China Construction Bank Corp. Q4 FY2025 earnings call

First, focus on core responsibilities on the primary business to empower the real economy, advanced 5 priorities with scale and quality in technology, digital, green and inclusive and pension finance. Second, continued and committed to advancing high-quality development, with customer operation focusing on enhancing service capabilities, asset business balancing scale, pricing and risk, liability business maintaining dynamic alignment, intermediary business enhancing value creation capabilities, cost management maintaining alignment between cost reduction and efficiency enhancement. Third, adopted a systematic approach and strengthened risk and compliance management, with solid foundation for comprehensive risk management, improved 3 lines of defense risk governance framework. Fourth, strengthened development foundation and continued to upgrade the operation and management system, promote the integrated development of operation data and technology, enhanced the foundation with transformation from centralized core business system to distributed model, increased cloud computing scale by 12%, applied large-scale modeling technology for 398 application scenarios within the group, enhanced enterprise-level large-scale operations in many key areas.

In 2025, net profit increased by 1.04% to CNY 339 billion, operating income increased by 1.69% YoY. Profit before provisions increased by 1.7% Y-o-Y. NIM is 1.34%, ROA 0.79%, ROE 10.04% and Capital adequacy ratio 19.69%. Cost-to-income ratio 29.44%. Net interest income ratio is 22.69%. Total assets increased to CNY 45.63 trillion by 12%. Gross loans to customers also increased by 7.47% to CNY 27.77 trillion. Financial investments also increased by 20% to CNY 12.9 trillion. Liabilities also increased to CNY 41.65 trillion by 12%. Debt deposits also increased by 7%. Technology finance loans over RMB 5 trillion, underwriting of sci-tech innovation bonds amounted to RMB 72 billion. Green finance issued RMB 6 trillion, up by 20.54%. Inclusive finance loan customers reached 3.69 million, finance loan balance reached RMB 3.83 trillion, agriculture-related loans balance reached RMB 3.71 trillion. Pension finance enterprise and personal pension business had solid growth, Pillar 2 or AUM management also grew by 15%. Digital Finance mobile banking and the CCB lifestyle app users reached 546 million. Personal consumption loans grew 29.41%, balance at RMB 6.72 trillion. Loan balance to private economy up by 12%, to manufacturing sector reached RMB 3.52 trillion. Digital supply chain financing provided RMB 1.32 trillion. Loans and deposits in key regions like Beijing-Tianjin-Hebei, Yangtze River Delta, Greater Bay Area, and Chengdu-Chongqing area outpaced the bank-wide average. Underwriting of nonfinancial corporate bonds increased by 85%. M&A loan balance increased by 24%. New equity investment scale 20% higher than over the period. International business loan balance is CNY 1.5 trillion, cross-border RMB settlement reached RMB 6.5 trillion. Overseas institutions recorded net profit of RMB 12 billion, integrated operations subsidiaries recorded net profit of RMB 9.45 billion, up by 31% and 7% Y-o-Y respectively. Assets under custody is CNY 27 trillion.

In 2026, will continue to serve the national strategy, do the 5 priorities of finance business, anchor ourselves as a leading financial institution of China to continue to enhance our professionalism and comprehensiveness and the integration of our business to strengthen our sustainable business model, continue to support domestic demand to follow up on consumption stimulus policies to offer consumer financial services to have a comprehensive solution covering credit payments, merchant services and value-added offerings to continue to unleash the growth potential of consumer financing, seize opportunities to further expand effective investment to fully expand financial services for infrastructure projects across land, sea, air, digital roads, network bridges and waterways to continue to strengthen our unique advantages here and to accelerate key project progress, focus on key areas such as ultra-long-term special government bonds, local government special bonds and new policy-based financial instruments to support the binary star and the 2 focuses to support regional banking coordination upgrade and enhancement to support the Hainan Free Trade Port and offshore renminbi market development, enhance county-level financial services based and help urban rural development and regional coordination and to enhance our financial services based on local conditions, continue and commit to advancing high-quality development, continue to invest in commercial bank integration, domestic and foreign currency integration, group-wide integration and corporate and retail banking integration across institutions, across sectors and across markets, will upgrade and refine the service models across ecosystems, industrial and supply chains and industrial and business clusters, upgrade and deep integration to deliver personalized services tailored to individual custom needs across the entire life cycle, further deepened integration under the Binary Stars model, committed to safeguard the bottom line of risk control, continue to advance a comprehensive, proactive, intelligent and agile risk control system to improve the working mechanism of the 3 lines of defense to further strengthen the joint risk management between bank and subsidiaries and enhance the look-through management of overseas institutions, further adopt a more dynamic loan control mechanism, roll out inclusive loans and continue to assess regional risks, hold true fast to the bottom line of risk control in order to assess risk in advance and increase our resolution capabilities, enhance enterprise-wide anti-fraud capabilities as well, continue to build a better consumer protection system to protect the deep integration across the entire business process.

Discussion of risks included model risks, data risks, fraud risks and new product risks. Also emphasized the need to continue to strengthen risk and compliance management, optimize risk-related processes, and enhance internal control, employee conduct management, case prevention control, anti-money laundering, etc.

Q: In 2025, what's the core drivers behind the good performance and outlook for 2026?

A: Yi Zhang mentioned factors like stabilizing the basic NIM structure, offering more in-depth comprehensive services, managing costs, managing our asset, consolidating our customer base, and leveraging traditional strengths and new strategies for 2026.

Q: What's the new arrangement compared with 2024 in terms of regional dispatchment and the sectors for loan in 2025 and outlook for 2026?

A: Yi Zhang said in 2025 loan growth was steady with 2 highs and 2 advancements in sectors and regions, and in 2026, it will guarantee steady growth, be structure oriented, respond to needs, and improve high-quality development.

Q: Can you introduce the NIM influences in terms of supply and demand side and outlook for NIM in 2026?

A: Sheng Liurong said NIM in 2025 had certain changes, and in 2026, through macro and micro measures, the NIM decline could continue to slow down.

Q: What's the highlight of CCB's bond investment philosophy and outlook in 2026?

A: Ji Zhihong said CCB doubled down on asset allocation, enhanced active management, actively participated in the bond trading market, and in 2026, would maintain stable, steady value-oriented investment principle and adjust strategies.

Q: What measures have you adopted in terms of risk management and future risk assessment especially in key core areas such as consumer loans?

A: Li Jianjiang said CCB continued to implement strategies, focus on risk management, defend risk bottom line, enhanced risk management systems, and would continue to focus on retail loan risk management.

Q: What are the key initiatives that CCB has with respect to AI tech?

A: Lei Ming said CCB improved foundational AI capability, applied AI in various areas like channel service, business, products, operation, risk control, and continued to improve efficiency and safety of AI adoption.

Q: Can you introduce 2025 savings growth and characteristic and outlook for 2026?

A: Tang Shuo said 2025 savings growth was steady with structure improvement, and in 2026, would focus on wealth management, guarantee steady savings, and optimize service.

Q: What are the sources of fee income increase and intermediary business growth opportunities?

A: Sheng Liurong said fee income increase came from asset-light, improved revenue structure, and various business areas, and intermediary business had opportunities from domestic demands and capital market booming.

Q: What have you done in Fintech area?

A: Lei Ming said CCB actively developed integrated service advantage, empowered technological innovation, built and ran an ecosystem of technology, and continued to promote high-quality development of the Fintech ecosystem.

Q: What's the growth of possible consumption loan at CCB and what more can CCB do to help stimulate domestic consumption?

A: Tang Shuo said personal consumption loans had healthy growth, and CCB actively promoted collaboration, rolled out policies, and focused on key consumption areas and financial innovation to help stimulate domestic consumption