China Construction Bank (939) Q2 2024 earnings summary

Executive summary

• Total assets reached RMB 40.29 trillion at end-June 2024, up 5.14% from end-2023, with net profit of RMB 165.04 billion and stable asset quality; NPL ratio at 1.35%, down 0.02% from year-end.

• Operating income for H1 2024 was RMB 374.83 billion, down 3.43% year-over-year; net interest income fell 5.17% and net fee and commission income dropped 11.20% due to lower market rates and fee reduction policies.

• Maintained peer-leading core performance indicators, including ROA of 0.84%, ROE of 10.82%, and NIM of 1.54%.

• Focused on supporting the real economy, green finance, digital transformation, and inclusive finance, with significant growth in loans to high-tech, green, and strategic emerging industries.

• Enhanced digital transformation, fintech capabilities, and ESG management, with a focus on sustainable development and consumer protection.

Financial highlights

• Net profit for H1 2024 was RMB 165.04 billion; operating income was RMB 374.83 billion.

• NPL ratio at 1.35%, down 0.02% from end-2023; provision coverage ratio at 238.75%.

• Net interest margin (NIM) at 1.54%, maintaining a leading industry position despite a slight decrease.

• ROE at 10.82%; ROA at 0.84%; capital adequacy ratio at 19.25%.

• Cost-to-income ratio at 24.15%; operating expenses decreased by 1.67% year-over-year.

Outlook and guidance

• Management expects China’s economy to maintain recovery momentum in H2 2024, with opportunities in technology, green, inclusive, pension, and digital finance.

• Plans to further support the real economy, green finance, digital transformation, and pension finance.

• Continued optimization of liability structure and focus on high-quality deposit growth.

• Commitment to maintain stable dividend payout, with a 30% interim dividend approved.

• Committed to business development within risk prevention and compliance limits, optimizing subsidiary and overseas management.