Welcome to the 2026 interim results presentation. Today, I will cover three areas.

Firstly, an overall introduction; and secondly, a detailed information; and thirdly, the business strategy for the next phase. In the first half of the year, the group implemented the strategy of building a value creation bank and adhered to the coordinated development of quality, profitability, and scale.

Various operation indicators registered steady progress with positive momentum. This was primarily reflected in the four aspects.

First, steady progress in operating performance with distinct strength in profitability. Net operating income, 178.135 billion, up by 4.83% year-on-year.

Net profit attributable attributable to shareholders of the bank, 76.45 billion, up by 2.02% year-on-year. ROAA and ROAE were 1.14% and 13.43%, respectively, remaining at industry-leading levels.

Net interest income, 112.02 billion, up by 5.6%. Affected by LPR repricing, ineffective credit demand, and declining market interest rates, the net interest margin was 1.83%, down 5 bps year-on-year, representing a narrower decline.

Net non-interest income reached 66.11 billion yuan, up by 3.56% year-on-year. The percentage of net non-interest income was 37.11%, maintaining the leading position in the industry.

Net fee and commission income reached 39.86 billion yuan, up by 5.99% year-on-year, of which income from extensive wealth management reached 24.7 billion yuan, rising by 18.44% year-on-year, representing the best level in the past 5 years. The cost-to-income ratio was 29.7%, down 0.41 percentage points year-on-year.

Second, we delivered balanced asset growth in both scale and quality, with continuous improvements in funding costs. Amid ineffective credit demand, we carried out a range of measures to strengthen asset origination and optimize asset allocation.

Our total assets amounted to 13.79 trillion, up by 5.47%. Total loans and advances to customers, 7.45 trillion, up by 2.61%, accounting for 54.07% of total assets, remaining stable.

Among them, general loans amounted to 7.19 trillion, up by 3.6%... We accelerated the turnover of bill assets, with discounted bills amounting to 265.38 billion, down 17.62%.

Investment securities and other financial assets amounted to 4.4 trillion, up by 6.07%, accounting for 31.95% of total assets, a level that the group considers appropriate. We pursued steady liability growth while continuing to optimize deposit structure, further consolidating advantage in low funding cost.

Total liabilities, 12.43 trillion yuan, up by 5.45%, of which total deposits from customers exceeded 10 trillion yuan, up by 3.32%. Core daily core deposit balance was 7.79 trillion yuan, up by 9.02% compared with the previous year.

It accounted for 82.06% of the average daily balance of total deposits, up by 1.37 percentage points as compared with last year. The average daily balance of demand deposits accounted for 49.6%, up by 0.2 percentage points compared with the previous year, remaining at an elevated level.

Interbank deposits grew rapidly, serving as an effective supplement to the funding sources, of which demand deposits accounted for 94.54% [percent?] .

The annualized average cost of interest-bearing liabilities was 1.05%, down 30 bps year-on-year, of which the average cost rate of deposits from customers was 0.97%, down 29 bps year-on-year. Thirdly, we maintained stable asset quality and strong risk compensation capacity.

The NPL balance was 70.25 billion yuan, up by 2.05 billion, and the NPL ratio was 0.94%, remaining at the same level. The annualized NPL formation ratio was 1.06%, up by 0.08 percentage points.

The allowance coverage ratio was 385.1%, and the allowance to loan ratio was 3.63%, reflecting a high level of risk compensation capacity. The annualized credit cost was 0.69%, representing a slight year-on-year increase of 0.02 percentage points.

Fourthly, we strengthened capital management with industry-leading capital adequacy level. Risk-weighted asset under the advanced approach and the weighted approach increased by 5.16% and 5.23%, respectively, which is generally in line with asset growth.

The CET1 CAR, the tier 1 CAR, and the CAR under the advanced approach were 14.07%, 16.59%, and 18.33%, respectively, down 0.09, up 0.08, and up 0.9 percentage points, respectively. As for weighted approach, the numbers were 11.84%, 13.96%, and 15.06%, respectively, down 0.08 percentage points, up by 0.6 percentage points, and up by 0.6 percentage points, respectively.

This is the brief overview of our performance in the first half of 2026. We will now turn to the company's operational info- information.

In the first half, amid new developments and challenges in the banking industry, the company proactively responded and seized opportunities, taking extensive wealth management to a new level. The transformation through the Four Initiatives delivered notable progress, further strengthening the company's resilience and market competitiveness.

This is mainly reflected in the following areas. First, we grew a client base rapidly while scaling up extensive wealth management business.

We remained customer-centric, further deepened its segmentation and classification-based customer management, and achieved growth in both size and quality of our client base. Retail customers totaled 231 million, up by 3.13%.

Among them, Golden Sunflower and above customers reached 6.41 million, up by 8.02%. The number of private banking customers reached 216,000, up by 8.36%.

Corporate customers reached 3.86 million, up by 6.56%, among which the number of newly acquired corporate customers was 347.9 thousand, and effective digital customer 78.5 thousand, up by 3.7%. The number of corporate customers for withholding transactions reached 1.53 million, representing a year-on-year increase of 14.97%.

AUM from retail customers exceeded 18 trillion yuan, up by 7.96% compared with year-end 2025. The half-year increase reached 1.36 trillion, hitting a record high.

The average daily balance of corporate wealth management products was 632.61 billion yuan, up by 20.51% compared to 2025. Total asset management amounted to nearly 5 trillion yuan, representing a year-to-date increase of 5.29%.

Balance of assets under custody, 23.58 trillion yuan, representing year-to-date increase of 8%, maintaining a leading position in the market. Secondly, we pursued differentiated development with more distinctive business strengths.

First, we continued to consolidate our leading position in retail finance, and we maintained the main role of retail finance business, with its net operating income accounting for 54.35% of the total. We continued to strengthen our professional service capabilities in wealth management, and the customers holding wealth management products, 66.72 million, up by 4.05%.

Customers covered by TREE system reached 12.58 million, up by 6.98%. In response to market trends and evolving customer demand, the growth structure of AUM of retail customers become more diversified.

Agency distribution of non-money market mutual funds and trust product increased by 82% and 40.48% year-on-year, respectively. The balance of retail wealth management products increased by 3.88% compared with prior year-end, and the balance of deposit from retail customers increased by 3.7%.

Facing rising risks and weakening demand, we prioritized asset quality in retail loans, resulting in a moderate contraction in loan scale. Retail loans totaled 3.61 trillion, down 1.11% compared with prior year-end.

The percentage of retail loans to total loans and advances was 51.04%, down 1.88 percentage points compared with prior year-end. Amid the industry's cyclical adjustment, the group adhered to a stable and low-volatility operational strategy for its credit card business.

Active credit card users totaled 74.4 billion million, up by 0.46% compared with prior year-end, and the transaction value was 1.91 trillion yuan, down 5.43% year-on-year, while maintaining the leading position in the industry, and our market share further increased. We continued to forge differentiated competitive advantages in corporate finance.

Total FPA was 7.24 7.27 trillion yuan, up by 8.13% year-to-date. We continued to optimize loan structure, further enhance quality and effectiveness of serving the real economy.

Total corporate loans, 3.2 trillion yuan, up by 9.27%. Growth of loans in key areas such as green loans, manufacturing loans, and agriculture-related loans are significantly outpacing the overall loan growth.

The overall the average daily balance of deposit from corporate customers, 5,230 billion yuan, up by 6.1%. Of which, demand deposits accounted for 50.4 15 50.14%, down by 0.8 percentage points.

We continue to enhance professional service capabilities of retirement finance. The number of individual pension account opened exceeded 17 million, with the pension funds under custody amounted to 1.77 trillion yuan, up by 9.68% compared with prior year-end.

We provided diversified financing services to technology enterprises, serving 378.3 thousand sci-tech enterprise customers, including more than 200,000 enterprises listed on sci-tech rankings. We continue to upgrade the distinctive brand of enterprise digital intelligence finance.

Compared with year-end 2025, the number of customers using treasury management cloud services increased by 14.26%. Those using cloud-based host-to-host connection increased by 13.44%.

We continue to enhance professional capabilities in investment banking and financial market businesses. FPA contributed by investment banking business increased by 8.64% year-to-date, and the net underwritten bonds amount worth 284.16 billion, and the M&A financing business value amounted to 165.92 billion yuan, up by 19.84% year-on-year, and we have completed multiple deals with significant market influence.

Regarding financial markets business, the number of wholesale customers involved in bond trading was 78,000, up by 18.38% year-on-year, and their FX transaction value amounted to 212.72 billion US dollars, up by 33.64% year-on-year. Bill business customers totaled 191.4 thousand, up by 11.49% year-on-year.

Direct bill discounting value was 1.78 trillion yuan, up by 26.61%, ranking second in the market. Fourthly, we accelerated the development of branches in key regions to strengthen their market competitiveness.

Multiple key indicators including growth rates of customer retail customer base, retail AUM, core deposit, corporate loans, net operating income, and EOA of branches in key regions were all higher than the average level of all domestic branches. The contribution was increasing.

The proportion of key region branches in the total of all domestic branches increased regarding retail AUM balance, up 0.26 percentage point; corporate loan balance, up 0.56%; and average daily core deposit balance, up 0.22 percentage points. Thirdly, we steadily advance comprehensive and international development with value contribution significantly increased.

Total assets of major subsidiaries, 1.05 trillion yuan, up by 10.62% compared with prior year-end. Net operating income accounted for 12.93% of the group's total, up by 0.39 percentage points.

Net profit for CMB Wing Lung Bank reached 4.73 billion Hong Kong dollars, up by 55.88%. Total assets, 487.8 billion Hong Kong dollars, up by 11.

11.63%. Net profit of CMB International Capital, 3.07 billion Hong Kong dollars, up by 124.14%.

Total overseas asset management business reached 94.37 billion Hong Kong dollars, up by 25.27%. Net profit of CMB Financial Leasing is 1.63 billion yuan, down 42.44% year-on-year.

This is mainly because a huge fee income last year. The leasing business was 70.49 billion yuan, maintaining the leading position.

Net profit of CMB Wealth Management, 1.51 billion, up 10.92%. Total wealth management products reached 2.74 trillion yuan, up by 3.79% compared with prior year-end, keeping leading position.

Net profit of China Merchants Fund was 802 million, and the non-money non-monetary mutual funds under management size was 623.15 billion yuan, up by 5.78%. Net profit of Cigna & CMB was 52 million yuan, down 12.68% year-on-year.

Entrusted management of insurance funds totaled 279.45 billion yuan, up by 19.78%. The total assets of overseas institutions increased by 7.01% compared with prior year-end, and net operating income rose by 30.5% year-on-year.

Each institutions in Hong Kong seized opportunities and expand their operations, achieving fast growth. Net operating income grew by 32.71% year-on-year.

Total assets under custody of Global Custody Hong Kong Center exceeded 1 trillion yuan. CMB International Capital completed three Hong Kong IPO sponsorship project and 24 Hong Kong IPO underwriting project.

Cross-border business grew rapidly. The number of corporate customer in respect of international balance of payments reached 93.7 thousand, and the international balance of payments of corporate customers increased amounted to 263.26 billion US dollars, accounting Fourth, we comprehensively promoted intelligent development and continuously strengthen technology advantages.

First, we promote AI development and application. We continued to refine our self-developed large model infrastructure.

Average daily token throughput increased by over 78% compared with 2025. 256 domestic domain-specific models were deployed, up by 40%.

A total of 1,386 intelligent scenarios were deployed, up by 68% compared with prior year-end. Large models applications have delivered tangible quality and efficiency gains.

AI contributes 13.88 million equivalent employee working hours in terms of efficiency gains. We also built a bank-wide knowledge management framework that enables large language models to unlock knowledge value across business lines.

We have increased our client-facing service capacities using AI and increased our capacity of complex business service. We have launched AI Xiaozhao, and AI agent serving wealth management partners was newly launched.

Private banking AI tools now deliver one-stop visualised service framework for spending, asset allocation, and protection and succession planning. We have upgraded our client service system.

The AI-powered intelligent customer service digital human system for institutional scenarios has served customers of 37.66 million times. Internal management intelligence upgrade continued to accelerate.

AI is reshaping credit process. We accelerated deployment across the pre-lending, lending, and post-lending stages.

In terms of business management, intelligent tools now span the front, middle, and back offices. Fifthly, we upheld the bottom line of risk control and reinforced advantages in asset qualities.

In the face of various risk and challenges, we stepped up efforts to prevent and mitigate risk in key sectors and continuously refined risk management strategies. Overall asset qualities remained sound.

We adhered to the strategy of stabilizing growth, preventing risk, and optimizing structure, strengthened risk management and control in sectors such as property and manufacturing, with corporate loan asset quality continuing to improve. NPL ratio of corporate loans, 0.78%, down 0.11 percentage point.

Among them, the NPL ratio of property industry was 4.47%, down 0.31 percentage point. The NPL ratio for manufacturing industry was 0.39%, down 0.04 percentage point.

Confronted with rising retail loan risks across the industry, we comprehensively reinforced retail loan risk management and optimized the asset structure. Retail asset retail asset quality remained stable and controllable, maintaining a relatively strong position within the industry.

The NPL ratio of retail loans was 1.16%, up by 0.1 percentage point. Among them, residential mortgage loans was 0.8 0.48%, down 0.03 percentage point.

Credit card loans, 1.9%, up by 0.16 percentage point. Retail microfinance loans and consumer loans were 1.34% and 1.39%, respectively, up by 0.12 percentage point and 0.37 percentage point, respectively.

In the end, I would like to give a brief introduction to the business strategy for the next phase. Looking ahead, we will fully implement China Merchants Bank's 15th Five-Year Strategic Plan, maintain strategic focus, uphold fundamental principles and breaking new ground, accelerate capacity building, and advance transformation through the Four Key Initiatives to consolidate existing strength while building our new advantages, achieving distinctiveness with an economy business model.

Firstly, we stay committed to long-termism to build stronger core competitiveness. We will remain customer-centric, reinforce the central role of retail finance through wealth management, uphold asset quality as the foundation, and sustain strong technology support.

While maintaining strategic focus, we will adhere to the principle of professionalism and market orientation, continuously innovating in products, services, technologies, and business models. By deepening and fine- refining our core businesses, CMB's business and revenue structure will take on a fixed earnings plus feature, which is resilience in down-cycles and flexible in up-cycles.

Secondly, capture structural opportunities to continuously cultivate new drivers for medium- and long-term growth. In retail finance, we will capitalize on the historic strategic opportunities in wealth management, centering on asset allocation to enhance professional wealth management capabilities, and improve customers' sense of fulfillment and experience.

Secondly, in corporate banking, we will further strengthen professional operation in different industries, deepen investigation across a broader range of sectors to refine the 'one branch, one policy; one industry, one policy' strategy in key region branches to enhance differentiation. Thirdly, we will also seize opportunities arising from new quality productive forces, leveraging synergies between CMB and its subsidiaries.

We will strive to build technology finance as a distinctive feature of CMB. Fourthly, we'll leverage our local and global presence, and establish a development framework comprising the head office plus institutions in Hong Kong plus five regional hubs to build distinctive feature in cross-border finance.

Thirdly, we will seize near-term decisive moves to sustain steady progress in operation. We will focus on stabilizing NIM, maintaining our advantage in low-cost deposits, and strengthen risk-based pricing on the asset side, and increase our risk compensation capacity.

We will leverage our strength of subsidiaries to better expand NII, and optimize revenue structure, keeping revenue broadly stable. We will seize cap- capital market opportunities, further expand extensive wealth management and financial markets businesses to enhance value contribution.

Capital management will be strengthened to improve capital returns and reinforce capital resilience. Fourthly, we will accelerate the intelligent transformation to further extend tech leadership.

With sustained technology input and intensified technology empowerment to better promote business growth with technology. Seizing the opportunity presented by AI, we will broader and deepen AI applications to drive improvement in customers' experience, internal efficiency, and risk management.

We will accelerate the building of an AI-powered organization, reshape the capabilities of workforce, and deepen people plus digital intelligence model, establishing CMB as a benchmark for intelligent transformation in the AI era. Fifthly, we'll stay anchored to risk-based approach and reinforce foundation for sustainable development.

We will uphold prudent and stable risk culture, operating within the boundaries of our capabilities. We will stay highly vigilant to early signs regarding asset qualities, strengthen risk prevention and resolution in key areas, including retail risk, credit, and the property sector, and intensify collection and resolution efforts, and internal control will be strengthened with rigorous safeguards against credit risk, market risk, operational risk, and liquidity risk, providing a solid foundation for high-quality development.

We will now open the floor for questions. You're welcome to raise questions.

Please follow the instruction of the operator, and include your name and this industry and the industry you and the institution you represent. For mobile users, please tap More at the bottom of the interface and select Raise Hand.

For PC users, please click Participants and choose Raise Hand. Please ask one question per turn.

When invited, please turn on your microphone and camera, and state your name and institution you represent. Thank you.

We will now take the first question. We will have the first question from Guotai Haitong Asset Management, Xu Chenxi.

Can you hear me?

Yes, we can hear you.

Thank you, senior management, for giving me the opportunity to raise the first question. My first my question is for Mr.

Wang Xiaoting. You just assumed to be the president of CMB.

I have a very simple question for you. For this time, as you assumed your new role, what is your actual inner thought?

We all know that you have assumed your new role for around half a year. You have done a lot of work.

I would like to learn from you what about your mindset, your idea about the future development of CMB's business. We see CMB in second quarter your revenue, your profit all accelerate.

Will that trend continue to the second half of the year?

Thank you for your question. By the end of April, I assumed my new role to be the president of CMB, and after that, first of all, I feel strong responsibility, which was reflected in the following aspects.

CMB has managing has been managing a 13 trillion asset size. It shoulders a very strong responsibility and mission.

Second, the bank-wide development is highly relevant to 120,000 CMB staff's life, and how could we inherit the good experience and the results from generations' hard generations of CMB staff's hard work, and stick to high-quality development? Third, the capital market, our investors, have attached great importance and recognition to CMB.

How do we live up to their expectation? How do we live up to what they expect from us is also a very important issue for us.

I can recall an individual investor from our shareholders' meeting that their fund are coming from their everyday life. Making good investments is what they want.

We should guarantee them with good results and deliver to our investors, so as to guarantee their return. Of course, from all these three aspects, these are the most important aspects.

We also have other dimensions. CMB are faced with important development opportunities, and of course, there are challenges ahead.

I have been discussing with many investors in different scenarios. Challenges, on one hand, are coming from the banking industry.

These are the common challenges faced by all banks, for instance, the low interest rate environment. They have been posed challenging to the bank and also the challenges they brought to the ongoing development.

Another dimension is that as the economic growth rate actually moderate, and also the whole society's financing structure are experiencing changes, the demand for the credit demand also shrinked. This is also the PBOC had mentioned in the forum in Shanghai that the total loan growth demand, the loan demand, is also in a slow-down trend.

For the second perspective for CMB, we have also been quite special in our own loan structure. As you all know, we are a bank that retail business stays in our major line, and the standard wealth management is a very important strength of ours.

In such a phase where retail credit assets, retail business facing challenges, I believe this challenge, on one hand, is coming from the household balance sheet re-evaluation and deleveraging. This is a phase, a special phase we have.

For the second perspective, some of our households, they're having challenges in their willingness to repay, and also their capability to repay. Thirdly, the joint-stock risks also joint debt risk also demonstrate in such an environment.

For CMB, who boast a retail business, are under pressure, much more pressure compared with our peers. Combined with the low interest rate environment, combined with our over 50% of retail loans among our all loans, and also the rather small room of liability cost control compared with our peers, I think all these factors combining together are posing stronger challenge to CMB compared with other banks.

For us, I think, on one hand, we need to follow the principle, the pattern, of the banking business development. For us, I think that we should always stick to the philosophy, the customer-centric philosophy, to be back to our origin and take customer as our center.

Secondly, we should balance risk, return, and maintain a good management over the two factors, and stick to good asset quality. Third, from a commercial bank's perspective, we need to combined with our own strengths, our resources, what we are good at.

I want to specially mention two points. One's that even though we are faced with challenges, how do we leverage our strengths in extensive wealth management business?

We can consolidate our characteristics as a retail bank. We cannot give up our own strengths and characteristics just because of the change of external environment.

On the contrary, as the market changes, during the process, we should even more, we should even learn better about the environment and seize the opportunities, and continue to foster our capability and grasp the development opportunities among the environment. Second perspective is that we have 3.8 million corporate clients and over 230 million retail clients, and we are having rather strong space to further dig deeper in these client groups.

We need to take a customer-centric perspective to understand better about their demand, where is the their demand, where is their pain point, and for CMB, we can understand better about them and provide corresponding service to these clients to match their needs, no matter they are retail clients or corporate clients, and to carry out our mission to serve the real economy, and to serve the sense of fulfillment and their investment gains of our customers. Of course, as a commercial bank, we should seize the pulse of the of this time, to seize the trend of development, and to seize what we should seize, to see from current situation.

The senior management has discussed the following aspects, directions of development. These are also what we think that we would grasp and seize to be the the characteristic of CMB's future development.

The first thing is extensive wealth management business under the low interest rate environment. How do we understand better about customers' demand, their demand of preserve and increase their asset value, and we also see the change of asset structure of every household of the Chinese residents.

For the first half, retail AUM increased by 8% to 18 trillion yuan. We can see that in deposits, insurance, trust schemes, and mutual fund products, these are all demands coming from our clients.

For CMB, we have already accumulated a capability recognized by the market, and for the next phase, we will further strengthen our capability to take customer as the center to increase the sense of fulfillment of our clients, and to increase also the experience of our client. We take these aspects our target to enhance our capability of providing asset allocation to our clients, and also provide companion service to our clients as well.

This is what I would like to discuss about the first capability. Besides retail, extensive wealth management also include wealth management to corporate clients.

Even though the scale of wealth management service provided to corporate clients is not as big as those we provide to retail clients, but it's also growing at a very fast pace. For the second perspective, I think we need to seize the opportunities arising from the new time and new environment, that is sci-tech finance.

We think that under the backdrop where the government encourage us to develop technology, and also the capital market are providing stronger support in this process, and of course, financial institutions like us should not miss this great opportunity. It's not just missing an opportunity, it's it may be a time that you miss.

Of course, probably every financial institutions are also practicing and trying to seize this opportunity, and how do we further consolidate our capability that is more systematic, based on our past accumulated experience? I think, on the one hand, we need to deepen our understanding towards industries.

For every area in technology, it actually requires us to have strong knowledge, deep understanding in different areas, segments in the technology business. How to further cultivate our capability, it is what we need to further dig deeper and cultivate, no matter in the head office or branch level or subsidiary.

It is also It is also built It is also building based on our professional operation that is industry-based. Only by understanding better about the future of a company could we deepen the development of technology finance.

For the second perspective, how do we better promote the development of technology finance? We should give into full play of our license, our full-license capability.

I understand that for commercial banking business, the high-growth and also high-volatile characteristics within technology finance, it cannot be satisfied by the traditional credit business model, because the return coming from loan business is rather certain, I think that the two aspects within the business are actually mismatch. How do we better satisfy the demand of technology finance?

We need to further leverage our full-license capability, our multi-license capability. That is what we need to think further for the next phase.

We have 1 + 1 + 8 license. One is commercial banking, and the other one is our overseas commercial banking, and the other eight are investment banking, investment management, AIC, leasing, and etc.

For CMB, within these eight licenses areas, they are having a rather a good market share and also market influence compared with CMB's commercial banking business within its own area, I think we should fully leverage what we have been cultivating, what we have been accumulating, and to better serve our nation's big strategy of developing technology, and within this trend, we should seize the opportunity and further development along with this trend. For the third perspective I would like to mention is that about our international development.

Logically speaking, our overseas branches are not having as many outlets as the big state-owned banks, how do we reflect our own characteristic in international development? Especially, how do we better leverage our Hong Kong institutions?

I think that these two ideas are what we need to think further. The fourth aspect is that in the intellectual intelligent era also bring us new opportunities for banks.

It might not be obviously or quickly reflected in our balance sheet, or even at recent phases, they will be reflected as expenses or cost. For us, we think it's the right thing to do.

How do we use a more scientific way to grasp the intelligent technology meant a lot for a commercial bank. It could help us to enhance customer experience, enhance our internal efficiency, and to conduct even more accurate risk management, and also to further accumulate our knowledge.

This is for the development of technology has always been a very important input. Long ago, we have been written that no less than 3.5% of our operating income will become the IT input, and for the next phase, this is written in our Articles of Association, we will We are having plan for developing our intelligent bank, and later on, our chief information officer, Mr.

Zhou, will give further introduction. Last but not least, we believe it is also an opportunities given by this era, and also another major long-term momentum is that during the development of Chinese economy, we should better give the full play of our branches in key areas.

According to the senior management's analysis, for the first half, recently, I've just report the figure of development in of branches in key areas, they're having a better growth rate in the average level of the bank's all all branches all all branches. We need to stay close to the local industrial policies, stay close to industries that are fitting to our understanding of risk, to our preference, and stay close to our clients, including corporate and retail client.

This is the This is what we need to do to further develop the key branches, great branches in key areas, so that they can contribute more to the bank's operating income and also profit. This is we need to For the next phase, we need to further foster our characteristics and strengths, so as to establish CMB's own driver of future development.

Your last question is about the growth of the first half. Will that trend be continued?

To see from the senior management's level, we will strive, we will make every effort, and this is also what we want to deliver to the market. We we aim to strive to maintain a stable and steady progress to deliver such results to our market, and make every effort to maintain our good asset quality, to deliver such good growth momentum, to consolidate what we have achieved to reflect better results to the capital market.

Thank you.

Next question, please. Next, we will invite Ma Kunpeng from China Securities.

Thank you. I'm Ma Kunpeng from China Securities.

Thank you for President Wang for the introduction. We are clear about the strategic outlook.

I want to further ask a my question on retail banking business. CMB has the best wealthy retail customer base in China banking industry.

In areas such as consumption scenarios, basic account services, wealth management, how will you continue to enhance the exclusivity, uniqueness, and premium experience of product and services to these clients, thereby avoiding simple price wars and marketing wars, so that we can further improve customer loyalty and returns? Is there any indicators or metrics we can track to monitor the progress and effectiveness of these efforts?

We would like to invite Ms. Wang Ying to answer this question.

Thank you for the question. I think this is a very good question.

You not only mention pay attention to wealth management, but also pay attention to customer consumption scenarios, including bank account services, which are integrated financial services. This is a direction that CMB is paying effort to, to serve the clients' basic needs in deposit, loans, and remittance.

Regarding these comprehensive financial services, we do not target only wealthy customers, but the whole customer base of China Merchants Bank. Deposits has been elaborated to extensive wealth management.

We will start from the client's sense of experience. We select good products and construct a long-term, stable asset allocation system.

Regarding loans, which means we will satisfy clients' demand in different financing, to provide provide the needs in households, business, etc. For remittance, we pay high attention, and continuously enhance our basic account system contribution construction, and dedicated to a safe, convenient, and rapid payment system to cover all scenarios such as elderly caring, social insurance, etc., so that clients can use one account to manage all kinds of businesses.

Make CMB card more is a very good to use this concept to be more widely widely promoted. Wealthy customers have more diversified requirements.

In the Most of the clients are entering a phase of wealth mature wealth accumulation, they have diversified from different dimensions. Their requirements has been wealth succession and wealth protection and more advanced needs.

Under such kind of complexity, we have to take into consideration more factors and provide more customized services and more differentiated services to these wealthy clients. We provide 1 + N comprehensive and scenario-based service solution, which is a one-on-one relationship managers, and plus an expert team for long-term companion, to fully respond to the clients' expectations on integrated services.

In product offerings, we would opt for all-round all-category product offerings that that serves across multiple accounts and multiple currencies, etc. Golden Sunflower and above customers' growth in the past 3 years has accumulated to 55%, and the CAGR has been 13.26%.

Another point that I would like to discuss with you is that we have always pay high attention to the upgrade of retail client service model, because retail customers is a 10 is a 100 million volume-based customers, and there are a lot of categories of retail banking businesses, and there are multi-dimensional services involved in retail banking client services. How to match clients' requirements and our product offerings?

This is a very important question. In the past, we used 3 years to basically complete the human plus digital intelligence new model in retail finance, and completed our digital remaching for clients and channels and product offerings.

We have three dimensions to support us. First, our customer-centric value, and our strong delivery capacity from the head office to branches and to sub-branches, as well as our strong support from of fintech.

This is a main support. In the next phase, our retail banking service model will deeply involve artificial intelligence from and transform for a people plus intelli- people plus digital intelligence to people plus AI agent.

Regarding metrics, I think there are many indicators to pay attention to. For example, the number of customers holding wealth management products, the allocation customers, MAU, active users, etc.

Our the the customers covered by TREE system has increased by 55% for the past 3 years, and the compound annual rate has reached 13%. Our monthly active users has increased by 31% in the past 3 years, and and the of the and 9.36% and the 5.14% of the CAGR of the past 5 years.

For as for the indicators, AUM and client base are the most fundamental indicators to look for. Structure, volume of these indicators are also something that worth paying attention to.

Our AUM increased by 52.12% over the past 3 years, and retail clients increased by 24.54% for the past 3 years, and the CAGR was 6.72%.

Broadly speaking, we use integrated service capacity to serve our clients. As long as we have our retail customer base, although even though their demand and preference changes across periods, however, for CMB, their trust for CMB and their choice for CMB will not change.

Next question, please. Next, we will invite Xu Ran from Morgan Stanley.

Thank you for giving me the opportunity. I'm Xu Ran from Morgan Stanley.

My question goes to Mr. Wang Xiaoting regarding loan growth.

We see that loan growth has slowed to below 5% year-on-year, and at shareholders' meeting, you mentioned that a loan growth rate around 7% would be appropriate fit. What is the management's long-term consideration on loan growth?

Previously, we think that CMB is a retail-oriented bank, and in retail sector, we see that risk are accumulating. What are your considerations regarding future portfolio allocation?

Thank you for the question. Indeed, as you mentioned, and also mentioned in the presentation previously, the bank's total loans and advances reached 7.45 trillion, up by 4.73% year-on-year.

In this process, we see that the difference between corporate loans and retail loans. Corporate loans increased by 13%, while retail loans increased by 0.05%, excluding corporate card.

We are seeing corporate loans growth is outpacing retail loans. This is broadly in line with the market trend.

You just mentioned the number 7%. This is mentioned in a previous investors' discussion regarding our expectation, which is 7%.

From actual operation, we think that currently is around 5%. In the in the next half of the year, we think that the growth rate would be relatively the same.

There are two reasons. Firstly, the external environment.

The the speed of loan growth is is slowing down, which is and the the asset quality is improving. This is the choice of it's our own decisions.

With insufficient credit demand in the market, especially the retail loans is facing a periodically high risk, we do not blindly pursue scale expansion. We emphasize the philosophy of a balanced development of quality, profitability, and scale.

In recent period, what we discuss with the retail banking business sector is that we should regarding the retail banking structure and asset quality, we have increased our requirements, and we do not pay very high emphasis on scale expansion, so that our team of retail banking have sufficient attention on the asset quality of retail loans. Even though I believe that from your from many analysis, the Q2 growth is lower than the previous numbers.

From the from the perspective of commercial bank operation, we think that we hope we hope to pay higher attention to the challenges, and adopt long-term perspective and conduct proactive management. Secondly, I would like to mention that about the low-yield bill financing and LC negotiating business, we are the volume is shrinking, and we are implementing proactive management.

The overall trend of demand is not changing very fundamentally. We if we are not seeing very good signs of improving trend, the overall trend of CMB's loan growth will still maintain.

Retail loans In terms of retail loans, we will continue to consolidate our quality customer base, effective control risk, and then we can have our good market share. In terms of corporate loans, we focus on key areas, key industries, and key industries featured by 6Nets, so that we can achieve growth in both volume and quality, and increase our quality and effectiveness of serving the real economy.

Thank you.

Next question, please. Next question is from Yang Shuo from Goldman Sachs.

Thank you for giving me this opportunity. I have a question for deposit.

Recently, we see that some major banks, they're resuming the issuance of large denomination personal CD. I would like to learn that whether it has caused any influence to our liability cost, and I would like to understand the repricing of deposit, and also the trend of NIM of CMB.

The question will be taken by Mr. Peng.

Thank you for your question. I think for the issuance of large denomination CD will have three purposes.

One is based on the maturity management to the duration, to match the duration and liability to absorb the long-duration liability to maintain a balance sheet management. Second, liquidity management, I think it's also the second purpose.

The third purpose is relevant to provide the product and service for clients' demand of having such kind of long-term deposit product requirement. Based on our understanding, five-year large denomination CDs issuance, the total size is limited, and the cost is rather low, based on our understanding, it will have limited influence on the bank's NIM.

For CMB, our duration, liability duration is appropriate and balanced, in market risk, we don't have quite strong requirements on the large denomination CD, and we have good liquidity, for temporarily, we won't need the issuance of large denomination CD to supplement our liquidity. If in the future we need to take such action, it will be out of the purpose of providing relevant deposit products required by our clients.

Of course, we will conduct further analysis and understanding that whether or not we have actual demand from our clients, and whether the demand should be satisfied by our product supply. We are also doing such kind of analysis and research.

Also, for those products that was that was further relieved, we need to conduct some rollover products. We will also start from the perspective of NIM management, and also from the perspective of liability management.

I think the influence is rather limited.

The next question is from Ma Tingting from Guotai Haitong Securities.

Thank you, senior management. I am Ma Tingting from Guotai Haitong.

I have a question about the overall CMB's asset quality. What's your point of view, and what is the major risk that you see, and what kind of coping tactics, measures, that you have been taken to these risk areas?

The question will be taken by Mr. Xu.

He is in charge of risk management.

Thank you for your question. For the first half of this year, we have stick to our prudent and stable risk management culture, and prevent the risk in key areas, and increase our level of risk management.

Our asset quality remain to be stable and having three characteristics. One is asset quality maintain stable towards a good momentum.

By the end of June, our NPL ratio was 0.94%, remained flat from the end of 2025. This is quite a good level.

The second is that we stick to a prudent and culture risk classification, asset asset asset classification. Loans overdue for 60 days and 90 days to NPL was 1.23, which was a good level among our peers.

Third, we have abundant provision. By the end of June, under the group's caliber, our coverage ratio was 385%, having a strong compensation level.

You have been paying attention to our understanding of risk areas. I would like to make some classification according different segments.

First, I would like to talk about corporate loan. For the first half, our NPL corporate NPL ratio was 27.4 billion yuan.

Corporate NPL ratio was 0.78%, down by 0.1 percentage point. Corporate asset quality actually improved.

For the first half, the NPL formation ratio of corporate loan was just 0.16%. Stretching to see from a longer cycle, CMB's corporate loan asset quality continue to improve, remain stable towards a good trend.

For the risk areas that we pay attention to, in terms of corporate loans, the future risk will be lying in real estate credit perspective. By the end of 2025, we have 14.5 billion of NPL loan in the real estate area, which represents a 4.47% of NPL ratio.

Even though these two figures remain at a high level, relatively high level, we are paying a very cautious attitude towards these two figures. For for the real estate market, we still see some divergence within the market.

For some clients with rather not that good performance and qualification, they're having quite poor asset quality. For this area is what we pay special attention to, that is the corporate real estate.

We're taking measures as follows. We continue to lower the proportion of retail of corporate loan, corporate real estate loans within total loan.

Its proportions was now 9.3%, which was lower than the end of 2025, lower by 0.45 percentage point. We will further optimize the structure of property loan, corporate property loan.

We focus on loan disbursement in Tier 1 and Tier 2 cities, and 85% of them are allocated to Tier 1 and Tier 2 cities. To see from clients' structure, 80 over 80% of our corporate property loans are are granted to local and central state-owned enterprises, and also very qualified private enterprises who are having stronger capability to paying their debt.

The third perspective is to maintain strict management towards management towards the projects. We have conduct closed-loop fund management towards different projects, and in the fourth perspective, we continue to dissolve the risk within the area, and speed up the disposal, and enhance collateral, enhance guarantee, and enhance the this other disposal methods taken by our staff.

Also, last but not least, to enhance our provision level to make sure that the risk compensation level within the corporate real estate sector is sufficient. The provision level is over three times than the average level of the provision for the corporate loan.

Looking into the year 2026, with many policies introduced by different regulators, we are seeing that the market, the real estate market, are seeing the trend of further concentrating in the risk, and the risk tend to be showing a momentum to contain, to be contained. We think that even though there will be some individual event of risk outbreak, but generally, the market is now in a stabilizing process.

The second perspective I would like to mention is about retail loan. For the first half, the retail The retail NPL loan amounted to 42.8 billion.

The NPL ratio was 1.16%, one up by 1 0.1 percentage point. Special mention loan ratio and balance of retail loan increased.

I noticed that some of you investors are paying special attention to the asset quality of our retail loan, and from my perspective, the retail loan asset quality is the major driver, the major reason that influence our overall asset quality. Even though the indicators, the credit asset quality indicators of the retail loans are maintaining at a relatively good level, but they are still under pressure.

The second, retail loan accounts for a high proportion in our loan book, it's natural for us to having stronger pressure. Of course, some of the pressure is coming from the market trend, and the other side, I think the pressure is also coming from the expectations from our investors, and also CMB's pursuit to be the best retail bank.

Currently, under such backdrop of the economic structure transformation, and also the downward trend of the real estate market, clients are under influence in terms of their capability of repay, and also their willingness to display repay, and also we're having joint debt risks in the consumer loan area. We are still having the idea that the retail loan risk is in an upward trend.

Of course, we have been taken measures to contain, to maintain the risk level of retail assets to What we have been doing is that we have adjust our budget and target of retail loan business, and in our evaluation and also internal encouragement, we even pay special attention to the quality of retail loan, and also to control the formation of retail loan, retail NPL loan. Of course, we also see some positive signals within retail loan asset quality for the first half.

Excluding credit card, our retail loan, our the the MP the We are having new formation of 247 million new formation of personal loans, that is that is retail loan excluding credit card. Retail credit assets, the momentum of its NPL new formation momentum has been curbed.

The second signal we see, our balance loan, that is our mortgage loan, for the first half of this year, the NPL balance was down by 509 million and down by 0.03 percentage point, and realized both decrease in the NPL balance and ratio of our mortgage loan for the first half of the year. Of course, good signals are also showing in credit card business.

Due to some special reasons, the adjustment of the asset classification within the credit card business, we have been taking stricter measures to carry out asset asset classification, so that we see some uptick in the in the formation of credit card NPL. Overdue loan ratio was down by 0.1 percentage point in credit card business for the first half.

Overdue loan ratio and balance also both decrease in terms of credit card loan. Of course, we have to admit that the credit card assets are still under pressure in terms of its asset quality, but I believe it still be a very important loan-granting direction for us to pursue.

In the following phase, we will follow the market trend, we will emphasize both on quality and size, and we will give the full play of our the strength of our customer base to increase the threshold of customer onboarding. Third, we will dig deeper into our existing customers, and to prevent the risk coming from joint debt risk.

Fourth, we will conduct early identification, warning, and also disposal, and etc. Fifth, we will enhance our systematic risk management capability to strengthen the leverage of AI or data, and also to strengthen the cultivation of our talent team.

We will further strengthen the management over the asset quality of retail assets. We wish it would it will be developing in a stable momentum.

Next question, please. Next, we will invite Li Meng from J.P.

Morgan for the question.

Thank you for giving me the opportunity. My question is regarding corporate banking business.

We notice that corporate banking revenue and profit are outperforming those of retail banking. What are the growth drivers, and what is the outlook going forward?

Under today's macroeconomic situation, how can we maintain good corporate loan asset quality? Thank you.

Thank you for the question. We will invite Mr.

Lei Caihua, who is in charge of corporate banking business, to answer this question.

Thank you for the question. You mentioned about the growth of corporate banking in the first half of the year.

Overall speaking, our growth is stable. Due to in the backdrop of the market environment, and we have four growth pillars, we have achieved good operating results.

In the past decades, corporate banking operation has formed a differentiated advantages as compared with our peers. The key lies in our the number and quality of our customer base, as well as our client experience and client coverage regarding our digital products.

The aforementioned two points generate three points: our cost of liabilities is outperforming outperforming our peers; and our investment banking and cross-border finance business is featured and satisfied our clients' needs, and as generating non-interest incomes. Fifthly, the four-pillar growth drivers of CMB corporate banking, especially wealth management, asset management, interbank coordination, has jointly formed a growth.

Sixthly, our good asset quality. Next, China Merchants Bank will continue to in terms of corporate banking, we would all we would focus on the six aspects to forge our differentiated advantages.

Firstly, leveraging digital empowerment, we will further strengthen our client service system. Currently, the classification and segmentation-based client operational model will be continued, and this is a core for our customer base operation.

We will enlarge our clients' loyalty and increase our income and low-cost liabilities. Compared to peers, we have a better advantage in the volume and quality of our client client base.

For technology-evolving growing clients, we should address their needs in operations, and become a principal bank for the clients. Next, we are in terms of operation, we need to continue to optimize our services.

Secondly, to improve our operational operation professional operation capacity and increase our asset origination. In terms of we focus on the new emerging quality clients and 6Nets clients, etc.

We will have specific industrial investigation and improve our risk investigation and forward-looking judgment on their demand, and impose differentiated credit policies so that we can obtain a asset allocation which is with controllable risks. We also strengthen to build a industrial ecosystems.

We have already covered 36 industries of professional investigation. Thirdly, we will improve our investment banking and commercial banking integrated service systems.

First, we would improve our digital products, including cross-border finance, investment banking, transaction banking, etc., so that we can enhance customer experience. In terms of customer experience, we are leading the industry, and we should maintain our advantage so that we can deepen our client loyalty, know better our clients, and forge stronger ties.

Leveraging high-efficiency synergy, we will forge a capital ecosystem to provide our clients with more diversified products, and in increase our M&A financing and direct financing, increase our FPA increase our FPA to improve our income. Next, we will improve cross-border finance business management, serving Chinese enterprises growing global.

In terms of customers of BOP, BOP value, cross-border financing, as compared with our comparable peers, we are leading in our position. Next, we will improve our synergy capacity in cross-border institutions so that we can help the client Chinese enterprises going global help their products going global, and investment and financing going global, so that we can provide better services for these clients.

Fifthly, we would increase the coordination between the four major business segments. The coordination of these four segments are the feature of CMB, especially the development of wealth management business as well as the other segments.

The coordination with by leveraging this coordination, we can achieve deep operation of this different client categories. Next, we will continue to forge differentiated processes and mechanisms.

Sixthly, we would use AI to empower our business. Firstly, we would we want to increase our response speed to our clients, and increase our risk management capacity and internal management internal operation efficiency, and as well as integration and synergy capacity.

That is my answer. Thank you.

Next question, please. Next, we will invite Wang Xianxian from Hwabao Minsheng Securities.

Can you hear me?

Yes.

Thank you. I'm Wang Xianxian from Hwabao Minsheng.

Thank you, CMB, for delivering stable performance, and under such kind of circumstances, you have good performance in operating results, and increase and see an increase in market price in H share and A share. My question is regarding asset and liability.

I want to ask the management, how do you What is your outlook on the NIM trend? The second is about fintech.

We notice in the interim report, you elaborated a lot on AI, and we believe CMB is leading the industry in AI deployment. The market is not having a very direct feeling of the AI application.

Can you Is there any tangible impact on the business? Can you give a few examples, so that we can have more concrete feelings?

Thank you for the question. First, we will invite Mr.

Peng to answer the question. For the second question, we will invite Mr.

Zhou for the answer.

Thank you for the question. Regarding NIM changes, this is a heated topic of the market.

Since this year, in the banking industry, the NIM is becoming stable. However, there are some divergence in this regard.

In some banks, we are seeing a rebound, but the others, we are seeing still seeing decline. As for CMB's perspective, currently, we are still declining.

However, the decline is rapidly narrowing. In the first half, the NIM was 1.83%, down 5 bps year-on-year.

As Q2 compared to Q1, 1 bps lower. We are declining, but the decline is narrower, and it is being stable.

As for CMB, we think that the the main factor is lies in asset side. First, the repricing factors have not been fully displayed.

This is a common factor impacting all the banks. Also, we are facing insufficient credit demand, which drive to the downturn of asset pricing.

Secondly, for China Merchants Bank, our retail banking, especially credit card banking, asset has a high proportion. Under current circumstances, this asset has been slowing in growth, posing pressure on our NIM decline.

I think for CMB, there are common factors, as well as factors that is applicable for CMB. Overall speaking, no matter how different each bank changes in their NIM trends, we can come to a conclusion that the NIM is facing less pressure of decline and gradually rebounding.

For the banking industry, in the future, we are still facing pressure of further decline in NIM. The main factors also include the there hasn't been a very clear turning point of insufficient credit demand.

In terms of deposit repricing, it is basically finished. Therefore, the downturn of cost of liability has been slowed down to as the impact on NIM.

In terms of asset quality in terms of property asset, it hasn't been fully recovered. We are not seeing very rapid rebound in this area.

In terms of NIM, we're still facing pressure. From my personal point of view, the most difficult time for NIM decline has already passed.

We are also faced with many preferential factors. For example, under the current macroeconomy, especially our good monetary policy, scientific monetary policies, as well as the advocate for reasonable competition, our competition will be more reasonable, which is a good factor for our NIM.

Secondly, loan repricing is expected to finish within the year. If there isn't large amount of rate cuts, we think that loan pricing is also turning gradually stable.

My point of view is that although we are facing a certain extent of pressure in NIM, we will gradually enter a phase which is more stable. CMB will continue our management on asset liability, and make good arrangements in asset structure.

For example, on the premise of good asset quality, we will promote the reasonable growth of retail credit loan, and promote a growth of retail loans which is considered appropriate, and we will strengthen cost management for liabilities. In terms of deposit, we think that quality is more important than volume, so that we can contribute more to the stabilization of NIM.

In the beginning of the year, we raised three targets. First, to narrow the decline of NIM, which, I believe, can be done.

Secondly, maintaining market leading position, and we are confident about that. Thirdly, we strive to achieve stability in NIM.

Thank you.

I'll answer the second question. Intelligent transformation is the trend of the time and also an opportunity for CMB.

Since 2024, we help leverage AI to help CMB transformation, we have intensified our effort in that regard. In our employees' daily workflow, AI has been implemented and playing effect.

The working items we identified with AI empowerment has has been over 1,000. We have achieved 13.88 million equivalent employee working hours contributed by AI.

AI has been playing its effect, spanning front, middle, and back offices. You mentioned that you hope to learn about what are the specific influence to our businesses.

I want to give you two examples. One, our Golden Sunflower client operation.

Currently, RM assistant is playing good effect of AI in for Golden Sunflower RMs. We are also seeing that for all of the bank- bank-wide relationship managers for Golden Sunflower clients are using AIs and achieving positive impact.

In the first half of the year, the average effective outreach calls per RM increased by 14.65%, with average transaction value per client increased by 35.82%, generating good effect. In terms of corporate credit, currently, 90% of the content in the due diligence report for small business can be generated assisted by AI.

In in the in-lending stage, AI can help with extraction of key information and assisted in decision, the average service time reduced from 36 hours to 2.70 2.72 hours. The tender guarantee can be issued within minutes.

AI, the adoption rate of AI monitoring results for for loans has been 68%, and the RMs can resolve risks in advance, and the alert triggering time has reduced by 40 45 days as compared with traditional mode. Currently, on the basis of China Merchants Bank 15th Five-Year Strategic Plan, CMB has more specific and detailed arrangements regarding AI empowerment, and raised a high target and posed a high target.

We are having full-range deployment regarding this area. Thank you.

Next question, please. Next question is from May from UBS.

Thank you, senior management, for giving me this opportunity. I'm May from UBS.

I have a question about the dividend payout ratio, the dividend policy. We can see that the state-owned banks, they increase their interim dividend payout ratio by 1 percentage point from 30% to 31%.

For CMB, you maintain at a 35% level. However, under such environment, will CMB consider to further increase your dividend payout ratio?

For your corporate loan business, you have seen quite good increment. Will that consume a lot of capital?

In the future, how do you plan your capital position and the RWA development? Thank you.

Thank you for your question. For China Merchants Bank, our dividend payout event, we have been authorized by the shareholders' meeting and also the board of directors.

We have rather corresponding arrangement. We understand that the capital market has been paying special attention to this matter.

We have also communicate with our investors to understand better about the capital adequacy ratio and also the RWA growth rate and capital position. In the end of June, we have held a shareholders' meeting, and under it answering a question about our market value arrangement, we have provide relevant answers.

We will, based on our capital adequacy ratio, to coordinate the asset growth, the asset return, and the financing of capital, and also dividend payout management, and also the market recognition, and to finally realize two targets. One target is the risk remain under control for the bank's operation, and for the second perspective, to value investors' and shareholders' requirements, their demand, and provide return and provide value creation for our shareholders.

Our mindset and the efforts we made are also based on what we have listened to our investors and shareholders, and based on these consideration, we have making plans in our RWA growth, in our capital adequacy ratio, and dividend payout ratio. We have always following a one principle, that is to balance the development of both light and heavy assets, and also arrangements.

Under such guidance, I think we can understand this matter from four perspectives. One is to in guarantee the enhance of our return, to optimize the allocation of our resources, enhance the utilization rate of our capital.

Second, scientifically manage RWA growth rate. It means that we need to be more efficient in using our capital, and reduce the idle occupation of capital.

Third, is what we have always been adhering to, that is the internal generation of our capital, endogenous generation of our capital. Fourth, is the recognition given by the market of the value of evaluation of CMB, to maintain our good market image, to make sure that we have can have a better market valuation and deeper recognition from the market.

We have multidimensional consideration and thoughts. We will take full consideration of the opinions from every perspective, from investors, from analysts.

They're also serving as very important channel of of comments, and also we should also be aligned with our own operation. Thank you for your question.

Next question, please. Next question is Gary Lam from HSBC.

Hi, senior management. I am Gary from HSBC.

I have a question about fee income and AUM. We see that your fee income increase, accelerate in the second quarter.

Will that trend continue for the next half? Your retail AUM recorded quite fast growth rate, which was annualized 15%, faster than the deposit growth rate.

I would like to understand what is the underlying reason behind, what is the underlying driver of this phenomenon? At the same time, we see that in the wealth management income, the driver has been changing.

Mostly, they are driven by the agency distribution of mutual fund and wealth management products, less from bancassurance products. In terms of future development, could you leverage the growth from mutual fund and wealth management product to offset that the decline from bancassurance?

Thank you. Thank you for your question.

It will be taken by Ms. Wang Ying.

For the first half, CMB's AUM has growing at a good pace, hitting a record high of 1.63 trillion yuan, 7.96%.

The wealth management products are giving a full play, and we have also see new growth drivers in the structure. Non-deposit AUM account for a higher proportion, excluding the third-party market value.

85% of the growth are coming from non-deposit assets. I think that is highly relevant to the high growth rate of our equity-related products, for instance, mutual fund, third-party depository payment, trust schemes, and etc.

They have all realized quite good growth, and also bring us the change in the structure of growth. Of course, in customer base, we also see good performance.

In the Golden Sunflower and above customers are having higher AUM growth rate compared with the same period of last year, and also that the average level of all customers. In wealth management scenarios or into pension, cross-border business scenarios, we also see faster AUM growth.

In income contribution, wealth management-relevant AUM yield has lead better return compared with other type of products. You just ask us, what is the underlying logic behind our AUM growth?

I would like to conclude in the following aspects. I think it is relevant with CMB's capability that we have long accumulate in terms of wealth management capability.

It contains three tiers. That is to provide full products and quality products.

The second is relationship managers and also our wealth management consultants and investment consultants consultants. They are forming a team to provide combined allocation service to our clients.

Third, our long-time companion service we provide for clients. For us, we understand that AUM growth is not just relevant to wealth management business.

It is more relevant to all retail banking business. It is also closely relevant to settlement and payment.

Our debit card, our credit card, whether it is of good use, whether it is safe, whether it is convenient, whether it is the first choice for our users. For our clients, it might not be using CMB for purchasing wealth management products only.

They would also like to make transactions within CMB. They would like to use the CMB account to be their principal settlement and payment account.

They are willing to buy wealth management products within CMB. They would like to use credit card with CMB.

They would like to use debit card with CMB. I think behind the AUM growth, indicators cannot be seen or analyzed isolatedly.

They are working with each other as a whole. As I answer the last question, the most important thing is we have a strong support such a large customer base, such a large talent team, such a diversified channels.

How do we leverage a strong technology infrastructure to break the sole the silo among different database, this is very important for us to provide a very smooth service to our clients. AUM growth, fee income growth, could we continue such high speed?

For us, CMB's AUM structure is quite light. It is very capital-oriented, capital market-oriented.

Wealth management business are accounting for a high proportion with this business. It is quite hard for us to say that we can maintain a very high-speed growth because it is relevant, highly relevant to the capital market development and transaction itself.

For a long period of time, we will continue to maintain our growth speed.

Next question, please. Next, we will invite Zhang Shuaishuai from CICC.

Thank you for giving me the opportunity. I'm Zhang Shuaishuai from CICC.

My question is regarding management. Previously, when the senior management is doing roadshows, you mentioned synergy a lot.

This is a very important concept because currently the market is limited, and many banks or institutions are seeking profitability from management. By various metrics, CMB is a leader in synergy.

I want to ask the management, how does the management achieve effective synergies across business lines, among branches and subsidiaries, not just in words, but in practice, how to maximize cost and resource efficiency? That is my question regarding management and synergy.

Thank you for your attention on synergy. This is a question that I would like to address on.

As you mentioned, on every level of CMB, including our subsidiaries, between branches, between head office and branches, across business lines, we have achieved good results in synergy. There are a few supporting factors.

There are five perspectives. Firstly, we have set up a mechanism for synergy.

For example, regarding cross-institutional synergies, we have designed the dual attribution and share shared rewards mechanisms. This design is helpful to the effect of synergy.

Secondly, the design of performance-driven incentives. In our assessments, we have put in the assessment, and given great attributes to synergy.

For different institutions and head office departments, we have given assessment indicators for synergy. Thirdly, model innovation.

A mechanism A institution needs a mature model for synergy. We have a mechanism incorporating investment banking, private banking, commercial banking, scientific research, etc.

Based on this very effective model, different institutions can have good collaborations. Fourthly, a corporate culture.

Synergy is not a task that is promoted with administrative forces, but a corporate culture that is internalized into the bank. Many many business lines and institutions will proactively embrace the concept of synergy.

In CMB, this is my feeling. The fifth point is about organizational organizational enablers.

Our organization structure is beneficial to the operation of synergy mechanism. Many departments, many structure designing is based on the consideration of synergy.

For example, we have set up a synergy committee bank-wide, and President Wang Xiaoting is the head of that committee, so that we can promote synergy via organizational structure. I think the above-mentioned five perspectives are a very good, very important factor to promote successful synergy within CMB.

Apart from the five-mentioned perspectives, there are also two extra factors. Firstly, we adhere to and pay high value to the synergy concept, including the board of directors as well as our senior management.

Each CMB employee would have such kind of concept in mind. Secondly, our data system and system design is a good support to the measurement of synergy effect, and which contribute to the performance incentives.

This is very important for a synergy mechanism building. We need top-tier we have top-tier awareness and a fundamental technical support, system support.

This is my question This is my answer to your question. Thank you.

Thank you, Mr. Peng.

Due to time constraints, we will now take the final question. To ensure the rights of individual investors, we have collected questions from individuals.

As most of them overlap with the questions we just mentioned, now, I would like to choose one of the one representative one for answer. Now, please read out the question.

The question is: The country is encouraging commodities and enterprises going global. CMB began its internationalization efforts 20 years ago.

My question goes to Mr. Wang: What is the future direction of CMB's international development strategy?

Are there any adjustments compared to the past? Are there any specific targets for international development?

Thank you for the question. International development is a important component of CMB's 15th Five-Year Strategic Plan, and also one of the transformation initiatives of our Four Initiatives.

The Regarding the background of internationalization, one of them is the Chinese enterprises going global, and also the international development of RMB. Another factor is the periodical interest rate gap between domestic and international interest rates, and some enterprises can in can benefit from the pricing gap.

China Merchants Bank pay high attention to international development. In terms of in terms of global presence and development presence, we have one subsidiary bank in in Hong Kong and CMB International, and we have six overseas branches.

This is our overseas presence. When I mentioned about the growth drivers for the medium and long term, I also mentioned international development.

As In terms of global presence, we do not have as much business presence business outlets as compared to the large state-owned banks, we have to adopt practical measures. What we hope is that we can serve we can better serve Chinese enterprises' global operation, especially we hope to do well in cross-border finance services to these clients.

Also, we also we also serve the foreign enterprises who are having their presence in China, leveraging our cross-border finance service system. Even though we do not have as many business outlets globally, cross-border finance of China Merchants Bank has formed advantage for China Merchants Bank.

Many clients have given us feedback that our cross-border finance team is very professional, and they have delivered very responsive services. We hope to consolidate these advantages.

We will fully leverage the current institutions we have. In the working conference for the first half, our development pattern will be the 1 + 1 + 5 development.

First one is head office, which is the strategic guidance, and the other one is our institutions in Hong Kong, which is a very important business hub for us in Hong Kong. The number five represents New York branch, Sydney branch, Luxembourg branch, and Singapore branch, and and the others, which forms the five major overseas business institutions.

They are serving as the regional hubs of our overseas business. Hong Kong Institutions in Hong Kong is China Merchants Bank Global Custody Center, syndication center, and other other business centers.

CMB will continue to increase resource input in that regard. In the past, we have served a lot of companies with global presence, and accumulated experience.

In the process of serving these clients, we have also increased our capacity, our tech capability, and experience. We will further serve these industry serve these companies who are the lighthouse companies, to improve our product offerings, and accumulate capacity and experience from the lighthouse enterprises, and leveraging this experience to serve more clients.

Thirdly, bank-wide, CMB will will cultivate more and more international talent team. Fourthly, we will make full use of our channel in like partner channels like agent banks, so that we can build a express highway that connects the major financial institutions globally.

More importantly, I think we need to increase our capacity in risk risk recognition capability. We As for CMB, we we continue we conducted our operation within the boundary of our capacities.

We will continue to build up our capacity, but we will not do businesses outside the range of our capacity. That is my answer.

Thank you.

In the interest of time, we will conclude the meeting here. This is the end of the meeting.

If you hope to learn more about the details, you can go to CMB official website for the interim report of CMB. If you hope to get further explanation of detailed questions, you are welcome to contact CMB IR team for further communication.

Thank you again. Goodbye.