Bank of China (601988:SSE) written Q&A, October 29, 2025 transcript

Ladies and gentlemen, investors and netizens, hello! Welcome to the Bank of China's third quarter 2025 results presentation. This activity is hosted by Bank of China Limited and supported by the network platform provided by Shanghai Stock Exchange Information Network Co., Ltd. Thank you for your attention and participation. On October 29, Bank of China Limited published the 2025 Third Quarter Report. Investors may log in the website of Shanghai Stock Exchange (https://www.sse.com.cn/) or this platform (https://roadshow.sseinfo.com/) to view the relevant announcements.

In order to facilitate investors to have a more comprehensive and in-depth understanding of the company's operating results and financial situation in the third quarter of 2025, the company decided to hold the Bank of China's third quarter of 2025 performance presentation. In today's event, the main members of the management of the Bank of China will visit the Shanghai Roadshow Center and communicate with investors. Everyone is welcome to participate actively. First of all, let's welcome guests from listed companies to make opening speeches.

Dear investors, Hello, everyone! Welcome to the Bank of China's third quarter performance presentation in 2025. Thank you for your long-term attention and support to the Bank of China. Thank you also to the Shanghai Stock Exchange and the Roadshow Center for providing an investor exchange platform for listed companies. I hope that through today's exchanges, investors and friends can have a better understanding of the Bank of China and have more confidence.

Since this year, the Bank of China has resolutely implemented the decision-making and deployment of the Party Central Committee and the State Council, adhered to the general tone of steady and progressive work, fully, accurately and comprehensively implemented the new development concept, further deepened the reform in an all-round way, actively promoted the sustained economic recovery, vigorously promoted all aspects of business management, and achieved steady and progressive business performance. To inject strong momentum into the high-quality development of economy and society with the actual effect of self-development.

The Bank has published the report for the third quarter of 2025 on the website of Shanghai Stock Exchange and the official website of the Bank, which can be downloaded and browsed. Thank you!

Hello, Mr. Zhuo, based on the performance and trend of the first three quarters, is your bank expected to achieve steady growth in the whole year?

Dear investors, hello. Since the beginning of this year, our bank has made steady progress in financial efficiency. In the first three quarters, the Group achieved an operating income of RMB492.1 billion, representing a year-on-year increase of 2.72%, maintaining a steady growth. Profit after tax and profit attributable to shareholders of the Bank were RMB189.6 billion and RMB177.7 billion, respectively, representing a year-on-year increase of 1.12% and 1.08%, and the change trend was improved as compared with the first half of the year.

The group's net interest margin was 1.26%, unchanged from the first half of the year. The return on average assets (ROA) was 0.70%, the return on equity (ROE) was 8.98%, and the cost-to-income ratio (regulated in mainland China) was 26.90%, all of which remained within a reasonable range. Its business scale grew steadily, with total assets of 37.55 trillion yuan and total liabilities of 34.31 trillion yuan, up 7.10% and 6.87% respectively from the end of last year.

Looking forward to the whole year, the Bank will continue to do a good job in all aspects of operation and management, and strive to repay the trust and support of customers, investors and all sectors of society with steady business performance.

As an investor, I am glad to see that Bank of China has achieved positive growth in after-tax profits in the first three quarters. I would like to know more about the specific operating efficiency. Thank you.

Dear investors, thank you for your attention and questions. Since the beginning of this year, our bank has made steady progress in financial efficiency. In the first three quarters, the Group achieved an operating income of RMB492.1 billion, representing a year-on-year increase of 2.72%, maintaining a steady growth. Profit after tax and profit attributable to shareholders of the Bank were RMB189.6 billion and RMB177.7 billion, respectively, representing a year-on-year increase of 1.12% and 1.08%, and the change trend was improved as compared with the first half of the year.

The group's net interest margin was 1.26%, unchanged from the first half of the year. The return on average assets (ROA) was 0.70%, the return on equity (ROE) was 8.98%, and the cost-to-income ratio (regulated in mainland China) was 26.90%, all of which remained within a reasonable range. Its business scale grew steadily, with total assets of 37.55 trillion yuan and total liabilities of 34.31 trillion yuan, up 7.10% and 6.87% respectively from the end of last year.

Hello, will you consider increasing the dividend ratio next year to improve shareholder returns?

Dear investors, hello! Since the share reform and listing, the Bank has attached great importance to the return to shareholders, and has accumulated dividends of more than 940 billion. In recent years, the dividend ratio has been stable at a high level of 30%, providing investors with a better return on investment. The Bank will conduct interim and final dividend distribution in 2024, which will continue to be implemented in this year.

In the next step, the Bank will strive to maintain a stable dividend policy, and determine a reasonable dividend ratio based on factors such as business performance, financial situation, shareholder returns and future development, so as to enhance investors' sense of gain. I hope you will continue to pay attention to and support the Bank of China.

Hello, leader! What is the main reason for the rapid year-on-year growth of the company's operating expenses in the third quarter? Thank you

Dear investors, hello! The Bank deeply practiced the concept of practicing economy and opposing waste, strengthened the fine financial management, strengthened the control of total expenses, optimized the structure of expenses, and firmly promoted cost reduction and efficiency enhancement. In the first three quarters, operating expenses amounted to approximately RMB186.6 billion, of which operating and management expenses (including staff expenses, operating expenses, depreciation and amortization) amounted to approximately RMB132.1 billion, representing a year-on-year increase of approximately 3%. For details, please refer to the information disclosed in the Bank's periodic reports.

Thank you!

Since the beginning of this year, the pace of bank credit has been faster. What are the main aspects of Bank of China's public loans and personal loans?

Dear investors, hello. Our bank has strengthened the supply of financial services in an all-round way, and the credit has increased steadily. By the end of September, RMB loans from domestic institutions had increased by 1.67 trillion yuan, or 9.15%, compared with the beginning of the year. The new loans were mainly corporate loans. The Bank increased investment in financial resources in key areas, and the balance of equipment renewal loans exceeded 130 billion yuan. The balance of domestic manufacturing loans and strategic emerging industry loans increased by 12.10% and 26.29% respectively compared with the end of last year.

Fully supporting the promotion and expansion of consumption, the balance of personal consumption loans increased by 26.11% compared with the beginning of the year. To support the rigid and improved housing demand of residents, we continued to increase the supply of housing mortgage loans, and the total amount of individual housing loans in the first three quarters exceeded 400 billion yuan. Thank you for your attention.

Next, what are the plans for credit delivery and how to manipulate assets and liabilities?

Dear investors, hello. The Bank will actively seize the market opportunities arising from the transformation and upgrading of the economic structure, focus on optimizing the structure of assets and liabilities, and promote the quality and efficiency of the assets and liabilities business. Enhance the ability of asset allocation, maintain the steady and healthy development of credit business, moderately increase bond investment, and increase the proportion of high-yield assets.

Enhance the ability of debt management, focus on optimizing the mode of deposit expansion, take key products such as salary payment and fast payment as the starting point, expand low-cost settlement funds and source funds, and reduce the cost of comprehensive liabilities. In terms of credit delivery, we will closely follow the financing needs of the market and customers, continuously optimize the business structure, increase the financial supply to major strategies, key areas and weak links, effectively improve the quality and efficiency of real economic services, and achieve our own high-quality development.

Thank you for your interest.

Thank you for attending today's performance presentation. If there are any questions that need to be communicated, please contact our investor relations staff. Thank you again for your concern and support for the Bank of China!

In the first three quarters of this year, Bank of China's net interest margin was 1.26%, down 0.14 percentage points from 2024. What do you think of this?

Dear investors, hello. In the current low interest rate environment, the net interest margin of domestic banking institutions is generally under pressure. The Bank actively grasped the market opportunities, focused on optimizing the business structure, promoted the quality and efficiency of assets and liabilities business, and strived to stabilize the net interest income. In the first three quarters of 2025, the Group's net interest margin was 1.26%, down from the previous year and flat from the first half of the year.

The Bank will continue to strengthen active management, strive to cope with the adverse impact of the external environment, adhere to the coordinated development of volume and price, continue to optimize the business structure, and strive to achieve stable operating results. Thank you for your attention.

I would like to ask the leadership: ① How to evaluate the performance of the third quarter and what is the outlook for the annual operating results? ② The Bank of China's non-interest income has been outstanding recently. What is the growth engine of its intermediary business? In the future, how will we further develop the advantages of globalization and integration and increase the proportion of non-interest income in order to better smooth performance fluctuations?

Dear investors, hello. Since the beginning of this year, our bank has made steady progress in financial efficiency. In the first three quarters, the Group achieved an operating income of RMB492.1 billion, representing a year-on-year increase of 2.72%, maintaining a steady growth. Profit after tax and profit attributable to shareholders of the Bank were RMB189.6 billion and RMB177.7 billion, respectively, representing a year-on-year increase of 1.12% and 1.08%, and the change trend was improved as compared with the first half of the year.

The group's net interest margin was 1.26%, unchanged from the first half of the year. The return on average assets (ROA) was 0.70%, the return on equity (ROE) was 8.98%, and the cost-to-income ratio (regulated in mainland China) was 26.90%, all of which remained within a reasonable range. Its business scale grew steadily, with total assets of 37.55 trillion yuan and total liabilities of 34.31 trillion yuan, up 7.10% and 6.87% respectively from the end of last year.

Looking forward to the whole year, the Bank will continue to do a good job in all aspects of operation and management, and strive to repay the trust and support of customers, investors and all sectors of society with steady business performance. For non-interest income, thank you for your attention and recognition. In the first three quarters of 2025, the Bank realized non-interest income of RMB 166.323 billion, representing a year-on-year increase of 16.22%, and the non-interest income accounted for 33.80% of the operating income, representing a year-on-year increase of 3.93 percentage points.

Among them, the net income and expenditure of handling fees and commissions amounted to 65.591 billion yuan, an increase of 8.07% over the same period last year, mainly due to the better growth of income from agency business, trusteeship and other trusteeship business. Other non-interest income totaled RMB100.732 billion, representing a year-on-year increase of 22.23%, which was mainly due to the fact that the Bank took the initiative to seize the opportunity of market fluctuations, resulting in a better growth in exchange gains, sales revenue of precious metals and net income from financial investment.

Our bank will closely focus on customer needs, actively grasp the market situation, and strive to continue the good trend. For details, please refer to the periodic reports disclosed by the Bank. Thank you for your interest!

Bank of China's non-performing loans are relatively stable in the first three quarters in terms of the non-performing rate. How about the overall asset quality? What risk control measures have been taken?

Dear investors, hello. In the first three quarters, the Bank's asset quality remained stable on the whole. By the end of September, the non-performing loan ratio of the Group was 1.24%, down 0.01 percentage point from the beginning of the year; the provision coverage ratio was 196.60%, and the risk offset was reasonable and sufficient. The Bank dynamically optimized the credit management mechanism, strengthened asset quality control in key areas, steadily promoted the resolution of non-performing loans, improved the quality and efficiency of collection and disposal, and took various measures to maintain the basic stability of asset quality.

Thank you for your interest!

Dear investors and netizens, the Bank of China's third quarter performance presentation in 2025 is drawing to a close. We invite guests from listed companies to make concluding remarks.

This is the successful conclusion of the Bank of China's performance presentation for the third quarter of 2025. Thank you for the active participation of investors and netizens. If you have further questions, you can keep communicating with the company through the e interactive platform of Shanghai Stock Exchange. Thank you!