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cailianshe news, august 29 (reporter gao ping)the latest semi-annual report released by china citic bank shows that the bank achieved an attributable net profit of 35.49 billion yuan in the first half of the year, a slight year-on-year decline of 1.60%. liu cheng, president of china citic bank, responded to the slight year-on-year decline in net profit at the 2024 semi-annual performance conference this morning.

liu cheng said that the bank's net profit decreased year-on-year in the first half of this year, mainly because it placed emphasis on improving its risk prevention and control capabilities, which provided room for better risk response in the future. therefore, it did not further lower the provision coverage ratio to supplement the bank's net profit.

the semi-annual report shows that during the reporting period, citic bank achieved operating income of 109.019 billion yuan, up 2.68% year-on-year; among them, non-interest net income was 36.411 billion yuan, up 10.44% year-on-year, achieving rapid growth. liu cheng summarized the operating conditions in the first half of the year as "balanced", "stable" and "sustainable", and expected that the annual operation will continue to maintain a stable and positive trend.

"the asset quality trend of citic bank is clear, and the overall risk cost is converging marginally. we are confident that we can control the non-performing loan ratio and provision coverage ratio within expectations in the later period, which will provide strong support for the performance in the second half of the year," liu cheng said.

in terms of asset quality, as of the end of the reporting period, the balance of non-performing loans of citic bank was 66.58 billion yuan; the non-performing loan ratio was 1.19%, a slight increase of 0.01 percentage point from the end of last year; the provision coverage ratio was 206.76%, a decrease of 0.83 percentage point from the end of last year; the loan-to-provision ratio was 2.46%, an increase of 0.01 percentage point from the end of last year.

talking about the trend of asset quality, hu gang, vice president of citic bank, expressed his confidence that the asset quality of citic bank will be stable and improve in the second half of the year. the confidence mainly comes from four aspects: first, the sound business philosophy, namely, balance, stability, and sustainability, not exchanging short-term gains for risk reduction, and not exchanging profit growth for damage to risk resistance; second, the sound asset quality indicators; third, the continuously optimized asset structure; and fourth, the continuously improved risk management capabilities.

the quality of real estate assets is a topic of concern in the market. the semi-annual report shows that as of the end of the first half of the year, the balance of citic bank's real estate loans was 277.547 billion yuan, accounting for 9.51% of the company's loans, down 0.11 percentage points from the end of the previous year. regarding real estate-related issues, hu gang also stated at the performance meeting that the bank's real estate loans accounted for only 9.5% and were declining. in addition, the non-performing rate was 2.3%, and the quality continued to improve. in addition, the country's support policies for real estate are increasing, and there is confidence that the quality of real estate assets will gradually stabilize.

the pressure of narrowing interest rate spread is a common problem faced by the banking industry. in the first half of the year, citic bank stabilized its interest rate spread at a reasonable level through various measures. on the one hand, it adjusted and optimized the deposit structure, vigorously developed settlement deposits, and promoted the steady decline of deposit costs; on the other hand, it actively adjusted the asset structure, increased the proportion of loans, optimized the loan structure, and improved asset returns. data shows that during the reporting period, citic bank's net interest margin was 1.77%, a year-on-year decrease of 0.08 percentage points. however, from the perspective of peers, citic bank's year-on-year change in interest rate spread outperformed the market by 12bp.

looking ahead to the trend of interest rate spread in the future, liu cheng said that interest rate spread is still facing the pressure of narrowing. under such circumstances, how to stabilize net interest margin is a challenge for every bank. citic bank will focus on improving business capabilities and optimizing business structure.