Since the beginning of this year, Bank of China has diligently implemented the decisions and arrangements of the Communist Party of China Central Committee and the State Council. Adhering to the general principle of seeking progress while maintaining stability and centering on the fundamental purpose of serving the real economy, BOC has actively adapted to new situations, responded to new challenges and seized new opportunities. It has solidly advanced all aspects of its operations and management, achieving steady progress in its business performance.

Stable and Improving Operations

In the first half of the year, BOC Group's operating income reached 329.4 billion yuan ($46.43 billion), a year-on-year increase of 3.61 percent, with net fee and commission income growing by 9.17 percent. Profit after tax was 126.1 billion yuan and profit after tax attributable to BOC equity holders was 117.6 billion yuan, remaining stable year-on-year with an improved trend compared to the first quarter. The net interest margin was 1.26 percent, the return on average assets was 0.70 percent, the return on equity was 9.11 percent and the cost-to-income ratio stood at 25.11 percent, all remaining within a reasonable range.

As of the end of June, BOC's total assets amounted to 36.79 trillion yuan, an increase of 4.93 percent from the end of the previous year. The proportion of high-yield assets, including loans and bond investments, increased by 2.32 percentage points. Total liabilities reached 33.66 trillion yuan, up 4.85 percent from the end of last year. The proportion of customer deposits to total liabilities rose by 0.78 percentage point. The market competitiveness of average daily domestic renminbi deposits has improved for consecutive years and the leading edge in foreign currency deposits has further expanded.

BOC's business scale, including the total number of corporate clients, the total number of individual clients and the total financial assets of individual clients, steadily increased in H1. The customer structure was optimized, with the number of medium-sized corporate clients with credit facilities growing by 13.48 percent from the end of the previous year and the proportion of mid-to-high-end individual clients increasing by 0.16 percentage point.

In H1, BOC completed the first batch of core tier-1 capital replenishment of 165 billion yuan. The core tier-1 capital adequacy ratio and capital adequacy ratio were 12.57 percent and 18.67 percent, respectively, up by 0.75 and 0.69 percentage point from the end of the previous quarter (before the capital injection), laying a more solid foundation for the group's medium and long-term development.

In H1, BOC actively implemented policy requirements for the high-quality development of the capital market, formulating and implementing market value management measures and a plan for valuation enhancement, quality and efficiency improvements and increased returns. Based on improving corporate quality, the bank focused on sound operations, strengthened market communications and enhanced information disclosures to continuously create long-term investment value for shareholders. It efficiently completed the 2024 interim and final dividend distributions, with a total payout of 71.36 billion yuan, maintaining a high payout ratio of 30 percent.

Continuously Optimizing Financial Supply

As of the end of June, BOC's domestic RMB loans increased by 1.41 trillion yuan, or 7.72 percent, from the beginning of the year. The balance of loans for equipment upgrades exceeded 90 billion yuan, loans to the manufacturing industry grew by 12.99 percent from the end of the last year and loans to strategic emerging industries increased by 22.92 percent.

The bank deepened the implementation of special actions to boost consumption, issuing the Bank of China's Measures to Support the Boosting and Expansion of Consumption. BOC strengthened its support for trade-in programs for consumer goods, expanding both business scale and customer reach. The balance of personal consumption loans increased by 15.42 percent from the beginning of the year.

BOC loans to private enterprises increased by 572 billion yuan, or 12.93 percent, from the beginning of the year. The bank leveraged its unique professional strengths to enrich and expand financing channels for private enterprises, helping them cultivate new drivers and stimulate new vitality through practical measures. It hosted events, including a China International Import Expo cross-border matchmaking conference in Hubei province and a special session in Chongqing focused on financial support for private enterprises in the Yangtze River Economic Belt to expand globally.

To serve the creation of a new model for real estate model, BOC provided optimal down payment ratios and interest rates for mortgages in accordance with national policies, supporting both rigid and improved housing demand. It increased the disbursement of residential mortgage loans, achieving year-on-year growth in H1.

In H1, BOC supported the stock buybacks and shareholding increase plans of 112 listed companies, with total intended loan amounts exceeding 30 billion yuan, maintaining a leading market position. It provided a variety of financial products and services, including bond underwriting and distribution, financial consulting, and asset securitization. In total, the bank underwrote over 430 billion yuan in credit bonds in the interbank market.

Solid Progress in "Five Financial Engines"

Seizing market opportunities in artificial intelligence and the mergers and acquisitions of technology enterprises, BOC innovated tech-finance products like the Computing Power Loan. As of the end of June, the balance of technology loans reached 4.59 trillion yuan, with 161,100 clients granted credit facilities. BOC continued to enrich financial service offerings for tech-related industries, supporting technological innovation through equity, debt, insurance and leasing. The cumulative supply of comprehensive tech-finance services exceeded 780 billion yuan. The bank solidly promoted the asset investment company (AIC) equity investment pilot program, having registered 15 AIC equity investment funds with a total committed capital of over 11 billion yuan since the policy's launch.

In H1, BOC's balance of green loans reached 4.54 trillion yuan, representing an increase of 16.95 percent compared to the end of the previous year based on the same caliber. The bank's overseas green loans ranked first among Chinese banks on Bloomberg's league tables for "Global Green Use of Proceeds Loans", "Global Sustainability-linked Loans" and "Global Green Loan Principles Loans". It maintained top position among Chinese peers in underwriting both domestic and overseas green bonds. Its green bond investment portfolio exceeded 100 billion yuan, ranking it first among investors of green debt financing instruments by the National Association of Financial Market Institutional Investors.

During the period, BOC's balance of inclusive loans to micro and small enterprises (MSEs) surpassed 2.65 trillion yuan, up 16.39 percent from the beginning of the year, while the number of MSE clients exceeded 1.72 million, a 15.58-percent increase. The bank provided over 700 billion yuan in credit facilities to more than 50,000 national and provincial-level SMEs that are specialized, refined, distinctive, and innovative. For the fourth consecutive year, it conducted a special initiative to boost employment, disbursing over 300 billion yuan in special loans to enterprises stabilizing and expanding employment in H1. Supporting the comprehensive revitalization of rural areas, BOC's balance of agriculture-related loans reached 2.87 trillion yuan, an increase of 367.4 billion yuan or 14.69 percent from the start of the year, focusing on key areas like farmland, agricultural materials, and grain production and circulation. Loans in key counties receiving targeted support grew by 10.08 percent, outpacing the average growth rate of all loans.

The bank continued to build a distinctive pension finance service system. Partnering with China Railway Group, it launched a groundbreaking social security card, the first in the industry to integrate social security, finance, transportation and high-speed rail networks. BOC ranked among the market leaders in the number of individual enterprise annuity accounts and the scale of enterprise annuity funds in custody, serving over 20,000 corporate clients. The bank continuously enriched its personal pension financial product offerings, including savings, wealth management, funds, and insurance, while enhancing elderly-friendly services through both online and offline channels.

In H1, BOC's pace of digital transformation accelerated, with deepened application of new technologies like artificial intelligence. The bank enhanced centralized transaction processing, improved its service efficiency and fostered the discovery of new digital transformation achievements at its branches, creating a virtuous cycle of promotion and reservation. From January to June, the monthly active users of its personal mobile banking grew by 8.59 percent year-on-year and its e-CNY transaction volume remained a market leader.

Leveraging Globalization and Integrated Operation Strengths

In H1, BOC's ability to establish a global presence and its international competitiveness improved at an accelerated pace, with the contribution of overseas commercial banks to operating income steadily increasing. It refined the top-level design for global development and comprehensively strengthened its global management framework. The bank promoted the implementation and dynamic optimization of differentiated development strategies for its overseas commercial banks. It built regional competitive advantages, leveraging BOC Hong Kong's role in driving the development of its Southeast Asian institutions to enhance their overall competitiveness. It also strengthened the capabilities of BOC Europe as its regional headquarters for the European Union, continuously advancing the centralized operation of middle and back offices.

BOC's domestic institutions handled $2.1 trillion in international settlements and 8.5 trillion yuan in cross-border RMB settlements in H1, representing year-on-year increases of 16.51 percent and 17.47 percent, respectively, solidifying its market-leading position. The bank continued to enhance its "global response, full-chain support" product services for cross-border e-commerce settlements, with the total transaction volume growing by 42.10 percent year-on-year.

BOC continued to support the expansion of the Cross-Border Interbank Payment System (CIPS) global network, maintaining its top rank among peers in the number of direct and indirect CIPS participants. It now holds 16 of the 35 global RMB clearing bank mandates authorized by the People's Bank of China, also ranking it first among peers. In H1, it processed 560.67 trillion yuan in cross-border RMB clearing business, maintaining its global leadership.

Guided by the eight major steps for high-quality Belt and Road cooperation, BOC supported the advancement of major landmark projects and "small yet smart" livelihood projects in H1. It ranked first in the market for underwriting Panda bonds, Chinese offshore bonds and offshore RMB bonds. Its market share in cross-border custody continued to rank first among Chinese peers. The bank helped business enterprises connect onshore and offshore funding channels, maintaining a leading market position in the number and volume of cross-border cash pools.

In H1, synergy between BOC and its subsidiaries was continuously deepened. It conducted tailored matchmaking and marketing activities for integrated operations, implementing key collaborative projects, including debt-for-equity swaps, financial leasing, investment banking and equity investments. Several BOC subsidiaries achieved significant progress and improved their rankings in core business metrics.

Coordinating Development and Security with Higher Standards

In H1, BOC improved mechanisms and processes for preventing systemic risks, enhanced its forward-looking risk assessment and emergency management capabilities, and effectively managed various types of risks. The bank strengthened its risk management capabilities both domestically and abroad, effectively responded to financial market volatility and proactively conducted special stress tests in key areas, keeping liquidity and market risks generally manageable.

During the period, BOC strengthened its asset quality control, steadily advanced the resolution of non-performing assets and improved the efficiency of collections and disposals. At the end of June, the group's non-performing loan (NPL) ratio was 1.24 percent, a decrease of 0.01 percentage point from the beginning of the year. The provision coverage ratio for NPLs was 197.39 percent.

The bank improved its due diligence management mechanism and enhanced risk prevention and control for high-risk clients and businesses, key sectors and key institutions. It deepened internal control and case prevention governance, continued to build a long-term mechanism for overseas compliance management and further enhanced its anti-money laundering compliance management.

Accelerating the Pace of Digital Transformation

In H1, BOC's regulatory rating for information technology improved for the second consecutive year. It made solid progress on 40 strategic technology projects and optimized its application project management mechanism, reducing the average project delivery cycle by 11.13 percent year-on-year. It continued to advance infrastructure construction, with the total number of cloud platform servers reaching 40,000.

During the period, the bank improved its digital tools for precision marketing and customer operations and optimized centralized transaction processing and remote approvals functions. It completed the centralized processing of 65 high-frequency transactions across five scenarios and used digital technology to enhance its intelligent review capabilities.

In H1, BOC released a work plan for the application and promotion of artificial intelligence, using large model technology to empower over 100 scenarios across the bank. It continued to reduce the burden on grassroots-level operations, with enterprise-level robotic process automation now covering more than 3,300 scenarios.

The bank vigorously promoted the replication of digital transformation achievements from its branches and focused on incubating new, outstanding results. It used pilot projects in specific areas to drive bank-wide iteration and optimization, enhancing the quality and efficiency of digital operations and management across the entire institution.

BOC will continue to focus on its core responsibilities and main business, uphold its original aspiration and founding mission and fully leverage its globalization and integrated operation strengths. By capitalizing on development opportunities, potential and advantages, the bank will unswervingly follow the path of financial development with Chinese characteristics, pushing its high-quality development to a new level while serving the construction of a strong financial nation.