Beijing/Hong Kong, 30 August 2020 – China Construction Bank Corporation (stock code: SH: 601939 and HK: 939; “CCB” or the “Bank”) announced its operating results for the first half of 2020. (The following data for the Group are prepared in line with International Financial Reporting Standards and denominated in RMB). According to the interim report, as at the end of June 2020, CCB’s total assets reached RMB27.66 trillion, up 8.72%. Net loans and advances totaled RMB15.93 trillion, up 9.54%. Total liabilities reached RMB25.35 trillion, up 9.28%, including deposits of RMB20.40 trillion, up 11.08%. Net interest income rose by 6.41%. Net fee and commission income increased by 4.34%. It realised operating revenue of RMB359.92 billion, up 4.51% from a year earlier. Pre-provision operating profit reached RMB280.34 billion, up 5.40% from a year earlier. The Group’s NPL ratio was 1.49%, up 0.07 pps from end-2019. The Group’s net profit came in at RMB138.94 billion, down 10.77% from a year earlier. Annualised return on average assets stood at 1.05%, annualised weighted average ROE was 12.65%, and the capital adequacy ratio was 16.62%.

In the wake of the sudden shocks brought about by the COVID-19 outbreak, CCB has proactively played its role as a major bank since early 2020. Based on requirements for construction of “three capabilities” proposed by General Secretary Xi Jinping for CCB and in line with missions and tasks centering on “Six Stabilities” and “Six guarantees”, CCB has been fully involved in the epidemic fight, aided the economic reopening, supported economic and social development and met financial needs of the people, continued to step up efforts to advance “Three Major Strategies” of house rental, inclusive finance and FinTech, and actively explored the digitalised operation model, thereby contributing financial resources to post-coronavirus reopening and social and economic and development. In the face of a complex external environment and downward pressure on economic growth, CCB, acting in line with the guidance of relevant national policies, has given full play to its early-mover advantages in digitalised operations and proactively stepped up support for inclusive finance and micro and small-sized enterprises and continued to sacrifice profit to support the real economy by adopting multi-pronged measures in accordance with the principles of business sustainability. By fully considering the impact of COVID-19 outbreak, CCB stepped up disposal of non-performing loans (NPLs) and increased relevant provisions, thereby enhancing resilience to risks. CCB also proactively quickened risk exposure, thereby it managed to proactively enhance risk prevention while striving to help stabilise economic growth. The Bank delivered its own solid and sustainable growth while helping facilitate steady social and economic development.

Multiple measures to support global pandemic fight; targeted support for participants in the real economy

Increased supply of credit resources. CCB responded to the calls of the central government in a timely manner by unveiling a series of service measures and launching green channels for lending in the wake of the COVID-19 outbreak. In line with needs of epidemic fight and economic and social reopening, CCB strengthened risk management and controls related to lending and enhanced the efficiency in approving loan applications. CCB has consolidated its advantages in the field of infrastructure loans, vigorously supported the development of inclusive finance, backed manufacturers’ transformation and upgrading efforts, and contributed to the steady development of green finance and strategic emerging industries. At the end of June, CCB saw total loans and advances up RMB1.45 trillion from the end of 2019, or an increase of 9.66%, of which domestic corporate loans and advances increased by 15.94%. CCB proactively supported epidemic prevention and control efforts and resumption of work and production. In the first half of 2020, CCB granted a total of RMB119.48 billion in loans to more than 10,000 key enterprises engaged in epidemic prevention and control. In support of coordinated resumption of work and production along industrial chains and supply chains, CCB wrote a total of RMB230.08 billion in online supply chain loans in the first half of 2020. CCB also vigorously supported efforts to address weak links in the infrastructure field, with loans to the infrastructure sector rising by RMB421.29 billion from end 2019, or an increase of 11.44%. To promote high-quality growth of the manufacturing sector, CCB’s loans to manufacturers increased by RMB211.43 billion from the end of the previous year, or an increase of 19.57%. In support of the transition from old to new growth drivers, CCB’s green loans increased by RMB118.50 billion from the end of the previous year, or an increase of 10.08%. At the same time, CCB stepped up investment in local government bonds and special anti-epidemic treasury bonds. In the first half of 2020, the Bank bought nearly RMB330 billion of local government bonds and underwrote more than RMB60 billion of special anti-epidemic treasury bonds.

Sacrificing profit to support the real economy and backing resumption of work and production. Along with changes in epidemic prevention and control situation, CCB, remaining firmly committed to missions and tasks centering on “Six Stabilities” and “Six guarantees”, unveiled a total of 99 measures to support epidemic prevention and control and economic reopening, strengthen financial services for micro, small, and medium-sized enterprises, support Hubei region, and help stabilise foreign trade and foreign investment. CCB implemented a package of targeted measures in support of epidemic prevention and control and economic reopening, striving to protect key sectors of the national economy and people’s livelihoods. CCB supported key enterprises engaged in epidemic prevention and control in a highly targeted manner, offering preferential interest rates on loans to relevant enterprises. The Bank increased credit supply to support the stable operation of key enterprises in sectors such as railways, civil aviation, electric power, and energy. Overall, CCB provided strong policy guarantees in support of epidemic prevention and control and accelerated recovery of the real economy.

On top of adhering to existing measures on service fee cuts and exemptions, CCB further stepped up efforts to slash fees to help businesses tide over difficulties. During the COVID-19 outbreak, CCB swiftly launched special financial service “Yunyidai” to supports small and micro-sized enterprises across the real economy. The service granted loans of RMB53.12 billion and made available RMB77.47 billion of credit lines within just one and a half months after going online. At the end of June, the balance of “Yunyidai” reached RMB98.30 billion, serving 119,200 customers. To lower micro and small-sized enterprises’ financing costs, the Bank offered preferential interest rates on inclusive finance loans to such enterprises. CCB offered loans to eligible micro, small and medium-sized enterprises that encountered short-term liquidity challenges and granted temporary loan repayment deferrals to borrowers, benefiting more than 150,000 micro, small and medium-sized enterprises. To ensure the stability of industrial chains and supply chains, the Bank tapped its advantages in integrated financial services as a major commercial bank, issuing loans through its online supply chain financing services, which helped support corporate clients’ resumption of work and production and stable the operation of supply chains.

Giving full play to the advantages of its role as a smart enterprise matching platform. CCB strengthened collaborations with enterprises and carried out cross-border matching services, fully supporting the stabilisation of foreign trade and foreign investment and facilitating access to industry chains, supply chains and value chains in global trade. In the first half of 2020, CCB continued to stepped up trade finance support for exporters and foreign-funded enterprises. Based on comprehensive assessments of the recovery in foreign trade enterprises’ production capacity utilisation and international supply and demand dynamics, CCB has provided customised financial services to exporters. At the end of June, the Bank’s outstanding on-balance-sheet and off-balance-sheet trade finance was RMB579.73 billion, up 37.75% from the end of the previous year. Leveraging online services of CCB Match Plus platform, the Bank facilitated cross-border collaborations between suppliers and buyers of epidemic prevention supplies. CCB also rolled out innovative digital exhibition services as part of its smart initiative aimed at helping stabilise foreign trade and foreign investment. To date, CCB has collected overseas sourcing requests for over 1 billion pieces of medical and epidemic prevention supplies, sorted out and contacted nearly 1,000 domestic producers and exporters of epidemic prevention supplies, published about 3,000 pieces of information about epidemic prevention supplies on the cross-border matching platform, and successfully facilitated exports of nearly 160 million pieces of various medical and epidemic prevention materials, involving total transaction amount of about RMB1 billion.

Further stepping up inclusive lending. CCB continued to expand service coverage, helping micro and small-sized enterprises access financing with “increased volume, reduced rates, higher quality and expanded coverage”. At the end of June, the Bank’s balance of inclusive finance loans reached RMB1,258.91 billion, an increase of RMB295.75 billion from the end of the previous year, with 1.59 million inclusive finance loan customers, up 265,600 from the end of the previous year. The average interest rate on inclusive finance loans written to micro and small-sized enterprises was 4.41%, down 63 bps from a year earlier. A total of 252 inclusive finance (small business) service centers and small business centers were established. CCB continued to step up agriculture-related lending to support epidemic prevention and control in rural areas and safeguard production and supply of agricultural products. CCB rolled out an individual version of “Yunong Quick Loan”, in a bid to address the problem of difficult and costly financing facing farmers. The Bank improved its loan product system aimed at revitalising rural areas, which covers business and individual lending and online and offline lending, and actively built and promoted its platform for rural land transactions. Service sites of “CCB Yunongtong” have largely realised full coverage of rural areas, effectively delivering basic financial services. At the end of June, the balance of CCB’s agriculture-related loans was RMB2,004.74 billion, an increase of RMB192.25 billion yuan from the end of the previous year, or up 10.61%.Supporting global epidemic prevention and control by leveraging technological strengths. Relying on its own FinTech platform, CCB vigorously promoted digital operations and services during the epidemic and actively provided online services and technical solutions related to epidemic prevention and control for local governments, enterprises and public institutions. The Bank innovatively launched “CCB Smart Community Management Platform”, integrating the application of national health QR codes for epidemic prevention, which helped urban and rural communities build an integrated “online + offline” epidemic prevention and control system. It brought online 2,464,800 communities and enterprises across the country, with a total of 51,068,800 users. To meet Hubei Province’s needs for epidemic prevention and control, CCB developed a management system for medical supplies, realising whole process online management of such supplies from demand management to multi-channel acquisition, unified distribution and final delivery acceptance. The Bank continued to donate money and supplies to virus-affected areas in China and other countries and regions, in a bid to support the global fight against the epidemic. At the end of June, CCB and its domestic and overseas employees donated funds and supplies worth a total of RMB310 million to the global fight against the pandemic. Among them, a total of 2.03 million pieces of masks, protective gowns, ventilators, medical gloves and other materials were donated to countries and regions hit hard by the pandemic.

Using all resources available to support the ultimate fight against poverty. CCB strengthened efforts to fulfill its responsibilities by closely integrating goal-oriented and problem-oriented approaches to poverty fight, combining poverty fight and rural revitalisation, and incorporating targeted poverty relief and new financial practices, thereby effectively integrating poverty alleviation and rural revitalisation. CCB stepped up targeted poverty relief efforts, with “one district and three counties” on the receiving end of the head office’s targeted poverty alleviation all lifted out of poverty and annual targets for the six metrics listed on the letter of responsibility for targeted poverty alleviation already fulfilled. CCB also stepped up organisation and promotion of poverty alleviation work by developing the “Leap to 2020” targeted poverty alleviation financial action plan, which focused deeply impoverished areas and designated areas on the receiving end of targeted poverty relief efforts by the head office and branches, thereby contributing to poverty fight and rural revitalisation. Based on statistics published by the People’s Bank of China, the balance of CCB’s loans for targeted poverty alleviation amounted to RMB234.13 billion, an increase of RMB 14.62 billion from the end of the previous year.

Advancing the implementation of the Three Major Strategies to achieve high-quality business growth

Deeply advancing the house rental strategy. CCB deepened the application of its comprehensive service platform for house rentals and enhanced activity on the platform, providing better services in support of regulatory oversight, public rental house management, and market-based rental house listings and transactions. At the end of June, CCB’s comprehensive service platform for house rentals had more than 23 million property listings online and 23.1 million registered users. The Bank signed strategic cooperation agreements with 11 pilot cities including Guangzhou, Hangzhou, and Jinan for development of government-backed rental housing, providing pilot cities with a package of comprehensive services including supportive financial products, rental property sourcing and operations, and IT system support. CCB also provided a total of nearly 2,000 housing units (rooms) to medical staff and related personnel free of charge during the epidemic fight.

Comprehensively enhancing new growth momentum of inclusive finance. CCB continued to improve new mechanisms for inclusive finance. The Bank’s inclusive finance business grew robustly thanks to its commitment to the development philosophy characterised by digitalisation, platform, ecosystem and empowerment. The Bank built a system of four major online products including “Rapid Loan for Small and Micro Businesses”, “Rapid Loan for Personal Businesses”, “Yunong Quick Loans” and “Rapid Loans for Transactions” established, which allows it to provide personalised and diversified products. CCB innovatively built an intelligent risk control system to promote high-quality growth of inclusive finance. NPL ratio of online loans granted via “Rapid Loan for Small and Micro Businesses” is below 1%. The Bank continuously optimises the functions of its new mobile financing platform, i.e., “Huidongni”.  “Huidongni” has logged more than 100 million customer visits and had over 3.8 million certified company users, with credit lines extended topping RMB280 billion. It has become an important brand through which CCB serves micro and small-sized enterprises. The Bank provided scenario-based services by realising information interoperability with All-China Federation of Industry and Commerce and its local chapters, business associations, and enterprises.  The Bank advanced efforts to build its “Entrepreneurs’ Harbor” for inclusive finance, providing comprehensive services related to equity investment, credit financing, and entrepreneurial growth for startups and innovative enterprises.

Supporting the construction of smart ecosystems with FinTech. The Bank forged ahead with efforts to build an ecosystem in the field of new retail, in a transition toward digital, intelligent, and networked operations. It has been building a new ecosystem for business customers that combines industries and financing, deepening industrial applications of supply chains, building an inter-bank client information management system, setting up a middle office for enterprise-level inter-bank applications, advancing capacity building for smart marketing channels and smart operations, and enhancing the quality and efficiency of channel operation services. The Bank has advanced comprehensive risk management and enhanced the Group’s integrated smart risk control capabilities. Focusing on technology management and technological empowerment, the Bank has promoted integrated operations of its subsidiaries. CCB also advanced the construction of an ecosystem in support of broader government affairs and enhanced the supporting role of digital operations across the ecosystem as a platform.

Actively exploring digitalised operation model. CCB has actively adapted to demand for online financial services brought about by epidemic prevention and control and vigorously innovate and promote digitalised operations and services. The Bank has set up a digitalisation committee, improved digitalised operation system, and integrated data into the whole process of operation and management.  With efforts centering on “building ecosystems, developing user cases, and expanding user base”, CCB’s digital operations have responded to market demand with agile iterations, scoring historical breakthroughs in the main business and continuously strengthening customer base. Driven by deepened systematic and online efforts to expand customer base and attract deposits, the Bank recorded more than RMB2 trillion in new deposits in the first half of 2020. CCB’s customer base continued to expand as the Bank signed up more than 300,000 new corporate and institutional customers, and the number of our credit card holders also exceeded 100 million mark. Personal deposit business saw solid growth momentum and the contribution from retail business further rose, with its share of the Bank’s total profit exceeding 50% for the first time, which helped further reinforce CCB’s position as the largest retail credit provider in China.

Exploring the new path of “Workers’ Harbours”. The Bank pivoted its financial services further toward lower-tier markets and continued to deepen its “Workers’ Harbours+” model. CCB opened a total of 14,315 Workers’ Harbours to the public, serving a total of 118 million people offline. The Bank also teamed up with 570 organisations including labor unions, sanitation service providers, and China Disabled Persons' Federation to co-build Workers’ Harbours, realising “Workers’ Harbours+” model at 1,637 CCB outlets.

Relying on CCB University to empower people. The Bank carried out integrated multi-level and diversified training sessions for different types of talented employees, building a team of financial professionals that meet the demanding requirements of a growing digital economy. In the first half of 2020, CCB University’s online platform delivered training to 320,000 employees. The Bank advanced it “Jin Zhi Hui Min” project, promoting the integration between businesses and education and proactively empowering communities. A total of 26,000 training sessions were launched as part of the project, benefiting 2.1 million people. Among them, “Jin Zhi Hui Min-Poverty Alleviation” training sessions benefited 146,000 people. CCB developed and published 28 micro-learning videos with the theme of COVID-19 prevention and control, which logged a total of 420 million impressions and 180 million views, rendering strong support to community-based epidemic fight across the country.

Prudently addressing various challenges and proactively guarding against financial risks

At present, China’s epidemic prevention and control efforts and high-quality social and economic development are advancing in a coordinated manner, though COVID-19 is still spreading globally, international political, economic, and diplomatic situation is complicated, and the domestic economy still faces many challenges. CCB prudently assessed the impact of the epidemic on its asset quality, disclosed risk profile realistically, and adequately addressed and absorbed related risks. CCB innovatively digitalised risk control model, improving comprehensive, proactive and intelligent risk management and control system. The Bank enhanced service quality and efficiency through refined management and ensured that credit demand in key sectors would be fulfilled. The Bank made adequate provisions, stepped up disposal of risky assets through multiple avenues. By continuously optimising credit structure and focusing on supporting key sectors of the real economy, CCB has aided the economic recovery, thereby achieving a balance between efforts to help steady economic growth and risk prevention while paving the way for long-term growth. At the end of June, the balance of CCB’s NPLs was RMB245.52 billion, an increase of RMB33.04 billion from the end of 2019. The NPL ratio was 1.49%, up 0.07 pps from the end of the previous year. Overdue loans accounted for 1.14% of the Bank’s total outstanding loans, down 0.01 pps from the end of the previous year. CCB stepped up efforts to dispose NPLs, in a bid to address risks and pave the way for future growth. In the first half of 2020, CCB wrote off RMB26.88 billion of NPLs, up RMB1.54 billion from a year earlier. Taking full account of changes in external environment and downward pressure on economic growth, CCB prudently set aside provisions to enhance its ability to offset risks. The Bank booked credit impairment losses of RMB111.38 billion in 1H20, an increase of RMB36.74 billion from a year earlier or up 49.22% year-on-year. At the end of June, loan loss provisions were RMB548.67 billion, up RMB64.88 billion from the end of 2019. The ratio of loss provision to total outstanding loans was 3.34% and the provision coverage ratio was 223.47%, remaining relatively high. CCB has adhered to a prudent capital management strategy, with adequate capital position and stable capital structure, which allows the Bank to give full play to the role of capital in counter-cyclical regulation. At the end of June, the Bank’s capital adequacy ratio was 16.62%, Tier 1 capital adequacy ratio was 13.88%, and core Tier 1 capital adequacy ratio was 13.15%.

Currently, the COVID-19 pandemic is still spreading, global economic growth is weak, and global instability and uncertainty become more prominent. CCB states that going forward, the bank will thoroughly implement General Secretary Xi Jinping’s important instructions, uphold the philosophy of prudent operation and value creation, calmly address complex economic and financial conditions, and support epidemic prevention and control and social and economic development. The Bank will strive to seize on new opportunities emerging from the crisis, embark on a new chapter of development amidst changes, and continuously intensify efforts to explore and develop new finance. CCB will forcefully advance the “Three Major Strategies” and innovate digitalised operation model, bringing credit access empowered by financial innovations to numerous households. By focusing on key links of social and economic developments and financial pain points and challenges in peoples’ life, the Bank is committed to exploring a secondary growth curve. At the same time, the Bank will step up comprehensive risk prevention and control efforts, maintain solid, balanced and sustainable operating results, continuously enhance its long-term value, and strive to deliver high-quality growth.