook for how to apply AI empowerment. So one is that we will invest more and scale further. And with this plan, the most important thing is that we will enhance our underlying capability, including platform capability and big data. And also the talent team, we need to enhance on those aspects. But of course, we know that we can not just focus on underlying technology, but also how to apply them. So we will find or identify more suitable scenarios that we can better use those AI technologies. technologies. We hope that every employee of Ping An Bank can understand or know well what we want AI to help us to find out how to better use AI. And we have some fruits or results circuasing like for example we have digital AI employee this can help our employee to better serve our customers with more tools so that efficiency can be greatly improved there are many such cases the key issue here is that we want to use AI to improve our internal efficiency, to better serve our customers, to enhance our capability in risk control and cost control, et cetera. And during this process, we also need to be mindful of compliance issues and the application of technology, the input or investment, because we have been asked quite a lot how much of a percentage we invest into AI. So the general idea is that we look at ROI. It cannot be just a pure AI investment, but more like what can the technology help us to improve, like how much efficiency it can give us. that's the key issue here thank you okay thank you mr uh thank you president xiang and this uh question so um banking growth drivers have shifted from labor and skill to tech and ai so sticking with the tech and the techno digital transformation is the only way to deliver and achieve quality all right that's um time's tight so we'll stop here in just over an hour we've covered a lot your concerns about our first half results and your expectations for the future we also collected questions from individual investors beforehand most of what already addressed today after this feel free to reach us the briefing ends but our work doesn't so we will keep pushing forward with certainty in an uncertain world we have confidence and patience we look forward to working this journey with all of you and to building long-term value together. Thank you all for joining today's meeting. Thank you for being with us today. That's all for today. Best wishes and see you next time.